A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
In the separate financial statements of the investor, investments in joint ventures are carried at fair value. The carrying amount is reduced to recognise any impairment in the value of individual investments.
Joint ventures are accounted for using the equity method.
2022 - The fair value has been based on a discounted cash flow approach over a period of ten years using the Gordon Growth Model. A WACC of 11.70% and terminal growth rate of 3.40% have been used. An increase/decrease in WACC by 5% would have been decreased/increased the investment fair value by MUR 27M/MUR 23M.
2021 - The fair value has been based on a discounted cash flow approach over a period of five years using the Gordon Growth Model. A WACC of 10.73% and terminal growth rate of 3% have been used. An increase/decrease in WACC by 5% would have been decreased/increased the investment fair value by MUR 16M/MUR 18M.
The Directors are of the opinion that there were no indicators of impairment on the investment in joint venture at year end.
(i) During the year ended 30 June 2022, the group has invested in Ebene Star Investment Ltd for MUR 29M, a company involved in the promotion of land and property development.
(ii) During the year ended 30 June 2021, the group has made additional investment of MUR 50M in Anahita Residence and Villas Ltd; with no changes in shareholding.
(c) The results of the joint ventures, all of which were incorporated in Mauritius and unlisted, have been included in the consolidated financial statements.
Details of the joint ventures of the Group and Company are as follows:
¹ Domaine de l'Etoile Limited is currently in the process of winding up.
For the joint ventures having a different reporting date, management accounts have been prepared as at June 30, 2022 and 2021 respectively.
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