2008 Annual report - Sappi

Notes to the group annual financial statements // continued
for the year ended September 2008
16. Trade and other receivables (continued)
16.2 Analysis of amounts past due (continued)
September 2007
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 16 – 16
Between 7 and 30 days overdue 12 – 12
Between 30 and 60 days overdue 2 – 2
More than 60 days overdue 2 6 8
32 6 38
All amounts due which are beyond their contractual repayment terms are reported to regional management on a regular basis.
Any provision for impairment is required to be approved by the regional credit controller. All provisions for impairment greater
than US$50,000 are required to be approved by regional management. The group has a provision of US$5 million (2007:
US$6 million) against trade receivables that are past due. The group holds collateral of US$17 million (2007: US$14 million)
against these trade receivables that are past due.
US$ million 2008 2007
The group has granted facilties to customers to buy on credit for the following amounts:
Less than and equal to US$0.5 million 280 302
Less than US$1 million but equal to or greater than US$0.5 million 246 408
Less than US$3 million but equal to or greater than US$1 million 426 453
Less than US$5 million but equal to or greater than US$3 million 207 200
Equal to or greater than US$5 million 812 444
1,971 1,807
16.3 Fair value
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
16.4 Trade receivables pledged as security
Trade receivables with a value of US$415 million (2007: US$415 million) have been pledged as collateral for amounts received
from the banks in respect of the securitisation programme. The value of the associated liabilities at year end amounted to
US$360 million (2007: US$354 million). The group is restricted from selling and repledging the trade receivables that have
been pledged as collateral for the liability.
16.5 Off balance sheet structures
Letters of credit discounting
To improve the group working capital, the group sells certain Letters of Credit to ABN AMRO Hong Kong and DBS bank
(London) every month end at a discount on a non recourse basis.
‘Scheck-Wechsel’
The Scheck-Wechsel is a financial guarantee supplied to the bank of certain trade receivables who wish to obtain a loan to
finance early payment of trade receivables thereby benefiting from an early settlement discount. By signing the Scheck-
Wechsel, Sappi provides a financial guarantee to the bank of the customer. This financial guarantee contract falls under the
scope of IAS 39 Financial instruments.
This financial guarantee contract is initially recognised at fair value. At inception the risk for Sappi having to reimburse the
bank is nil because there is no evidence that the customer will not reimburse its loan to the bank. There is also no guarantee
fee due by the bank and the Scheck-Wechsel is a short term instrument (maximum 90 days). Therefore the fair value is zero
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