Senwesbel Consolidated Financial Statements | Page 47

11. TRADE AND OTHER RECEIVABLES GROUP NOTES 2020 R’m 2019 R’m Trade receivables 2 739 2 332 Production accounts 11.1 2 404 2 120 Current accounts 11.2 335 212 Current portion of loans and other receivables 9.1 398 374 Grain debtors 11.3 183 166 Sundry receivables 11.4 519 106 Less: Allowance for expected credit losses 11.5 (104) (97) Balance at the end of the year 3 735 2 881 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: Interest-free for first 30 days after statement, thereafter classified as arrears. Silo cost account: Interest-free period that varies from season to season (determined before every season), thereafter classified as arrears. Deferred payment arrangement: Interest-free period that varies according to various transactions and products, thereafter classified as arrears. Interest on arrear 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 R2,8 million (2019: R1,9 million) is included in the group balances. No agency grain debtors were encumbered at year-end (2019: Rnil). The terms of these debtors are as follows: Mill-doors Ex-silo financing Ex-silo non-financing 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 for which there have been significant increases in credit risk since initial recognition — 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 treated as having significantly increased when default in payment occurs and is reflected in arrears. Senwesbel Limited Reg no: 1996/017629/06 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2020 46