Chapter 10: Assets

10.2.1 Accounting policies relating to intangible assets

Goodwill

Goodwill that arises on the acquisition of subsidiaries is presented with intangible assets.

Goodwill is carried at cost less accumulated impairment losses and is not subject to amortisation, but rather tested annually for impairment or more frequently if events or changes in circumstances indicate a potential impairment.

For purposes of impairment testing, goodwill acquired in a business combination is allocated to each CGU, or group of CGUs, which is expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which goodwill is monitored for internal management purposes.

The carrying value of the CGU containing the goodwill is compared to the recoverable amount, which is the higher of the value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.

Patents, licences, software and customer contracts

Patents, licences, software and customer contracts are intangible assets with a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of the finite useful life assets from the date available for use. The amortisation method, useful lives and residual values are reviewed at each reporting date and adjusted where appropriate. The estimated useful lives of intangible assets with a finite useful life are:

Impairment testing is undertaken when circumstances indicate that the carrying amount may not be recoverable.

Intangible assets under development

Intangible assets under development are stated at cost and not amortised but tested annually for impairment. Development expenditure is accumulated separately for each project. Such expenditure comprises costs directly attributable to the development of an asset, including the cost of services, direct labour and an appropriate proportion of overheads. Development costs are capitalised once approval for such development is obtained from management (as determined per project). On completion of development, all assets included in assets under development are reclassified to the appropriate asset class to which it relates.

10.2.2 Significant judgements and assumptions made by management in applying the related accounting policies

Impairment testing of goodwill

In allocating goodwill, the Cennergi operating windfarms (Amakhala SPV and Tsitsikamma SPV) have been identified as a single CGU to which the goodwill of R521 million has been allocated.

The Cennergi operating windfarms CGU was assessed for impairment as at 31 December 2025 and 31 December 2024 as a result of the requirement to test goodwill annually for impairment. There were no indicators of impairment for the Cennergi operating windfarms CGU during the reporting period. No impairment charge was required as the recoverable amount, determined using fair value less costs of disposal, exceeded the carrying amount on 31 December 2025.

The recoverable amount was derived using a DCF model which is a Level 3 valuation technique in terms of the fair value hierarchy. The valuation has been performed in South African rand using the following information:

• Approved financial budgets and outlook covering a period up to five years
• Project financing models post the five-year outlook period up to the end of the contractual life of the power purchase agreements
• Extrapolated results for a further post contractual 10-year period, representing the expected additional economic life for which the wind farms are expected to operate

The key assumptions made by management (expressed in nominal terms) and management’s approach to determining these key assumptions are summarised as follows:

Management considered and assessed reasonably possible changes to the key assumptions and have not identified any instances that could cause the carrying amount of the Cennergi CGU to exceed its recoverable amount.

10.2.3 Intangible assets composition and analysis