bold spirit - ArcelorMittal South Africa

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ArcelorMittal South Africa
Annual Report 2010
Notes to the group and company annual financial statements continued
for the year ended 31 December 2010
Group
2010
Rm
2009
Rm
2010
Rm
Company
2009
Rm
18. TRADE AND OTHER RECEIVABLES
Trade receivables
– Local 1 485 1 717 1 371 1 609
– Exports 249 1 77 183 118
Total gross trade receivables 1 734 1 894 1 554 1 727
Less allowances
Allowance for doubtful debts
– Local (1) (16) (1) (16)
– Exports (4) (1) (4) (1)
Total allowances for doubtful debts (5) (17) (5) (17)
Other allowances
– Local (178) (171) (178) (171)
– Exports (1) (1) (1) (1)
Total other allowances (179) (172) (179) (172)
Net trade receivables
– Local 1 306 1 530 1 192 1 422
– Exports 244 175 178 116
Total net trade receivables 1 550 1 705 1 370 1 538
Other receivables 146 328 120 89
Less: allowance for doubtful debts (17) (28) (17) (28)
129 300 103 61
Net value-added tax receivable 137 91 109 45
Net other receivables 266 391 212 106
Total 1 816 2 096 1 582 1 644
Average credit period for trade receivables
The sectoral split of the average credit period
on sales of goods is as follows:
– Local 34 33 34 34
– Exports 9 9 9 9
No interest is charged on trade receivables for the first 30 days from date of statement. Thereafter, interest is
charged at prime + 3% per annum on the outstanding balance.
Other receivables relate primarily to by-product sales, site rental due, prepayments and staff education and bursary
loans.
In determining the recoverability of trade and other receivables, the group and company consider any change in the
credit quality of the trade receivable from the date credit was initially granted up to the reporting date. Management
believes that there is no further credit provision required in excess of the allowance for doubtful debts.
The following allowances exist:
• Allowance for doubtful debts, which is based on the ageing of customers and the calculation of customers handed over
to the insurers, based on whether there is insurance cover or not. The amount provided for, is 10% excess for receivables
that are handed over to the insurers and the remaining 90% will be paid as the participation percentage of the insurer.
Customers without cover and older than 180 days are fully provided for. The movement in allowance for doubtful debts
is not deemed material.
• Other allowances, which relate to settlement discounts, price, quality, dispatch and related claims, are based on
the exact amounts as withheld from payment by customers, for which credit notes still have to be issued. The
movement in other allowances is not deemed material.
The group and company did not transfer any receivables to related or unrelated entities during the current or
comparative years. No factoring or securitisation arrangements were transacted.