|
Financial instruments carried on the statement of financial position include:
Financial assets
- Loans receivable
- Loans receivable from associates and joint ventures
- Trade and other receivables
- Advances to customers
- Cash and cash equivalents
- Financial assets at fair value through profit or loss
- Financial assets at fair value through other comprehensive income
Financial liabilities
- Borrowings
- Trade and other payables
- Lease liabilities
- Contingent purchase consideration
- Financial guarantee contracts
- Financial liabilities at fair value through profit or loss
Financial assets and liabilities are recognised when the Group becomes a party to the contractual
provisions of the instruments.
Financial assets are classified as current if expected to be realised within 12 months of the statement
of financial position date; if not, they are classified as non-current. Financial liabilities are classified as
non-current if the Group has the right to defer settlement beyond 12 months of the statement of
financial position date.
The Group classifies financial assets on initial recognition as measured at amortised cost, fair value
through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) on the
basis of the Group�s business model for managing the financial asset and the cash flow
characteristics of the financial asset.
Financial assets are classified as follows:
| Measurement category |
|
Criteria |
| Amortised cost |
|
The asset is held within a business model with the objective to
collect the contractual cash flows, and the contractual terms give
rise on specified dates to cash flows that are solely payments of
principal and interest on the principal outstanding. |
| Fair value through profit or loss |
|
Debt investments that do not qualify for measurement at
amortised cost or fair value through other comprehensive income
and equity investments that are held-for-trading. |
| Fair value through other
comprehensive income |
|
Derivatives that the Group designates as hedging instruments in
respect of foreign currency risk and interest rate risk in fair value
hedges, cash flow hedges, or hedges of net investments in foreign
operations, which meet the hedging criteria. |
Financial assets are not reclassified unless the Group changes its business model for managing those
financial assets. In rare circumstances where the Group does change its business model,
reclassifications are done prospectively from the date that the Group changes its business model.
Financial liabilities are classified as measured at amortised cost except for those derivative liabilities
that are measured at fair value through profit or loss.
Measurement on initial recognition
All financial assets (unless it is a trade receivable without a significant financing component) and
liabilities are initially measured at fair value, including transaction costs, except for those classified as
fair value through profit or loss which are initially measured at fair value excluding transaction costs.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through profit or loss are recognised immediately in profit or loss. A trade receivable
without a significant financing component is initially recognised at the transaction price.
Subsequent measurement
Subsequent to initial recognition, financial instruments are measured as described below:
| Category |
|
Subsequent measurement |
| Financial assets |
|
|
| Amortised cost |
|
These financial assets are subsequently measured at amortised
cost using the effective interest method, less any impairment
losses. Interest income, foreign exchange gains and losses and
impairments are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss. Where the amortised
cost using the effective interest method is materially lower than
the fair value, this is separately disclosed. |
| Fair value through profit or loss |
|
These financial assets are subsequently measured at fair value
and changes therein (including any interest or dividend income)
are recognised in profit or loss. |
| Fair value through other
comprehensive income |
|
The effective portion of changes in the fair value of derivatives
and other qualifying hedging instruments that are designated and
qualify as cash flow hedges are recognised in other
comprehensive income. The gain or loss relating to the ineffective
portion are recognised immediately in profit or loss, and are
included in finance costs. |
| Financial liabilities |
|
|
| Amortised cost |
|
These financial liabilities are subsequently measured at amortised
cost using the effective interest method. Interest expenses and
foreign exchange gains and losses are recognised in profit or loss.
Where the amortised cost using the effective interest method is
materially more than the fair value, this is separately disclosed. |
| Fair value through profit or loss |
|
These financial liabilities are subsequently measured at fair value
with changes therein recognised in profit or loss. |
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the assets have expired
or have been transferred and the Group has transferred substantially all risks and rewards of
ownership. Financial liabilities are derecognised when the obligations specified in the contracts are
discharged, cancelled or expire. On derecognition of a financial asset/liability, any difference
between the carrying amount extinguished and the consideration paid is recognised in profit or loss.
Impairment
Under IFRS 9, the Group calculates its allowance for credit losses as expected credit losses (ECLs)
for financial assets measured at amortised cost. ECLs are a probability weighted estimate of credit
losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference
between the cash flows due to the Group in accordance with the contract and the cash flows that
the Group expects to receive). ECLs are discounted at the original effective interest rate (EIR) of the
financial asset.
In order to calculate ECLs, the Group aggregates trade receivables by customer type, as disclosed
in the trade and other receivables note (note 3.5.2). The Group applies the simplified approach to
determine the ECL for trade and other receivables. This results in calculating lifetime ECLs for trade
and other receivables. ECLs for trade and other receivables are calculated using a provision matrix.
Refer to the credit risk note (note 3.1) for more detail about ECLs and how this is calculated.
ECLs for receivables other than trade receivables have been determined using the general approach
in IFRS 9. Under the general approach, an entity calculates ECLs for loans and receivables at initial
recognition by considering the consequences and probabilities of possible defaults only for the
next 12 months, rather than the life of the asset. It continues to apply this method until a significant
increase in credit risk has occurred, at which point the loss allowance is measured based on
lifetime ECLs.
Financial risk management
In the course of its business, the Group is exposed to a number of financial risks, namely credit risk,
liquidity risk and market risk (including foreign currency, interest rate and other price risks). This note
presents the Group�s objectives, policies and processes for managing its financial risk and capital.
Risk management is monitored and managed by key personnel of each entity in the Group on a daily
basis, based on their specific operational requirements.
Classes of financial instruments
|
|
| 2021
R’000 |
2020
R’000 |
| Financial assets |
|
| |
| Trade and other receivables* |
| 3 287 121 |
3 475 089 |
| Cash and cash equivalents |
| 2 417 325 |
2 014 917 |
| Loans to associates and joint ventures (refer to note 2.1) |
| 22 763 |
9 488 |
| Loans receivable |
| 69 804 |
72 120 |
| Advances to customers |
| 1 812 288 |
1 682 075 |
| Financial assets at fair value through profit or loss |
| 219 139 |
249 538 |
| Financial assets at fair value through other comprehensive income |
| 6 915 |
– |
|
|
| 7 835 355 |
7 503 227 |
| Financial liabilities |
|
| |
| Interest-bearing borrowings |
| 1 706 163 |
2 305 209 |
| Non-interest-bearing borrowings |
| 989 |
13 952 |
| Trade and other payables* |
| 5 869 710 |
4 553 659 |
| Lease liability |
| 73 125 |
141 123 |
| Derivative liability |
| 68 178 |
77 524 |
| Liquidity support |
| – |
350 410 |
| Other financial liabilities at fair value through profit or loss |
| 564 |
7 152 |
| Financial guarantee contracts |
| 105 621 |
201 474 |
| Bank overdraft |
| 118 |
192 |
|
|
| 7 824 468 |
7 650 695 |
| Net financial position |
| 10 887 |
(147 468) |
| * |
Trade and other receivables and trade and other payables exclude non-financial instruments. |
Reconciliation of financial assets and non-financial assets
|
|
| |
2021 |
|
|
2020 |
|
|
|
| Total
R’000 |
Financial
asset
R’000 |
Non-
financial
asset
R’000 |
Total
R’000 |
Financial
asset
R’000 |
Non-
financial
asset
R’000 |
| Loans receivable |
| 69 804 |
69 804 |
– |
72 120 |
72 120 |
– |
| Trade and other receivables |
| 3 752 019 |
3 287 121 |
464 898 |
3 929 743 |
3 475 089 |
454 654 |
| Advances to customers |
| 1 812 288 |
1 812 288 |
– |
1 682 075 |
1 682 075 |
– |
| Cash and cash equivalents |
| 2 417 325 |
2 417 325 |
– |
2 014 917 |
2 014 917 |
– |
| Financial assets at fair value through profit or loss |
| 219 139 |
219 139 |
– |
249 538 |
249 538 |
– |
| Financial assets at fair value through other comprehensive income |
| 6 915 |
6 915 |
– |
– |
– |
– |
| Loans to associates and joint ventures |
| 22 763 |
22 763 |
– |
9 488 |
9 488 |
– |
|
|
| 8 300 253 |
7 835 355 |
464 898 |
7 957 881 |
7 503 227 |
454 654 |
Reconciliation of financial liabilities and non-financial liabilities
|
|
| |
2021 |
|
|
2020 |
|
|
|
| Total
R’000 |
Financial
liability
R’000 |
Non-
financial
liability
R’000 |
Total
R’000 |
Financial
liability
R’000 |
Non-
financial
liability
R’000 |
| Interest-bearing borrowings |
| 1 706 163 |
1 706 163 |
– |
2 305 209 |
2 305 209 |
– |
| Non-interest-bearing borrowings |
| 989 |
989 |
– |
13 952 |
13 952 |
– |
| Trade and other payables |
| 6 052 849 |
5 869 710 |
183 139 |
4 611 643 |
4 553 659 |
57 984 |
| Lease liability |
| 73 125 |
73 125 |
– |
141 123 |
141 123 |
– |
| Derivative liability |
| 68 178 |
68 178 |
– |
77 524 |
77 524 |
– |
| Liquidity support |
| – |
– |
– |
350 410 |
350 410 |
– |
| Other financial liabilities at fair value through profit or loss |
| 564 |
564 |
– |
7 152 |
7 152 |
– |
| Financial guarantee contracts |
| 105 621 |
105 621 |
– |
201 474 |
201 474 |
– |
| Bank overdraft |
| 118 |
118 |
– |
192 |
192 |
– |
|
|
| 8 007 607 |
7 824 468 |
183 139 |
7 708 679 |
7 650 695 |
57 984 |
|