On 15 May 2022, NAMIB AIR in conjunction with 2 other investors formed Trio Airport (Pty)...

  

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On 15 May 2022, NAMIB AIR in conjunction with 2 other investors formed Trio Airport (Pty) Ltd (hereafter Trio). Trio purchased land which will be used to begin the development of a small airport. Trio, is located in Walvisbay, has a mission to become a trusted airline in Namibia whilst increasing employment opportunities within the Walvisbay community. Trio is owned 51% by the Walvisbay municipality, 31% by Moyeni Airlines and 18% by NAMIB AIR. The Walvisbay municipality invited NAMIB AIR to be an investor of Trio due to their know-how and expertise in the airline industry. An extract of the shareholder's agreement of Trio Airline is as follows: Ordinary or special resolutions may be passed if they are supported by more than 50% or 75% of voting rights respective exercised on the resolution. Trio will be funded 37.5% by the equity injected by the three shareholders. The remainder will be financed via a loan from FNB Namibia As Trio is a newly established operation, the Walvisbay municipality will act as a guarantor to the financing received from FNB Bank. NAMIB AIR is required to provide at minimum, airport operator experts to spend at least 48 hours per week at Trio for the first 18 months. Between month 1936, NAMIB AIR is required to provide at minimum four experts to spend at least 32 hours per week at Trio. These experts will manage the operations and educate and empower the operators employed by the Walvisbaymunicipality to enable them to manage Trio on their own after the initial 36-month period. NAMIB AIR will lease at minimum, 80% of all required equipment for the first 60 months of operation to Trio. These includes tugs, transporters, passenger steps, loaders etc. Trio will purchase the remaining 20%. Trio's MOI states that the entity is required to have three board of directors who will manage the operating and financing activities of the entity. The Walvisbay municipality has the ability to appoint and/or remove these board members. NAMIB AIR and Moyeni Airlines may however recommend any eligible members to the Walvisbay municipality for consideration. A specific clause included in the shareholders agreement, upon Peter Petrus's request is the dividend or reinvestment clause. This clause states that at each financial year-end (for the first five years of incorporation); the accounting records, forecasts and budgets shall be reviewed by NAMIB AIR before a dividend is paid-out. NAMIB AIR will also determine the value of the dividend to be paid out (if any). (b) Discuss whether NAMIB AIR has significant influence over Trio Airport (Pty) Ltd in terms of IAS 28 Investments in Associates and Joint Ventures as at 30 June 2022. Communication skills - clarity of expression Communication skills - logical argument 11 12 1 Adapt On 15 May 2022, NAMIB AIR in conjunction with 2 other investors formed Trio Airport (Pty) Ltd (hereafter Trio). Trio purchased land which will be used to begin the development of a small airport. Trio, is located in Walvisbay, has a mission to become a trusted airline in Namibia whilst increasing employment opportunities within the Walvisbay community. Trio is owned 51% by the Walvisbay municipality, 31% by Moyeni Airlines and 18% by NAMIB AIR. The Walvisbay municipality invited NAMIB AIR to be an investor of Trio due to their know-how and expertise in the airline industry. An extract of the shareholder's agreement of Trio Airline is as follows: Ordinary or special resolutions may be passed if they are supported by more than 50% or 75% of voting rights respective exercised on the resolution. Trio will be funded 37.5% by the equity injected by the three shareholders. The remainder will be financed via a loan from FNB Namibia As Trio is a newly established operation, the Walvisbay municipality will act as a guarantor to the financing received from FNB Bank. NAMIB AIR is required to provide at minimum, airport operator experts to spend at least 48 hours per week at Trio for the first 18 months. Between month 1936, NAMIB AIR is required to provide at minimum four experts to spend at least 32 hours per week at Trio. These experts will manage the operations and educate and empower the operators employed by the Walvisbaymunicipality to enable them to manage Trio on their own after the initial 36-month period. NAMIB AIR will lease at minimum, 80% of all required equipment for the first 60 months of operation to Trio. These includes tugs, transporters, passenger steps, loaders etc. Trio will purchase the remaining 20%. Trio's MOI states that the entity is required to have three board of directors who will manage the operating and financing activities of the entity. The Walvisbay municipality has the ability to appoint and/or remove these board members. NAMIB AIR and Moyeni Airlines may however recommend any eligible members to the Walvisbay municipality for consideration. A specific clause included in the shareholders agreement, upon Peter Petrus's request is the dividend or reinvestment clause. This clause states that at each financial year-end (for the first five years of incorporation); the accounting records, forecasts and budgets shall be reviewed by NAMIB AIR before a dividend is paid-out. NAMIB AIR will also determine the value of the dividend to be paid out (if any). (b) Discuss whether NAMIB AIR has significant influence over Trio Airport (Pty) Ltd in terms of IAS 28 Investments in Associates and Joint Ventures as at 30 June 2022. Communication skills - clarity of expression Communication skills - logical argument 11 12 1 Adapt