Senwes Annual Financial Statements 2022 | Page 27

SENWES ANNUAL FINANCIAL STATEMENTS 2022
5.1
Goodwill
GROUP
COMPANY
2022 R ' m
2021 R ' m
2022 R ' m
2021 R ' m
Carrying value at the beginning of year
35
35
-
-
Fair value at initial recognition
64
35
-
-
Accumulated impairment provision
( 29 )
-
-
-
Movements during the year : Goodwill acquired through business combination ( s ) *
16
29
-
-
Decrease due to impairments recognised **
( 8 )
( 29 )
-
-
Carrying value at the end of year
43
35
-
-
Fair value at initial recognition
80
64
-
-
Accumulated impairment provision
( 37 )
( 29 )
-
-
* The goodwill acquired during the year relates to SENWK ( Pty ) Ltd ( 2021 : relates to Suidwes IT Solutions 2 ( Pty ) Ltd ). Refer to note 6.1 for further details . ** The impairment loss was allocated to the corporate reportable segment in terms of the segmental results ( note 1.2 ).
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 a consolidated value-in-use calculation of these business units , due to the subsequent merger of these units . The calculation was performed using the discounted cash flow (" DCF ") valuation method by applying a weighted average cost of capital (" WACC ") rate of 17,8 %, over an eight year period and a perpetual growth rate of 2 %.
The valuation was in line with the combined net asset value of these units and no impairment charge was consequently recognised on goodwill .
2021 : The net asset values of Falcon and 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 .
Refer to note 6.1 regarding goodwill recognised on Suidwes IT Solutions 2 ( Pty ) Ltd (" SWITO 2 ") in the prior year . The company was in a net liability position at 30 April 2021 . Therefore , goodwill was expected not to be recovered and a R29 million impairment charge was recognised in profit and loss .
5.2
Intangible Assets
GROUP
COMPANY
2022 R ' m
2021 R ' m
2022 R ' m
2021 R ' m
Cost
138
110
6
6
Intellectual property
6
6
6
6
Brandnames , patents , trademarks and other rights
54
47
-
-
Computer software
8
3
-
-
Customer relationships
56
40
-
-
Supplier agreements
11
11
-
-
Accreditation
3
3
-
-
Accumulated amortisation and impairments
( 20 )
( 12 )
( 1 )
( 1 )
Intellectual property
( 1 )
( 1 )
( 1 )
( 1 )
Brandnames , patents , trademarks and other rights
( 6 )
( 6 )
-
-
Computer software
( 4 )
( 3 )
-
-
Customer relationships
( 8 )
( 2 )
-
-
Supplier agreements
-
-
-
-
Accreditation
( 1 )
-
-
-
Total carrying value
118
98
5
5
2022 - Reconciliation of movements on intangible assets
Balance at the beginning of the year R ' m
Business combinations
1
R ' m
Additions R ' m
Amortisation R ' m
Balance at the end of the year
R ' m
GROUP - 2022 Intellectual property
5
-
-
-
5
Brandnames , patents , trademarks and other rights *
41
-
7
-
48
Computer software
-
-
5
( 1 )
4
Customer relationships *
38
16
-
( 6 )
48
Supplier agreements
11
-
-
-
11
Accreditation
3
-
-
( 1 )
2
Total
98
16
12
( 8 )
118
* The remaining amortisation period of significant finite intangible assets are 8,5 years for trademarks and 8 to 9 years for customer relationships .
COMPANY - 2022
Intellectual property
5
-
-
-
5
Total
5
-
-
-
5

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