4. LEASE ASSETS AND LIABILITIES (CONTINUED)
The group has several lease contracts that include extension and termination options. These options are negotiated by management
to provide flexibility in managing the leased-asset portfolio and align with the group’s business needs. Management exercises judgement
in determining whether these extension and termination options are reasonably certain to be exercised. Set out below are the
undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options
that are not included in the lease term:
GROUP
WITHIN FIVE
YEARS
MORE THAN
FIVE YEARS
2020
R’m
TOTAL
Extension options expected not to be exercised 17 48 65
Termination options expected to be exercised 5 - 5
Total potential future payments 22 48 70
5. GOODWILL AND INTANGIBLE ASSETS
NOTES
GROUP
2020
R’m
Goodwill 5.1 35 9
Intangible asset 5.2 6 -
Total carrying value 41 9
2019
R’m
5.1 GOODWILL
GROUP
2020
R’m
Carrying value at the beginning of year 9 -
Fair value at initial recognition 15 -
Accumulated impairment provision (6) -
Movements during the year:
Goodwill acquired 1 26 9
Transfer from property, plant and equipment 2 - 6
Decrease due to impairments recognised 3 - (6)
Carrying value at the end of year 35 9
Fair value at initial recognition 41 15
Accumulated impairment provision (6) (6)
1
The goodwill acquired during the year relates to the Falcon Agricultural Equipment (Pty) Ltd and Grainovation (Pty) Ltd acquisitions. Refer
to note 6.2 for further details.
2
Goodwill to the value of R6 million was previously included in property, plant and equipment. This reallocation was done in 2019.
3
Senwes Equipment and JDI Agrico branches: The depressed state of the agricultural sector, causing producers to incur less capital expen-
diture, meant that the acquired branches from Agrico were unable to achieve its revenue growth targets as originally expected. As a result
thereof, Senwes and JDI impaired the goodwill recognised at acquisition date (Senwes: R4 million and JDI: R2 million).
Goodwill is tested for impairment on an annual basis during the last quarter of each financial year. 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. (2019: The investment in Staalmeester Agricultural Equipment (Pty)
Ltd delivered results beyond the required rate of return as determined at the inception of the investment.)
2019
R’m
Senwesbel Limited Reg no: 1996/017629/06 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2020 20