Adcock Ingram Integrated Report 2018

ANNUAL FINANCIAL STATEMENTS Notes to the Group annual financial statements continued 98 ADCOCK INGRAM  Integrated Report 2018 2018 2017 R’000 R’000 26 NOTES TO THE STATEMENTS OF CASH FLOWS (continued) 26.9 MOVEMENT IN BORROWINGS Balance at beginning of year 251 908 500 000 Non-cash items: Acquisition of business (note 1.1) 24 297 2 118 Exchange rate adjustments (28) (82) Reclassification to disposal group held-for-sale – (7 822) Balance at end of year – (251 908) Cash movement in borrowings 276 177 242 306 Disclosed as follows: Increase in borrowings – 9 917 Repayment of borrowings (276 177) (252 223) (276 177) (242 306) 26.10DECREASE IN OTHER FINANCIAL ASSETS Proceeds from sale of interest in Group Risk Holdings Proprietary Limited – 318 Decrease in Black Managers Share Trust 5 232 32 038 5 232 32 356 27 CONTINGENT LIABILITIES The wholly-owned South African companies in the Group provide cross-sureties for the debt obligations (refer note 21) and overdraft facilities (refer note 17) in South Africa. 28 COMMITMENTS AND CONTINGENCIES 28.1 OPERATING LEASE COMMITMENTS The Group has entered into the following material lease agreements in South Africa for premises used as offices and distribution centres for pharmaceutical products. These leases represent more than 95% of the lease commitments of the Group. Lease 1 Lease 2 Lease 3 Lease 4 Lease 5 Lease 6 New Road Durban Cape Town Port Elizabeth Capital Hill Office Park 19 Louis Gradner Street, Cape Town (4th Floor) Initial lease period (years) 10 12 10 5 2 5 Ending 30 November 2021 31 October 2022 31 August 2022 31 July 2022 31 May 2019 31 October 2020 Renewal option period (years) 10 10 5 5 N/A N/A Ending 30 November 2031 31 October 2032 31 August 2027 31 July 2027 N/A N/A Escalation % 7.3% 8.5% 7.0% 7.0% 8.0% 7.5% 2018 2017 R’000 R’000 Future minimum rentals payable under all non-cancellable operating leases are as follows: Within one year 50 388 38 780 After one year but not more than five years 150 485 164 783 More than five years 1 455 6 572 202 328 210 135