REG - Central Asia Metals - Proposed acquisition of Lynx Resources Limited <Origin Href="QuoteRef">CAML.L</Origin> - Part 8
22/09/2017 07:08
- Part 8: For the preceding part double click ID:nRSV5104Rg
sales are made to one customer who is a related party with an
appropriate credit history and not exceed acceptable credit exposure.
SASA does not guarantee obligations of other parties. The maximum exposure to credit risk is represented by the carrying
amount of each financial asset in the balance sheet. Consequently, SASA considers that its maximum exposure is reflected by
the amount of debtors net of provisions for impairment recognized and the amount of cash deposits in banks at the Balance
Sheet date. Management is focused on dealing with most reputable banks in foreign and domestic ownership on the domestic
market.
The following table represents SASA's exposure to credit risk as at 31 December 2015 and 31 December 2014:
2015 2014
Cashandcashequivalents ................................... 216,641 962,947
Tradereceivables ......................................... 6,022,610 45,415,543
Otherreceivables ......................................... 1,374,647 2,351,664
Loans ................................................ - 55,500,372
7,613,898 104,230,526
The receivables are summarized as follows:
31 December 2015 31 December 2014
Trade receivables - domestic Trade receivables - foreign Trade receivables - domestic Trade receivables - foreign
Neither past due nor impaired.............. 905 6,021,705 1,622 45,413,921
Past due but not impaired..................... - - - -
Impaired .................................................. 6,723 - 7,496
Gross....................................................... 7,628 6,021,705 9,118 45,413,921
Less: allowance for impairment............ (6,723) - (7,496) -
Net............................................................ 905 6,021,705 1,622 45,413,921
Trade receivables of USD 6,022,610 (2014: USD 45,415,543) were neither past due nor impaired. Main part of these
receivables is matured up to 120 days, with no recent history of default. SASA analyzes the credit quality of neither past
due nor impaired dividing between related parties and third parties. The amount presented as neither past due nor impaired
is from related parties. Impaired receivables of USD 6,723 (2014: USD 7,496) relates to third party receivables which are
due over 360 days. Further details are presented in Note 15.
SASA's maximum exposure to credit risk for trade receivables at the reporting date by geographic regions is as follows:
2015 2014
Domestic.................................................................................................................... 905 1,622
Other Foreign countries.......................................................................................... 6,021,705 45,413,921
6,022,610 45,415,543
(v) Liquidity risk
Liquidity risk is defined as the risk that SASA could not be able to settle or meet its obligations on time. SASA's policy
is to maintain sufficient cash and cash equivalents to meet its commitments in the foreseeable future. Any excess cash is
mostly deposited in commercial banks. SASA's liquidity management process includes projecting cash flows by major
currencies and considering the level of necessary liquid assets, considering business plan, historical collection and
outflow data. Regular cash projections are prepared and updated by Management.
The table below analyses SASA's financial liabilities into relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
Financial assets
Cash and cash equivalents............... 216,641 216,641 - - -
Trade receivables............................. 6,022,610 6,022,610 - - -
Other receivables............................. 1,374,647 1,374,647 - - -
7,613,898 7,613,898 - - -
Financial liabilities
Trade payables................................ 2,097,672 2,097,672 - - -
Other current financial liabilities...... 11,208,226 11,208,225 - - -
Borrowings...................................... 14,546,585 14,546,585 - - -
Net exposure.................................. (6,932,687) (6,932,687) - - -
Net exposure..................................
(6,932,687)
(6,932,687)
-
-
-
Financial assets
Cash and cash equivalents............... 962,947 962,947 - - -
Trade receivables............................. 45,415,543 45,415,543 - - -
Other receivables............................. 2,351,664 2,351,664 - - -
Short Term loans............................. 55,500,372 55,500,372 - - -
104,230,526 104,230,526 - - -
Financial liabilities
Trade payables................................ 1,882,145 1,882,145 - - -
Other current financial liabilities...... 1,448,466 1,448,466 - - -
Loans and borrowings...................... 9,228,566 2,483,900 6,744,666 - -
Dividend liability............................. 62,366,773 62,366,773 - - -
74,925,950 68,181,284 6,744,666 - -
Net exposure.................................. 29,304,576 36,049,242 (6,744,666) - -
Net exposure..................................
29,304,576
36,049,242
(6,744,666)
-
-
3.2 Capital risk management
SASA's objectives when managing capital are to safeguard the SASA's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
3.3 Fair value estimation
Cash and cash equivalents, trade receivables and other current financial assets mainly have short term maturity. For this
reason, their carrying amounts at the reporting date approximate their fair values.
31 December 2015
Assets as per the Statement of financial position Loans and Receivables Carrying amount Fair
value
Trade and other receivables.................................................... 7,397,257 7,397,257 7,397,257
Cash and cash equivalents..................................................... 216,641 216,641 216,641
7,613,898 7,613,898 7,613,898
Trade payables and other current liabilities......................... 3,338,359 3,338,359 3,338,359
Interest bearing borrowings.................................................... 11,208,226 11,208,226 11,208,226
14,546,585 14,546,585 14,546,585
11,208,226
14,546,585
14,546,585
14,546,585
31 December 2014
Assets as per the Statement of financial position Loans and Receivables Carrying amount Fair
value
Trade and other receivables................................................. 47,767,207 47,767,207 47,767,207
Cash and cash equivalents................................................... 962,947 962,947 962,947
Short-term loans..................................................................... 55,500,372 55,500,372 55,500,372
104,230,526 104,230,526 104,230,526
Liabilities as per the Statement of financial position Other financial liabilities Carrying amount Fair value
Interest bearing borrowings.................................................... 9,228,566 9,228,566 9,228,566
Trade payables and other currentfinancial liabilities......... 65,697,384 65,697,384 65,697,384
74,925,950 74,925,950 74,925,950
The fair value of borrowings has been calculated by discounting the expected future cash flows at contracted interest
rates. The fair value of loan notes and other financial assets has been calculated using market interest rates. As at 31
December 2015 and 31 December 2014, SASA measured the fair value using techniques for which all inputs which have a
significant effect on the recorded fair value are observable, either directly or indirectly (Level 2).
4. Critical accounting estimates and judgments
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
4.1 Critical accounting estimates and assumptions
SASA makes estimates and assumptions concerning the future. Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. The most critical estimates and assumptions are discussed below.
(i) Useful lives of assets
Units of production basis
For mining properties and leases and certain mining equipment, consumption of the economic benefits of the asset is linked
to production. Except as noted below, these assets are depreciated on a unit of production basis.
In applying the units of production method, depreciation is normally calculated based on production in the period as a
percentage of total expected production in current and future periods based on ore reserves and, for some mines, other
mineral resources and therefore the annual depreciation expense could be materially affected by changes in the underlying
estimates which are driven by the life of mine plans. Changes in estimates can be the result of actual future production
differing from current forecasts of future production, expansion of mineral reserves through exploration activities,
differences between estimated and actual costs of mining and differences in the commodity prices used in the estimation of
mineral reserves.
The required level of confidence is unlikely to exist for minerals that are typically found in low-grade ore. Specific
areas of mineralisation have to be evaluated in considerable detail before their economic status can be predicted with
confidence. In calculating the units of production ratio, management made significant estimates. Changes in the proven and
probable reserves estimates may impact the carrying value of property, plant and equipment.
Straight-line basis
Assets within operations for which production is not expected to fluctuate significantly from one year to another or which
have a physical life shorter than the related mine are depreciated on a straight-line basis.
Further, due to the significant weight of depreciable assets in SASA's total assets, the impact of any changes in these
assumptions could be material to SASA's financial position, and results of operations. If depreciation cost is
decreased/increased by 10%, this would result in additional annual depreciation of approximately USD 547,199 (2014: USD
529,946).
(ii) Potential impairment of property, plant and equipment and intangibles
SASA is assessing the impairment of identifiable property, plant, equipment and intangibles whenever there is a reason to
believe that the carrying value may materially exceed the recoverable amount and where impairment in value is anticipated.
The recoverable amounts are determined by value in use calculations, which use a broad range of estimates and factors
affecting those. Among others, SASA typically considers future revenues and expenses, macroeconomic indicators,
technological obsolescence, discontinuance of operations and other changes in circumstances that may indicate impairment.
If impairment is identified using the value in use calculations, SASA also determines the fair value less cost to sell (if
determinable), to calculate the exact amount of impairment to be charged (if any). As this exercise is highly judgmental,
the amount of potential impairment may be significantly different from that of the result of these calculations.
(iii) Impairment of trade and other receivables
SASA calculates impairment for doubtful accounts based on estimated losses resulting from the inability of its customers to
make required payments. For customers in bankruptcy and liquidation, impairment is calculated on an individual basis, while
for other customers it is estimated on a portfolio basis, for which SASA bases its estimate on the aging of its account
receivables balance and its historical write-off experience, customer credit-worthiness and changes in its customer payment
terms. These factors are reviewed periodically, and changes are made to calculations when necessary. The estimates involve
assumptions about future customer behaviour and the resulting future cash collections. If the financial condition of its
customers were to deteriorate, actual write-offs of currently existing receivables may be higher than expected and may
exceed the level of the impairment losses recognized so far.
(iv) Ore reserves & Resources
Mineral Reserves and Resources may be used to calculate useful economic lives of assets and depreciation on SASA's mining
properties and are defined as SASA's best estimate of Mineral Ore that can be mined in an economically viable fashion from
the relevant property. Feasibility is determined based on operational assumptions that include, but are not limited to,
production costs, mining and processing recoveries, cut-off grades, long term commodity prices as well as, possibly,
exchange rates, inflation rates and capital costs. SASA's estimates are supported by geological studies conducted by
appropriately qualified persons. However, SASA maintains that estimates ultimately depend upon interpretation and
statistical inferences drawn from drilling and sampling analysis, and may therefore be subject to upward or downward
restatements over time.
Mineral Reserves and Resources are determined based on assumptions that were valid at the time of estimation may change
when new information becomes available. In addition, the calculation of the unit of production rate of amortisation could
be impacted to the extent that actual production in the future is different from current forecast production. Any changes
in estimate could affect prospective depreciation rates and asset carrying values and, as a result, the determination of
Ore Reserves is considered a key source of estimation uncertainty.
(v) Provisions for rehabilitation and environmental provision
Management estimates and recognizes provisions for rehabilitation and environmental disturbances at the moment when
disruption of the environment is caused by the initial and current development of the mine. Expenses for withdrawal are
calculated at the present value of the estimated future expenses for settlement of liabilities based on projected cash
flows. Consequently, a rehabilitation asset is recognized within property, plant or equipment. Cash flows are discounted
using a risk free rate and changes are recognized as financial expenses. Estimated future expenses for withdrawal are
estimated each year. Changes in the estimated future expenses or discount rates are added or deduct from the expense of the
asset.
(vi) Income taxes
SASA is subject to income taxes in the Country of operation. Significant estimates are required in determining the
provision for income taxes. There are some transactions and calculations for which the ultimate tax determination is
uncertain. SASA recognises liabilities for anticipated tax based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences
will impact the income tax and deferred tax provisions in the period in which such determination is made.
5. Gross Revenue
2015 2014
Revenue on foreign markets-lead and zinc concentrate.................................. 70,424,600 82,725,595
Revenue on domestic market.................................................................................. 67,229 111,987
70,491,829 82,837,582
6. Other Operating income
2015 2014
Income from insurance claims................................................................................ 40,417 10,378
Other operating income........................................................................................... 36,650 41,104
77,067 51,482
7. Consumed raw materials
2015 2014
Consumed materials................................................................................................. 5,418,344 5,729,401
Consumed spare parts and tools........................................................................... 4,381,150 5,343,789
Consumed electricity............................................................................................... 2,312,402 2,784,462
Consumed petrol...................................................................................................... 998,183 1,662,380
3,110,079 15,520,032
8. Salaries/payroll expenses
2015 2014
Net salaries................................................................................................................ 3,918,367 4,677,210
Compulsory social security contributions........................................................... 1,910,235 2,042,802
Other staff costs....................................................................................................... 1,458,515 1,573,841
Employee related expenses..................................................................................... 275,818 329,090
Termination benefits (Note 19)............................................................................... 51,336 56,004
7,614,271 8,678,947
9. Concession expenses
2015 2014
Concession for water use........................................................................................ 35,173 40,867
Concession for space use....................................................................................... 13,586 13,737
Concession for the use of mineral resources....................................................... 2,127,076 2,504,163
2,175,835 2,558,767
10. Other operating expenses
2015 2014
Maintenance expenses............................................................................................ 1,948,273 2,120,122
Marketing and representation expenses............................................................... 573,132 681,501
Consultancy and audit expenses........................................................................... 71,788 79,237
Security expenses..................................................................................................... 136,350 155,115
Bank charges............................................................................................................. 53,661 78,376
Telecommunication expenses................................................................................. 103,465 121,417
Insurance expenses.................................................................................................. 170,424 210,666
Rental expenses........................................................................................................ 53,444 45,324
Other expenses......................................................................................................... 469,342 750,532
3,579,879 4,242,290
11. Finance income and costs
2015 2014
Foreign exchange gain............................................................................................. 14,597,227 22,653,883
Interest income......................................................................................................... 265,366 1,448,526
Finance income........................................................................................................ 14,862,593 24,102,409
Foreign exchange loss............................................................................................. (6,593,547) (5,183,292)
Interest expenses...................................................................................................... (676,975) (1,195,528)
Accretion expense (Note 19).................................................................................. (185,848) (182,589)
Finance costs............................................................................................................ (7,456,370) (6,561,409)
Net finance income.................................................................................................. 7,406,223 17,541,000
12. Income tax expenses
Recognised in the statement of comprehensive income:
2015 2014
Current tax expense
Current year............................................................................................................... (4,693,270) (6,807,990)
Tax of dividend paid................................................................................................ (1,076,782) (7,543,967)
Deferred tax income/(expenses)
(Decrease)/increase in deferred tax assets........................................................... - -
Total income tax in the statement of comprehensive income........................... (5,670,052) (14,351,957)
2015 2014
Profit before tax.............................................................................................................. 45,881,925 63,933,751
Tax rate............................................................................................................................ 10% 10%
Tax expense at SASA tax rate...................................................................................... 4,588,193 6,393,375
Items which are not deductible (taxable) in calculating taxable income:
Other non-deductible expenses.................................................................................. 1,376,889 8,780,671
Tax credit........................................................................................................................ (1,611,875) (353,551)
Unwinding of discount................................................................................................. 152,801 222,057
Depreciation for provision for rehabilitation and environment.............................. 81,572 87,419
Provision for retirement and other employment benefit obligation....................... 51,336 409,551
Subtotal........................................................................................................................... 50,723 4,146,147
Current tax rate............................................................................................................... 10% 10%
Tax effect........................................................................................................................ 5,072 414,615
Tax of dividend paid..................................................................................................... 1,076,787 7,543,967
Income tax expense....................................................................................................... 5,670,052 14,351,957
Effective Tax rate.......................................................................................................... 12% 22%
According to the provisions of the Profit Tax Law the tax base is the profit generated during the fiscal year increased for
non-deductible expenses and reduced for deductible revenue (i.e. dividends already taxed at the payer), with profit tax at
rate of 10%.
The tax authorities may at any time inspect the books and records within 5 to 10 years subsequent to the reported tax year,
and may impose additional tax assessments and penalties. SASA's management is not aware of any circumstances, which may
give rise to a potential material liability in this respect.
13. Property Plant and Equipment
Land Buildings and mining infrastructure Machinery and equipment Construction in progress Total
Year ended 31 December 2015
Opening net book amount.............. 670,505 25,358,739 14,636,672 8,387,671 49,053,857
Additions........................................ - - - 7,508,625 7,508,625
Transfer from construction in progress.......................................... - 5,121,931 3,123,042 (8,244,973) -
Write-off/Disposal......................... - - (59,193) - (59,193)
Depreciation charge....................... - (1,191,834) (4,280,153) - (5,471,987)
Foreign exchange gain (loss)........... - 185,098 - - 189,093
Exchange differences...................... (69,150) (2,679,356) (1,490,574) (853,574) (5,092,654)
Closing net book amount.......... 601,355 26,794,573 11,929,794 6,797,749 46,123,471
At 31 December 2015
Cost............................................ 601,355 29,820,858 36,566,207 6,797,749 73,786,169
Accumulated depreciation........... - (3,026,285) (24,636,413) - (27,662,698)
Net book amount..................... 601,355 26,794,573 11,929,794 6,797,749 46,123,471
Year ended 31 December 2014
Opening net book amount........... 760,148 26,134,571 15,750,114 7,066,095 49,710,928
Additions.................................... - - - 10,729,092 10,729,092
Transfer from construction in progress...................................... - 3,279,477 5,103,710 (8,383,187) -
Disposals..................................... - - (345) - (345)
Depreciation charge.................... - (1,005,984) (4,293,471) - (5,299,455)
Foreign exchange gain (loss)....... - 237,129 - - 237,129
Exchange differences.................. (89,643) (3,286,454) (1,923,336) (1,024,329) (6,323,762)
Closing net book amount....... 670,505 25,358,739 14,636,672 8,387,671 49,053,587
At 31 December 2014
Cost............................................ 670,505 27,424,822 37,945,902 8,387,671 74,428,900
Accumulated depreciation........... - (2,066,083) (23,309,230) - (25,375,313)
Net book amount..................... 670,505 25,358,739 14,636,672 8,387,671 49,053,587
SASA has pledged building and equipment with an estimated value of USD 3,590,974 (2014: USD 5,234,749) as a guarantee for
the Borrowings (See Note 20).
14. Inventories
2015 2014
Raw materials............................................................................................................ 248,641 202,866
Finished goods and production............................................................................. 184,800 283,206
Spare parts and other materials.............................................................................. 1,105,325 1,546,012
1,538,766 2,032,084
Finished goods represent lead and zinc concentrate.
15. Trade and other receivables
2015 2014
Trade receivables
Trade receivables - domestic................................................................................. 7,628 9,118
Trade receivables - foreign.................................................................................... 6,021,705 45,413,921
Less: Provision for impairment............................................................................... (6,723) (7,496)
Trade receivables - net........................................................................................... 6,022,610 45,415,543
Other receivables
Prepaid expenses...................................................................................................... 19,885 135,719
Advance payments.................................................................................................. 734,055 1,023,904
VAT receivables....................................................................................................... 620,317 1,232,091
Other short term receivables................................................................................... 390 6,251
Less: Provision for impairment............................................................................... - (46,321)
Other receivables.................................................................................................... 1,374,647 2,351,644
Movements on the provision for impairment of trade receivables are as follows:
2015 2014
At 1 January.............................................................................................................. 7,496 8,515
Write off of previously impaired receivables....................................................... - -
Exchange difference................................................................................................. (773) (1,019)
At 31 December....................................................................................................... 6,723 7,496
Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional
cash. The ageing analysis of provision for impairment is as follows:
2015 2014
Over 180 days........................................................................................................... - -
Over 1 year................................................................................................................ 6,723 7,496
6,723 7,496
According to SASA's policies the following factors are been taken into consideration when assessing the impairment of
receivables: receivables above 90 days or more, frequent late payments, high-risk customers and customer with financial
difficulties.
The carrying amounts of SASA's trade receivables are denominated in the following currencies:
2015 2014
USD............................................................................................................................ 6,014,982 45,406,425
MKD........................................................................................................................... 7,628 9,118
6,022,610 45,415,543
The carrying amounts of SASA's other receivables are denominated in the following currencies:
2015 2014
MKD........................................................................................................................... 1,276,837 2,127,910
EUR............................................................................................................................. 97,810 223,734
1,374,647 2,351,644
The fair value of the trade receivables and the other receivables at the balance sheet date is the same as their carrying
value.
16. Short term loans
2015 2014
Short term loans........................................................................................................ - 55,500,372
- 55,500,372
Short-term loans was granted on 19 February 2013 to Solway Finance Limited bearing 3 months Libor interest rate for USD +
1% p.a. The loan was fully repaid during 2015.
17. Cash and cash equivalents
2015 2014
Bank accounts in domestic currency.................................................................... 62,262 24,308
Bank accounts in foreign currency........................................................................ 154,379 938,639
216,641 962,947
The carrying amounts of the cash and cash equivalents are denominated in the following currencies:
2015 2014
MKD........................................................................................................................... 62,262 24,307
EUR............................................................................................................................. 154,379 15,506
USD............................................................................................................................ - 923,134
216,641 962,947
18. Capital and reserves
Own Capital
Own Capital
At 31 December 2015, the total of SASA's paid-in capital amounts to 4,672,933 (2014 and 2013: 4,672,933).
Ownership structure
SASA is wholly owned subsidiary of Lynx Europe dooel Skopje.
Reserves
Statutory reserves
Reserves are initially created based on the local legal provisions and are subsequently increased during the years due to
allocation of net profit after tax. According to local regulation, SASA is required to have compulsory general reserves
established through a portion of their net profits. With the changes of the Law on Trading Companies effective from 1
January 2013, SASA is required to set aside 5 per cent (15% prior to changes) of its net statutory profit for the year in a
statutory reserve until the level of the reserve reaches 1/10 (1/5th prior to change) of the share capital. According to
the local legal provisions, reserves can be used for recovering of the accumulated losses, purchase of own shares and
payment of dividends, as well. SASA has achieved the required minimum in prior years and consequently no appropriation in
2015 has been made.
Dividends
During 2015, SASA allocated part of its retained earnings for dividends in the total amount of USD 65,608,527. This amount
consists of profit arising from 2014 in amount of USD 49,393,043 advance dividend arising for the profit from 2015 in
amount of USD 6,392,541 and dividend for the profit arising from 2013 and 2012 in amount of USD 9,822,943 net of related
Income tax of USD 1,076,782.
During 2014, SASA allocated part of its retained earnings from 2013 and 2012 for dividends in the total amount of USD
62,616,333 net of related Income tax of USD 7,543,967. In addition, during the same period, SASA declared and paid
dividends from other reserves (see "other reserves" subheading above) in the amount USD 137,777,464 including related
withholding tax in the amount of USD 13,926,662.
19. Provisions for liabilities and charges
Provisions for employee benefits
Provisions for rehabilitation and environment Retirement benefit obligation Other employee benefits Total
As at 1 January 2015 2,014,838 119,739 256,465 2,391,042
Unwinding of discount (Note 11) 185,092 - - 185,092
Foreign exchange gain (loss) (Note 11) 211,814 31,353 19,983 263,150
Exchange differences (213,973) (12,838) (26,761) (253,572)
As at 31 December 2015 2,197,771 138,254 249,687 2,585,712
Current - 19,459 116,542 136,001
Non-current 2,197,771 118,795 133,145 2,449,711
2,197,771 138,254 249,687 2,585,712
Provisions for employee benefits
Provisions for rehabilitation and environment Retirement benefit obligation Other employee benefits Total
As at 1 January 2014 1,847,127 124,221 243,958 2,215,306
Unwinding of discount (Note 11) 237,129 11,067 44,937 293,133
Foreign exchange gain (loss) (Note 11) 182,589 - - 182,589
Exchange differences (252,007) (15,549) (32,430) (299,986)
As at 31 December 2014 2,014,838 119,739 256,465 2,391,042
Current - 12,382 43,334 55,716
Non-current 2,014,838 107,357 213,131 2,335,326
2,014,838 119,739 256,465 2,391,042
(i) Provisions for rehabilitation and environment
Under current legislation entities operating mining and related activities in the Republic of Macedonia are required to
take remedial action for the land where such activities have occurred based on a plan approved by the Ministry of the
Environment as well as in accordance with international best practices. After the ceasing of mining activities SASA is
obliged to restore the mining area and to return in its initial condition.
SASA has engaged an independent expert to conduct an independent assessment on the environment of the mining activities of
SASA and to prepare assessment of the restoration and the relevant costs connected with the mine, tailing site and the
mining properties. The calculation was performed on a basis of this independent assessment performed by an environmental
technical expert.
The expected current cash flows were projected over the useful life of the mining sites and discounted to 2014 terms using
a risk free discount rate. The cost of the relating assets is depreciated over the useful life of the assets and is
included in property, plant and equipment. If the estimated discount rate used in the calculation had been 10% lower than
management's estimates, the carrying amount of the restoration and decommissioning provision would have been USD 259,161
higher.
(ii) Employee retirement benefit provision
All employers in the Republic of Macedonia are obliged to pay employees minimum severance pay on retirement equal to two
months of the average monthly salary applicable in the Country at the time of retirement.
(iii) Other employee benefits
The Lynx Group is also obliged to pay jubilee anniversary awards that correspond to the total number of years of service of
the employee. Provisions for termination and retirement obligations are recognized in accordance with actuary calculation
in 2016. Basic actuary assumptions are used as follows:
2015 2014 As at 1 January 2014
Discount rate............................................................................................... 4.3% 4.8% 5.35%
Exacted rate for increasing of salary........................................................ 2.5% 1.5% 2.35%
Retirement benefit obligation is stated at the present value of expected future payments to employees with respect to
employment retirement pay. The present value of expected future payments to employees is determined by an independent
authorised actuary in accordance with the prevailing rules of actuarial mathematics.
20. Borrowings
2015 2014
Borrowings............................................................................................................... 11,208,226 9,228,567
11,208,226 9,228,557
Current....................................................................................................................... 11,208,226 4,209,520
Non-current.............................................................................................................. - 5,019,047
11,208,226 9,228,557
Borrowings are measured at amortized cost. Borrowings relate to two short-term loans from Ohrid Bank AD Skopje. The first
short-term loan was approved in amount of USD 5,504,271 with interest rate of 6.2% per annum and maturing on 1 May 2016.
The second short-term loan was issued in amount of USD 6,563,263 with interest rate of 3.5% p.a. with maturity date on 4
January 2016. The loans towards Natixis and Solway Commodities were repaid in 2015 with interest rate of one-month Libor
+6% p.a.
The carrying amounts and fair value of the current borrowings are as follows:
Carrying amount Fair value
2015 2014 2015 2014
Ohridska Banka AD Skopje................ 11,208,226 - 11,208,226 -
Nataxis Solway..................................... - 8,904,756 - 8,904,756
Soloway Commodities......................... - 323,811 - 323,811
11,208,226 9,228,567 11,208,226 9,228,567
The fair value of current borrowings equals their carrying amount, as the impact of discounting is not significant.
The information in relation to the pledge of collateral is presented in Note 13. The carrying amounts of the borrowings are
denominated in the following currencies.
2015 2014
MKD.......................................................................................................................... 11,208,226 -
USD............................................................................................................................ - 9,228,567
11,208,226 9,228,557
21. Trade and other payables
2015 2014
Trade payables
Domestic trade payables........................................................................................ 1,473,914 1,412,350
Foreign trade payables........................................................................................... 623,758 469,795
Trade payables 2,097,672 1,882,145
Other current liabilities
Dividend liabilities................................................................................................... - 62,366,773
Employee related liabilities..................................................................................... 637,843 736,169
Concession liability................................................................................................. 476,741 570,763
Other current liabilities............................................................................................ 126,103 141,534
Other current liabilities........................................................................................ 1,240,687 63,815,239
Total 3,338,359 65,697,384
The carrying amounts of the trade payables are denominated in the following currencies:
2015 2014
MKD.......................................................................................................................... 1,473,914 1,412,351
USD............................................................................................................................ 45,641 -
EUR............................................................................................................................ 442,470 380,871
SEK............................................................................................................................ 135,657 88,923
2,097,672 1,882,145
The carrying amounts of the other current financial liabilities are denominated in the following currencies:
2015 2014
MKD.......................................................................................................................... 1,240,687 63,815,239
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