Notes to the Financial Statements continued Group Company 2015 R’000 2014 R’000 17. Borrowings (continued) (C) The loan bears no interest and has therefore been present valued such that R493,992 deemed interest will be recognised over the life of the loan. R66,155 of this has been recognised in 2015, leaving a balance of R428,837 to be recognised in the future. (D) The loan bears no interest and has therefore been present valued such that R91,582 deemed interest will be recognised over the life of the loan. Nil of this has been recognised in 2015, leaving a balance of R91,582 to be recognised in the future. In terms of the settlement agreement with the NHFC that was signed on 30 May 2011, Nexus (a wholly owned subsidiary of Afdawn) facility of R5 million became payable in October 2013. Nexus has ceded it debtors book as security for payment of the amount. NHFC demanded payment from Afdawn. Nexus was liquidated in October 2014 and NHFC instituted Arbitration proceedings against Afdawn for the payment of R5 million plus interest and costs in terms of the settlement agreement. In terms of the out-of-court settlement, Afdawn as guarantor is liable for payment of amount of R3,75 million payable as follows: R2 million was paid on 6 February 2015 and the balance is interest-free and due for pay-ment on or before 30 September 2015. Total present value adjustment recognised as a gain in 2015 is R661,338. Total deemed interest expense recognised in 2015 is R109,602 (Refer to note 28). AFRICAN DAWN 91 ANNUAL REPORT 2015 2015 R’000 2014 R’000 18. Finance lease liabilities Minimum lease payments due - within one year 122 122 - - - in second to fifth year inclusive 74 194 - - 196 316 - - less: future finance charges (14) (35) - - Present value of minimum lease payments 182 281 - - Non-current liabilities 60 194 - - Current liabilities 122 87 - - 182 281 - - It is group policy to lease certain motor vehicles under finance leases. The average lease term is 1-5 years and the average effective borrowing rate is 10% (2014: 10%) Interest rates are linked to prime at the contract date. All leases have fixed repayments and no arrangements have been en-tered into for contingent rent. The Group’s obligations under finance leases are secured by the lessor’s charge over the leased assets. Refer to note 3.
AFRICAN DAWN 2015 Annual Report
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