2012 Integrated report - Sappi

Notes to the group annual financial statements
for the year ended September 2012
16. Trade and other receivables continued
16.2 Analysis of amounts past due
September 2012
The following provides an analysis of the amounts that are past the due contractual maturity dates:
Not impaired Impaired Total
Less than 7 days overdue 13 – 13
Between 7 and 30 days overdue 14 – 14
Between 30 and 60 days overdue 1 – 1
More than 60 days overdue – 10 10
September 2011
The following provides an analysis of the amounts that are past the due contractual maturity dates:
28 10 38
Not impaired Impaired Total
Less than 7 days overdue 30 – 30
Between 7 and 30 days overdue 12 – 12
Between 30 and 60 days overdue 4 – 4
More than 60 days overdue 2 15 17
48 15 63
All amounts due which are beyond their contractual repayment terms are reported to divisional management on a regular basis.
Any provision for impairment is required to be approved in line with the group limits of authority framework.
The group holds no collateral (2011: no collateral) against overdue trade receivables.
The group has granted facilities to customers to buy on credit for the following amounts:
2012 2011
Less than US$0.5 million 289 299
Less than US$1 million but equal to or greater than US$0.5 million 258 277
Less than US$3 million but equal to or greater than US$1 million 524 597
Less than US$5 million but equal to or greater than US$3 million 219 213
Equal to or greater than US$5 million 939 1,031
2,229 2,417
16.3 Trade receivables securitisation
The group operates two trade receivables securitisation programmes due to the cost effectiveness of such structures.
The Sappi Southern African securitisation programme is off-balance sheet and is described in detail in note 16.4.
In fiscal 2011, the group replaced its existing on-balance sheet securitisation programmes with a single three-year committed trade
receivables purchase programme with UniCredit Bank AG with a programme limit of €360 million. Trade receivables sold in terms of
this programme are disclosed on the balance sheet together with a corresponding liability.
At fiscal year-end, trade receivables with a value of US$490 million (2011: US$491 million) have been pledged as collateral for amounts
received as funding under the programme of US$377 million (2011: US$368 million). The group is restricted from selling or repledging
the trade receivables that have been pledged as collateral for this liability. For more detail on this programme, refer to note 20.
16.4 Off-balance sheet structures
Letters of credit discounting
To improve the group’s working capital, the group sells certain Letters of Credit to Royal Bank of Scotland (‘RBS’), Hong Kong and Union
Bancaire Privee (‘UBP’), Switzerland at each fiscal month-end on a non-recourse basis.
Scheckwechsel
The Scheckwechsel is a financial guarantee supplied by Sappi to the bank of certain customers (trade receivables) who wish to obtain a
loan to finance early payment of specified trade receivables (thereby benefiting from an early settlement discount). By signing the
Scheckwechsel, Sappi provides a financial guarantee to the bank of the customer.
This financial guarantee contract is initially recognised at fair value. The fair value at inception is zero as the risk of Sappi having to
reimburse the bank is nil (there is no evidence that the customer will not reimburse its loan to the bank), there is no guarantee fee payable
by the bank and the Scheckwechsel is a short-term instrument (maximum 90 days). Subsequently, the financial guarantee contract is
measured at the higher of:
(i) the amount determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and
(ii) the amount initially recognised less any cumulative amortisation.
As no event of default has occurred, no provision has been set up and the fair value at year-end remains at zero. However, according to
IAS 37, a contingent liability of US$29 million (2011: US$32 million) has been disclosed in this respect.
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