SENWES ANNUAL FINANCIAL STATEMENTS 2022
Stages of debt
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 |
48 % |
2,214 |
676 |
106 |
Stage 2 |
50 % |
2,274 |
587 |
62 |
Stage 3 |
2 % |
74 |
64 |
53 |
Total |
100 % |
4,562 |
1,327 |
221 |
Credit risk for company arises from intercompany loans receivable and has been assessed in note 7.1.2 .
The different stages are defined as follows :
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 45 % for 2022 , from 50 % in 2021 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
24.1.3 Liquidity risk
The group monitors its liquidity risk by means of a cash flow planning and security model .
GROUP 2021
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 :
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 .
The group takes into account the maturity dates of its various assets and funds its activities by obtaining a balance between the optimal financing mechanism and the different financing products , which include bank overdrafts , short-term loans , commodity finance and other creditors . These are the remaining undiscounted cash-flows . The different debt expiry dates are as follows :
Total R ' m
GROUP Financial liabilities - 2022
Due within 1 year
R ' m
Due within 1-5 years
R ' m
Due after 5 years
R ' m
Other financial liabilities * |
490 |
- |
- |
490 |
JD Implemente ( Pty ) Ltd loans |
3 |
- |
1 |
2 |
KLK Landbou Ltd loans |
8 |
3 |
5 |
- |
PE-BEE Agri ( Pty ) Ltd loans |
6 |
3 |
3 |
- |
Commodity finance |
93 |
93 |
- |
- |
Lease liabilities ** |
34 |
12 |
22 |
- |
ABSA interest-bearing loans |
3,628 |
3,628 |
- |
- |
Nedbank interest-bearing loans |
1,857 |
142 |
631 |
1,084 |
Hinterland Holdings ( Pty ) Ltd loan |
325 |
325 |
- |
- |
Bank overdrafts *** |
89 |
89 |
- |
- |
Trade and other payables and contract liabilities **** |
1,160 |
1,160 |
- |
- |
Derivative financial instruments , incentive bonuses , provisions and other loans payable |
|
|
|
|
***** |
345 |
345 |
- |
- |
Total liabilities , including interest payable |
8,038 |
5,800 |
662 |
1,576 |
* Company : R423 million . ** Company : R1 million . *** Company : R10 million . **** Company : R339 million . ***** Company : R238 million . |
|
|
|
|
Reimagine Agriculture
57