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For the year ended 31 May 2016
BLUE LABEL INTEGRATED ANNUAL REPORT 2016
168
6.
Investments in Group companies and related loans
continued
6.2 Investments in and loans to joint ventures and associates
2016
R’000
2015
R’000
Investments in and loans to joint ventures and associates
Shares as at the beginning of the year
304 175
254 142
Acquisition of joint venture and associate
42 654
50 033
Shares as at the end of the year
346 829
304 175
Loans at the beginning of the year
—
1 054
Loan granted to joint venture capitalised
—
(50 033)
Loans granted to joint venture
—
48 979
Loans at the end of the year
—
—
Closing net book value
346 829
304 175
There was no impairment of investment in joint ventures. The terminal growth rate applied was 3.5% (2015: 3.5%).
The weighted average cost of capital used to discount these cash flows was 16.44% (2015: 18.46%). The discount
rates used are post-tax and reflect specific risks relating to the relevant companies.
The discount rate used when calculating the value-in-use calculations would need to be increased by 13% before any
impairments would need to be recognised. Refer to note 2.1. of the Group annual financial statements.
Shares in associate and joint venture acquired during the current year:
Date
acquired
Country of
incorporation
Percentage
interest
acquired
Blue Label Mexico S.A. de C.V.
Joint venture 1 September 2015
Mexico
0.92
Banosign Proprietary Limited
Joint venture
1 April 2016 South Africa
50.1
Refer to note 2.1 of the Group financial statements for details of other associates held directly by the Company.
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS
continued