Georgia Healthcare Group PLC Annual Report 2018 Financial Statements Notes to Consolidated Financial Statements continued (Thousands of Georgian Lari unless otherwise stated) 16. Other assets Other assets comprise: 31 December 2018 31 December 2017 Call option (Notes 30, 40) 16,969 10,106 Lease deposit 1,832 1,774 Loans issued 1,452 1,425 Reinsurance asset 1,313 – Prepaid operating taxes 1,115 756 Deferred acquisition costs 1,071 1,293 Operating lease receivable 742 – Investment property 653 395 Non-medical receivables 170 1,626 Receivable from non-controlling interest shareholder – 2,128 Derivative financial assets 40 130 Other receivables 4,998 5,588 Total other assets, gross 30,355 25,221 Less – allowance for impairment (Note 33) (2,428) (2,473) Total other assets, net 27,927 22,748 As part of the ABC acquisition contract the Group entered into a call option agreement to buy the remaining non-controlling interest, which is a 33% stake in the combined pharma business during the period from 1 January 2023 to 31 December 2023. Respective derivative financial asset amounted to GEL 16,969 as at 31 December 2018 (2017: GEL 10,106). Lease deposit comprises advances paid to a lease contractor on the rent of an ambulatory clinic as at 31 December 2018. Lease payments are netted against the deposited amount upon payment due date. Other receivables mainly comprise rent receivables and receivables from employees. 17.Insurance contract liabilities Insurance contract liabilities comprise: 31 December 2018 31 December 2017 Insurance contracts liabilities – Unearned premiums reserve (“UPR”) 19,291 17,851 – Reserves for claims reported but not settled (“RBNS”) 1,964 177 – Reserves for claims incurred but not reported (“IBNR”) 1,289 2,925 Total insurance contracts liabilities 22,544 20,953 Movement in the insurance contract liabilities during the year can be analysed as follows: 31 December 2018 31 December 2017 Insurance contract Insurance contract liabilitiesReinsurance asset Net liabilities At 1 January 20,953 – 20,953 26,787 Premiums written during the period 60,340 5,048 55,292 49,220 Premiums earned during the period (58,900) (4,753) (54,147) (53,741) Claims incurred during the period 37,211 4,427 32,784 35,153 Claims paid during the period (37,060) (3,409) (33,651) (36,466) At 31 December 22,544 1,313 21,231 20,953 18. Borrowings The Groups’ borrowings comprise: 31 December 2018 31 December 2017 Borrowings from foreign financial institutions 156,449 159,683 Borrowings from local financial institutions 134,337 100,537 Borrowings from non-controlling interest shareholders 6,031 6,790 Total borrowings 296,817 267,010 In the year ended 31 December 2018 borrowings from local financial institutions had an average interest rate of 10.74% per annum (2017: 10.81%), maturing on average in 782 days (2017: 1,081 days). Borrowings from international financial institutions had an average interest rate of 9.52% (2017: 8.76%), maturing in 1,918 days (2017: 2,168 days). Borrowings from non-controlling interest shareholder of subsidiary had an average interest rate of 12.32% (2017: 12.41%), maturing in 74 days (2017: 74 days). Some borrowings are received upon certain conditions, such as maintaining different limits for leverage, capital investments, minimum amount of immovable property and others. As at 31 December 2018 and 31 December 2017 the Group complied with all these lender covenants. The Company’s borrowings are GEL 9,432 (2017: GEL 7,852), which entirely represents loans from Medical Corporation EVEX. 156