Senwes Annual Financial Statements 2022 | Page 28

SENWES ANNUAL FINANCIAL STATEMENTS 2022

2021 - Reconciliation of movements on intangible assets

Balance at the beginning of the year R ' m

Business combinations

1

Additions R ' m

Amortisation R ' m

Balance at the end of the year

R ' m

* The remaining amortisation period of significant finite intangible assets were 9,5 years for trademarks and 9 to 10 years for customer relationships .

¹ Refer to note 6.1 .

6 . INVESTMENT IN COMPANIES

6.1 Corporate transactions and restructuring 2022

SENWK ( Pty ) Ltd (" SENWK ") During the year , Senwes acquired an additional 50 % interest in SENWK from NWK Ltd (" NWK "), the other party to the joint venture . This transaction constitutes a business combination with change in control ( joint venture to fully owned subsidiary ) in terms of IFRS 3 . The SENWK Group operates in the insurance , brokerage and administrative services industry . The effective date of acquisition and consolidation was 1 May 2021 .

Group

Fair value of assets acquired and liabilities assumed : A ….………………....... 59 Property , plant and equipment 1 Intangible assets 16 Deferred tax asset 1 Trade and other receivables ² 29 Cash and short-term deposits 72 Fiduciary assets and cash and cash equivalents 3 Other current assets 2 Deferred tax liabilities ( 11 ) Trade and other payables ( 46 ) Fiduciary liabilities ( 6 ) Provisions ( 2 ) Consideration paid ¹ B …….……………...... 75 Goodwill C =( B-A )…………… 16 ¹ The consideration paid consists of the acquisition date fair value of the equity interest in SENWK held immediately before the acquisition date as well as an

additional R26,1 million paid to NWK . A loss of R9,9 million was recognised as a result of remeasuring to fair value the equity interest in SENWK held before the business combination , and is included in the "( Loss )/ gain on disposal of investment in joint venture " line in the statement of comprehensive income . ² The fair value of trade and other receivables acquired ( R29 million ) includes a provision of Rnil million which is not expected to be collected .

Since acquisition date , and for the 2022 financial year , revenue of R51 million and a profit after tax of R9 million were contributed to the consolidated statement of comprehensive income by the SENWK Group . The acquisition became effective at the start of the 12-month accounting period .

Suidwes IT Solutions 2 ( Pty ) Ltd (" SWITO 2 ") Senwes as the legal and beneficial owner of its IT division within Senwes Ltd , disposed of its business to a separate legal entity , SWITO 2 , during the current financial year . SWITO 2 is fully owned by Africum ( Pty ) Ltd ( a fully owned indirect subsidiary of Senwes Ltd ). This is therefore a common control transaction , and excluded from the scope of IFRS 3 . There were no assets or liabilities transferred to SWITO 2 and only the operations were transferred . Refer to note 13 for more details regarding the transaction .

Hinterland SA ( Pty ) Ltd (" Hinterland SA ") In terms of the group ' s strategic intent , Agrinet ( Pty ) Ltd (" Agrinet ") and Hinterland SA ( Pty ) Ltd ( wholesale ) merged into one entity effective from 1 May 2021 .

The Agrinet business was sold as a going concern to Hinterland SA ( Pty ) Ltd therefore all of the Agrinet business operations were conducted in Hinterland SA ( Pty ) Ltd from 1 May 2021 . Effectively the wholesale operations , which were a division of Hinterland SA ( Pty ) Ltd and the Agrinet operations merged on the effective date . The transaction was concluded as an asset-for-share transaction . Agrinet continued as a property holding entity , leasing fixed property to Hinterland where the operations are being conducted .

On 1 May 2021 the operations of the retail division of Hinterland SA ( Pty ) Ltd were sold to Hinterland Holdings ( Pty ) Ltd . The assets and liabilities of the retail division were transferred to the holding company and a corresponding receivable was recognised as consideration receivable from Hinterland SA ( Pty ) Ltd .

The abovementioned transactions were accounted for as business combinations under common control and therefore excluded from the scope of IFRS 3 .

Other transactions :

During the year , KLK Landbou Ltd (" KLK ") repurchased 47 773 of their own issued shares , effectively increasing the shareholding held by Senwes to 57,8 %. The transaction resulted in a change in ownership reserve of R0,3 million being recognised in the statement of changes in equity .

R ' m

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