PowerEnergy Ltd is an integrated energy and chemical company

with a $31$ December financial year end. The company's head

office is in Bela$-$Bela, Limpopo, with projects across South Africa.

The company has $31$ December year end.

Chemical Division

On $1$ April $2019$ PowerEnergy Ltd purchased an old factory at a

cost of R$4600000($Land; R$800000$; building R $3800000).$

Transfer fees to register the property at the deed's office amount

to R$270000$ and was settled in cash. Additional significant work

was needed to upgrade the factory building according to

PowerEnergy Ltd operational requirements, an invoice of R$1500$

$000$ was send to PowerEnergy Ltd by the contractor for the

upgrade work on the building.

The contractor has a two$-$month period after work is completed

for settlement of invoices. PowerEnergy Ltd was granted eight$-$

month period by the contractor to settle the R$1500000$ invoice.

The contractor considers the eight$-$month period to be material.

The factory building was available for use, as intended by

management on $1$ February $2020,$ after all the upgrades were

completed. The factory building has a total useful life of $25$ years

and a R$200000$ residual value.

On $31$ December $2021,$ the fair value of the land was determined

to be R$1000000,$ and residual value was revised to $R270000,$

and useful life of $25$ years remain unchanged.

Heavy Alcohol Division

Due to the ban of alcohol consumption and transportation

PowerEngergy Ltd decided to sell the assets of the heavy

alcohol division, in a single transaction. On $30$ April $2021,$ all the

criteria to classify the disposal group as held for sale, as

stipulated in IFRS $5,$ Non$-$current Assets Held for Sale and

discontinued operations, were met. The sale is expected to be

completed by $1$ February $2022,$ for cash. The fair value less cost

to sell of the disposal group on $30$ April $2021$ amounted to R$5$

$203738.$ Towards the end of the current financial year,

PowerEnergy Ltd experienced an increase in ethyl alcohol sales

due to introduction of sanitation by varies Governments to

combat covid$-19$ rising infection. The fair value less cost to sell of

the disposal group was revised to R$5090000$ on $31$ December

Management is still committed to the sale of the group