SENWES ANNUAL FINANCIAL STATEMENTS 2022
2021 Hinterland Holdings ( Pty ) Ltd (" Hinterland ") During the 2021 financial year , Senwes obtained an additional 50 % interest in Hinterland , which brought the investment to 100 %. The acquisition of the additional 50 % was achieved by transferring fixed and movable assets from Hinterland to AFGRI , the other party to the joint venture , in exchange for their 50 % share in Hinterland . Hinterland cancelled the shares repurchased , leaving Senwes with the only remaining issued shares . This transaction constitutes a business combination with change in control ( joint venture to fully owned subsidiary ) in terms of IFRS 3 . The effective date of acquisition and consolidation was 1 October 2020 . The Hinterland Group operates mainly as a retailer of agricultural , fuel and industrial retail products to clients .
Group
Fair value of assets acquired and liabilities assumed 1 : A ….………………....... 191 Right of use assets 20 Property , plant and equipment 269 Intangible assets 21 Inventory 351 Trade and other receivables 4 233 Cash and cash equivalents 22 Deferred tax liabilities ( 8 ) Lease liabilities ( 27 ) Trade payables ( 462 ) Current financial liabilities , excluding trade payables and bank overdraft ( 225 ) Non-controlling interest ( 3 ) Consideration paid 2 B …….……………...... 103 Bargain purchase 3 C =( A-B )…………… 88
1
The amounts recognised at the acquisition date for each major class of assets acquired and liabilities assumed . 2 The consideration paid consists of the acquisition date fair value of the equity interest in Hinterland held immediately before the acquisition date . A gain of R28
million was recognised as a result of remeasuring to fair value the equity interest in Hinterland held before the business combination , and is included in the " Gain on disposal of investment in joint venture " line in the statement of comprehensive income . 3 The bargain purchase is included in the " Gain on bargain purchase of acquisitions " line item in the statement of comprehensive income . The transaction
resulted in a gain mainly due to the fair value of the investment in the joint venture being lower than the remaining fair value of assets and liabilities as a result of the separation agreement . 4 The fair value of trade and other receivables acquired ( R233 million ) included a provision of R4 million which was not expected to be collected .
R ' m
Since acquisition date , and for the 2021 financial year , revenue of R851 million and a profit after tax of R23 million were contributed to the consolidated statement of comprehensive income by Hinterland , whereas the revenue and profit contributed by the company for the 12-month accounting period , as though the acquisition had been as of the beginning of the 2021 reporting period , were R2 779 million and R51 million , respectively .
Other transactions : Before the business combination , Hinterland held 90 % of the shareholding in Hinterland Fuels ( Pty ) Ltd (" Hinterland Fuels "). The remaining 10 % was held by an external shareholder , Izitsalo Employee Investments ( Pty ) Ltd ( 5 %), and Thobo Trust ( 5 %). As part of the separation transaction , the 5 % held by Izitsalo was transferred back to Hinterland , which increased its shareholding to 95 %. The entire Hinterland Group is therefore fully owned by Senwes and Thobo Trust .
Since acquisition , Hinterland sold an additional 25 % shareholding in Hinterland Fuels to Thobo Trust for R15 million , which reduced its shareholding to 70 %. Within the Senwes Group , no change in control occurred .
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