Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. If collection is expected in the normal operating cycle of the business, they are classified as current assets.
If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest rate method, less provision for impairment. A provision for impairment of trade receivables is
established when there is objective evidence that the Group will not be able to collect all amounts due according to
the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount
and the present value of estimated future cash flows, discounted at the original effective interest rate. The amount
of the provision is recognised in the income statement. |
| |
|
|
|
|
|
| |
2017
R’000 |
|
|
2016
R’000 |
|
| Trade receivables |
2 470 705 |
|
|
2 440 111 |
|
| Less: Provision for impairment |
(19 020) |
|
|
(13 850) |
|
| |
2 451 685 |
|
|
2 426 261 |
|
| Sundry debtors |
98 521 |
|
|
75 244 |
|
| Contingent consideration receivable1 |
— |
|
|
15 860 |
|
| Prepayments2 |
175 955 |
|
|
72 272 |
|
| VAT |
52 646 |
|
|
92 833 |
|
| Receivables from related parties (refer to note 8) |
22 702 |
|
|
25 719 |
|
| |
2 801 509 |
|
|
2 708 189 |
|
| Less: Amounts included in current portion of trade and other receivables3 |
(2 758 997) |
|
|
(2 679 023) |
|
| |
42 512 |
|
|
29 166 |
|
| 1 |
Ukash was disposed of in April 2015. The proceeds included a contingent receivable of R17.5 million. The contingent consideration
arrangement required the acquirer to pay in cash to the Group an additional amount of R18.1 million if certain warranties were
achieved. The amounts were receivable in four six-month intervals commencing 30 September 2015. In the current year, the Group
received R12.8 million (2016: R5.8 million) relating to this. |
| 2 |
Included in the amount above are prepayments to customers of R89 million (2016: R23 million). |
| 3 |
Included in the amount above are starter pack debtors that have a normal operating cycle period which may be in excess of
12 months. |
Fair value estimation
| Fair value measurement hierarchy: |
| Level 1: fair value based on quoted prices (unadjusted) in active markets for identical assets or liabilities; |
| Level 2: fair value based on inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); or |
| Level 3: fair value based on inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). |
Contingent consideration receivable
Changes in level 3 instruments are as follows:
| |
|
|
|
|
|
| |
2017
R’000 |
|
|
2016
R’000 |
|
| Opening balance |
15 860 |
|
|
17 757 |
|
| Receipts |
(12 839) |
|
|
(5 813) |
|
| Gains or losses recognised in profit or loss |
(3 021) |
|
|
3 916 |
|
| Closing balance |
— |
|
|
15 860 |
|
| Total gains or losses for the period included in profit or loss for receivables held at the end of the reporting period, under: |
|
|
|
|
|
| (Other expenses)/other income |
(3 104) |
|
|
3 650 |
|
| Interest received |
83 |
|
|
266 |
|
| Unrealised gains or losses for the period included in profit or loss
for receivables held at the end of the reporting period |
— |
|
|
3 919 |
|
The Group’s exposure to credit and currency risk relating to trade and other receivables is disclosed in this note and note 3.
Performance of trade debtors and receivables from related parties is assessed to be as follows:
| |
|
|
|
|
|
|
| |
Gross
R’000 |
|
Impairment
R’000 |
|
Net
R’000 |
|
| 31 May 2017 |
|
|
|
|
|
|
| Fully performing |
2 459 389 |
|
— |
|
2 459 389 |
|
| Past due by one to 30 days |
20 341 |
|
(4 681) |
|
15 660 |
|
| Past due by 31 to 60 days |
7 408 |
|
(32) |
|
7 376 |
|
| Past due by 61 to 90 days |
2 938 |
|
(190) |
|
2 748 |
|
| Past due by more than 90 days |
32 443 |
|
(14 117) |
|
18 326 |
|
| |
2 522 519 |
|
(19 020) |
|
2 503 499 |
|
| 31 May 2016 |
|
|
|
|
|
|
| Fully performing |
2 313 935 |
|
— |
|
2 313 935 |
|
| Past due by one to 30 days |
100 853 |
|
(342) |
|
100 511 |
|
| Past due by 31 to 60 days |
32 298 |
|
(118) |
|
32 180 |
|
| Past due by 61 to 90 days |
16 346 |
|
(150) |
|
16 196 |
|
| Past due by more than 90 days |
46 476 |
|
(11 660) |
|
34 816 |
|
| |
2 509 908 |
|
(12 270) |
|
2 497 638 |
|
| Portfolio impairment |
— |
|
(1 580) |
|
(1 580) |
|
| |
2 509 908 |
|
(13 850) |
|
2 496 058 |
|
Receivables in respect of starter pack debtors are included in fully performing debtors above.
Trade receivables are discounted at a discount rate of 10.5% per annum (2016: 10.5% per annum) over average
debtors’ days outstanding. The effect of discounting of the trade receivables balance which amounts to
R8.271 million (2016: R9.514 million) is not taken into account in the previous table.
The Group holds guarantees to the value of R30 million (2016: R50 million) as security over specific customers
included in trade receivables. The Group has further insurance cover to the value of R245 million (2016: R375 million)
over trade receivable balances with certain material customers. All insured values exclude VAT.
The trade receivables that are neither past due nor impaired relate to independent customers for whom there is no
recent history of default.
Sundry debtors are considered to be fully performing.
| |
|
|
|
|
|
| |
2017
R’000 |
|
|
2016
R’000 |
|
| Provision for impairment of receivables |
|
|
|
|
|
| Balance at the beginning of the year |
13 850 |
|
|
10 927 |
|
| Allowances made during the year |
20 811 |
|
|
8 891 |
|
| Disposal of subsidiary |
— |
|
|
(5 814) |
|
| Amounts utilised and reversal of unutilised amounts |
(15 641) |
|
|
(154) |
|
| At 31 May |
19 020 |
|
|
13 850 |
|
| There is a cession of trade receivables of R2.330 billion (2016: R2.289 billion) in favour of Investec Bank Limited as security for facilities referred to in note 3 |
|
|
|
|
|
| The Group considers its maximum exposure in respect of trade receivables which have not been impaired, without taking into account any collateral and financial guarantees, to be as follows: |
|
|
|
|
|
| Group 1 |
9 232 |
|
|
30 525 |
|
| Group 2 |
2 479 711 |
|
|
2 453 930 |
|
| Group 3 |
13 195 |
|
|
11 603 |
|
| Total unimpaired trade receivables |
2 502 138 |
|
|
2 496 058 |
|
The effect of discounting of the trade receivables is not taken into account in the table above.
The rating groups for counterparties are categorised as follows:
Group 1 – New customers/related parties (less than six months).
Group 2 – Existing customers/related parties (more than six months) with no defaults in the past.
Group 3 – Existing customers/related parties (more than six months) with some defaults in the past.
All defaults were fully recovered or are in the process of being recovered.
|