EAPCC_Annual_Report_.. - Investing In Africa

2010/2011
EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2011
2011 2010
KShs’000
KShs’000
12 TRADE AND OTHER RECEIVABLES
Gross trade receivables 664,847 604,574
Impaired trade receivables (278,145) (222,691)
Net trade receivables 386,702 381,883
Staff receivables 42,344 25,207
Deposits, prepayments and other receivables 535,457 264,887
964,503 671,977
Trade receivables are non-interest bearing. The average credit period on sales of finished goods is 15 days. The bulk of
the trade receivables are covered by bank guarantees in favour of the company. For terms and conditions relating to related
party receivables, refer to note 13. Before accepting any new customer, the company uses a credit scoring system
to assess the potential customer’s credit quality and defines credit limits by customer. Limits and scoring attributed to
customers are reviewed twice a year.
As at 30 June, the aging analysis of trade receivables was as follows:
2011 2010
KShs’000
KShs’000
Neither past due nor impaired 166,515 165,712
Past due but not impaired trade receivables:
Between 15 and 30 days 62,912 35,963
Between 31 and 60 days 6,282 645
Over 60 days 150,993 179,563
Total trade receivables not impaired 386,702 381,883
Impaired trade receivables 278,145 222,691
Gross trade receivables 664,847 604,574
The company has provided for all receivables that are impaired. These receivables are over 120 days old.
The movement in the provision for credit losses is as set out below:
Trade Other Total Total
receivables receivables 2011 2010
KShs’000 KShs’000 KShs’000 KShs’000
At the beginning of the year 222,691 88,340 311,031 258,452
Additions 55,454 - 55,454 -
Reversals - - - -
Utilised - (38,116) (38,116) 52,579
As at 30 June 278,145 50,224 328,369 311,031
60
In determining the recoverability of trade receivables, the company considers any change in the credit quality of
the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit
risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that there is
no further credit provision required in excess of the allowance for credit losses already recognized.
EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS 2010/2011