ANNUAL REPORT 2015
71
Notes to the Combined
Financial Statements
As at 30 September 2015
17
FINANCE LEASES
Minimum lease
payments
Present value of minimum
lease payments
2015
2014
2015
2014
$
$
$
$
Group
Amounts payable under finance leases:
Within one year
65,640
126,784
72,741
113,879
In the second to fifth years inclusive
82,050
221,485
62,259
200,704
147,690
348,269
135,000
314,583
Less: Future finance charges
(12,690)
(33,686)
N/A
N/A
Present value of lease obligations
135,000
314,583
135,000
314,583
Less: Amount due for settlement within 12 months
(shown under current liabilities)
(72,741)
(113,879)
Amount due for settlement after 12 months
62,259
200,704
It is the Group’s policy to lease certain of its motor vehicles under finance lease. The lease term is for a period of 1 to 5 years (2014 :
1 to 5 years). For the year ended 30 September 2015, the average effective borrowing rate is approximately 3.59% (2014 : 4.31%) per
annum. Interest rates are fixed at the contract date, and thus expose the Group to fair value interest rate risk. All leases are on a fixed
repayment basis and no arrangements have been entered into for contingent rental payments.
All lease obligations are denominated in the functional currency of the Company. The Group’s obligations under finance leases are
secured by the lessor’s title to the leased assets. In 2014, certain finance leases are guaranteed by directors of the Company.
18
BANK BORROWINGS
Group
2015
2014
$
$
Secured – at amortised cost
Current
109,298
116,412
Non-current
586,778
674,582
696,076
790,994
The bank loan was taken up in 19 June 2012 and borne interest of 0.88% per annum over the bank’s prevailing three-month cost of
funds for the first year, 1.28% per annum over the bank’s prevailing three-month cost of funds for the second year and 3% per annum
over the bank’s prevailing three-month cost of funds for subsequent years.
During the financial year, the Group refinanced the bank loan. Effective 26 December 2014, the refinanced bank loan bears interest of
0.88% per annum over the bank’s prevailing three-month cost of funds for the first year, 1.28% per annum over the bank’s prevailing
three-month cost of funds for the second year, 3% per annum over the bank’s prevailing three-month cost of funds for the third year and
0.75% per annum over the bank’s commercial financing rate for subsequent years. Leasehold property amounting to $2,108,572 (2014
: $2,160,000) owned by the Group is mortgaged to secure the loan which is repayable over 90 monthly principal instalments ending on
20 June 2022.
Management estimates the fair value of the above loans to approximate their carrying amounts.
As at 30 September 2015, the Group had available $10,000,000 (2014 : $Nil) of undrawn committed borrowing facilities in respect of
which all conditions precedent had been met. The borrowings are secured against the corporate guarantee given by the Company.
