3.3 Financial assets
3.3.1 Loans receivable

Interest-free loans     64 421  52 729 
Interest-bearing loans receivable     56 728  43 209 
Less: Provision for impairment     (16 959) (14 224)
      104 190  81 714 
Amounts included in non-current portion of loans receivable     65 386  48 913 
Amounts included in current portion of loans receivable     38 804  32 801 

All loans receivable are unsecured and repayable within five years. Interest-bearing loans bear interest at a range of between prime and prime plus three percent. The fair value of the loans, which include loans to product distributors, approximates their carrying value. This has been corroborated through discounted cash flow calculations at the effective interest rate the lender would have been able to secure from a financing institution, using an expected payment timeframe.

3.3.2 Trade and other receivables

Trade receivables comprise receivables that are due from customers which arise from transactions for the sale of goods, rendering of services and leasing of equipment in the ordinary course of business. For details related to the ECLs, refer to note 3.2.1. Receivables for prepayments and VAT are stated at their nominal values.

The following table provides an analysis of the Group's trade and other receivables, including an analysis of trade receivables by originating transaction type as well as by counterparty:

Trade receivables arising on revenue from contracts with customers     1 668 845  1 328 295 
Banks     110 134  84 935 
Independent and informal retail customers     286 166  627 908 
Formal market retail customers     315 657  158 224 
Customers in the petroleum sector     83 441  73 538 
Receivables for starter packs     74 680  74 085 
Cell C     13 275  7 580 
Other cellular networks     531 142  122 608 
Municipalities and private utilities     254 350  179 417 
Trade receivables arising on financing transactions     341 843  2 571 784 
Cell C     248 524  2 557 395 
Other     93 319  14 389 
Less: Provision for impairment     (26 818) (66 343)
Net trade receivables     1 983 870  3 833 736 
Net sundry debtors     162 206  219 689 
Receivables from revenue recognised on fixed term contracts     130 339  134 036 
Prepayments     714 477  463 841 
VAT     69 618  92 036 
      3 060 510  4 743 338 

Included in trade receivables are debtors of R53 million (2022: R84 million) which have a cycle period in excess of 12 months but are considered current due to management expecting to realise the assets in their normal operating cycle.

CEC and Cell C entered into an agreement whereby on recapitalisation of Cell C, set-offs were performed resulting in an adjusted existing claim of R1.1 billion by CEC against Cell C. CEC accounted for the change in repayment terms as a significant modification, which resulted in the derecognition of the previous trade receivable and the recognition of a new long-term loan. Trade and other payables amounting to R872 million were set-off against trade and other receivables in line with the recapitalisation agreement. Refer to note 2.1.2 for details of the deferral loan.

Airtime purchase agreement

The amounts paid to Cell C have been treated as prepayments and not as airtime stock because, until TPC is free to sell the airtime, it does not have the associated risks and rewards of ownership. The prepayment will be tested for impairment at each reporting date and written down accordingly. The prepayment of R140 million is included above as prepayments.

Purchase of certain trade claims against Cell C

TPC accounted for the acquisition, and settlement, of the fore-mentioned claims as the purchase of airtime stock for R65 million. In respect of the last-mentioned claims acquired, TPC recognised a long-term financial asset, initially at its fair value of R53 million. Subsequently management recognised a 100% ECL against this balance taking cognisance of the unsecured nature and payment terms of the claim. The R53 million is included above as a sundry receivable.

The Group's receivables from revenue recognised on fixed term contracts comprise the following movements for the year:

Balance at the beginning of the year  134 036  54 516 
Revenue recognised – handsets, tablets and other devices  156 455  177 130 
Revenue recognised – finance revenue  20 715  13 247 
Amounts becoming due in the period  (180 867) (110 857)
Loss allowance*   —     — 
   130 339  134 036 
* The loss allowance was deemed to be insignificant.

Included in receivables from revenue recognised on fixed term contracts are amounts of R27 million (2022: R34.7 million) which have a cycle period in excess of 12 months but are considered current due to management expecting to realise the assets in their normal operating cycle of 24 months.

The fair value of the trade and other receivables approximates their carrying amounts.

3.3.3 Advances to customers

Advances to customers comprise receivables arising on financing transactions where, in substance, the nature of the business activities undertaken by certain subsidiaries of the Group is to engage in the provision of financing. Refer to note 3.1 for further detail.

Collateralised handset financing receivables      —     67 355 
Handset financing and subscription income sharing receivables     2 839 181  1 849 639 
Less: Provision for impairment     (581 979) (249 456)
      2 257 202  1 667 538 
Amounts included in non-current portion of advances to customers     810 252  547 711 
Amounts included in current portion of advances to customers     1 446 950  1 119 827 

The fair value of the advances to customers approximates their carrying amounts.

Under the Supply, Sale and Financing of Products Agreement effective 1 November 2020, Cell C no longer guarantees bad debts and cancellations and this now exposes the Group to the credit risk of the population of the underlying subscribers who are all customers of Cell C Proprietary Limited.

3.3.4 Cash and cash equivalents

Cash and cash equivalents include cash on hand and deposits held on call with banks.

Cash at bank 1 302 546 2 723 365
Cash on hand 224 226
  1 302 770 2 723 591
Bank overdraft (3) (63)
  1 302 767 2 723 528

Included in this balance is restricted cash of R41.3 million (2022: R45.8 million), received on behalf of and immediately due to third parties, which may not be utilised in the Group's ordinary course of business. There is further restricted cash of R71.1 million relating to collateral for guarantees issued by insurers on the Group's behalf.