Page 178 - WCPP Annual Report 2021-22_Draft #7.6.2

Annual Report for the 2021/22 Financial Year
Vote 2: Western Cape Provincial Parliament
Part E: Financial Information for the year ended 31 March 2022

Notes to the Annual Financial Statements

Figures in Rand 2022 2021

15. Finance lease obligation

Minimum lease payments due
- within one year 631,800 878,434

- in second to fifth year inclusive 1,089,644 1,628,622

1,721,444 2,507,056
less: future finance charges (747,549) (970,246)

Present value of minimum lease payments 973,895 1,536,810

Present value of minimum lease payments due

- within one year 112,228 162,150
- in second to fifth year inclusive 861,667 1,374,660
973,895 1,536,810

Non-current liabilities 861,667 1,374,660

Current liabilities 112,228 162,150

973,895 1,536,810

Finance Leases relate to vehicles with lease terms of between 5 to 11 years. The effective annual interest rate on the Finance

Lease payables is between 34% and 77%.

Interest on finance lease payables are charged by Government Motor Transport to replace vehicles at the end of their useful
lives and to recoup operating expenditure such as tracking, insurance and Government Motor Transport overhead expenditure.
Ownership of the leased vehicle is transferred to Government Motor Transport at the conclusion of the lease agreements. A

software licence with a lease term of 1 year and the effective borrowing rate of 7% has been entered into.

None of our lease agreements have any restrictions imposed on these arrangements.

Annual Report for 2021/22 Financial Year Page 163