Notes to the Group annual financial statements | Note 3.3

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.

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:

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:

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.

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.

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.

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

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.