Notes to the financial statements | Note 6.2

6. Financing structure and commitments
6.2 Net finance charges and fair value movements
 

       

  Group Company
  31 March
2023
Rm 		31 March
2022
Rm 		31 March
2023
Rm 		31 March
2022
Rm
Net finance charges and fair value movements (1 484) (1 279) (1 546) (1 423)
Net finance charges (1 460) (1 112) (1 579) (1 262)
Finance charges on lease liabilities (488) (450) (464) (517)
Net finance charges on local debt1 (1 017) (740) (1 154) (823)
Less: Finance charges capitalised2 45 78 39 78
Foreign exchange and fair value movements (24) (167) 33 (161)
Foreign exchange loss (532) (136) (546) (125)
Fair value adjustments 508 (31) 579 (36)
Capitalisation rate for borrowing costs (%) 7.7 6.6 7.7 6.6
 
1 For interest-bearing debt movement refer to note 6.4.
2 Finance charges on general borrowings are capitalised to qualifying assets (property, plant and equipment and intangible assets).

Finance charges relate to interest expense on financial liabilities measured at amortised cost.

Finance charges on local and foreign debt increased from R1 112 million in March 2022 to R1 460 million in March 2023 for the Group and increased from R1 262 million in March 2022 to R1 579 million in March 2023 for the Company, respectively. The increase in finance charges is largely due to increases in interest rates and higher debt levels in the current financial year.