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AFRICAN DAWN Annual Report 2016

Accounting Policies continued • classified as loans and receivables; • split between non-current assets and current assets in accordance with the terms and the intention of the lender; • assessed for impairment; and • discounted over the estimate repayment period with deemed interest income being recognised subsequent to the initial recognition. • Debit loans that have repayment terms are: • classified as loans and receivables; • split between non-current assets and current assets in accordance with the terms and the intention of the lender; • assessed for impairment; and • discounted over the repayment period with deemed interest income being recognised subsequent to the initial recognition 2016 All loans were attracting market related rates during the year so no present value adjustments were made. 2015 Capital amount R’000 Classification Initial present value adjustment R’000 Deemed interest (income)/ expense R’000 National Housing Finance Corporation (“NHFC”) in note 15 1,750 Liability at amortised cost 91 - Sandown Capital Elite Two loan (B) in note 15 1,750 Liability at amortised cost 76 (43) Sandown Capital Interest portion of loan (C) in note 15 3,333 Liability at amortised cost 494 (66) 6,833 - 661 (109) The interest rates that have been applied in the discounting is an effective interest rate of 10.16%. Change in estimate – interest and penalties on income tax and VAT liability As disclosed in the prior year financial statements an estimate was made of the current tax and VAT liabilities relating to Afdawn, Elite and Bhenka, plus the related interest and penalties that would be due to SARS. However, as a result of the section 200 application to SARS being declined in May 2015 (refer to note 12), additional interest and penalties of R- (2015: R5,518 million) were due. R2,808 million of the amount relates to VAT and is recognised as an additional VAT liability in note 20 and R2,710 million of this relates to current income tax and is recognised as an additional current tax liability refer to note 12. This has been accounted for as a change in accounting estimate and recognised in full in the current year. The total group liabilities (including penalties and interest) are as follows: • VAT - R5,938 million (2015: R7,709 million (refer to note 20) • Current tax – R15,054 million (2015: R14, 840 million (refer to note 12). 56 AFRICAN DAWN ANNUAL REPORT 2016


AFRICAN DAWN Annual Report 2016
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