Note 33. Finance Leases

The Directorate has 351 finance leases, which have been taken up as a finance lease liability and an asset under a finance lease. These leases are for motor vehicles. The interest rate implicit in these leases vary from 4.35% to 7.99% and the terms vary from 1 year to 5 years. These leases allow for extensions, but have no terms of renewal or purchase options and escalation clauses.

 

  2013
$’000
2012
$’000
Current Finance Leases    
Secured    
Finance Leases 2,315 3,288
Total Current Finance Leases 2,315 3,288
     
Non-Current Finance Leases    
Secured    
Finance Leasesa 4,162 1,802
Total Non-Current Finance Leases 4,162 1,802
Total Finance Leases 6,477 5,090

 

Secured Liability

The Directorate’s finance lease liability is effectively secured because, if the Directorate defaults, the assets under a financial lease revert to the lessor.

a) The increase in non-current finance leases is due to the cyclic nature of the motor vehicles which are generally on a 3 year lease. In 2012‑13 Health Directorate acquired 185 new motor vehicle leases and disposed of 164 old motor vehicle finance leases which results in a larger non-current balance.

 

  2013
$’000
2012
$’000
Finance lease commitments are payable as follows:    
Within one year 2,613 3,513
Later than one year but not later than five years 4,412 1,905
Minimum Lease Payments 7,025 5,418
Less: Future Finance Lease Charges (548) (328)
Amount Recognised as a Liability 6,477 5,090
Add: Lease incentive involved with non-cancellable operating lease
Total Present Value of Minimum Lease Payments 6,477 5,090
The present value of the minimum lease payments are as follows:    
Within one year 2,613 3,288
Later than one year but not later than five years 3,864 1,802
Total Present Value of Minimum Lease Payments 6,477 5,090
     
Classification on the Balance Sheet    
Finance Leases    
Current Finance Leases 2,315 3,288
Non-Current Finance Leases 4,162 1,802
Total Finance Leases 6,477 5,090