| 25. | Other income/expenses |
| 25.1 | Administrative and other operating expenses |
General, administrative and other operating expenses are comprised of the following:
| 2017 | 2016 | 2015 | ||||||||||
|
Wages, salaries and social security costs |
7,769 | 11,654 | 9,382 | |||||||||
|
Provision for legal claims, net |
1,995 | 59 | 996 | |||||||||
|
Office expenses |
1,211 | 1,397 | 1,333 | |||||||||
|
Audit and consulting services |
631 | 569 | 570 | |||||||||
|
Depreciation |
605 | 716 | 690 | |||||||||
|
Social expenses |
406 | 452 | 387 | |||||||||
|
Fines and penalties related to business contracts |
303 | 487 | 236 | |||||||||
|
Consumables |
276 | 411 | 437 | |||||||||
|
Banking charges and services |
271 | 268 | 168 | |||||||||
|
Rent |
165 | 259 | 259 | |||||||||
|
Business trips |
132 | 136 | 165 | |||||||||
|
Write off of accounts receivable |
109 | 113 | 247 | |||||||||
|
Loss from disposal of property, plant and equipment |
34 | 57 | 806 | |||||||||
|
Other |
1,683 | 2,213 | 1,624 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total |
15,590 | 18,791 | 17,300 | |||||||||
|
|
|
|
|
|
|
|||||||
| 25.2 | Employee benefits expense |
Employee benefits expenses are comprised of the following:
| 2017 | 2016 | 2015 | ||||||||||
|
Included in cost of sales |
||||||||||||
|
Wages and salaries |
20,591 | 19,806 | 19,867 | |||||||||
|
Social security costs |
6,438 | 5,909 | 6,181 | |||||||||
|
Post-employment benefits |
142 | 126 | 157 | |||||||||
|
Included in selling and distribution expenses |
||||||||||||
|
Wages and salaries |
3,686 | 4,029 | 3,966 | |||||||||
|
Social security costs |
973 | 1,015 | 1,024 | |||||||||
|
Post-employment benefits |
0 | — | — | |||||||||
|
Included in administrative and other operating expenses |
||||||||||||
|
Wages and salaries |
6,259 | 9,510 | 7,631 | |||||||||
|
Social security costs |
1,510 | 2,144 | 1,751 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total |
39,599 | 42,539 | 40,577 | |||||||||
|
|
|
|
|
|
|
|||||||
| 25.3 | Other operating income |
Other operating income is comprised of the following:
| 2017 | 2016 | 2015 | ||||||||||
|
Subsidies received from the governmental authorities as a compensation for operating activities (energy tariffs) |
496 | — | — | |||||||||
|
Income from fines and penalties related to business contracts |
307 | 248 | — | |||||||||
|
Gain from sales of scrap materials |
226 | 190 | 184 | |||||||||
|
Curtailment and remeasurement of pension obligations |
175 | 392 | 142 | |||||||||
|
Revision in estimated cash flows of rehabilitation provision |
0 | 375 | 47 | |||||||||
|
Insurance compensation |
0 | 153 | — | |||||||||
|
Other operating income |
183 | 495 | — | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total |
1,387 | 1,853 | 373 | |||||||||
|
|
|
|
|
|
|
|||||||
In 2017, the Group recognized gain on remeasurement of pension obligations because of changing in the actuarial assumptions, fluctuation in payment amounts from year to year, adjustment in the financial support amount per one pensioner. In 2016, the Group recognized curtailment gain on cancellation of the certain pension programs for workers of Yakutugol, Mechel-Remservice OOO.
Revision in estimated cash flows of rehabilitation provision relates primarily to changes in the discount rate, in the planned volumes of works and change in costs of rehabilitation expenses.
| 25.4 | Finance income |
Finance income is comprised of the following:
| 2017 | 2016 | 2015 | ||||||||||
|
Waiving of fines and penalties on loans and finance leases |
264 | 992 | — | |||||||||
|
Interest income from investments |
158 | 177 | 134 | |||||||||
|
Remeasurement of fair value of financial instruments (Note 11.5) |
197 | — | — | |||||||||
|
Income from the discounting of financial instruments |
14 | 7 | 49 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total |
633 | 1,176 | 183 | |||||||||
|
|
|
|
|
|
|
|||||||
Waiving of fines and penalties on loans and finance leases were recognised due to the debt restructuring primarily with Sberbank.
| 25.5 | Finance costs |
Finance costs are comprised of the following:
| 2017 | 2016 | 2015 | ||||||||||
|
Interest on loans and borrowings |
(40,298 | ) | (44,164 | ) | (38,664 | ) | ||||||
|
Fines and penalties on overdue loans and borrowing payments and overdue interest payments |
(1,086 | ) | (5,538 | ) | (18,525 | ) | ||||||
|
Finance charges payable under finance leases |
(1,230 | ) | (1,500 | ) | (1,673 | ) | ||||||
|
Fines and penalties on overdue finance leases |
(75 | ) | (475 | ) | (642 | ) | ||||||
|
|
|
|
|
|
|
|||||||
|
Total finance costs related to loans, borrowings
and |
(42,689 | ) | (51,677 | ) | (59,504 | ) | ||||||
|
Interest expenses under pension liabilities |
(314 | ) | (368 | ) | (400 | ) | ||||||
|
Expenses related to discounting of financial instruments |
(4,179 | ) | (1,956 | ) | (175 | ) | ||||||
|
Remeasurement of fair value of financial instruments(Note 11.5) |
(117 | ) | — | — | ||||||||
|
Unwinding of discount on provisions |
(311 | ) | (239 | ) | (373 | ) | ||||||
|
|
|
|
|
|
|
|||||||
|
Total |
(47,610 | ) | (54,240 | ) | (60,452 | ) | ||||||
|
|
|
|
|
|
|
|||||||
The interest on loans and borrowings includes fines and penalties on overdue loans and borrowing payments and overdue interest payments of RUB 1,086 million, RUB 5,538 million and RUB 18,525 million for 2017, 2016 and 2015, respectively. The finance charges payable under finance leases include fines and penalties on overdue finance lease payments of RUB 75 million, RUB 475 million and RUB 642 million for 2017, 2016 and 2015, respectively. Expenses related to discounting of financial instruments include changes in the measurement of the non-current obligation related to put-option granted on non-controlling interests in the amount of RUB 4,062 million (2016: RUB 1,898 million) (Note 6 and Note 11.4).
| 25.6 | Other income and other expenses |
Other income is comprised of the following:
| 2017 | 2016 | 2015 | ||||||||||
|
Gain on accounts payable with expired legal term |
516 | 115 | 222 | |||||||||
|
Gain on royalty and other proceeds associated with disposal of Bluestone |
474 | 121 | — | |||||||||
|
Gain on accounts payable forgiveness and restructuring |
447 | — | — | |||||||||
|
Dividends received |
0 | 3 | 8 | |||||||||
|
Gain on sale of investments in equity securities |
2 | — | — | |||||||||
|
Gain on final settlements from subsidiaries’ disposal occurred in previous years |
0 | 194 | — | |||||||||
|
Other income |
56 | 165 | 112 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total |
1,495 | 598 | 342 | |||||||||
|
|
|
|
|
|
|
|||||||
Other expenses are comprised of the following:
| 2017 | 2016 | 2015 | ||||||||||
|
Loss on sales and purchases of foreign currencies |
(114 | ) | (130 | ) | (273 | ) | ||||||
|
VEB commissions write off |
0 | (1,411 | ) | — | ||||||||
|
Provision on non-recoverable advances to pension funds |
0 | (408 | ) | — | ||||||||
|
Loss on sale of investments in equity securities |
0 | (8 | ) | — | ||||||||
|
Loss from disposal of subsidiaries |
0 | — | (19 | ) | ||||||||
|
Other expenses |
(106 | ) | (46 | ) | (55 | ) | ||||||
|
|
|
|
|
|
|
|||||||
|
Total |
(220 | ) | (2,003 | ) | (347 | ) | ||||||
|
|
|
|
|
|
|
|||||||
Gain on accounts payable with expired legal term constitutes gain on the write-off of payable amounts that were written-off due to legal liquidation of the creditors or expiration of the statute of limitation.
The upfront fee in the amount of RUB 1,411 million paid in 2014 to VEB for the opening of the credit line was written off in 2016 due to uncertainty in further financing.