Senwes Annual Financial Statements 2022 | Page 30

SENWES ANNUAL FINANCIAL STATEMENTS 2022

Suidwes Holdings ( RF ) ( Pty ) Ltd (" Suidwes ") During the 2021 financial year , Senwes acquired a 100 % interest in Suidwes , which operates as a group of companies in the agricultural sector , with the effective date being 31 October 2020 .

Group *

Fair value of assets acquired and liabilities assumed ¹ : A ….………………....... 127

Non-current assets , excluding property , plant and equipment , deferred tax and intangible assets

Property , plant and equipment 733 Deferred tax asset 27 Intangible assets 74

Other loans receivable 119 Trade payables ( 462 ) Bank overdraft ( 316 ) Current financial liabilities , excluding trade payables and bank overdraft ( 1,108 ) Non-current liabilities ( 129 )

² The acquisition was funded from operating cash flows ( R63 million ) and the issue of 4 948 812 normal shares with a market value of R10 per share ( R50 million ),

which amounted to a total investment of R113 million . 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 significant fair value adjustments on properties recognised at acquisition date . ⁴ The fair value of trade and other receivables acquired ( R392 million ) included a provision of R53 million which was not expected to be collected .

Since acquisition date , and for the 2021 financial year , revenue of R838 million and a profit after tax of R49 million were contributed to the consolidated statement of comprehensive income by Suidwes , 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 R1 698 million and R100 million , respectively .

* In terms of IFRS 3 , a retrospective adjustment of amounts recognised at the acquisition date of Suidwes was made to reflect new information obtained about facts and circumstances that existed as of the acquisition date and , if known , would have affected the measurement of the amounts recognised as of that date . The impact of the adjustment being a decrease in bargain purchase of R22 million .

R ' m

84

Suidwes IT Solutions ( Pty ) Ltd (" SWITO ") During the 2021 financial year , Africum Ltd acquired the remaining 51 % of SWITO . The investment was previously held as an investment in associate with a 49 % shareholding held by Africum Ltd . This resulted in SWITO being fully owned and consolidated in the Senwes Group . The effective date of the transaction was 30 April 2021 .

Group

Fair value of assets acquired and liabilities assumed : A ….………………....... - Property , plant and equipment 2 Deferred tax asset * Trade and other receivables 1 Other loans payable ( 3 ) Consideration paid ¹ B …….……………...... * Bargain purchase ² C =( A-B )…………… * * Amounts are less than R0,5 million . ¹ The acquisition was funded from operating cash flows .

2

The bargain purchase is included in the " Gain on bargain purchase of acquisitions " line item in the statement of comprehensive income .

R ' m

Since the acquisition date , and for the 2021 financial year , no revenue or profit after tax was contributed to the consolidated statement of comprehensive income by SWITO since the acquisition occurred on the last day of the financial year , whereas the revenue contributed by the company for the 12-month accounting period , as though the acquisition had been at the beginning of the 2021 reporting period , would have been R5 million . No profit would have been recorded for the 12 months ended 30 April 2021 .

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