Petrol AD - Separate Annual Financial Statements - Part 2
09/06/2016 14:02
- Part 2: For the preceding part double click ID:nRSI7630Aa
1,594 1,480
Revenue from government grants in year 2014 is received under the Operational
Programme 'Development of Human Resources'.
7. Cost of goods sold
2015BGN'000 2014BGN'000
Fuels 544,362 667,863
Lubricants and other goods 28,857 25,961
573,219 693,824
8. Materials and consumables
2015BGN'000 2014BGN'000
Electricity and heating 2,143 2,016
Fuels and lubricants 447 535
Office consumables 383 474
Working clothing 200 416
Advertising materials 153 88
Spare parts 149 205
Water 127 109
Other 124 158
3,726 4,001
9. Hired services
2015BGN'000 2014BGN'000
Rent 19,896 18,444
Commissions 6,789 6,938
Consulting and training 1,775 1,303
Security expenses 1,424 383
Maintenance and repairs 1,224 1,164
Communications 835 723
Cash collection expenses 757 877
State and municipal fees 726 264
Advertising costs 699 694
Insurance expense 515 436
Commodity control 260 498
Software licenses 209 428
Transportation 150 127
Other 364 679
35,623 32,958
Rental costs include BGN 17,617 thousands (2014: 16,056 thousands) rent of
petrol stations, under operating lease agreements.
10. Personnel expenses
2015BGN'000 2014BGN'000
Wages and salaries 14,856 14,748
Social security contributions and benefits 2,908 2,987
Expenses related to defined benefit plans 72 72
17,836 17,807
11. Impairment losses
2015BGN'000 2014BGN'000
Recognised impairment loss on financial assets, including.: 122,442 271,297
Impairment loss on investment in subsidiaries 111,366 228,311
Impairment loss on interest-bearing loans granted 6,961 40,807
Impairment loss on trade receivables 4,115 2,179
Reversed impairment loss on financial assets, including: (14,213) (43)
Reversed impairment loss on interest-bearing loans (14,011) -
Reversed impairment loss on trade receivables (202) (43)
108,229 271,254
For the period ending on December 31, 2015 in connection with Naftex Petrol
EOOD's cessation of business activity and insolvency proceedings, Petrol AD
has fully impaired its investment in that subsidiary and recognised impairment
loss of BGN 40.000 thousand. As at the end of 2015, Naftex Petrol EOOD is no
longer part of Petrol AD's group. In December 2015, a contract signed at a
certified public notary was concluded and according to the terms of the
contract Petrol AD transferred its entire shareholding in Naftex Petrol EOOD
to a company, not belonging to Petrol AD's group. The change in ownership of
Naftex Petrol EOOD was timely filed in for inscription with Commercial
Register of the Registry Agency, but the change is not reflected due to
incomplete information being field in. However, insofar the contract dated
December 2015 was signed in a form prescribed by the Commercial Act, it raises
legal consequences between the parties involved, therefore Petrol AD is no
longer to be considered sole owner of Naftex Petrol EOOD's share capital and
respectfully, the investment in that subsidiary is full written off (see also
note 17).
As at December 31, 2015, Management has performed analysis of Elite Petrol
AD's investment value. During the reporting period due to foreclosure imposed
on assets controlled by Elit Petrol's subsidiaries, Company fully impaired its
investment in Elit Petrol AD, which resulted in impairment losses of BGN
70,915 thousand
As at December 31, 2015 Management has performed analysis of Petrol Gas EOOD's
investment value. That subsidiary's net assets are a negative figure and
throughout the year its main assets were disposed of. Therefore the investment
is fully impaired at 100%.
As at the date of approval of these financial statements for issuance, the
Company managed to collect receivables impaired in prior periods representing
loans granted to related parties, resulting in recovered impairment losses of
BGN 14,149 thousand and trade receivables, resulting in recovered impairment
losses if BGN 202 thousand (see also note 20 and 21).
12. Other expenses
2015BGN'000 2014BGN'000
Receivables written-off 556 4
Scrap, shortages and written off assets 535 827
Penalties and indemnities 524 168
Entertainment expenses and sponsorship 412 563
Local taxes and taxes on expenses 403 442
Expenses for insurance claims 99 40
Business trips 87 80
Loss on sale of PPE, incl.:. - 634
Sale proceeds - (2,735)
Carrying value - 3,369
Other 30 62
2,646 2,820
13. Finance income and costs
2015BGN'000 2014BGN'000
Finance income
Interest income, including 1,952 6,634
Interest income on loans granted 1,604 6,146
Interest income on trade receivables 328 476
Other interest income 20 12
Foreign exchange gains, net 17 -
Gain on disposal of investments in subsidiaries 34,225 -
Gain from in-kind contribution of PPE 1,278 -
Income from share capital investments 15,185 413
52,657 7,047
Finance costs
Interest costs, including (5,662) (13,445)
Interest expenses on debenture loans (3,242) (3,227)
Interest expenses on trade loans (2,079) (7,798)
Interest expenses on trade and other payables (341) (2,420)
Negative exchange differences, net - (10,206)
Loss on PPE contributed to a subsidiary's equity - (2,410)
Bank fees, commissions and other finance costs (224) (55)
(5,886) (26,116)
Finance income (cost), net 46,771 (19,069)
14. Taxation
14.1. Tax expenses
Tax expense recognised in profit or loss includes the amount of current and
deferred income tax expenses in accordance with IAS 12 Income taxes
2015BGN'000 2014BGN'000
Change in deferred tax, including (16,049) 26,915
Temporary differences arising during the period (12,291) 27,113
Temporary differences recognised during the period 28,563 (198)
Tax assets adjustments (223) -
Total tax expense (benefit) (16,049) 26,915
14.2. Effective tax rate
Reconciliation between accounting profit and tax expense and calculation of
the effective tax rate as of December 31, 2015 and 2014 is presented in the
table below:
2015BGN'000 2014BGN'000
Accounting loss for the year 55,072 284,982
Applicable tax rate 10% 10%
Corporate tax expense (benefit) at the applicable tax rate 5,507 28,498
Tax effect of :
Permanent differences 1,471 (38)
Tax asset in current year, arising in previous periods (23,250) (1,545)
Adjustments in current period in tax assets (liability), arising in previous periods 223 -
Tax expense (income) (16,049) 26,915
Effective tax rate - -
The respective tax periods of the Company may be subject to inspection by the
tax authorities until the expiration of 5 years from the end of the year in
which a declaration was submitted, or should have been submitted. Consequently
additional taxes or penalties may be imposed in accordance with the
interpretation of the tax legislation. The Company's management is not aware
of any circumstances which may give rise to a contingent additional liability
in this respect.
The last tax audit of the Company commenced in December 2014 and encompasses
social security's and personal income tax for the period December 2008 till
December 2013, corporate income tax and value added tax for year 2013. The
latest tax inspection dates from August, 2015and encompasses review of
company's corporate income tax for year 2014 and value added tax as at June,
2015.
As at the date of approval of these financial statements the tax audit
stipulates a breach relating to social securities' amounting to BGN 543
thousand principal and BGN 248 thousand interest. The tax audit stipulations
are being challenged by the Company (see also Note 33).
14.3. Recognised deferred tax assets and liabilities
The Company has recognised deferred tax assets and liabilities and respective
movement attributable to the following positions:
Asset (liability) as at January 2014 Recognised in profit and loss Asset (liability) as at December 31 , 2014 Recognised in profit and loss Asset (liability) as at December 31 2015
BGN'000 BGN'000 BGN'000 BGN'000 BGN'000
Property, plant and equipment (598) (111) (709) 363 (346)
Impairment of assets 1,246 27,082 28,328 (16,417) 11,911
Provisions for unused paid leave and other provisions 97 (37) 60 5 65
Other temporary differences, including unpaid benefits to individuals 19 (19) - - -
764 26,915 27,679 (16,049) 11,630
The Company has the right to carry forward tax loss till year 2020 incl. The
Company has not recognised tax asset on carry forward tax losses due to
uncertainty in ability to realize sufficient future tax profits.
15. Property, plant and equipment
Land BGN'000 Buildings BGN'000 Plant and equipment BGN'000 Vehicles BGN'000 Other BGN'000 Assets under constr.BGN'000 Total BGN'000
Cost
Balance at January 2014 9,935 12,191 27,351 841 6,555 1,786 58,659
Additions 68 52 579 1 110 2,704 3,514
Transfers - 689 2,691 - 287 (3,667) -
Disposals (2,239) (4,360) (7,031) (151) (1,748) (1) (15,530)
Balance at December 2014 7,764 8,572 23,590 691 5,204 822 46,643
Additions 2,609 1,270 193 - 58 607 4,737
Transfers - - 390 - 17 (407) -
Disposals (1,667) (4,209) (12,704) - (2,275) (140) (20,995)
Balance at December 2015 8,706 5,633 11,469 691 3,004 882 30,385
Accumulated depreciation
Balance at January 2014 - 5,035 15,076 780 4,717 - 25,608
Accumulated - 470 1,595 17 465 - 2,547
Transfers - - (2) - 2 - -
Disposals - (1,481) (3,646) (151) (1,415) - (6,693)
Balance at December 2014 - 4,024 13,023 646 3,769 - 21,462
Accumulated - 312 1,243 9 349 - 1,913
Disposals - (1,586) (6,463) - (1,577) - (9,626)
Balance at December 2015 - 2,750 7,803 655 2,541 - 13,749
Carrying amount at 1 January 2014 9,935 7,156 12,275 61 1,838 1,786 33,051
Carrying amount at 31 December 2014 7,764 4,548 10,567 45 1,435 822 25,181
Carrying amount at 31 December 2015 8,706 2,883 3,666 36 463 882 16,636
16,636
Property, plant and equipment with carrying amount of BGN 4,474 thousand
(2014: BGN 7,079 thousand) were mortgaged as collateral under bank loans
granted to the Controlling company until November 2013 and to subsidiaries and
third not related parties.
BGN 4,474 thousand also comprises PPP given as a security in favour of
National Revenue Agency in relation to a tax inspection report (see also note
32).
The carrying amount of assets acquired through finance leases as at December
31, 2015 comes up to BGN 3, 279 thousand(see Note 26.2). Assets under
construction include expenses in relation to reconstruction of sites.
Management's impairment tests on property, plant and equipment, confirm that
there is no evidence or circumstances indicating a sustained decline in the
carrying amounts of assets, which recoverable amount significantly differs
from their carrying amount.
The book value of all fully depreciated property, plant and equipment still in
use amounts to BGN 7,136 thousand.
The statement of financial position of the company includes assets with low
value, which book value at December 31, 2015 totals BGN 1,068 thousand and
carrying amount of BGN 133 thousand.
16. Intangible assets
Software BGN'000 Licenses BGN'000 Other BGN'000 Total BGN'000
Cost
Balance at January 1, 2014 367 3,116 702 4,185
Additions - 43 10 53
Disposals (7) (111) - (118)
Balance at December 31, 2014 360 3,048 712 4,120
Disposals - (2,857) - (2,857)
Balance at December 31, 2015 360 191 712 1,263
Accumulated depreciation
Balance at January 1, 2014 219 2,990 449 3,658
Accumulated 120 43 107 270
Disposals (7) (111) - (118)
Balance at December 31, 2014 332 2,922 556 3,810
Accumulated 28 41 109 178
Disposals - (2,814) - (2,814)
Balance at December 31, 2015 360 149 665 1,174
Carrying amount at 1 January 2014 148 126 253 527
Carrying amount at 31 December 2014 28 126 156 310
Carrying amount at 31 December 2015 - 42 47 89
-
42
47
89
The statement of financial position of the company includes intangible assets
with low value, which book value at December 31, 2015 totals BGN 36 thousand
and nill carrying amount.
The book value of all fully depreciated intangible assets still in use amounts
to BGN 440 thousand.
17. Investments in subsidiaries
Subsidiary Activity 31 December 2015 31 December 2014
BGN '000 Share (%) BGN '000 Share (%)
Grifon Power EAD Asset Management 11,233 100 - -
BPI AD Real estate management 5,342 99.60 5,364 100
Petrol Technologies OOD IT services 821 98.8 - -
Petrol Finance OOD Financial and accounting services 99 99.0 - -
Petrol Properties EOOD Trade with immovable properties 5 100 5 100
Elit Petrol AD Asset Management - 99.99 70,915 99.99
Petrol Gas EOOD Wholesale of fuels - 100 451 100
Naftex Petrol EOOD Wholesale of fuels - - 40,000 100
Petrol Eco Tour Invest EOOD Consultancy and engineering services - - 5 100
Varna Storage EOOD Trade with petrol and petrol products - - 18,749 100
Petrol Trans Expres EOOD Transport services - - 996 100
Petrol Technika EOOD Service and maintenance of petrol stations - - 50 100
Petrol Zapad EOOD Trade with petrol products - - 2,991 100
17,500 139,526
In November, 2014 the Company established a 100% subsidiary Petrol Zapad EOOD
by a non-monetary equity contribution of property, plant and equipment and
other tangible and intangible assets pertaining the 10 fuel stations total
valued at BGN 2,992 thousand with carrying amount of BGN 5,402 thousand. As a
result from the equity contribution a loss of BGN 2,410 thousand was
accumulated. In the beginning of January, 2015 a decision to sell the
investment in Petrol Zapad EOOD was met to a third not related party. Selling
price agreed comes up to BGN 2,992 thousand and which was paid at the date on
signing the agreement.
In February, 2015 the company acquired 99% of the share capital of Petrol
Technologies EOOD for BGN 495, which was subsequently renamed to Petrol
Finances OOD. In August, 2015 the Company participated in the capital increase
subscribing 98,505 new shares for a cash contribution in the amount of BGN 99
thousand.
In March 2015 the Company sold 100% of its participation in Varna Storage EOOD
to another subsidiary company for a selling price of BGN 51,600 thousand. At
the date of signing of contracts for the sale of shares, obligations arising
under the transaction aforementioned are fully paid.
In August 2015 the Company became a shareholder in Petrol Technologies OOD and
subscribed for 3,800 new shares, each with par value of BGN 100 in a capital
increase for a cash contribution of BGN 380 thousand, representing 99.74% of
the share capital the subsidiary. In the same month the Managing Board of the
Company met the decision that the Company is to participate in the capital
increase of Petrol Technologies OOD from BGN 381 thousand to BGN 831 thousand
and subscribed for further 4,410 new shares for a cash contribution of BGN 441
thousand.
In August, the Company sold 100% of its share in Petrol Trans Express EOOD and
in Petrol Technika EOOD to third not related parties for the selling price of
BGN 2,360 thousand and BGN 80 thousand.
In October 2015, the Company in its capacity of a sole shareholder of BPI EAD
transferred by selling the right of ownership of one share of Petrol Finance
OOD and one share of Petrol Technologies OOD. Each share represents 0.2% of
capital and was sold at par value of BGN 100.
In December 2015 the Company established a new subsidiary Grifon Power EAD by
in kind contribution of property, plant, equipment and other tangible and
intangible assets valued at BGN 11,233 thousand. The carrying amount of assets
contributed to the equity of the newly incorporated subsidiary comes up to BGN
9,955 thousand. As a result of the in kind contribution a profit of BGN 1,278
thousand was reported.
As at December 31, 2015 Management performed analysis of Elit Petrol AD's
investment value, based on which a decision to fully impair that investment
was met. The decision was driven by a foreclosure imposed on assets controlled
by Elit Petrol AD's subsidiaries.
As at December 31, 2015 the investment in Petrol Gas EOOD was fully impaired
mainly because key assets were sold and net assets value for the year were
below the registered capital value.
In December 2015 a contract for sale of the entire 100% participation in
Naftex Petrol EOOD was signed at a public notary for the amount of 1 lev. The
change in Naftex Petrol EOOD's equity owner is not inscribed in Commercial
Register as at the end of 2015, where the application for inscription of the
new circumstances was rejected by the authority due to incomplete information
submitted with the application.
However, insofar the contract dated December 2015 was signed in a form
prescribed by the Commercial Act, it raises legal consequences between the
parties involved, therefore Petrol AD is no longer to be considered sole owner
of Naftex Petrol EOOD's share capital.
All subsidiaries are domiciled in Bulgaria.
18. Financial assets available for sale
As a result from the loss of control over the subsidiary company Petrol Eco
Tur Invest EOOD, the investment cost amounting to BGN 5 thousand in shown in
these financial statements as non-current asset available for sale.
19. Inventories
31 December2015BGN'000 31 December2014BGN'000
Goods, including: 17,858 18,831
Petrol products 11,052 12,407
Other goods 6,806 6,424
Materials 1,724 1,881
19,582 20,712
20. Loans granted
31 December2015BGN'000 31 December2014BGN'000
Long-term loans
Loans granted to related parties, including - 22,609
Initial value - 38,034
Allowance for impairment - (15,425)
Loans granted to third parties, including - -
Initial value 23,288 21,034
Allowance for impairment (23,288) (21,034)
- 22,609
Short-term loans
Loans granted to related parties, including 672 10,627
Initial value 10,434 16,133
Allowance for impairment (9,762) (5,506)
Loans granted to third parties, including - 810
Initial value 6,686 5,999
Allowance for impairment (6,686) (5,189)
672 11,437
672 34,046
Receivables from loans granted to related parties are disclosed in note 31.
In 2014 the company recognised an impairment loss on receivables from the
related party that was a controlling entity till November 2013 on loans
granted and interest receivable in the amount of BGN 25,382 thousand.
Impairment loss was recognised because insolvency proceedings were initiated
and difficulties in collecting the receivables were experienced.
In 2014 due to fall in trading volumes an allowance for impairment was made on
a loan granted to a subsidiary company coming up to BGN 15,425 thousand, which
represented the amount of outstanding liability as at the date of issuance of
the individual financial statements of the Company for the year ending 2014.
As at the date of these financial statements, the subsidiary managed to
partially repay its obligation, thus resulting in a reversed impairment
allowance of BGN 13,171 thousand.
The loan and impairment allowance losses are reclassified as loans to
unrelated parties, since as at December 31, 2015 this company is no longer
part of the Petrol Group.
For the year ending on December 31, 2015 Company managed to collect BGN 840
thousand from loans granted to other related parties, which were fully
impaired in previous periods.
Management performed an analysis of loans granted in order to determine their
fair values and their respective level in the fair value hierarchy. Management
considers that the carrying amounts of granted loans in the statement of
financial position are reasonable approximations of their fair value as at
December 31, 2015 and December 31, 2014 within Level 3 category.
Company's exposure to credit and foreign currency risks and impairment losses
related to loans granted is disclosed in Note 29.
21. Trade and other receivables
31 December2015BGN'000 31 December2014BGN'000
Receivables from clients, including 20,970 23,554
Initial value 24,503 29,297
Allowance for impairment (3,533) (5,743)
Cession and assumption of debt 2,742 -
Initial value 4,146 227
Allowance for impairment (1,404) (227)
Receivables from related parties 449 25,828
Initial value 1,993 25,895
Allowance for impairment (1,544) (67)
Advances granted 6,806 1,218
Initial value 7,031 2,267
Allowance for impairment (225) (1,049)
Guarantees for participation in tender procedures 1,396 1,477
Value Added Tax refundable 587 -
Deferred expenses 145 109
Litigations and writs 2 45
Initial value 252 345
Allowance for impairment (250) (300)
Other 1,864 1,146
Initial value 2,176 2,341
Allowance for impairment (312) (1,195)
34,961 53,377
Receivables from related parties are disclosed in note 31.
In accordance with the adopted policy, the Company grants to its customers a
credit period after the expiry of which penalty interest for overdue payment
is accrued on the unsettled balance to the amount set in each individual
contract.
As at the end of each reporting period the Company performs a detailed review
and analysis of overdue trade receivables, as a result of which receivables
evaluated as uncollectable are impaired. Other trade receivables usually
overdue by more than 360 days are completely impaired, since the historical
experience indicates they are not recoverable.
Management performed an analysis of the trade receivables in order to
determine their fair values and their level in the fair value hierarchy. The
Management considers that the carrying values of the trade and other
receivables in the statement of financial position are reasonable
approximations of their fair value as at December 31, 2015 and 2014 within
Level 3 category.
The Company is of the opinion that unimpaired overdue receivables are
collectible based on historical information about payments, guarantees
received and a detailed analysis of the credit risk and collaterals of its
customers.
The Company's exposure to credit, currency and impairment losses related to
loans provided is disclosed in note 29.
22. Current income tax
The excess of corporate taxes paid during the current and prior periods above
tax payables at the amount of BGN 499 thousand as at December 31, 2015 and
2014 is presented in the statement of financial position as refundable income
tax.
23. Cash and cash equivalents
31 December2015BGN'000 31 December2014BGN'000
Cash at banks 2,807 3,167
Cash in transit 3,423 2,855
Cash on hand 128 71
Cash and cash equivalents in Statement of Cash Flows 6,358 6,093
Blocked cash amount 2,326 450
Cash and cash equivalents in the Statement of Financial Position 8,684 6,543
The amounts presented as blocked cash as at December 31, 2015 in Cash and Cash
Equivalents comprise: BGN 1,119 thousand held at a bank account that is
blocked as a bank guarantee under a bank loan agreement to serve as a security
for a public tender participation; BGN 1,207 thousand bank guarantees issued
in favor of National Revenue Agency with respect to a proceeding of an appeal
against a tax audit.
Cash in transit comprises cash collected from fuel stations as at the end of
the reporting period but actually received in the bank accounts of the Company
in the beginning of the next reporting period
24. Registered capital
The registered capital is presented at its nominal value in accordance with
the court decision for registration. As at December 31, 2015 and 2014 The
fully paid-in capital to the amount of BGN 109,250 thousand is distributed in
109,249,612 registered shares with a nominal value of BGN 1 each.
As of the end of the reporting period, the shareholders in the Company are as
follows:
Shareholder 31 December2015 31 December2014
Alfa Capital AD 28.85% 28.85%
Julinor EOOD 23.11% 23.11%
Correct Pharm EOOD 18.31% 18.31%
Perfeto consulting EOOD 16.43% -
Corporate Commercial Bank AD 5.51% 5.51%
El Trading EOOD 2.54% -
VIP Properties EOOD 2.26% 18.31%
The Ministry of Economy of the Republic of Bulgaria 0.65% 0.65%
Naftex Petrol EOOD - 0.34%
Varna Storage EOOD - 0.04%
Other minority shareholders 2.34% 4.88%
100.00% 100.00%
The order of distribution of profits and covering of losses is set out in the
Commercial Act and the Articles of Association of the Company. The Company
retains at least 1/10 of the profit in fund "Reserves" until it reaches 1/10
of the capital.
25. Basic net earnings (loss) per share
Loss per share is calculated on the basis of net profit (loss) attributable to
ordinary shareholders and the weighted average number of ordinary shares
outstanding during the period.
31 December 2015 31 December 2014
Weighted average number of shares (in thousands) 109,250 109,250
Profit (loss) in thousands of BGN (71,166) (258,067)
Earnings (loss) per share in BGN (0.65) (2,36)
26. Loans and borrowings
31 December2015BGN'000 31 December2014BGN'000
Non-current liabilities
Debenture loans 36,258 36,073
Finance Leasing 2,685 -
Loan from related parties - 81,149
38,943 117,222
Current liabilities
Debenture loans 2,838 2,838
Finance Leasing 589 -
Loan from related parties 29 -
3,456 2,838
42,399 120,060
Liabilities on loans received from related parties are disclosed in note 31.
26.1. Debenture loans
In October, 2006 the Company issued 2,000 registered transferable debenture
notes with fixed annual interest rate of 8.375% and issue value 99.507% of the
face value, which is determined at EUR 50,000 per bond. The principal is due
in one payment at the maturity date. At the general meetings of the note
holders conducted in the end of year 2011, it was decided to extend the term
of the issue until January 26, 2017.
The issue is secured by the Company's receivables on granted loans to the
Controlling Company until November 2013 and by a corporate guarantee issued by
a subsidiary. Interest is paid once a year. The annual effective interest rate
after the extension is 8.6%. The purpose of issue is providing of working
capital, financing in investment projects and restructuring of a previous
Company's debt.
The bond liabilities are presented in the statement of financial position at
amortised cost.
The fair value of the bond liability as at December 31, 2015 is BGN 34,224
thousand (2014: BGN 36,494 thousand) calculated at an interest rate of 9.12%
(2014: 9.12%).
Additional information related to Company's exposure to credit, currency and
impairment losses related to loans and borrowing receiver is disclosed in note
29.
26.2. Finance lease liabilities
31 December 2015
Future minimum lease payments Interest on lease payments Present value of minimum lease payments
BGN '000 BGN '000 BGN '000
Up to 1 year 796 (207) 589
Between 1 and 5 years 2,940 (377) 2,563
Over 5 years 123 (1) 122
3,859 (585) 3,274
In November, 2015 Company acquired a property under a finance lease agreement.
Lease term period is 6 years. As at December 31, 2015 the effective interest
rate in 6.35%.
The Company's management believes that the fair value of finance lease
liabilities is not materially different from their carrying value.
27. Obligation for defined benefit retirement compensations
During the current reporting period the Company accrued retirement benefits to
the amount of BGN 397 thousand. The liability is determined on the basis of an
actuarial valuation grounded on assumptions for mortality, disability,
employment turnover, salary increases, etc. The present value of the liability
is calculated using a discount factor of 3.0% (2014: 3.5%).
Movement in the present value of the defined benefit retirement
compensations:
31 December2015BGN'000 31 December2014BGN'000
Present value of defined benefit obligations at 1 January 383 384
Benefits paid by the plan (76) (85)
Current service cost 54 52
Interest expense 12 13
Past service cost 6 7
Expenses recognized in profit or loss (4) (13)
Remeasurements of defined benefit retirement compensations recognised in other comprehensive income 18 12
Present value of defined benefit obligations at 31 December 397 383
Actuarial assumptions
The following are the principal actuarial assumptions at the reporting date:
31 December2015 31 December2014
Discount rate 3.0% 3.5%
Future salary increases 4% 4%
Assumptions regarding mortality growth presents the probability employees to
live to a certain age giving them right to a pension. It is calculated for
each employee separately based on their gender and their current age at the
moment of performing the valuation. As at December 31, 2015 and December 31,
2014 a table was used indicating mortality and average longevity of Bulgarian
population for the period 2008-2010 of the National Statistical Institute.
The following table presents a sensitivity analysis against the main mortality
assumptions as at December 31, 2015 based on a method which extrapolates the
effect on the retirement benefit obligations with a reasonable change in the
main assumptions as at the end of the reporting period.
Main assumptions Change with one point EffectBGN'000
Discount rate 1% (28)
Discount rate -1% 32
Staff turnover, annually -1 29
Staff turnover, annually 1 (29)
Salary growth 1% 20
Salary drop -1% (20)
Mortality (probability for dying by age) -1 (2)
Mortality (probability for dying by age) 1 2
Although the analysis does not take account of the full distribution of cash
flows expected under the plan, it does provide an approximation of the
sensitivity of the assumptions shown.
28. Trade and other payables
31 December2015BGN'000 31 December2014BGN'000
Payables to suppliers 15,999 38,111
Payables to personnel and social security funds 1,390 1,346
Advances received 1,246 1,212
Payables to related parties 1,173 27,402
Tax payables 656 1,219
Other 961 964
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