AFRICAN DAWN ANNUAL REPORT 2019 Notes to the Financial Statements continued Annual Financial Statements For the year ended 28 February 2019 63 Movement in impairment 2019 2018 R’000 R’000 Opening balance as previously stated 58,186 51,076 Adjustment for IFRS 9 related to prior year ^ 1,130 - Balance in terms of IFRS 9/IAS 39 59,316 51,076 Impairment raised 5 7,110 Impairment reversed on loans written off (3,624) - Reversal of impairment due to improved net asset value (693) - 55,004 58,186 All the loans are unsecured, interest free and have no fixed terms of repayment, except as indicated below. # These loans were written off at year end. * The loans are sub-ordinated to the extent that the subsidiaries' liabilities exceed the assets in favour of other creditors of the subsidiaries for as long as the subsidiaries' liabilities exceeds the assets. ~ In 2018 the loan from Bhenka Financial Services Proprietary Limited was reduced by R3,685 million in line with the settlement with SARS (refer to Note 14). Loans to Group companies impaired All of the above loans are classified as stage 2, under performing in both 2019 and 2018. The expected credit loss on stage 2 loans has been calculated based on the lifetime Expected Credit Losses (“ECL”). The ECL is calculated taking into account the net asset value of the subsidiaries that take into account the ECL calculation of the subsidiary financial assets. The ECL on the financial assets of the subsidiaries took into account the same assumptions as disclosed Note 1.15. ^ The impact of IFRS 9 relating to the prior year has been taken into account in the statement of changes in equity as the company has elected not to restate prior years. The impact is reflected in the loan to Elite group as indicated in Note 1.2. 9. Trade and other receivables Financial assets at amortised cost: Group Company 2019 2018 2019 2018 R’000 R’000 R’000 R’000 Trade receivables 26,452 30,291 - 37 Impaired allowance # (11,667) (9,440) - - Deposits 236 286 - - Phezula (A) - 418 - - Thinkroom (B) - 946 - 946 Other receivables 327 340 - 1 Non-financial receivables: VAT 39 10 34 10 15,387 22,851 34 994 (A) Phezula the previous owners of SME Snapshot were given a cash loan to assist with further development of the software in SME Snapshot. (B) Thinkroom the purchaser of associate Grindstone Accelerator Proprietary Limited settled the outstanding balance during the current financial year. The loan was settled during the year. # The impairment allowance in 2018 have been reclassified to offset the deemed interest of (R152) as this is part of the Impairment testing process. (refer Note 35) Refer to Note 33 for a detailed analysis of the trade receivables
AFDAWN AR FINAL 2019
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