SENWES ANNUAL FINANCIAL STATEMENTS 2022
Sensitivity of interest rates The potential impact of interest rate changes on finance costs is illustrated below :
Increase / ( decrease )
%
( Increase )/ decrease interest expenses before tax
R ' m
Increase / ( decrease )
%
( Increase )/ decrease interest expenses before tax
R ' m
Commodity finance |
2 % |
( 1.9 ) |
2 % |
( 1.0 ) |
|
1 % |
( 0.9 ) |
1 % |
( 0.5 ) |
|
( 1 )% |
0.9 |
( 1 )% |
0.5 |
|
( 2 )% |
1.9 |
( 2 )% |
1.0 |
Short-term debt |
2 % |
( 77.7 ) |
2 % |
( 77.2 ) |
|
1 % |
( 38.9 ) |
1 % |
( 38.6 ) |
|
( 1 )% |
38.9 |
( 1 )% |
38.6 |
|
( 2 )% |
77.7 |
( 2 )% |
77.2 |
Long-term debt |
2 % |
( 28.1 ) |
2 % |
( 1.8 ) |
|
1 % |
( 14.1 ) |
1 % |
( 0.9 ) |
|
( 1 )% |
14.1 |
( 1 )% |
0.9 |
|
( 2 )% |
28.1 |
( 2 )% |
1.8 |
24.1.2 Credit risk
Concentration risk
1 . “ Gross carry amount ” is calculated by decreasing the total producer debtor balance by the security value held or ceded to Senwes as well as the appropriate allowance for expected credit losses . " Gross exposure " is calculated by decreasing the total gross carry amount by the securities held . " Net exposure " is calculated by decreasing the total gross exposure amount by the partial allocation of net asset value . " Security " may , without limiting the generality thereof , amongst others , assume the form of a special hypothec , a special notarial bond , right of retention , a lessor ’ s hypothec , pledge , cession , surety , option or any other form of security .
2 .
Gross carry amount - Securities held = Gross exposure Gross exposure - Partial net asset value = Net exposure to credit risk after net asset value
Geography
Stratification and arrears
Exposure of book
Exposure of book
Stratification of the client base to the extent of credit extended |
|
Arrears |
|
Arrears |
R1 – R500 000 |
1.2 % |
9.5 % |
1.1 % |
4.2 % |
R500 000 – R1 250 000 |
2.0 % |
4.3 % |
1.7 % |
3.1 % |
R1 250 000 – R3 000 000 |
6.5 % |
0.8 % |
5.6 % |
1.0 % |
R3 000 000 – R5 000 000 |
13.1 % |
0.2 % |
14.6 % |
2.1 % |
R5 000 000 – R12 500 000 |
24.4 % |
0.3 % |
24.6 % |
0.5 % |
Above R12 500 000 |
52.8 % |
0.4 % |
52.3 % |
0.9 % |
Legal clients |
0.0 % |
97.3 % |
0.1 % |
70.3 % |
Total |
100.0 % |
|
100.0 % |
|
The total arrears for 2022 amounted to 1,50 % ( 2021 : 2,52 %).
Distribution of debtors by category
Trade debtors
%
Gross carrying amount
R ' m
Net exposure Gross to credit risk exposure after net asset amount value
R ' m R ' m
Stage 1 |
53 % |
2,582 |
860 |
225 |
Stage 2 |
45 % |
2,146 |
541 |
89 |
Stage 3 |
2 % |
88 |
61 |
61 |
Total |
100 % |
4,816 |
1,462 |
375 |
2022
GROUP
The potential credit concentration risk relates mainly to trade debtors . Trade debtors consist of a large number of clients , spread over different geographic areas and credit is extended in accordance with the credit policy of the group . Prudent credit evaluation processes are strictly adhered to .
The value at risk is calculated as follows :
Distribution ( spread ) is measured against best practices in the industry , given the concentration in respect of geography , stratification , categorisation and arrears . Sources for measurement of concentration risk are formulated by using various agricultural industry norms , market trends in large companies and own analyses . The spread will increase the value at risk should it be higher than the norm and will decrease the risk should it be lower than the norm .
The risk is measured in respect of concentration in the different areas , namely arrears , categorisation , stratification ( individual extent of the balance of the debtor account ) and geography and are discussed in detail below .
Low concentration risk is applicable due to an extensively spread geographic area , mainly the Free State , North West and Northern Cape .
GROUP
A fair distribution of client size and arrears is applicable and the size of the current book is in line with the risk appetite per segment of Senwes .
2022
GROUP 2022
2021
2021
56
Reimagine Agriculture