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33.
FINANCIAL INSTRUMENTS
(continued)
33.2 Credit risk
(continued)
33.2.1 Trade receivables
(continued)
Collateral held on past due amounts
2017
2016
Fair value of
collateral
held
R’000
Trade
receivables
net of
impairment
allowance
R’000
Fair value of
collateral
held
R’000
Trade
receivables
net of
impairment
allowance
R’000
Cover by credit insurance
Australasia
79 773
79 773
79 397
79 397
United Kingdom
49 054
49 054
44 919
44 919
Europe
146 268
146 268
82 781
140 153
Emerging Markets
104 812
76 863
117 353
38 604
Total
379 907
351 958
324 450
303 073
In certain instances the group’s operations reserve the right to collect inventory sold when the outstanding debt is not settled by the
customer. The collateral detailed above is in addition to these aforementioned measures taken to reduce credit risk in respect of trade
receivables.
33.2.2 Investments, interest in associates and investment in jointly controlled entity
The classes for investments are listed held-for-trading, unlisted held-for-trading and unlisted available-for-sale. Refer to note 18 for the
carrying amounts for each of these categories. The group manages its credit risk for investments by investing in reputable instruments.
However, there was an impairment loss of R43,4 million (2016: R119,1 million) that was recognised in respect of investments which related
to Icelandic Water Holdings ehf.
There were no impairments noted in relation to the interest in associates and investment in jointly controlled entity.
33.2.3 Cash and cash equivalents
The credit risk on cash and cash equivalents is addressed by utilising financial institutions of good standing for investment and cash
management purposes.
33.3 Liquidity risk
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.
The group manages its borrowings centrally for each of the segments. The divisions within each segment are therefore not responsible for
the management of liquidity risk but rather senior management for each of these segments is responsible for implementing procedures to
manage the regional liquidity risk.
121
Annual integrated report 2017
Bid Corporation Limited