AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
5 . GOODWILL AND INTANGIBLE ASSETS
Notes
GROUP 2021 R ' m
2020 R ' m
Goodwill 5.1 35 35 Intangible asset 5.2 98 6 Total carrying value 133 41
5.1 . |
Goodwill |
GROUP |
|
2021 R ' m |
2020 R ' m |
Carrying value at the beginning of year |
35 |
9 |
Fair value at initial recognition |
41 |
15 |
Accumulated impairment provision |
( 6 ) |
( 6 ) |
Movements during the year : Goodwill acquired through business combination ( s ) * |
29 |
26 |
Decrease due to impairments recognised |
( 29 ) |
- |
Carrying value at the end of year |
35 |
35 |
Fair value at initial recognition |
70 |
41 |
Accumulated impairment provision |
( 35 ) |
( 6 ) |
* The goodwill acquired during the year relates to Suidwes IT Solutions 2 ( Pty ) Ltd ( 2020 : relates to the acquisitions of Falcon Agricultural Equipment ( Pty ) Ltd and Grainovation ( Pty ) Ltd ). Refer to note 6.2 for further details . Goodwill is tested for impairment on an annual basis during the last quarter of each financial year . The net asset value of Falcon Agricultural Equipment ( Pty ) Ltd (" Falcon ") and Staalmeester Agricultural Equipment ( Pty ) Ltd (" Staalmeester ") were compared to the value-in-use calculations of these business units . The calculations were performed using the price-earnings (" PE ") ratio valuation method by applying an average PE ratio of 4.8 and 5.6 for Falcon and Staalmeester respectively to an average forecasted profit after tax for the next three years .
The PE ratios were benchmarked against market averages and past transactions . The valuations were in excess of the respective net asset values and no impairment charge was consequently recognised on goodwill . ( 2020 : The investments in Falcon Agricultural Equipment ( Pty ) Ltd and Staalmeester Agricultural Equipment ( Pty ) Ltd delivered results beyond the required rate of return as determined at the inception of the investment ).
Refer to note 6.2 regarding goodwill recognised on Suidwes IT Solutions 2 ( Pty ) Ltd (" SWITO 2 "). The company was in a net liability position at 30 April 2021 . Therefore , goodwill is expected not to be recovered and a R29 million impairment charge was recognised in profit and loss .
5.2 . |
Intangible assets |
GROUP |
2021 R ' m |
2020 R ' m |
Intangible assets Carrying value at the beginning of year |
6 |
- |
Cost price at initial recognition |
6 |
- |
Accumulated amortisation and impairments |
- |
- |
Movements during the year : Additions * |
- |
6 |
Business combinations ** |
95 |
- |
Amortisation |
( 3 ) |
- |
Carrying value at the end of year |
98 |
6 |
Cost price at initial recognition |
101 |
6 |
Accumulated amortisation and impairments |
( 3 ) |
- |
* During the prior financial year the company acquired intellectual property ( IP ) relating to a laser-based volume measuring devices which the seller has |
developed on behalf of , and with the assistance of Senwes . |
** Refer to note 6.2 . |
Agribel Holdings Limited Reg nr : 1996 / 017629 / 06 AGRIBEL ANNUAL FINANCIAL REVIEW 2021
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