Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

19. Finance Leases

v3.19.1
19. Finance Leases
12 Months Ended
Dec. 31, 2018
Finance Leases  
Finance Leases

Note 19 — Finance Leases

 

The Group leases all of its real estate properties except for the properties located in Via Lazio 95 in Buccinasco.

 

Such assets are classified as finance leases as the Group has the right to purchase the assets outright at the end of the minimum lease term by paying a nominal amount. The total fair value of the investment properties that carried finance leases was $28,243,616, $29,742,423 and $25,731,052 as of December 31, 2018, 2017 and 2016 respectively.

 

Future minimum lease payments due are as follows:

 

2018   Minimum
lease
payments
    Interest     Present
value
 
                   
Less than one year   $ 1,673,915     $ 782,610     $ 891,305  
Later than one year and not later than five years     6,532,708       2,590,505       3,944,203  
Later than five years     13,974,542       2,427,715       11,546,827  
Total   $ 22,181,165     $ 5,800,830     $ 16,382,335  

 

2017   Minimum
lease
payments
    Interest     Present
value
 
                   
Less than one year   $ 2,180,616     $ 1,049,434     $ 1,131,182  
Later than one year and not later than five years     7,236,202       3,231,225       3,967,793  
Later than five years     16,296,170       3,115,542       13,180,628  
Total   $ 25,712,988     $ 7,396,201     $ 18,279,603  

 

2016   Minimum
lease
payments
    Interest     Present
value
 
                   
Less than one year   $ 1,920,618     $ 998,984     $ 921,634  
Later than one year and not later than five years     6,739,259       3,156,663       3,582,596  
Later than five years     16,073,358       3,600,982       12,472,376  
Total   $ 24,733,235     $ 7,756,629     $ 16,976,606  

 

As at December 31, 2018, 2017 and 2016, the effective interest rate varies from EURIBOR+1.4% to EURIBOR+2.762%. This amounted to 1.09% to 2.452%, 1.07% to 2.432% and 1.08% to 2.442% as of December 31, 2018, 2017 and 2016, respectively.

  

The present value of the future minimum lease payments are categorized as follows:

 

    2018     2017     2016  
                   
Current liabilities   $ 891,305     $ 1,131,182     $ 921,634  
Non-current liabilities     15,491,030       17,148,421       16,054,972  
Total   $ 16,382,335     $ 18,279,603     $ 16,976,606  

  

During 2016, the Group successfully obtained the approval from a finance lease creditor of a modification repayment plan. In addition, one of the Subsidiaries missed certain scheduled payments to another finance lease creditor, but has since obtained the approval from this finance lease creditor of a modification repayment plan. As a result, Management has not classified the full portion of this affected finance lease as current loans and borrowing as of December 31, 2018, 2017 and 2016.

 

During 2018, the Group has been current with all scheduled lease payments and the repayment plans approved by the finance lease creditors. During 2018, with the approval of the finance lease creditor, one of the subsidiaries suspended its repayment plan beginning in June 2018, and will restart such repayments beginning in January 2019 with quarterly installments.