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33.
FINANCIAL INSTRUMENTS
(continued)
33.2 Credit risk
(continued)
33.2.1 Trade receivables
(continued)
The total number of debtors per reporting division was obtained and the average turnover per trade debtor was calculated for each
reporting division. Based on the average turnover per trade debtor in comparison to the group’s total revenue for the year, there was no
significant concentration of credit risk to any single trade debtor. The concentration of credit risk is therefore limited due to the customer
base being large and independent.
As a function of the decentralised structure, each operation establishes an impairment allowance that represents its estimate of incurred
losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to
individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have
been incurred but not yet identified.
The review of the impairment allowances in respect of trade and other receivables is monitored under the oversight of the divisional audit
and risk committees, and ultimately the Bidcorp group audit and risk committee. The operations’ average credit period depend on the
local trends as well as the creditworthiness of their customers. The majority of the customers are given credit terms ranging from cash on
delivery to 60 days from statement. The largest impairment raised for a specific trade receivable was obtained for each reporting operation
and calculated as a percentage of the group’s total impairment allowance. It was determined that such percentage did not exceed 2,0%
(2016: 2,3%) of the total allowance raised at year-end.
2017
R’000
2016
R’000
Movement in impairment allowance in respect of trade receivables
Balance at July 1
548 531
377 288
Allowances raised during the year
169 453
256 832
Australasia
8 715
33 650
United Kingdom
31 930
18 070
Europe
72 361
147 440
Emerging Markets
56 447
57 672
Bad debts written off during the year
(133 858)
(150 467)
Australasia
(21 677)
(28 750)
United Kingdom
(28 000)
(19 236)
Europe
(72 162)
(80 616)
Emerging Markets
(12 019)
(21 865)
Acquisition of businesses
48 988
2 243
Australasia
390
–
United Kingdom
2 516
2 243
Europe
46 082
–
Transfer as a result of unbundling
Emerging Markets
–
39 698
On disposal of business
(7 173)
(403)
Emerging Markets
(7 173)
(383)
Bidvest Services
–
(20)
Allowances reversed during the year
(41 662)
(47 835)
United Kingdom
(853)
(3 846)
Europe
(8 961)
(3 462)
Emerging Markets
(31 848)
(40 527)
Exchange rate adjustments
(53 202)
71 175
Balance at June 30
531 077
548 531
119
Annual integrated report 2017
Bid Corporation Limited