AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
Distribution of debtors by category
GROUP 2020
Net exposure |
Gross |
Gross to credit risk |
|
Trade debtors
%
|
carrying amount
R ' m
|
carrying amount
R ' m
|
after net asset value
R ' m
|
Stage 1 |
38 % |
1 632 |
667 |
109 |
Stage 2 |
60 % |
2 565 |
616 |
46 |
Stage 3 |
2 % |
67 |
35 |
31 |
Total |
100 % |
4 264 |
1 318 |
186 |
The different stages are defined as follows :
Although not required by IFRS 9 Financial Instruments , Senwes categorises trade and other receivables as well , in order to evaluate financing provided in a holistic manner . Trade and other receivables and loans ( collectively referred to as debtors ) with significant financing components are classified into the following categories , in accordance with IFRS 9 Financial instruments , for impairment purposes , taking into account factors mentioned in note 11.5 , that reflect changes in credit risk since initial recognition :
Stage 1 : the loss allowance measured at an amount equal to 12-month expected credit losses Debtors where there has not been a significant increase in credit risk since initial recognition : Portfolio impairment ( non-legal clients ) – A group impairment assessment : debtors are not individually assessed but debtors with similar credit risks and characteristics are grouped . The group is then assessed for impairment .
Stage 2 : the loss allowance measured at an amount equal to lifetime expected credit losses Debtors whose credit risk has increased significantly since initial recognition : Portfolio impairment ( non-legal ) clients : A group impairment assessment , debtors are not individually considered , debtors with similar credit risks and characteristics are grouped together . The group is then assessed for impairment . These debtors have not been handed over to the legal department for collection as yet , but there is an indicator of impairment . The two most significant indicators of impairment in the current financial year are arrears ( non-compliance with debtor terms ) and consolidation of loans in arrears . During the year stage 2 trade debtors decreased to 50 % for 2021 , from 60 % in 2020 see note 24.1.2 . Allowances for life time expected losses were made specifically for loans .
Stage 3 : financial assets that are purchased or originated credit-impaired Debtors whose credit risk has increased significantly since initial recognition : Specifically impaired ( legal clients ): This will typically be the case where the debtor is already handed over to the legal department for recovery . The impairment represents the actual risk ( LGD ) for possible bad debt determined by the legal department , taking into account all securities and the client ’ s balance sheet . The factors that influence management ' s estimates and judgement include whether customers that have been handed over to the legal department for collection , are specifically provided for based on the exposure and the estimation of the quality and expected realisation of securities held for the specific customers .
Counter-party risk Absa and Nedbank as key financiers are regarded as excellent counter-parties and therefore fall within acceptable levels of counter-party risk . Counter-party risk relating to credit extension to clients is managed actively and is considered to be within acceptable levels .
Agribel Holdings Limited Reg nr : 1996 / 017629 / 06 AGRIBEL ANNUAL FINANCIAL REVIEW 2021
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