Integrated Reports Senwes Financial Review 2018 - Page 23

FINANCIAL REVIEW 2017 - Reconciliation of the movements on property, plant and equipment Balance at the begin- ning of the year R’m Disposals and Transfers impair- within ment asset provisions classes R’m R’m Purchases R’m Land 17 18 - Silos * 43 4 (6) Buildings and improvements 138 14 - Plant and equipment ** 180 70 - 25 10 (1) 403 116 (7) 3. Depre- ciation R’m Balance at the end of the year R’m - - 35 (3) - 38 - (5) 147 3 (27) 226 - (9) 25 - (41) 471 GROUP - 2017 Vehicles Total * Included with this balance is an impairment provision of R5,7 million. Due to the five year average result and the ROA being lower than the required WACC rate, impairment was provided for the total net asset value at a specific silo which is attri­butable to the Market Access segment. The impairment is included with distribution, sales and administrative expenses on the statement of comprehensive income. The recoverable amount of the silo is the value in use. ** Included with purchases is goodwill to the value of R6 million, which originated from the Agrico-transaction. Refer note 3.1. The goodwill was tested for impairment at year end and no impairment was recognised. COMPANY - 2017 Land 2 Silos Buildings and improvements Plant and equipment Vehicles Total 6 - - - 8 43 4 (6) (3) - 38 96 14 - - (5) 105 179 68 - 3 (26) 224 21 10 (1) - (8) 22 341 102 (7) - (39) 397 **Included with purchases is goodwill to the value of R6 million, which originated from the Agrico-transaction. Refer note 3.1. The goodwill was tested for impairment at year end and no impairment was recognised. INVESTMENT IN COMPANIES 3.1 Corporate transactions 2018 There were no corporate transactions during the year under review. 2017 Agrico (Pty) Ltd Due to Agrico (Pty) Ltd effectively dissolving its John Deere agency, Senwes Equipment was afforded the opportunity to acquire two branches from Agrico (Pty) Ltd, namely Agrico Aliwal-North and Agrico Ugie on 1 August 2016. Simultaneously, JD Implemente (Pty) Ltd acquired Agrico George from Agrico (Pty) Ltd. At acquisition date fair value of assets acquired and liabilities assumed: Senwes Ltd R’m JD Implemente (Pty) Ltd R’m Property, plant and equipment 6 1 Inventory 8 8 14 9 Total identifiable net assets Goodwill arising from acquisition Purchase consideration transferred 4 2 18 11 The net assets recognised in these financial statements are at fair value as at the acquisition date and due to the fact that no other identifiable assets were identified, goodwill was recognised. Goodwill is included with plant and equipment under property, plant and equipment in the statement of financial position. The goodwill that arose was tested for impairment and the headroom was sufficient. 100% of each of the two branches was obtained by Senwes. Nautilus Hedge Fund A hedge fund was established on a 50/50 basis with Absa during 2017. Both parties contributed R25 million to the hedge fund upon establishment thereof. The plan is to grow the fund with external investors. In this partnership Absa will be responsible for the