7. INVESTMENTS IN ASSOCIATES
The Group's investments in associates (all accounted for using the equity method) comprised the following:
|
|
|
Country of |
|
Operating activity |
|
December 31, |
|
December 31, |
|
|
|
|||
|
MTS Belarus |
|
Belarus |
|
telecommunications |
|
|
3,660 |
|
|
4,303 |
|
|
|
|
|
MTS Bank |
|
Russia |
|
banking |
|
|
2,902 |
|
|
3,592 |
|
|
|
|
|
Equity investments in other unquoted companies |
|
Russia |
|
e-commerce, digital TV, asset management, etc. |
|
|
2,890 |
|
|
2,656 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments in associates |
|
|
|
|
|
|
9,452 |
|
|
10,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
The reconciliation of summarised financial information of MTS Belarus to the carrying amount of the Group's interest in associate is presented as follows:
|
|
|
December 31, |
|
December 31, |
|
||
|
Assets |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
9,819 |
|
|
9,414 |
|
|
Current assets |
|
|
8,117 |
|
|
6,800 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
(703 |
) |
|
(0 |
) |
|
Current liabilities |
|
|
(9,764 |
) |
|
(7,433 |
) |
|
|
|
|
|
|
|
|
|
|
Total identifiable net assets |
|
|
7,469 |
|
|
8,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group's share in associate |
|
|
49 |
% |
|
49 |
% |
|
The Group's share of identifiable net assets |
|
|
3,660 |
|
|
4,303 |
|
|
Carrying amount of the Group's interest |
|
|
3,660 |
|
|
4,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group's share in the profit of MTS Belarus was included in operating share of the profit of associates in the accompanying consolidated statement of profit or loss. The composition of the Group's share of income of MTS Belarus is as follows:
|
|
|
Year ended December 31, |
|
|||||||
|
|
|
2017 |
|
2016 |
|
2015 |
|
|||
|
Revenue |
|
|
(23,037 |
) |
|
(22,256 |
) |
|
(20,886 |
) |
|
Net profit for the year |
|
|
(6,552 |
) |
|
(6,356 |
) |
|
(7,054 |
) |
|
The Group's share of the profit of the associate for the year |
|
|
(3,210 |
) |
|
(3,115 |
) |
|
(3,456 |
) |
|
Other comprehensive loss for the year (currency translation adjustment) |
|
|
525 |
|
|
2,292 |
|
|
3,110 |
|
|
Total comprehensive income for the year |
|
|
(6,027 |
) |
|
(4,064 |
) |
|
(3,944 |
) |
|
The Group's share of total comprehensive income of the associate for the year |
|
|
(2,953 |
) |
|
(1,991 |
) |
|
(1,933 |
) |
|
Dividends received |
|
|
3,590 |
|
|
2,795 |
|
|
3,269 |
|
The reconciliation of summarized financial information of MTS Bank to the carrying amount of the Group's interest in associate is presented below:
|
|
|
December 31, |
|
December 31, |
|
||
|
Total assets |
|
|
142,405 |
|
|
166,594 |
|
|
Total liabilities |
|
|
(121,169 |
) |
|
(137,627 |
) |
|
Non-controlling interests |
|
|
— |
|
|
(3,339 |
) |
|
|
|
|
|
|
|
|
|
|
Total identifiable net assets attributable to the Group |
|
|
21,236 |
|
|
25,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group's share in associate |
|
|
26,6 |
% |
|
26,6 |
% |
|
The Group's share of identifiable net assets |
|
|
6,127 |
|
|
6,817 |
|
|
Impairment of investment in associate |
|
|
(3,225 |
) |
|
(3,225 |
) |
|
|
|
|
|
|
|
|
|
|
Carrying amount of the Group's interest |
|
|
2,902 |
|
|
3,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In February 2016, MTS Bank placed 3,588,304 additional ordinary shares. The Group acquired 946,347 shares in the placement for a total consideration of RUB 1,325 million. As the result of the transaction, the Group's share in MTS Bank decreased from 27.0% to 26.8%.
In November 2016, MTS Bank placed 10,000,000 additional ordinary shares. The Group acquired 2,637,310 shares in the placement for a total consideration of RUB 2,769 million. As the result of the transaction, the Group's share in MTS Bank decreased from 26.8% to 26.6%.
In May 2017 MTS Bank disposed of a 47% stake in East-West United Bank to Sistema, retaining less than 20% and losing control. Consequently, the accumulated foreign currency translation reserve in the amount of RUB 659 million was derecognized from the accumulated other comprehensive income of the Group.
The Group's share in the net losses of MTS Bank was included in the non-operating share of the loss of the associates in the accompanying consolidated statement of profit or loss. The composition of the Group's share of loss of MTS Bank is as follows:
|
|
|
Year ended December 31, |
|
|||||||
|
|
|
2017 |
|
2016 |
|
2015 |
|
|||
|
Total interest income |
|
|
(14,204 |
) |
|
(16,555 |
) |
|
(20,455 |
) |
|
Total interest expense |
|
|
6,505 |
|
|
8,364 |
|
|
9,691 |
|
|
Net loss for the year |
|
|
593 |
|
|
4,495 |
|
|
15,371 |
|
|
The Group's share of the loss of the associate for the year |
|
|
109 |
|
|
1,179 |
|
|
4,078 |
|
|
Other comprehensive loss / (income) for the year |
|
|
2,000 |
|
|
1,614 |
|
|
(1,251 |
|
|
Total comprehensive loss for the year |
|
|
2,593 |
|
|
6,109 |
|
|
14,120 |
|
|
The Group's share of the total comprehensive loss for the year |
|
|
690 |
|
|
1,608 |
|
|
3,737 |
|
The Group holds less than 20% of the equity interests in OZON Holdings Limited, nevertheless it determined that it has significant influence over the investee based on direct and indirect ownership of equity shares, representation on the investee's Board of Directors and certain veto rights related to matters intersecting with the Group's interests.
In September, 2017 the Group acquired 5,193 additional ordinary shares of OZON Holdings Limited for a total consideration of RUB 19 million. As the result of the transaction, the Group's share in OZON Holdings Limited increased from 10.8% to 10.96%.
In October, 2017 the Group acquired 7,698 additional ordinary shares for a total consideration of RUB 28 million. As the result of the transaction, the Group's share in OZON Holdings Limited increased from 10.96% to 11.19%.
In September, 2017 the Group acquired 30% ownership interest in Sistema Capital, a trust management company, by making a cash contribution of RUB 356 million into its authorized share capital.
The following table is the aggregate financial information of investments in the other individually insignificant associates, held by the Group:
|
|
|
Year ended December 31, |
|
|||||||
|
|
|
2017 |
|
2016 |
|
2015 |
|
|||
|
Net loss/(profit) for the year |
|
|
1,760 |
|
|
1,172 |
|
|
(1,079 |
) |
|
The Group's share of the loss/(profit) of the associate for the year |
|
|
327 |
|
|
108 |
|
|
(297 |
|
|
Other comprehensive income for the year |
|
|
— |
|
|
— |
|
|
— |
|
|
Total comprehensive loss/(income) for the year |
|
|
1,760 |
|
|
1,172 |
|
|
(1,079 |
) |
|
The Group's share of total comprehensive loss/(income) of the associate for the year |
|
|
327 |
|
|
108 |
|
|
(297 |
|