COMPANY           GROUP  
2019     2018     (R’million)   2019      2018   
            19 Trade and other receivables            
            19.1 Analysis of trade and other receivables            
              Trade receivables   3 564,3      3 372,5   
              VAT receivable   73,1      76,1   
15,3     326,7       Sundry receivables   192,5      544,7   
              Prepayments   121,4      103,8   
              Pension fund contribution holiday (refer note 28)   75,7      64,5   
2,5     0,2       Tax receivable   40,6      32,7   
              Contract asset – rebates   3,6      12,6   
17,8     326,9       Total gross receivables   4 071,2      4 206,9   
              Impairment provision – trade receivables   (83,4)     (89,0)  
17,8     326,9       Total net receivables   3 987,8      4 117,9   
              Trade receivables, which generally have 30 to 60 day terms, are non-interest-bearing and are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. Included within trade receivables are derivative assets of R27,0 million (2018: R14,7 million) which are carried at fair value (refer note 31.7 for further details).            
            19.2 Impairment provisions            
              Balance at the beginning of the year   (89,0)     (56,0)  
              Utilised during the year   8,4      9,2   
              Reversed during the year   9,1      1,8   
              Raised during the year   (11,9)     (44,0)  
              Balance at the end of the year*   (83,4)     (89,0)  
* IFRS 9 introduces a new trade debtors impairment model based on “expected credit loss” (ECL) and not the previously used “incurred loss” approach, resulting in the recognition of a loss allowance before the credit loss is incurred. Factors that are considered must account for current conditions along with reasonable and supportable forward-looking information that is not time consuming or costly to obtain. The company has adopted the “simplified approach” in determining the expected credit loss.

Considering that IFRS 9 does not provide an explicit guide or any specific requirements, we have opted to use a provision matrix approach to calculate the expected credit loss. This involves allocating individual trade debtors into groups that share similar credit risk characteristics.

Customers’ risk rating was determined by applying the following criteria:

  • Historical data spanning three years which include payment history and behavioural trends
  • Economic environment that has a significant impact on each customer
  • Geographical location of the customer.

The percentage used to calculate the ECL for each risk segment was determined by:

  • Past three years: specific impairment provisions
  • Past three years: specific bad debts written off
  • Past three years: trade credit insurance claims ratios
  • Management’s forward-looking analysis of the FMCG environment
  • An unbiased approach that involves evaluating a range of possible outcomes based on current economic trends.

The company makes use of selective trade credit insurance. For those debtors that are not insured, the full carrying value of the outstanding debt was included in the calculation of the ECL. For those debtors that are insured, only the uninsured portion of the debt was included in the calculation of the ECL.

A process of identifying specific impairments is included in the total impairment provision. Management will raise a specific impairment provision when all internal and or pre-legal efforts to collect overdue debt have been exhausted.

  Performing trade receivables        
(R’million) Low risk  Medium risk 
level 1 		 Medium risk 
level 2  		Medium risk 
level 3  		  Defaulted 
receivables 		 Defaulted 
receivables 		  
As at 30 September 2019 2 092,2  826,9  478,1  152,7    14,4  3 564,3   
Allowance for doubtful debts (0,8) (37,4) (4,2) (26,6)   (14,4) (83,4)  
Net amount 2 091,4  789,5  473,9  126,1    –  3 480,9   
% risk mitigating factor –  (4,5) (0,9) (17,4)   (100,0) (2,3)  
COMPANY           GROUP  
2019     2018     (R’million)   2019     2018  
            19.3 Past due analysis            
              As at 30 September, the ageing of trade receivables was as follows:            
              Not past due   2 558,5     3 021,4  
              Past due:            
              Current to 60 days   871,3     272,3  
              61 to 90 days   94,8     28,5  
              91 to 180 days   26,9     18,9  
              > 180 days   12,8     31,4  
              Total   3 564,3     3 372,5  
              As at 30 September, the ageing of all other receivables, excluding tax receivables and prepayments, was as follows:            
3,3     297,4       Not past due   161,1     599,1  
              Past due:            
0,3             Current to 60 days   100,1     64,4  
              61 to 90 days   0,6     5,7  
6,3     9,0       91 to 180 days   71,0     5,6  
7,9     20,5       > 180 days   12,1     23,1  
17,8     326,9       Total   344,9     697,9  
            19.4 Trade receivable analysis            
              Industry spread of trade receivables:            
              Retail   1 743,5     1 447,0  
              Wholesale/Distributors   1 123,5     1 197,7  
              Export   478,0     642,7  
              Other   219,3     85,1  
              Total   3 564,3     3 372,5  
              Geographical spread of trade receivables:            
              South Africa   2 988,0     2 418,8  
              Rest of Africa   425,3     823,8  
              Europe   50,0     40,8  
              Rest of the World   101,0     89,1  
              Total   3 564,3     3 372,5  
      19.5       Collateral held            
              Fair value of collateral held   16,3     19,0  
              Collateral held represents hawker deposits which may be applied against accounts which are in default.