18. Borrowings

Borrowings as at 31 December 2013, 2012 and 2011 were as follows:


  31 December 2013 31 December 2012 31 December 2011
Long–term Borrowings      
Non–current portion of long–term borrowings      
Bank and corporate loans 149,393 142,623 89,188
Bonds 35,000 10,000 4,604
Promissory notes 9 9 48
Vendor financing 55 65 69
Finance lease liabilities 107 129 690
Interest payable 15 14 13
Restructured customer payments 21 34 28
Total non–current portion of long–term borrowings 184,600 152,874 94,640
Current portion of long–term borrowings      
Bank and corporate loans 1,133 44,173 45,319
Bonds 5,000 1,613 4,285
Promissory notes 659 682
Vendor financing 9 2,665 2,717
Finance lease liabilities 61 750 1,971
Restructured customer payments 75 70 77
Total current portion of long–term borrowings 6,278 49,930 55,051
Total  long–term borrowings 190,878 202,804 149,691
       
Short–term Borrowings      
Bank and corporate loans 25,399 14,319 26,588
Promissory notes 377 151 149
Interest payable 1,155 616 665
Total short–term borrowings 26,931 15,086 27,402
Current portion of long–term borrowings 6,278 49,930 55,051
Total current borrowings 33,209 65,016 82,453
Total borrowings 217,809 217,890 177,093

As a result of the reorganization approved on the shareholders’ meeting at December 30, 2013 creditors obtained the right to claim earlier repayment of long–term loans. As at the reporting date, the Company received waivers from all significant creditors, stating that they had no intention to claim earlier repayment. As at the date of issuance of the financial statements, the period of claims determined by the Russian law had expired and no claims were actually received by the Company. Therefore, liabilities were classified as long–term in accordance with contracted maturity.

Finance lease liabilities

In April 2005, the Group entered into a finance lease agreement for use of terrestrial optical fiber cables. The lease agreement is non–cancellable for the period of 15 years, which approximates the remaining useful life of the optical fibers. Effective interest rate of the lease is 7.21% p.a. Lease payments are denominated in US Dollars.

Also, the Group is involved in a finance lease agreement for use of a digital telecommunication station over its estimated remaining useful life of 7 years. Effective interest rate of the lease is 11.7% p.a. Lease payments are denominated in Russian Roubles.

The Group has two lease tranches of optical fibers with OJSC FSK EES until year 2030. The effective interest rates of these leases are 15% and 17% p.a. Lease payments are denominated in Russian Roubles.

Future minimum lease payments together with the present value of the net minimum lease payments as at 31 December 2013, 2012 and 2011 are as follows:


  31 December 2013 31 December 201231 December 2011
  Minimum lease payments Present value of minimum lease payments Minimum lease payments Present value of minimum lease payments Minimum lease payments Present value of minimum lease payments
Current portion (less than 1 year) 78 61 836 750 2,242 1,971
More than 1 to 5 years 75 14 113 36 720 590
Over 5 years 182 93 182 93 218 100
Total 335 168 1,131 879 3,180 2,661

Depreciation of property, plant and equipment under the finance lease contracts for 2013, 2012 and 2011 amounted to 236, 1,090 and 1,636 respectively. Finance charges for the year ended 31 December 2013, 2012 and 2011 amounted to 49, 371 and 565 respectively, and are included in finance costs in these consolidated statements of comprehensive income.

Vendor financing

Vendor financing payable includes the following as at 31 December 2013, 2012 and 2011:


  31 December 2013 31 December 2012 31 December 2011
Government of Dagestan Republic 53 62 69
Other 2 3
Vendor financing payable – long–term 55 65 69
Globalstar L.P. 2,162 2,159
Metrosvyaz Ltd 99 99
Сisko Capital CIS 47
Huawei Technologies Co. Ltd. 391 389
Government of Dagestan Republic 9 9 10
Other 4 13
Vendor financing payable – current portion 9 2,665 2,717
Total vendor financing payable 64 2,730 2,786

Decrease in vendor financing payable was due to the following:

As at 31 December 2012, the Group had 2,162 payable by CJSC GlobalTel to Globalstar L.P., which was the non–controlling shareholder of CJSC GlobalTel, for the purchase of three gateways and associated equipment and services. Globalstar L.P. had a lien over this equipment until the liability is fully paid. CJSC GlobalTel was in default in respect of payments in 2004 – 2012 and has not obtained a waiver from Globalstar L.P. As a result, the entire balance of 1,248 at 31 December 2012 (2011: 1,323) was classified as current in the consolidated statements of financial position as at 31 December 2012 and 2011. Penalty interest in the amount of 914 and 836, accrued for each day of delay at the rate of 10% p.a., was included in the vendor financing payable in the consolidated statements of financial position as at 31 December 2012 and 2011 respectively. In July 2013 the Group has lost control over CJSC GlobalTel (refer to Note 8), so payable by CJSC GlobalTel to Globalstar L.P was not included in the consolidated statements of financial position as at 31December 2013.