South African Local Government Association
Schedule 3A public entity i.t.o. the Public Finance Management Act, 1999 and recognised i.t.o. the
Organised Local Government Act, 1997
Annual Financial Statements for the year ended 31 March 2017
Notes to the Annual Financial Statements
Figures in Rand
13.
2017 2016
915 544
516 677
1 432 221
(129 233)
1 302 988 941 919
713 441
1 655 360
(140 762)
1 514 598
825 589
477 399
1 302 988 838 586
676 012
1 514 598
477 399
825 589
1 302 988 676 012
838 586
1 514 598
Finance lease obligation
Minimum lease payments due
- within one year
- in second to fifth year inclusive
Less: future finance charges
Present value of minimum lease payments
Present value of minimum lease payments due
- within one year
- in second to fifth year inclusive
Non-current liabilities
Current liabilities
It is SALGA’s standard operating practice to lease certain office equipment under finance leases.
Obligations under finance leases are secured by the lessor’s title to the leased assets.
SALGA ordinarily concludes these leasing arrangements for a period that ranges up to 36 months. The
average lease period for leased office equipment is 36 months. The average remaining lease term is
17 months and the average effective interest rate implicit in the lease was 10% (2016: 9%).
Interest rates are fixed at the contract date. All leases have fixed repayments and no arrangements
have been entered into for contingent rent. There are purchase options entered into on these leased
assets. SALGA does not renew the leases upon expiry as the useful life approximates the lease term.
SALGA’s obligations under finance leases are secured by the lessor’s claim over the leased assets, in an
instant where SALGA defaults on the contractual lease payments. Refer to note 3.
Leased assets with a carrying amount of R 1 233 772 (2016: R 1 439 783) are subject to the lessors’
restrictions in terms of movement (relocation).
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