12. | Group composition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12.2. | Non-current asset held for sale and discontinued operation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
During the 2023 financial year, the Telkom Board approved the disposal of Swiftnet SOC Ltd (Swiftnet), a 100% owned subsidiary. The disposal is part of the Group's Value Unlock Strategy, which aims at realising the intrinsic value of the underlying business. Significant judgement in assessing if Swiftnet meets the conditions to be classified as held for sale in accordance with IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations) The asset held for sale classification was met during the first half of the 2024 financial year and reported in the September 2023 interim financial statements, after the current preferred bidder presented an offer that was within Telkom's acceptable range. The receipt of an offer within the acceptable range made the transaction structure more certain and the likelihood of finalising the transaction within 12 months highly probable considering the bidder's profile. Subsequent to 30 September 2023, the disposal has progressed as planned with a sale agreement being finalised in March 2024. The disposal is subject to approvals that are expected to be obtained within 12 months based on previous market precedents. Non-current assets held for sale classification Swiftnet's assets and liabilities were presented as held for sale in the interim reporting, 30 September 2023, as the sale was considered highly probable. The sale transaction has since progressed as planned. A sale agreement was finalised in March 2024, followed by the issue of the JSE circular in April 2024. The circular reassures the market of management's commitment to sell Swiftnet. The transaction is expected to be completed within 12 months from year-end. The assets and liabilities of Swiftnet, as well as the investment in Swiftnet, therefore remain classified as held for sale. In line with IFRS 5 requirements, the statement of financial position and the statement of cash flows have not been re-presented for prior periods to reflect the classification as held for sale. Discontinued operation assessment In addition to being classified as held for sale, it was confirmed that Swiftnet is a separate component of Telkom and represents a separate major line of business and therefore meets the discontinued operation classification. Consequently, Swiftnet's operating results (revenue and expenses) have been separately disclosed as a single line item in the consolidated statement of profit or loss and other comprehensive income. The comparative statement of profit or loss and other comprehensive income has been re-presented for the discontinued operation.
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