Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information | |
Entity Registrant Name | MOBILE TELESYSTEMS PJSC |
Entity Central Index Key | 0001115837 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 1,129,245,695 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
NON-CURRENT ASSETS: | ||
Property, plant and equipment | ₽ 276,443 | ₽ 263,063 |
Investment property | 2,177 | 407 |
Right-of-use assets | 149,007 | |
Goodwill | 39,107 | 34,281 |
Other intangible assets | 95,962 | 79,397 |
Investment in associates | 10,735 | 9,452 |
Other investments | 16,873 | 1,953 |
Deferred tax assets | 11,190 | 5,545 |
Accounts receivable, related parties | 2,545 | 2 |
Trade accounts receivable | 2,600 | |
Bank deposits and loans to customers | 30,653 | |
Other financial assets | 4,729 | 8,890 |
Other non-financial assets | 5,038 | 2,048 |
Total non-current assets | 647,059 | 405,038 |
CURRENT ASSETS: | ||
Inventories | 18,654 | 9,995 |
Trade and other receivables | 34,543 | 28,017 |
Accounts receivable, related parties | 6,385 | 11,358 |
Bank deposits and loans to customers | 32,385 | |
Short-term investments | 47,863 | 50,757 |
Advances paid and prepaid expenses | 4,208 | 3,894 |
VAT receivable | 7,415 | 7,165 |
Income tax assets | 3,887 | 2,838 |
Assets held for sale | 2,694 | 1,276 |
Cash and cash equivalents | 84,075 | 30,586 |
Other financial assets | 25,487 | 146 |
Other non-financial assets | 1,338 | |
Total current assets | 268,934 | 146,032 |
TOTAL ASSETS | 915,993 | 551,070 |
EQUITY: | ||
Common stock | 200 | 200 |
Treasury stock | (44,808) | (22,644) |
Additional paid-in capital | 381 | |
Retained earnings | 110,946 | 151,043 |
Accumulated other comprehensive loss | (1,064) | (8,854) |
Equity attributable to owners of the Company | 65,274 | 120,126 |
Non-controlling interests | 12,291 | 4,079 |
Total equity | 77,565 | 124,205 |
NON-CURRENT LIABILITIES: | ||
Borrowings | 365,072 | 228,040 |
Lease obligations | 144,740 | 11,056 |
Bank deposits and liabilities | 2,633 | |
Deferred tax liabilities | 24,439 | 23,773 |
Provisions | 3,391 | 2,309 |
Contract liabilities | 558 | 765 |
Other non-financial liabilities | 1,643 | 3,203 |
Other financial liabilities | 481 | 1,048 |
Total non-current liabilities | 542,957 | 270,194 |
CURRENT LIABILITIES: | ||
Trade and other payables | 53,623 | 47,314 |
Accounts payable, related parties | 1,301 | 1,102 |
Contract liabilities | 21,597 | 17,696 |
Borrowings | 3,063 | 63,673 |
Lease obligations | 15,812 | 801 |
Bank deposits and liabilities | 108,821 | |
Income tax liabilities | 1,792 | 1,150 |
Provisions | 70,911 | 9,852 |
Other non-financial liabilities | 13,903 | 12,047 |
Other financial liabilities | 4,648 | 3,036 |
Total current liabilities | 295,471 | 156,671 |
TOTAL EQUITY AND LIABILITIES | ₽ 915,993 | ₽ 551,070 |
CONSOLIDATED STATEMENTS OF PROF
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS | |||
Service revenue | ₽ 410,890 | ₽ 390,761 | ₽ 386,486 |
Sales of goods | 69,403 | 52,150 | 49,206 |
Revenue | 480,293 | 442,911 | 435,692 |
Cost of services | 112,401 | 123,779 | 130,158 |
Cost of goods | 63,869 | 45,623 | 45,574 |
Selling, general and administrative expenses | 87,946 | 95,186 | 94,046 |
Depreciation and amortization | 104,588 | 79,912 | 81,582 |
Operating share of the profit of associates | (3,799) | (3,210) | (3,115) |
Impairment of non-current assets | 149 | 3,775 | |
Impairment of financial assets | 3,694 | 2,923 | 2,698 |
Other income | (4,740) | (1,177) | (2,920) |
Operating profit | 116,185 | 96,100 | 87,669 |
Finance income | (5,981) | (5,548) | (5,273) |
Finance costs | 38,165 | 26,064 | 27,136 |
Currency exchange loss / (gain) | 3,594 | (1,301) | (3,241) |
Non-operating share of the loss of associates | 909 | 436 | 1,287 |
Change in fair value of financial instruments | (5,384) | (110) | (166) |
Other expenses | 1,031 | 992 | 317 |
Profit before tax | 83,851 | 75,567 | 67,609 |
Income tax expense | 16,969 | 18,977 | 15,138 |
Profit for the year from continuing operations | 66,882 | 56,590 | 52,471 |
Loss / (gain) from discontinued operations | 59,050 | (4,021) | |
Profit for the year | 7,832 | 56,590 | 48,450 |
Profit / (loss) for the year attributable to: | |||
Owners of the Company | 6,848 | 56,042 | 48,474 |
Non-controlling interests | ₽ 984 | ₽ 548 | ₽ (24) |
Earnings per share from continuing operations (basic), Russian Rubles: | ₽ 35.17 | ₽ 28.68 | ₽ 26.06 |
Earnings per share from continuing operations (diluted), Russian Rubles: | 35.13 | ₽ 28.66 | 26.04 |
Earnings per share from discontinued operations (basic), Russian Rubles: | (31.52) | (1.69) | |
Earnings per share from discontinued operations (diluted), Russian Rubles: | ₽ (31.48) | ₽ (1.69) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Profit for the year | ₽ 7,832 | ₽ 56,590 | ₽ 48,450 |
Items that will not be reclassified subsequently to profit or loss: | |||
Unrecognized actuarial gain / (loss) | 167 | (40) | 50 |
Items that may be reclassified subsequently to profit or loss: | |||
Exchange differences on translating foreign operations | 7,416 | (2,469) | (15,104) |
Net fair value (loss) / gain on financial instruments | (103) | 495 | (1,200) |
Items that may be reclassified subsequently to profit or loss: | |||
Exchange differences on translating foreign operations in associates | 319 | (810) | (1,553) |
Other comprehensive income / (loss) for the year, net of income tax | 7,799 | (2,824) | (17,807) |
Total comprehensive income for the year | 15,631 | 53,766 | 30,643 |
Total comprehensive income / (loss) for the year attributable to: | |||
Owners of the Company | 14,638 | 53,218 | 31,268 |
Non-controlling interests | ₽ 993 | ₽ 548 | ₽ (625) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - RUB (₽) ₽ in Millions | Common stock | Treasury stock | Additional paid-in capitalMTS Bank | Additional paid-in capital | Cash flow hedging reserve | Foreign currency translation reserveMTS BankEast-West United Bank | Foreign currency translation reserve | Remeasurements of the net defined benefit liability | Retained earnings | Equity attributable to equity holdersMTS BankEast-West United Bank | Equity attributable to equity holdersMTS Bank | Equity attributable to equity holders | Non-controlling interests | MTS BankEast-West United Bank | MTS Bank | Total |
Balance at beginning of the year at Dec. 31, 2015 | ₽ 207 | ₽ (24,468) | ₽ 1,045 | ₽ 9,638 | ₽ 493 | ₽ 173,200 | ₽ 160,115 | ₽ 8,256 | ₽ 168,371 | |||||||
Balance at beginning of the year (in shares) at Dec. 31, 2015 | 2,066,413,562 | (77,521,163) | ||||||||||||||
Profit for the year | 48,474 | 48,474 | (24) | ₽ (4,495) | 48,450 | |||||||||||
Unrecognized actuarial gain / (loss) | 50 | |||||||||||||||
Change in fair value of derivatives, net of income tax | (1,200) | |||||||||||||||
Other comprehensive (loss) / income for the year, net of income tax | (1,200) | (13,970) | 50 | (15,120) | (601) | (15,721) | ||||||||||
Total comprehensive (loss) / income for the year | (6,109) | 30,643 | ||||||||||||||
Total comprehensive (loss) / income for the year | (1,200) | (13,970) | 50 | 48,474 | 33,354 | (625) | 32,729 | |||||||||
Issuance of stock options | ₽ 131 | 131 | 11 | 142 | ||||||||||||
Dividends declared by MTS | (51,738) | (51,738) | (51,738) | |||||||||||||
Dividends to non-controlling interest | (1,120) | (1,120) | ||||||||||||||
Unclaimed dividends | (3) | (3) | (3) | |||||||||||||
Sale of own stock | ₽ 213 | 213 | 213 | |||||||||||||
Sale of own stock (in shares) | 1,074,525 | |||||||||||||||
Purchase of own stock | ₽ (748) | (748) | (748) | |||||||||||||
Purchase of own stock (in shares) | (3,067,396) | |||||||||||||||
Purchase of NCI | 5 | 5 | (22) | (17) | ||||||||||||
Changes in ownership interest with no gain/loss of control - MTS Bank additional share issuance | ₽ (14) | ₽ (14) | (14) | |||||||||||||
Redemption of treasury shares (Note23) | ₽ (7) | ₽ 24,255 | (24,248) | |||||||||||||
Redemption of treasury shares (Note 23) (in shares) | (68,031,987) | 68,031,987 | ||||||||||||||
Disposal of UMS, the Group's subsidiary in Uzbekistan (Note 27) | (2,086) | (2,086) | (1,787) | (3,873) | ||||||||||||
Reclassification of retained earnings | 69 | (69) | ||||||||||||||
Balance at end of the year at Dec. 31, 2016 | ₽ 200 | ₽ (748) | 191 | (155) | (6,418) | 543 | 145,622 | 139,235 | 4,713 | 143,948 | ||||||
Balance at end of the year (in shares) at Dec. 31, 2016 | 1,998,381,575 | (11,482,047) | ||||||||||||||
Profit for the year | 56,042 | 56,042 | 548 | (593) | 56,590 | |||||||||||
Unrecognized actuarial gain / (loss) | (40) | |||||||||||||||
Change in fair value of derivatives, net of income tax | 495 | |||||||||||||||
Other comprehensive (loss) / income for the year, net of income tax | 495 | (2,620) | (40) | (2,165) | (2,165) | |||||||||||
Total comprehensive (loss) / income for the year | 495 | (3,279) | (40) | 56,042 | 53,218 | 548 | (2,593) | 53,766 | ||||||||
Exercise of stock options | 240 | 240 | 240 | |||||||||||||
Exercise of stock options (in shares) | 851,275 | |||||||||||||||
Dividends declared by MTS | (50,621) | (50,621) | (50,621) | |||||||||||||
Dividends to non-controlling interest | (1,175) | (1,175) | ||||||||||||||
Purchase of own stock | ₽ (21,896) | (21,896) | (21,896) | |||||||||||||
Purchase of own stock (in shares) | (75,708,384) | |||||||||||||||
Purchase of NCI | (2) | (2) | (7) | (9) | ||||||||||||
Changes in ownership interest with no gain/loss of control - MGTS and NIS | (48) | (48) | (48) | |||||||||||||
Balance at end of the year (Increase (decrease) due to changes in accounting policy required by IFRSs) at Dec. 31, 2017 | 154,938 | 124,021 | 4,096 | 128,117 | ||||||||||||
Balance at end of the year (Adjustment on initial application of IFRS 9) at Dec. 31, 2017 | 1,367 | 1,367 | 1,367 | |||||||||||||
Balance at end of the year (IFRS 15 adjustments) at Dec. 31, 2017 | 2,528 | 2,528 | 17 | 2,545 | ||||||||||||
Balance at end of the year at Dec. 31, 2017 | ₽ 200 | ₽ (22,644) | 381 | 340 | (9,697) | 503 | 151,043 | 120,126 | 4,079 | ₽ 124,205 | ||||||
Balance at end of the year (in shares) at Dec. 31, 2017 | 1,998,381,575 | (86,339,156) | 1,912,042,419 | |||||||||||||
Disposal of East-West United Bank by MTS Bank, the Group's associate (Note 7) | ₽ (659) | ₽ (659) | ₽ (659) | |||||||||||||
Profit for the year | 6,848 | 6,848 | 984 | (609) | ₽ 7,832 | |||||||||||
Unrecognized actuarial gain / (loss) | 167 | 167 | 167 | |||||||||||||
Currency translation adjustment, net of income tax | 7,726 | 7,726 | 9 | 7,735 | ||||||||||||
Change in fair value of derivatives, net of income tax | (103) | (103) | (103) | |||||||||||||
Total comprehensive (loss) / income for the year | (103) | 7,726 | 167 | 6,848 | 14,638 | 993 | ₽ (1,223) | 15,631 | ||||||||
Issuance of stock options | 675 | 675 | 675 | |||||||||||||
Exercise of stock options | ₽ 403 | (403) | ||||||||||||||
Exercise of stock options (in shares) | 1,369,303 | |||||||||||||||
Dividends declared by MTS | (48,921) | (48,921) | (48,921) | |||||||||||||
Dividends to non-controlling interest | (1,165) | (1,165) | ||||||||||||||
Purchase of own stock | ₽ (22,567) | (4) | (22,571) | (22,571) | ||||||||||||
Purchase of own stock (in shares) | (82,669,046) | |||||||||||||||
Purchase of NCI | (97) | (97) | 47 | (50) | ||||||||||||
Acquisitions under common control | (2,471) | (2,471) | 8,320 | 5,849 | ||||||||||||
Reclassification of retained earnings | ₽ 1,919 | (1,919) | ||||||||||||||
Balance at end of the year at Dec. 31, 2018 | ₽ 200 | ₽ (44,808) | ₽ 237 | ₽ (1,971) | ₽ 670 | ₽ 110,946 | ₽ 65,274 | ₽ 12,291 | ₽ 77,565 | |||||||
Balance at end of the year (in shares) at Dec. 31, 2018 | 1,998,381,575 | (167,638,899) | 1,830,742,676 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Profit for the year | ₽ 7,832 | ₽ 56,590 | ₽ 48,450 |
Adjustments for: | |||
Depreciation and amortization | 104,588 | 79,912 | 83,259 |
Impairment of non-current assets | 149 | 3,775 | |
Impairment of financial assets | 3,694 | 2,923 | 2,857 |
Non-cash loss from sale of subsidiary in Uzbekistan | 2,726 | ||
Provision related to SEC investigation (Note 34) | 55,752 | ||
Finance income | (5,981) | (5,548) | (5,273) |
Finance costs | 38,165 | 26,064 | 27,427 |
Income tax expense | 16,969 | 18,977 | 14,954 |
Currency exchange loss/(gain) | 6,892 | (1,301) | (3,232) |
Amortization of deferred connection fees | (3,904) | (2,876) | (2,287) |
Share of profit of associates | (2,890) | (2,774) | (1,828) |
Change in fair value of financial instruments | (5,384) | (110) | (166) |
Inventory obsolescence expense | 3,326 | 2,179 | 1,548 |
Change in provisions | 13,534 | 14,347 | 13,161 |
Other non-cash items | (3,479) | (657) | (3,656) |
Movements in operating assets and liabilities: | |||
Decrease/(Increase) in trade and other receivables | 438 | (3,514) | (3,525) |
Increase in bank loans to customers and interbank loans | (15,367) | ||
(Increase) / Decrease in inventory | (11,292) | 2,200 | (1,816) |
Decrease / (Increase) in advances paid and prepaid expenses | 1,429 | 1,197 | (812) |
Decrease/ (Increase) in VAT receivable | 72 | (1,145) | 227 |
Decrease in trade and other payables and other current liabilities | (11,162) | (6,715) | (9,086) |
Increase in bank deposits and liabilities | 4,100 | ||
Dividends received | 3,726 | 3,590 | 2,801 |
Income tax paid | (19,777) | (22,427) | (11,687) |
Interest received | 10,016 | 3,319 | 3,344 |
Interest paid, net of interest capitalized | (37,056) | (23,366) | (26,821) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 154,390 | 144,640 | 130,565 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of subsidiaries, net of cash acquired (Note 5) | (3,444) | (367) | (5) |
Purchases of property, plant and equipment (including capitalized interest in the amount of RUB 460 million, RUB 307 million and RUB 388 million, respectively) | (64,731) | (53,366) | (55,538) |
Purchases of other intangible assets | (21,751) | (23,065) | (28,013) |
Purchase of 3G and 4G licenses in Ukraine and Russia | (5,527) | (2,598) | |
Cost to obtain and fulfill contracts, paid | (4,764) | ||
Proceeds from sale of property, plant and equipment and assets held for sale | 5,905 | 4,343 | 4,042 |
Purchases of short-term and other investments | (18,754) | (33,717) | (9,739) |
Proceeds from sale of short-term and other investments | 38,596 | 25,385 | 39,021 |
Investments in associates (Note 16) | (3,871) | (723) | (4,094) |
Cash proceeds related to swap contracts | 6,892 | ||
Proceeds from sale of subsidiary | 619 | ||
Disposal of discontinued operation, net of cash disposed | (378) | ||
NET CASH USED IN INVESTING ACTIVITIES | (78,389) | (81,510) | (57,302) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repayment of notes | (27,983) | (12,042) | (20,364) |
Proceeds from issuance of notes | 27,550 | 45,000 | 10,000 |
Notes and debt issuance cost paid | (39) | (98) | (16) |
Lease obligation principal paid | (13,577) | (774) | (334) |
Dividends paid | (50,054) | (51,759) | (52,805) |
Acquisition of entities under common control, net of cash acquired | (13,242) | 3,063 | |
Proceeds from loans | 95,000 | 25,136 | 50,696 |
Repayment of loans | (20,076) | (32,239) | (69,532) |
Payments under credit guarantee agreement related to foreign-currency hedge (Note 30) | (981) | (1,766) | (2,984) |
Repurchase of common stock | (22,655) | (21,896) | (748) |
Other financing activities | 133 | (7) | (14) |
NET CASH USED IN FINANCING ACTIVITIES | (25,924) | (50,445) | (83,038) |
Effect of exchange rate changes on cash and cash equivalents | 3,412 | (569) | (5,219) |
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS | 53,489 | 12,116 | (14,994) |
CASH AND CASH EQUIVALENTS, beginning of the year | 30,586 | 18,470 | 33,464 |
CASH AND CASH EQUIVALENTS, end of the year | 84,075 | ₽ 30,586 | ₽ 18,470 |
Avantage | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of subsidiaries, net of cash acquired (Note 5) | ₽ (7,559) |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Interest paid, capitalized | ₽ 460 | ₽ 307 | ₽ 388 |
GENERAL INFORMATION AND DESCRIP
GENERAL INFORMATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
GENERAL INFORMATION AND DESCRIPTION OF BUSINESS | |
GENERAL INFORMATION AND DESCRIPTION OF BUSINESS | 1. GENERAL INFORMATION AND DESCRIPTION OF BUSINESS Mobile TeleSystems Public Joint-Stock Company (“MTS PJSC”, or “the Company”) is a company incorporated under the laws of the Russian Federation and having its registered address at 4, Marksistskaya Street, 109147, Moscow, Russian Federation. The consolidated financial statements of the Company and its subsidiaries (“the Group” or “MTS”) as of December 31, 2018 and 2017, and for the years ended 31 December 2018, 2017 and 2016 were authorized for issue by the President of MTS on March 19, 2019. Business of the Group – MTS PJSC was incorporated on March 1, 2000, through the merger of MTS CJSC and Rosico TC CJSC, its wholly-owned subsidiary. MTS CJSC started its operations in the Moscow licence area in 1994, before expanding through Russia and the CIS. MTS PJSC’s majority shareholder is Sistema Public Joint-Stock Financial Corporation or Sistema, whose controlling shareholder is Vladimir P. Yevtushenkov. The Group provides a wide range of telecommunications services including voice and data transmission, internet access, pay TV, various value added services (“VAS”) through wireless and fixed lines, financial services, banking services, integration services as well as the sale of equipment, accessories and software. The Group primarily operates in Russia, Ukraine and Armenia. MTS completed its initial public offering in 2000 and listed its shares of common stock, represented by American Depositary Shares, or ADSs, on the New York Stock Exchange under the symbol “MBT”. Since 2003 common shares of MTS PJSC have been traded on the Public Joint-Stock Company “Moscow Exchange MICEX-RTS” ( the “Moscow Exchange”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS Basis of preparation – These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements have been prepared on a historical cost basis, unless disclosed otherwise. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Amounts in the consolidated financial statements are stated in millions of Russian Rubles (“RUB million”), unless indicated otherwise. These consolidated financial statements have been prepared on the assumption that the Group is a going concern and will continue in operation for the foreseeable future. Basis of consolidation – The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved only where the Company has power over the entity, is exposed and has rights to variable returns, and is able to use the power to affect its amount of variable returns. The results of the controlled entities acquired or disposed of during the reporting period are included in the consolidated financial statements from the date the Group achieves control over the entity, or until the date on which the Company ceases to control the entity. If necessary, the accounting policies of controlled entities are aligned with the accounting policy applied by the Group. All intra-group balances, income, expenses and cash flows are eliminated on consolidation. Effective ownership interests in the Group’s significant subsidiaries were the following: Accounting December 31, December 31, method 2018 2017 RTC Consolidated 100.0 % 100.0 % Vodafone Ukraine (VF Ukraine) Consolidated 100.0 % 100.0 % MTS Turkmenistan (Note 11) Consolidated 100.0 % 100.0 % Sibintertelecom Consolidated 100.0 % 100.0 % NVision Group Consolidated 100.0 % 100.0 % Sitronics Telecom Solutions Consolidated 100.0 % 100.0 % NVision Czech Republic Consolidated 100.0 % 100.0 % Sputnikovoe TV Consolidated 100.0 % 100.0 % Stream Consolidated 100.0 % 100.0 % Dega Consolidated 100.0 % 100.0 % Stream Digital Consolidated 100.0 % 100.0 % MTS Energo Consolidated 100.0 % 100.0 % Bashkortostan Cellular Communications (BCC) (1) Consolidated — 100.0 % Praliss Enterprises Limited Consolidated 100.0 % 100.0 % MDTZK LLC (Ticketland) Consolidated 100.0 % — IT Grad Consolidated 100.0 % — Metro-Telecom Consolidated 95.0 % 95.0 % MGTS Group Consolidated 94.7 % 94.7 % MTS Armenia Consolidated 80.0 % 80.0 % Kulturnaya Sluzhba (Ponominalu) Consolidated 78.2 % — Navigation Information Systems Group Consolidated 77.7 % 77.7 % MTS Bank (Note 5) Consolidated 55.4 % 26.6 % Oblachny Retail LLC Consolidated 50.8 % 50.8 % MTS International Funding Limited (2) (“MTS International”) Consolidated SE SE MTS Belarus (Note 16) Equity 49.0 % 49.0 % Sistema Capital Equity 30.0 % 30.0 % Zifrovoe TV Equity 20.0 % 20.0 % OZON Holdings Limited (Note 16) Equity 18.7 % 11.2 % YOUDO Web Technologies (Note 16) Equity 13.7 % — (1) A wholly-owned subsidiary, through which the Group repurchases its own shares. (2) Merged with MTS PJSC on November 15, 2018 (3) A company organized and existing as a private limited company under the laws of Ireland. The Group does not have any equity in MTS International. It was established for the purpose of raising capital through the issuance of debt securities on the Irish Stock Exchange followed by transferring the proceeds through a loan facility to the Group. In 2010 and 2013, MTS International issued USD 750 million 8.625% notes due in 2020 and USD 500 million 5.0% notes due in 2023, respectively (Note 15). The notes are guaranteed by MTS PJSC in the event of default. MTS International does not perform any other activities except those required for notes servicing. The Group bears all costs incurred by MTS International in connection with the notes’ maintenance activities. Accordingly, the Group concluded that it exercises control over the entity. Acquisitions from entities under common control – Business combinations arising from transfers of interests in entities that are under common control with the Group are consolidated prospectively starting from the date that the control over those entities is passed to the Group. The assets and liabilities acquired are recognized at the carrying values recorded previously in the counterparty’s financial statements, with the resulting gain or loss recognized directly in equity. Joint operations – The Group has joint operations with Megafon and Vimpelcom, relating to the construction of LTE base stations. Joint operations are characterized by the fact that the operators that have joint control over the arrangement each have both a right to the assets, and obligations for the liabilities, according to the arrangement. Respectively, each operator accounts for its share of the joint assets and its agreed share of any liabilities, and recognizes its share of the output, revenues and expenses incurred under the arrangement. Functional currency translation methodology – As of December 31, 2018, the functional currencies of Group entities were as follows: · For entities incorporated in the Russian Federation, Dega and MTS International – the Russian Ruble (“RUB”); · For VF Ukraine – the Ukrainian Hryvna; · For MTS Armenia – the Armenian Dram; · For MTS Turkmenistan – the Turkmenian Manat; · For MTS Belarus – the Belarusian Ruble; · For NVision Czech Republic – the Czech Crown. Foreign-currency transactions are translated into the functional currency at the exchange rates at the dates of the transactions. At the reporting date, monetary items denominated in foreign currencies are translated at the closing rate, whereas non-monetary items are stated at the exchange rate at the date of their recognition. Exchange rate differences are recognized in profit or loss. For entities whose records are maintained in their functional currency, which is other than the reporting currency, all year-end assets and liabilities have been translated into U.S. Dollars (“USD”) at the period-end exchange rate set by local central banks. Subsequently, U.S. Dollars balances have been translated into Russian Rubles at the period-end exchange rate set by the Central Bank of Russia. Revenues and expenses have been translated at the average exchange rate for the period using the cross-currency exchange rate via the U.S. Dollar as described above. Translation differences resulting from the use of these rates are reported as a component of other comprehensive income. Standards, interpretations and amendments adopted on January 1, 2018 Starting from January 1, 2018 the Group has applied IFRS 9, “ Financial Instruments ” , IFRS 15, “ Revenue from Contracts with Customers ” , and IFRS 16, “ Leases ” . IFRS 9, “ Financial Instruments” – IFRS 9 replaces the existing standard IAS 39 in regulating the classification and measurement of financial assets and liabilities and requires certain additional disclosures. The primary changes relate to the assessment of hedging arrangements and provisioning for potential future credit losses on financial assets as well as recognition of modification gain or loss for all revisions of estimated payments or receipts, including changes in cash flows arising from a modification or exchange of a financial liability, that does not result in its derecognition. Resulting from the adoption of the IFRS 9 standard, the Group recognized RUB 3.0 billion (RUB 2.4 billion net of tax) gain relating to modification of its financial liabilities , which did not result in extinguishment of the original liabilities, and RUB 1.2 billion (1.0 billion net of tax) loss related to expected losses on financial assets. The new guidance on the classification of financial assets did not results in any changes in the measurement and presentation of the Group’s financial assets. The following table compares the classification of financial assets in accordance with IFRS 9 and IAS 39: Classification December 31, January 1, IAS 39 IFRS 9 2017 2018 Trade and other receivables Loans and receivables At amortized cost 28,017 28,017 Accounts receivable, related parties Loans and receivables At amortized cost 11,358 11,358 Cash and Cash equivalents At amortized cost At amortized cost 30,586 30,586 Assets in Sistema Capital trust management At fair value through profit or loss At fair value through profit or loss 9,600 9,600 Notes Available-for-sale At fair value through OCI 57 57 Cross-currency swap designated as cash flow hedge At fair value through OCI At fair value through OCI 8,403 8,403 Bank deposits Loans and receivables At amortized cost 27,836 27,836 Loans Loans and receivables At amortized cost 5,415 4,935 Notes Loans and receivables At amortized cost 8,480 8,480 Other Loans and receivables At amortized cost 1,810 1,810 Total 131,562 131,082 The Group recognized the cumulative effect arising from the transition to IFRS 9 as an adjustment to the opening balance of equity. Prior period comparatives have not been restated. IFRS 15, “ Revenue from Contracts with Customers ” – The standard establishes a single comprehensive framework for the determination and recognition of revenue to be applied to all contracts with customers. IFRS 15 replaces the existing standards IAS 18, “ Revenue ” , and IAS 11, “Construction Contracts ” . The core principle of IFRS 15 is that an entity should recognize revenue to accurately reflect the transfer of promised goods or services to customers in an amount that is equal to the consideration to which the entity expects to be entitled in exchange for those goods or services. The most significant impact of the adoption of IFRS 15 on the Group’s consolidated financial statements related to the deferral of certain incremental costs, which were incurred in acquiring or fullfilling a contracts with a customers. The Group utilized the option for simplified initial application, meaning that those contracts that were not completed by January 1, 2018 were recognized as if they had been accounted for under IFRS 15 from the very beginning. The cumulative effect arising from the transition amounted to RUB 3.1 billion gain (2.5 billion net of tax) and was recognized as an adjustment to the opening balance of equity. The prior period comparatives were not restated. The effects of implementation of IFRS 15 on the Group financial statements as of December 31, 2018 are summarized in Note 3. IFRS 16, “Leases ” – The standard requires lessees to recognize assets and liabilities for all leases and to present the rights and obligations associated with these leases in the statement of financial position. The standard also includes a new definition of a lease and requirements for its presentation, new disclosures requirements and changes in the accounting for sale and leaseback transactions. The Group elected for an early adoption of the IFRS 16 standard effective as of January 1, 2018 concurrent with the adoption of the new IFRS 15 standard on revenue recognition. In applying IFRS 16 for the first time, the Group used the following practical expedients permitted by the standard: · Relief from the requirement to reassess whether a contract is, or contains the lease for contracts existing as of january 1, 2018; · The use of a single discount rate to a portfolio of leases with reasonably similar characteristics; reliance on previous assessments on whether leases are onerous; · Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and · Use of hindsight in determining the lease term if the contract contains options to extend or terminate the lease. As a result of the application of the IFRS 16 standard the Group has recognised an additional lease liability and right-of-use assets in the amount of RUB 141 billion. On initial application the balance relating to leased equipment previously included in property, plant and equipment was reclassified to right-of-use assets. The lease liability previously presented within borrowings has been presented separately. As of January 1, 2018 the weighted average borrowing rate applied by the Group to discount its lease liabilities amounted to 8.83%. The reconciliation between the operating lease commitments disclosed under IAS 17 as of December 31, 2017 discounted at the weighted average rate and lease liability recognized under IFRS 16 at January 1, 2018 is presented below: January 1, 2018 Operating lease commitments 15,135 Operating lease commitments discounted at 8.83% 10,530 Lease liability under IFRS 16 148,897 Difference 138,367 Thereof: Finance lease liability recognized at December 31, 2017 11,056 Lease liability related to exclusive right to use trademark 1,808 Extention options reasonably certain to be exercised 125,503 The most significant difference between the discounted value of the operating lease commitments as of December 31, 2017 and the value of lease liability under IFRS 16 recognised at January 1, 2018, pertains to the requirements of the previously applied standard IAS 17 that in determining its lease operating commitments, the Group only considers future payments under the non-cancellable period of leases. Under the new lease standard, when determining a lease liability, the Group is required to consider existing extension options which are reasonably certain to be exercised. Prior period comparatives were not restated. Lease liabilities as of December 31, 2017 include financial lease obligations recognized in accordance with IAS 17 Leases. Other standards, interpretations and amendments adopted by the Group on January 1, 2018 had no effect on the Group’s consolidated financial statements. Standards, interpretations and amendments in issue but not yet effective The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective: Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures (1) IFRIC 23 Uncertainty over Income Tax Treatments (1) Amendments to IFRS 9 Prepayment Features With Negative Compensation (1) Amendments IFRSs Annual Improvements to IFRSs 2015-2017 Cycle (1) Amendments to Conceptual Framework Conceptual Framework in IFRS standards (2) IFRS 17 Insurance Contracts (3) Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (4) (1) Effective for annual periods beginning on or after January 1, 2019, with earlier application permitted. (2) Effective for annual periods beginning on or after January 1, 2020, with earlier application permitted. (3) Effective for annual periods beginning on or after January 1, 2021, with earlier application permitted. (4) The effective date for these amendments was deferred indefinitely. Early adoption continues to be permitted. These IFRS pronouncements are not expected to have a material impact on the Group's consolidated financial statements. |
EFFECT FROM IFRS 15 IMPLEMENTAT
EFFECT FROM IFRS 15 IMPLEMENTATION | 12 Months Ended |
Dec. 31, 2018 | |
EFFECT FROM IFRS 15 IMPLEMENTATION | |
EFFECT FROM IFRS 15 IMPLEMENTATION | 3. EFFECT FROM IFRS 15 IMPLEMENTATION The effects of IFRS 15 adoption on the Group’s consolidated statement of financial position as of December 31, 2018 are presented below: As if IFRS 15 was not IFRS 15 As applied adjustments reported ASSETS NON-CURRENT ASSETS: Property, plant and equipment 278,002 (1,559) 276,443 Other intangible assets 88,945 7,017 95,962 Investments in associates 10,772 (37) 10,735 Other non financial assets 3,424 1,614 5,038 Total non-current assets 640,024 7,035 647,059 CURRENT ASSETS: Other non financial assets 1,238 100 1,338 Total current assets 268,834 100 268,934 TOTAL ASSETS 908,858 7,135 915,993 EQUITY AND LIABILITIES EQUITY: Retained earnings 108,243 2,703 110,946 Accumulated other comprehensive loss (1,158) 94 (1,064) Equity attributable to owners of the Company 62,477 2,797 65,274 Non-controlling interests 12,269 22 12,291 Total equity 74,746 2,819 77,565 NON-CURRENT LIABILITIES: Deferred tax liabilities 23,740 699 24,439 Total non-current liabilities 542,258 699 542,957 CURRENT LIABILITIES: Contract liabilities Total current liabilities TOTAL EQUITY AND LIABILITIES The effects of IFRS 15 adoption on the Group’s consolidated statements of profit or loss for the twelve months ended December 31, 2018 are presented below: As if IFRS 15 was not IFRS 15 As applied adjustments reported Service revenue 413,067 (2,177) 410,890 Revenue 482,470 (2,177) 480,293 Cost of services 114,458 (2,057) 112,401 Cost of goods 64,169 (300) 63,869 Selling, general and administrative expenses 91,887 (3,941) 87,946 Depreciation and amortization 100,687 3,901 104,588 Operating profit 115,965 220 116,185 Profit before tax 83,631 220 83,851 Income tax expense 16,925 44 16,969 Profit for the year 66,706 176 66,882 Profit for the period attributable to: Owners of the Company 6,672 176 6,848 The effects of IFRS 15 adoption on the Group’s consolidated statements of cash flows for the twelve months ended December 31, 2018 are presented below: As if IFRS 15 was not IFRS 15 As applied adjustments reported CASH FLOWS FROM OPERATING ACTIVITIES: Profit for the year 7,656 176 7,832 Adjustments for: Depreciation and amortization 100,687 3,901 104,588 Income tax expense 16,925 44 16,969 Movements in operating assets and liabilities: Decrease in trade and other payables and other current liabilities (10,896) (266) (11,162) NET CASH PROVIDED BY OPERATING ACTIVITIES 150,535 3,855 154,390 CASH FLOWS FROM INVESTING ACTIVITIES: Cost to obtain and fulfill contracts, paid — (4,764) (4,764) Other investing activities (909) 909 — NET CASH USED IN INVESTING ACTIVITIES (74,534) (3,855) (78,389) |
SIGNIFICANT ACCOUNTING JUDGMENT
SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS | 12 Months Ended |
Dec. 31, 2018 | |
SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS | |
SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS | 4 . SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS 1. Critical accounting estimates A critical accounting estimate is an estimate that is both important to the presentation of the Group’s financial position and requires management’s most difficult, subjective or complex judgments, often as a result of the need to determine estimates and develop assumptions about the outcome of matters that are inherently uncertain. Management evaluates such estimates on an on-going basis, based upon historical results, historical experience, trends, consultations with experts, forecasts of the future, and other methods which management considers reasonable under the circumstances. Management considers the accounting estimates discussed below to be its critical accounting estimates, and, accordingly, provides an explanation of each. 2. Depreciation and amortization of non-current assets Depreciation and amortization expenses are based on management estimates of useful life, residual value and amortization method of property and equipment and intangible assets. Estimates may change due to technological developments, competition, changes in market conditions and other factors and may result in changes in the estimated useful life and in the amortization or depreciation charges. Technological developments are difficult to predict and management views on the trends and pace of development may change over time. Some of the assets and technologies, in which the Group invested several years ago, are still in use and provide the basis for new technologies. Critical estimates in the evaluations of useful lives for intangible assets include, but are not limited to, the estimated average customer relationship based on churn, the remaining license period and the expected developments in technology and markets. The useful lives of property and equipment and intangible assets are reviewed at least annually, taking into consideration the factors mentioned above and all other important relevant factors. The actual economic lives of intangible assets may be different from useful lives estimated by management, thereby resulting in a different carrying value of intangible assets with finite lives. The Group continues to evaluate the amortization period for intangible assets with finite lives to determine whether events or circumstances warrant revised amortization periods. A change in estimated useful lives is a change in accounting estimate, and depreciation and amortization charges are adjusted prospectively. See Notes 20 and 23 for further information. 3. Impairment of non-current assets The Group has made significant investments including in property, plant and equipment, intangible assets, goodwill , right-of-use assets, acquiring and fulfilling of contracts and other. Pursuant to IAS 36, goodwill and other intangible assets with indefinite useful lives and intangible assets not yet brought into use must be tested for impairment annually or more often if indicators of impairment exist. Other assets are tested for impairment when circumstances indicate that there may be a potential impairment. Recoverable amounts of assets and cash generating units ("CGUs") are based on evaluations, including the determination of the appropriate CGUs, the discount rate, estimates of future performance, the revenue generating capacity of the assets, timing and amount of future purchases of property and equipment, assumptions of the future market conditions and the long-term growth rate into perpetuity (terminal value). A change of assumptions, particularly in relation to the discount rate and growth rate used to estimate the recoverable amounts of assets, could significantly impact results of the Group’s impairment evaluation. All of the Group’s operations are in countries with emerging markets. The political and economic situation in these countries may change rapidly which could potentially have a significant impact on these operations. The changing state of the world economy, and increased macroeconomic risks also impact the assessment of cash flow forecasts and the discount rates applied. There are significant variations between different markets with respect to growth, mobile penetration, Average revenue per user,the Company's market share and similar parameters, which result in differences in operating margins. The future developments of operating margins are important in the Group’s impairment assessments, and the long-term estimates of these margins are highly uncertain. See Note 22 for further information. 4. Fair value of financial instruments Where the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques, including discounted cash flow models. The inputs to these models are taken from observable markets where possible, but when this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 28 for further information. 5. Provisions and contingencies The Group is subject to various legal proceedings, disputes and claims, including regulatory discussions related to the Group’s business, licenses, tax positions and investments, where the outcomes are subject to significant uncertainty. In addition, significant uncertainty exists in relation to employee bonuses and other rewards, which depend on their individual performance and Group’s results. The management evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss or related expense. Unanticipated events or changes in these factors may require the Group to increase or decrease the amount recorded or to be recorded for a matter that has not been previously recorded because it was not considered probable. See Note 27 and Note 34 for further information. 6. Right-of-use assets and lease liabilities The value of right-of-use assets and lease liabilities is based on management estimates of lease terms as well as an incremental borrowing rate used to discount lease payments. The lease term corresponds to the non-cancellable period of each contract except in cases where the Group is reasonably certain of exercising renewal options. When assessing the lease term the management considers all facts and circumstances that create the economic incentive for the Group to excise the option to extend the lease, such as the useful life of the asset located on the leased site, statistics on sites replacement, sequence of technology change, profitability of our retail stores as well as costs to terminate or enter into lease contracts. The incremental borrowing rate of the Group is determined based on the credit spreads of the Group's debt instruments in relation to zero-coupon yield curve for government securities. Changes in these factors could affect the estimated lease term and the reported value of right-of-use assets and lease liabilities. 7. Impairment of financial assets The Group uses management’s judgement to estimate allowance for Expected Credit Losses (ECL) for financial assets at amortized costs. ECL are measured in a way that reflects the unbiased and probability-weighted amount, the time-value of money and reasonable and supportable information at the reporting date pertaining to past events, current conditions and forecasts of future economic conditions. ECL are measured as probability-weighted present value of all cash shortfalls over the expected life of each financial asset. For receivables from financial services, ECL are mainly calculated using a statistical model based on three major risk parameters: probability of default, loss given default and exposure of default. The estimation of these risk parameters incorporates all available relevant information, not only historical and current loss data, but also reasonable and supportable forward-looking information reflected by the future expectation factors. This information includes macroeconomic factors (unemployment rate, inflation rate) and forecasts of future economic conditions. Significant changes in risk parameters could affect the estimated amount of ECL. See Note 18 and Note 30 for further information. |
BUSINESS ACQUISITIONS AND DISPO
BUSINESS ACQUISITIONS AND DISPOSALS | 12 Months Ended |
Dec. 31, 2018 | |
BUSINESS ACQUISITIONS AND DISPOSALS | |
BUSINESS ACQUISITIONS AND DISPOSALS | 5 . BUSINESS ACQUISITIONS AND DISPOSALS 1. Acquisitions in 2018 Acquisition of Kulturnaya Sluzhba -- In January 2018, the Group acquired a 78.2% ownership interest in Kulturnaya Sluzhba LLC (“KS”), operating under the trademark Ponominalu.ru. The purchase price comprised a cash payment, deferred payment due within 12 months from the acquisition date, and a contingent consideration to be paid to the sellers if agreed upon financial targets are met by KS. As of December 31, 2018, the Group paid the full amount of a RUB 54 million contingent consideration to the seller. Acquisition of Moskovskaia Direktciia Teatralno-Kontcertnyh i Sportivno-Zrelishchnyh Kass - In February 2018, the Group acquired a 100% ownership interest in Moskovskaia Direktciia Teatralno-Kontcertnyh i Sportivno-Zrelishchnyh Kass LLC (“MDTZK”), operating under the trademark Ticketland.ru. The purchase price comprised of both cash payment and deferred payment payable within 12 months from the acquisition date. These acquisitions allow the Group to enter the event ticketing market, whilst also broadening the Group’s suite of digital services. Acquisition of Progressivniye Technologii (ProgTech) – In August 2018, the Group acquired a 99% ownership interest in science and production association Progressivniye Technologii CJSC, a provider of fixed-line services in the cities of Zhukovskiy and Anapa. The acquisition of ProgTech allows the Group to strengthen its position in these local markets and benefit from the expected synergies. The purchase price comprised of cash payment and deferred payment. The Group will make a deferred payment of RUB 11 million in 12 months after the acquisition date, and of RUB 21 million in 24 months after the acquisition date. Acquisition of IT-Grad – In December 2018, the Group acquired a 100% ownership interest in IT-Grad 1 Cloud LLC (IT-Grad), one of the largest cloud services providers on the Russian IaaS market. The acquisition allows the Group to strengthen its presence in the Russian cloud services market. The purchase price comprised of cash payment of RUB 1,515 million and a contingent consideration. The Group will pay the contingent consideration of RUB 691 million in 8 months after the acquisition date and of RUB 249 million in 18 months after the acquisition date following certain conditions, including the transfer of rights on tangible and intangible assets.The contingent consideration could also be reduced by the amount of any losses incurred by the Group in respect to any tax or other claims relating to the pre-acquisition period. In case the amount of losses incurred exceeds the amount of contingent consideration, the sellers have indemnified the Group for the amounts in excess. As of the acquisition date, the Group recognized the contingent consideration in the amount of RUB 907 million. The business combinations were accounted for by applying the acquisition method. The fair values of the identifiable assets and liabilities of acquired companies as at the dates of acquisitions were the following (including the preliminary purchase price allocation for IT-Grad): KS MDTZK ProgTech IT-Grad Goodwill 479 2,033 213 1,877 Customer base 37 727 123 643 Trademark 129 779 — — Other non-current assets 43 145 172 32 Current assets 117 202 15 44 Cash and cash equivalents 39 542 28 13 Current liabilities (383) (868) (80) (59) Liability under put option agreement over non-controlling interests (106) — — — Non-current liabilities (34) (370) (76) (128) Total consideration 321 3,190 395 2,422 Including: Fair value of contingent consideration — 3 907 Cash paid 1,515 The excess of the total consideration over the value of net assets acquired of KS in the amount of RUB 479 million was recorded as goodwill arising from the acquisition of one of the leading players in the Russian event ticketing industry and expected synergies. This has been allocated to the “Ponominalu” operating segment. The excess of the total consideration over the value of net assets acquired through MDTZK, in the amount of RUB 2,033 million was recorded as goodwill arising from the acquisition of one of the leading players in the Russian event ticketing industry and expected synergies. This has been allocated to the “Ticketland” operating segment. The excess of the total consideration over the value of Progtech' net assets acquired, in the amount of RUB 213 million, was recorded as goodwill arising from expected synergies. This has been allocated to the “Moscow fixed line” operating segment. The excess of the total consideration over the value of net assets acquired of IT-Grad in the amount of RUB 1,877 million was recorded as goodwill arising from expected synergies and market position obtained. This has been allocated to the “Russia Convergent” operating segment. Goodwill recognized as a result of the acquisitions is not expected to be deductible for income tax purposes. KS's trademark is amortized over 10 years, along with its customer base. The trademark of MDTZK is amortized over 10 years, along with its customer base. The customer base acquired upon acquisition of Progtech is amortized over 15 years. The customer base acquired upon acquisition of IT-Grad is amortized over 7 years. According to the terms of the purchase agreements, deferred payments payable by the Group could be reduced by the amount of any losses incurred by the Group in respect of any claims relating to the pre-acquisition period. In case the amount of the losses incurred exceeds the amount of deferred payment, the seller has indemnified the Group for the amounts in excess. The Group recognized the following liabilities and indemnification assets in respect to deferred payments on aforementioned acquisitions on acquisition dates: KS MDTZK ProgTech Expected timing of deferred payment January, 2019 February, 2019 August, 2019 – August, 2020 Deferred payment per agreement 78 60 32 Provision for tax liabilities related to pre-acquisition period as of acquisition date (134) (125) (29) Liability on deferred payment — — (3) Indemnification asset 56 65 — The Group recognized the following liabilities and indemnification assets in respect to deferred payments on aforementioned acquisitions as of December 31, 2018: KS MDTZK ProgTech Deferred payment per agreement 78 60 32 Provision for tax liabilities related to the pre-acquisition period as of December 31, 2018 (49) (67) (29) Liability on deferred payment (29) — (3) Indemnification asset — 7 — The Group also entered into an option agreement with the non-controlling shareholders of the KS. Pursuant to the agreement the Group has the right and obligation in the form of a call and put option, with the put option exercisable at the request of non-controlling shareholders, to acquire their shares at a price calculated based on the operating and financial results of KS. Acquisition of Dekart - In October 2018, the Group acquired Dekart property complex from Sistema for a total consideration of RUB 5,242 million. The property complex comprises office facilities leased by the Group, subsidiaries of Sistema and other counterparties, parking premises and engineering networks and operates under management agreement with Business-Nedvizhimost, a subsidiary of Sistema. The acquisition was accounted for as a transaction under common control directly in equity. The acquisition enables the Group to optimize its rental expenses and enchance its investment property portfolio. Acquisition of MTS Bank – In July 2018, the Group increased ownership share in the Group associate MTS Bank from 26.6% to 55.4% and obtained control over the entity. Consideration paid to Sistema for additional share in MTS Bank amounted to RUB 8,273 million. The acquisition was accounted for as a transaction with entities under common control directly in equity. Acquisition of Serebryaniy Bor - In December 2018, the Group acquired Serebryaniy Bor property complex from Sistema for a total consideration of RUB 1,711 million. The property complex comprises land, nonresidential buildings leased by the Group and other counterparties, and engineering networks. The acquisition was accounted for as a transaction under common control directly in equity. The following table summarizes the details of acquisitions of subsidiaries under common control finalized in 2018: Consideration Assets paid net acquired of cash Cash other than Liabilities Acquired company acquired* acquired cash assumed Dekart 4,658 — 3,406 125 Serebryaniy Bor 1,711 — 383 — MTS Bank 6,873 1,401 * 126,180 128,165 * Included in consolidated statement of cash flows within cash flows from financing activities as transactions with entities under common control 2. Acquisitions in 2017 Acquisition of Bashkortostan Cellular Communication - In July 2017, the Group acquired a 100% ownership interest in Bashkortostan Cellular Communication OJSC (“BCC”). BCC operates in the Republic of Bashkortostan and holds rights to use 450 MHz and 2,100 MHz radio frequencies. The acquisition enhances the Group’s spectrum of resources in the Republic of Bashkortostan. The purchase price comprised of cash payment and a contingent consideration, payable in 12 months from the acquisition date. Acquisition of Oblachny Retail – In October 2017, the Group acquired a 50.82% of ownership interest in the Russian retail software developer Oblachny Retail LLC ("Oblachny Retail"), operating under trademark LiteBox, with a call and put option arrangement existing over another 49.18% of shares. The deal allows the Group to enter the cloud-based cash register market as a fully licensed fiscal data operator ("FDO") and a provider of integrated digital cash management solutions for B2B clients. The purchase price comprised of cash payment and a contingent consideration, payable within 12 months from the acquisition date. As a part of business combination, the Group also contributed RUB 420 million to the share capital of the acquiree to provide funds for future development. The Group has elected to measure the non-controlling interests in the acquiree at fair value. Acquisition of Praliss Enterprises – In December 2017, the Group purchased a 100% ownership interest in Praliss Enterprises ("Praliss"), thus acquiring one of the world’s leading eSport clubs – Gambit Esports. The acquisition is a part of the Group's digital innovation strategy. The purchase price comprised of cash payment, a contingent consideration, payable within 12 months from the acquisition date, and the earn-out amounts to be paid to the sellers in the course of two years from 2018 to 2019 on the basis that agreed upon operational targets are met by Praliss. The fair values of the identifiable assets and liabilities of acquired companies as at the dates of acquisitions were the following: BCC Oblachny Retail Praliss Goodwill 62 524 208 Licenses 260 — — Other non-current assets 21 181 132 Current assets 5 23 — Cash and cash equivalents 13 420 — Current liabilities (15) (123) — Liability under put option agreement over non-controlling interests — (402) — Non‑current liabilities (54) (33) (27) Total consideration 292 590 313 Including: Fair value of contingent consideration and earn-out payments 72 10 93 Additional contribution — 420 Cash paid 220 160 220 The excess of the total consideration over the value of net assets acquired of BCC in the amount of RUB 62 million was allocated to goodwill arising from expected synergies. This has been attributed to the “Russia Convergent” segment. The excess of the total consideration over the value of net assets acquired of Oblachny Retail in the amount of RUB 524 million, was allocated to goodwill arising from the company employees and expected synergies. This has been assigned to the “Oblachny Retail” operating segment (Note 22). The excess of the total consideration over the value of net assets acquired of Praliss in the amount of RUB 208 million was allocated to goodwill arising from expected synergies. This has been attributed to the “eSports” operating segment. None of the goodwill recognized is expected to be deductible for income tax purposes. Licenses acquired upon acquisition of BCC are amortized over a period of their remaining useful life of 15 years on average. Software acquired through Oblachny Retail is amortized over a period of their remaining useful life of 5 years on average. The Group also entered into an option agreement with the shareholders of the Litebox, pursuant to which the Group has the right and obligation, at the request of non-controlling shareholders, to acquire their shares at a price calculated based on the operating results of Oblachny Retail for 2019-2020. As of December 31, 2018 the consideration payable relating to acquisitions of BCC, Oblachny Retail and Praliss were fully settled by the Group, except for earn-out payments due on acquisition of Praliss in the amount of RUB 13 million. 3. Acquisition and disposal in 2016 Acquisition of Smarts-Yoshkar-Ola – In September 2016, the Group acquired 100% of the shares of Smarts-Yoshkar-Ola CJSC (“Smarts-Yoshkar-Ola”), operating in the Republic of Mari El and holding rights to use 1800 MHz radio frequencies. The acquisition enhances the Group’s spectrum resources in the Republic of Mari El. The business combination was accounted for by applying the acquisition method. The following table summarizes the purchase price allocation for SMARTS-Yoshkar-Ola at the date of acquisition: Smarts- Yoshkar-Ola Cash and cash equivalents 5 Current assets 5 Licenses 323 Other non-current assets 14 Current liabilities (30) Non-current liabilities (69) Gain from bargain purchase (included in other operating income in the consolidated statement of profit or loss) (235) Total consideration 13 Including: Contingent consideration 3 Cash paid 10 The total consideration was initially determined by a contract concluded between the Group and the seller (SMARTS Group) in 2014. To determine the fair value of assets acquired, the Group used comparative prices of the first radio frequencies auction that was held in Russia in 2015, which gave rise to the recognition of a gain from bargain purchase. As of December 31, 2018 the consideration payable was fully settled by the Group. The details on disposal of 50.01% share in LLC “Universal Mobile Systems" ("UMS") are disclosed in Note 10. Pro forma results of operations – The following pro forma financial data for the years ended December 31, 2018, 2017 and 2016 give effect to the business combinations as they had been completed at the beginning of the year. 2018 (MTS Bank, MDTZK, Kulturnaya Sluzhba, Progtech, Dekart, IT Grad, 2017 (BCC, 2016 Serebryaniy Oblachny Retail, (SMARTS- Pro forma: Bor) Praliss) Yoshkar-Ola) Net revenues 491,936 443,178 435,694 Net income 8,194 55,881 48,465 The pro forma information is based on various assumptions and estimates. The pro forma information is neither necessarily indicative of the operating results that would have occurred if the Group acquisitions had been consummated as of January 1, 2016, 2017, or 2018, nor is it necessarily indicative of future operating results. The pro forma information does not give effect to any potential revenue enhancements or cost synergies or other operating efficiencies that could result from the acquisitions. The actual results of operations of these companies are included into the consolidated financial statements of the Group only from the respective dates of acquisition. Since their respective acquisition dates, companies acquired in 2016 contributed revenue in the amount of RUB 1 million and net loss in the amount of RUB 15 million to the consolidated statement of profit or loss for the year ended December 31, 2016. The companies acquired in 2017 contributed revenue in the amount of RUB 37 million and net loss in the amount of RUB 105 million to the consolidated statement of profit or loss for the year ended December 31, 2017. Companies acquired in 2018 contributed revenue in the amount of RUB 13,261 million and net income in the amount of RUB 615 million to the consolidated statement of profit or loss for the year ended December 31, 2018 . |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 6. SEGMENT INFORMATION Management (chief operating decision maker) analyzes and reviews results of the Group’s operating segments separately based on the nature of products and services, regulatory environments and geographic areas. MTS Group’s management evaluates the segments’ performance of each segment based on revenue and operating profit, excluding depreciation and amortization. Management does not analyze assets or liabilities by reportable segments. The Group identified the following reportable segments: Russia Convergent : represents the results of mobile and fixed line operations, which encompasses services rendered to customers across the regions of Russia, including voice and data services, transmission, broadband, pay-TV and various value-added services and retail operations. Moscow fixed line: represents the results of fixed line operations carried out in Moscow by the Group’s subsidiary MGTS. MGTS is the only licensed public switched telephone network ("PSTN") operator in Moscow and is considered a natural monopoly under Russian antimonopoly regulations. Consequently, a substantial part of the services provided by MGTS are subject to governmental regulation. Ukraine: represents the results of mobile and fixed line operations carried out across multiple regions of Ukraine. MTS Bank: represents the results of banking services rendered to customers across regions of Russia. The “Other” category does not constitute a reportable segment. It includes the results of a number of other operating segments that do not meet the quantitative thresholds for separate reporting, such as Turkmenistan, Armenia, System Integrator, Satellite TV and others. In 2017, the management has started to assess Russia Convergent, NVision Czech Republic, Stream, Navigation Information Systems and Metro-Telecom separately to monitor the results and make funding decisions on this basis, and thus has presented them separately. Related financial information was, retrospectively, restated. The intercompany eliminations presented below primarily consist of sales transactions between segments conducted under the normal course of operations. Financial information by reportable segments is presented below: Year ended December 31, 2018: Russia Moscow MTS HQ and Convergent fixed line Ukraine Bank Total Other elimination Consolidated Revenue External customers 386,838 34,348 28,826 11,313 19,550 (582) 480,293 Intersegment 6,258 4,498 891 538 12,780 (24,965) — Total revenue 393,096 38,846 29,717 11,851 32,330 (25,547) 480,293 Operating profit 106,296 12,695 6,658 1,291 1,072 (11,827) 116,185 Depreciation and amortization (82,457) (10,867) (9,346) (547) (103,217) (3,620) 2,249 (104,588) Other disclosure: Capital expenditures 67,863 6,306 15,151 683 13,596 — 103,599 Year ended December 31, 2017: Russia Moscow HQ and Convergent fixed line Ukraine Total Other elimination Consolidated Revenue External customers 365,846 34,350 24,992 425,188 17,618 105 442,911 Intersegment 5,136 4,683 1,111 10,930 12,785 (23,715) — Total revenue 370,982 39,033 26,103 436,118 30,403 (23,610) 442,911 Operating profit 93,821 8,801 5,258 107,880 (871) (10,909) 96,100 Depreciation and amortization 59,942 10,642 6,106 76,690 3,481 (259) 79,912 Other disclosure: Capital expenditures 65,790 7,403 10,573 83,766 2,392 — 86,158 Year ended December 31, 2016: Russia Moscow HQ and Convergent fixed line Ukraine Total Other elimination Consolidated Revenue External customers 355,056 34,796 27,026 416,878 18,689 125 435,692 Intersegment 4,849 4,871 2,161 11,881 14,423 (26,304) — Total revenue 359,905 39,667 29,187 428,759 33,112 (26,179) 435,692 Operating profit 81,484 10,850 3,599 95,933 3,523 (11,787) 87,669 Depreciation and amortization 60,087 10,900 6,304 77,291 4,395 (104) 81,582 Other disclosure: Capital expenditures 61,208 7,316 7,666 76,190 3,995 — 80,185 The consolidated operating profit is reconciled to the consolidated profit before tax on the face of the consolidated statement of profit or loss. Financial information by geographic area is presented below: For the year ended December 31, Revenue 2018 2017 2016 Russia 440,899 405,365 392,764 Other 39,394 37,546 42,928 Total revenue 480,293 442,911 435,692 As of As of December 31, December 31, Non-current assets (1) 2018 2017 Russia 357,361 339,693 Other 54,151 37,048 Total non-current assets: 411,512 376,741 (1) Comprises property, plant and equipment, goodwill and other intangible assets. Revenues from external customers and non-current assets are allocated to individual countries based on location of operations. No single customer represents 10% or more of the consolidated revenue. Disaggregation of revenue: Year ended Russia Moscow HQ and December 31, 2018: Convergent fixed line Ukraine MTS Bank Total Other elimination Consolidated Revenue Mobile services 304,049 1,487 27,951 — 333,487 6,663 104 340,254 Fixed line services 22,939 32,739 241 — 55,919 377 — 56,296 Finance services — — — 11,313 11,313 — 240 11,553 Integration services 444 5 — — 449 1,089 — 1,538 Sales of goods 59,406 117 634 — 60,157 10,172 (926) 69,403 Other services — — — — — 1,249 — 1,249 External Customers 386,838 34,348 28,826 11,313 461,325 19,550 (582) 480,293 Intersegment 6,258 4,498 891 538 12,185 12,780 (24,965) — Total revenue 393,096 38,846 29,717 11,851 473,510 32,330 (25,547) 480,293 Thereof: Recognised over time 327,432 34,231 28,192 11,313 401,168 9,378 (582) 409,964 Recognised at point of time 59,406 117 634 — 60,157 10,172 — 70,329 386,838 34,348 28,826 11,313 461,325 19,550 (582) 480,293 Year ended Russia Moscow HQ and December 31, 2017: Convergent fixed line Ukraine MTS Bank Total Other elimination Consolidated Revenue Mobile services 297,273 798 24,722 — 322,793 10,237 105 333,135 Fixed line services 22,358 33,453 208 — 56,019 353 — 56,372 Finance services — — — — — — — — Integration services 191 — — — 191 1,062 — 1,253 Sales of goods 46,024 99 62 — 46,185 5,966 — 52,151 Other services — — — — — — — — External Customers 365,846 34,350 24,992 — 425,188 17,618 105 442,911 Intersegment 5,136 4,683 1,111 — 10,930 12,785 (23,715) — Total revenue 370,982 39,033 26,103 — 436,118 30,403 (23,610) 442,911 Thereof: Recognised over time 319,822 34,251 24,930 — 379,003 11,652 105 390,760 Recognised at point of time 46,024 99 62 — 46,185 5,966 — 52,151 365,846 34,350 24,992 — 425,188 17,618 105 442,911 Year ended Russia Moscow HQ and December 31, 2016: Convergent fixed line Ukraine MTS Bank Total Other elimination Consolidated Revenue Mobile services 288,547 425 26,724 — 315,696 12,395 125 328,216 Fixed line services 21,685 34,346 243 — 56,274 284 — 56,558 Finance services — — — — — — — — Integration services 185 — — — 185 1,527 — 1,712 Sales of goods 44,639 25 59 — 44,723 4,483 — 49,206 Other services — — — — — — — — External Customers 355,056 34,796 27,026 — 416,878 18,689 125 435,692 Intersegment 4,849 4,871 2,161 — 11,881 14,423 (26,304) — Total revenue 359,905 39,667 29,187 — 428,759 33,112 (26,179) 435,692 Thereof: Recognised over time 310,417 34,771 26,967 — 372,155 14,206 125 386,486 Recognised at point of time 44,639 25 59 — 44,723 4,483 — 49,206 355,056 34,796 27,026 — 416,878 18,689 125 435,692 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 7. REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue is recognized to the extent that the Group has delivered goods or rendered services under an agreement, the amount of revenue can be reliably measured and it is probable that the economic benefits associated with the transaction will flow to the Group. Revenue is measured at the fair value of the consideration receivable, exclusive of value added taxes and discounts. The Group obtains revenue from providing mobile and fixed telecommunication services (access charges, voice and video calls, messaging, interconnect fees, fixed and mobile broadband, tv and musical content and connection fees), financial services, integration services as well as selling equipment, accessories and software. Products and services may be sold separately or in bundle packages. The most significant part of our revenue relates to prepaid contracts. Revenue for access charges, voice and video calls, messaging, interconnect fees and fixed and mobile broadband is recognized as services are rendered. This is based upon either usage (minutes of traffic processed, volume of data transmitted) or passage of time (monthly subscription fees). Revenue from the sale of prepaid credit is deferred until such time as the customer consumes the services or the credit expires. Revenue from the provision of TV and music content is recognized as the Group renders the service and is recorded either at the gross amount billed to the customers or in the amount of commission fee receivable by the Group. Revenue from sales of goods (mainly mobile handsets and other mobile devices) is recognized when the significant risks and rewards of ownership have been transferred to the customer For bundled packages, the Group accounts for individual products and services separately if they are distinct, which means that a product or service, as well as the customer benefit, is separately identifiable from other items in the bundled package and a customer can benefit from it. The arrangement consideration is allocated to each separate product and service, based on its relative fair value. The determined fair value of individual elements is generally based on prices at which the deliverable is regularly sold on a stand-alone basis after considering any appropriate volume discounts. The Group provides retrospective volume discounts under roaming agreements with international and local mobile operators. To estimate the variable consideration in relation to these discounts, the Group uses original data traffic adjusted adjusted on a monthly basis to reflect newly-available information. The resulting liability for the expected future discounts is recognized as a reduction of revenue within trade and other payables in the accompanying consolidated statement of financial position. For contracts that permit customers to return acquired mobile devices, the amount of recognized revenue is adjusted for expected product return or refunds, which are estimated based on the basis of historical data. The respective refund liability is recorded as provision in the accompanying consolidated statement of financial position. Revenue from the provision of financial services mainly relates to interest bearing assets of MTS Bank. Such revenue is recognized on an accrual basis using the effective interest method. Revenue from integration services mainly relates to project type contracts and is determined by reference to the stage of completion of each respective projects. The stage of completion is calculated using the input method – based on the proportion of costs incurred for work performed to date to the estimated total contract costs. Revenue is recognized cumulatively as total revenue under the project multiplied by percentage of completion as at reporting date. When it is probable that total contract costs will exceed the total contract revenue, the expected loss is recognized as an expense immediately. Disaggregation of revenue for the years ended December 31, 2018, 2017 and 2016 is dislosed in the tables below. Disaggregation of revenue: HQ and Year ended December 31, 2018: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 312,649 28,828 6,687 (3,274) 344,889 Fixed line services 60,401 255 199 (59) 60,796 Finance services 11,851 — 0 — 11,851 Integration services 7,392 — 0 (655) 6,737 Sales of goods 69,174 634 643 (1,048) 69,403 Other services 1,269 — — — 1,269 Eliminations (14,652) — — (14,652) Total revenue 448,083 29,717 7,529 (5,037) 480,293 * Comprised of the following segments: Russia convergent, Moscow fixed line, MTS Bank and Other (excluding MTS Armenia) HQ and Year ended December 31, 2017: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 303,991 25,815 9,588 (3,819) 335,575 Fixed line services 60,782 226 160 (68) 61,101 Finance services — — — — — Integration services 5,571 — — (916) 4,655 Sales of goods 52,536 62 381 (829) 52,149 Other services — — — — — Eliminations (10,568) — — — (10,568) Total revenue 412,312 26,103 10,129 (5,632) 442 911 HQ and Year ended December 31, 2016: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 294,988 28,851 12,695 (5,288) 331,246 Fixed line services 61,166 277 98 (56) 61,485 Finance services — — — — — Integration services 5,603 — — (996) 4,607 Sales of goods 49,648 59 319 (821) 49,205 Other services — — — — — Eliminations (10,851) — — — (10,851) Total revenue 400,554 29,187 13,111 (7,160) 435,692 Contract balances Contract balances include trade receivables related to the recognized revenue, contract assets and contract liabilities. Trade receivables represent an unconditional right to receive consideration (primarily in cash). Contract assets represent accrued revenues that have not yet been billed to customers due to certain contractual terms other than the passage of time. This is the case in a bundled offering which combines the sale of a mobile device and the provision of mobile services for a fixed-period, where the mobile device is invoiced at a reduced price leading to the reallocation of a portion of amounts invoiced for mobile communication services to the supply of the mobile phone. The excess of the amount allocated to the mobile phone over the price invoiced is recognized as a contract asset and is thus transferred to trade receivables as the service is invoiced. The other part of contract assets relates to the Group’s rights to consideration for work completed but not yet billed for integration services projects. Contract liabilities represent amounts paid by customers to the Group before receiving the goods and/or services promised in the contract. This is the case for advances received from customers or amounts invoiced or amounts invoiced and paid for goods or services that are yet to be transferred. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: As of December 31, January 1, 2018 2018 Receivables 28,097 14,271 Contract assets 105 — Total assets 28,202 14,271 Less current portion (28,192) (14,271) Total non-current assets 10 — Contract liabilities (22,155) (18,461) Thereof: Mobile and fixed telecommunication services (20,094) (17,156) Other services (1,741) (1,084) Loyalty programme (320) (221) Total liabilities (22,155) (18,461) Less current portion 21,597 17,696 Total non-current liabilities (558) (765) Changes in the contract assets and the contract liabilities balances during the period are as follows: Contract Contract assets liabilities Balance as of January 1, 2018 (18,461) Revenue recognised that was included in the contract liability balance at the beginning of the period — 10,999 Increase due to cash received, excluding amount recognised as revenue during the period — (14,390) Transfers from contract assets to receivables Effect of changes in estimates 105 — Business combinations — (303) Balance as of December 31, 2018 105 (22,155) The Group expects to recognize revenue related to performance obligations that were unsatisfied (or partially unsatisfied) as of December 31, 2018 as follows: 2019 2020-2024 2025-2029 After 2029 Total Mobile telecommunication services (19,536) (541) (17) — (20,094) Other services (1,741) (1,741) Loyalty programme (320) — — — (320) Cost to obtain and fulfill a contract The Group capitalizes certain incremental costs incurred in acquiring or fullfilling a contract with a customer if the management expects these costs to be recoverable. Costs of acquiring a contract include commissions paid to a third-party distrubutors as well as the associated remuneration of the Group’s commercial employees for obtaining a contract with a customer. These costs are amortized on a straight-line basis over the average subscriber life. Costs to fulfill a contract mainly relate to costs of equipment transferred to the subscribers required for the provision of services. These costs are amortized on a straight-line basis for the shorter of equipment useful life or average subscriber life. The Group uses a practical expedient from IFRS 15 which allows to expense contract costs as incurred when the expected contract duration is one year or less. As of December 31, 2018 and January 1, 2018 the balances of cost to obtain and fulfill contracts capitalized by the Group amounted to: December 31, January 1, 2018 2018 Cost to obtain contracts 7,017 6,829 Cost to fulfull contracts 1,614 966 As of December 31, 2018 and January 1,2018, the accumulated amortization expense related to cost to obtain and fulfill contracts amounted to 16,908 RUB million and 12,420 RUB million, respectively. Amortization expense related to cost to obtain and fulfill contracts recognized for the year ended December 31, 2018 amounted to 4,371 RUB million. There was no impairment loss relating to the costs capitalized. |
SELLING, GENERAL AND ADMINISTRA
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 8. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the years ended December 31, 2018, 2017 and 2016 comprised the following: 2018 2017 2016 Salaries and social contributions 46,769 44,605 44,347 Advertising and marketing expenses 10,090 9,185 10,480 General and administrative expenses 8,127 8,321 7,007 Taxes other than income tax 4,010 3,896 3,806 Cash collection commission 3,724 3,689 3,311 Universal service fund 3,535 3,462 3,412 Dealers commission 3,387 6,718 6,740 Utilities and maintenance 2,852 9,361 9,092 Consulting expenses 2,067 1,975 1,618 Billing and data processing 1,243 1,292 1,485 Other 2,142 2,682 2,748 Total 87,946 95,186 94,046 |
FINANCE INCOME AND COSTS
FINANCE INCOME AND COSTS | 12 Months Ended |
Dec. 31, 2018 | |
FINANCE INCOME AND COSTS | |
FINANCE INCOME AND COSTS | 9. FINANCE INCOME AND COSTS Finance income and costs for the years ended December 31, 2018, 2017 and 2016 comprised the following: 2018 2017 2016 Interest expense: – Loans and notes 25,613 22,131 22,982 – Amortization of debt issuance costs 415 623 683 – Lease obligations (1) 13,917 954 855 – Provisions: unwinding of discount 223 91 94 Total interest expense 40,168 23,799 24,614 Loss on financial instruments 1,008 2,486 25 Other finance costs 63 86 2,885 Total finance costs 41,239 26,371 27,524 Less: amounts capitalized on qualifying assets (2) (460) (307) (388) Less: debt modification and other gain (2,614) — — Finance costs 38,165 26,064 27,136 Finance income on loans and receivables – Interest income on bank deposits 5,182 4,818 4,277 – Interest income on loans issued 357 330 510 – Other finance income 442 400 486 Finance income 5,981 5,548 5,273 Net finance costs 32,184 20,516 21,863 (1) Starting from January 1, 2018 the Group has applied IFRS 16, “Leases” (2) The annual weighted average capitalization rates of 8.2%, 8.2% and 8.3% were used to determine the amount of capitalized interest for the years ended December 31, 2018, 2017 and 2016, respectively . |
OPERATIONS IN UZBEKISTAN
OPERATIONS IN UZBEKISTAN | 12 Months Ended |
Dec. 31, 2018 | |
OPERATIONS IN UZBEKISTAN | |
OPERATIONS IN UZBEKISTAN | 10. OPERATIONS IN UZBEKISTAN On August 5, 2016, the Group sold its 50.01% stake in UMS LLC, or UMS, a subsidiary in Uzbekistan for USD 1 to UMS's sole remaining shareholder - the State Unitary Enterprise Centre of Radio Communication, Radio Broadcasting and Television of The Ministry of Development of Information Technologies and Communications of the Republic of Uzbekistan. The results of UMS’s operations were reported as discontinued operations in the accompanying consolidated statements of profit or loss. The consolidated statements of financial position and consolidated statements of cash flows for all periods presented were not retrospectively restated on discontinued operations. UMS’s summary of financial information: Results of discontinued operation Year ended December 31, 2016 Revenue 5,115 Expenses (6,602) Loss before tax (1,487) Income tax gain (note 12) 192 Loss for the period (1,295) Loss on sale of discontinued operations (2,726) Loss from discontinued operations (4,021) Loss attributable to non-controlling interests (654) Loss to owners of the Company (3,367) Basic loss per share (1.69) Diluted loss per share (1.69) Cash flows from (used in) discontinued operation Year ended December 31, 2016 Net cash used in operating activities (543) Net cash used in investing activities (1,253) Net cash provided by financing activities 1,234 As of August 5, 2016, the carrying amounts of UMS’s net assets and reconciliation of the loss on disposal were as follows: Property, plant and equipment (6,960) Other intangible assets (2,922) Other non-current assets (2,577) Cash and cash equivalents (378) Other current assets (1,359) Non-current liabilities 5,113 Current liabilities 2,484 Non-controlling interest 1,787 Accumulated other comprehensive income 2,086 Consideration received — Loss on disposal of UMS (2,726) |
OPERATIONS IN TURKMENISTAN
OPERATIONS IN TURKMENISTAN | 12 Months Ended |
Dec. 31, 2018 | |
OPERATIONS IN TURKMENISTAN | |
OPERATIONS IN TURKMENISTAN | 11. OPERATIONS IN TURKMENISTAN In September 2017, the Group’s subsidiary in Turkmenistan MTS Turkmenistan or MTS-TM, suspended the provision of telecommunication services to its subscribers, due to the termination by Turkmen state-owned companies and state authorities of line rental, frequency allocation, interconnect, and other agreements necessary to servicing MTS clients. The license for the provision of telecommunication services on the territory of Turkmenistan was valid until the end of July 2018. According to the IAS 36 (par.12), the Group considered facts described above as an impairment indicators and consequently determined that all long-lived assets attributable to the Turkmenistan subsidiary were impaired. The Group also assessed the recoverability of the current assets and recorded a provision for those that were considered to be impaired. No indicators of impairment were identified in respect of cash and cash equivalents attributable to MTS-TM. Total impairment charges recognized in the Group’s consolidated statement of profit or loss for the year ended December 31, 2017 were as follows: Impairment of long-lived assets 3,204 Current provision for income tax 100 Provision for doubtful accounts 74 Other operating expenses 37 Taxes other than income tax 20 Deferred income tax (69) 3,366 In July 2018, the Group filed a Request for Arbitration against the Sovereign State of Turkmenistan with the World Bank’s International Center for Settlement of Investments Disputes (“ICSID”) in order to protect its legal rights and investments in Turkmenistan. In December 2018 the Group started dismantling of terminal network equipment in Turkmenistan and accrued a dismaltlment provision in the amount of RUB 228 million in the Group’s consolidated statement of profit or loss. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAX | |
INCOME TAX | 12. INCOME TAX Income taxes of the Group’s Russia-incorporated entities have been calculated in accordance with Russian legislation and are based on the taxable profit for the period. The corporate income tax rate in Russia is 20%. The withholding tax rate on dividends paid within Russia is 13%. The foreign subsidiaries of the Group pay withholding taxes in their respective jurisdictions. Deferred tax assets and liabilities are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases of assets and liabilities that will result in future taxable or deductible amounts. The deferred tax assets and liabilities are measured using the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Significant components of income tax expense for the years ended December 31, 2018, 2017 and 2016 were as follows: 2018 2017 2016 Current income tax charge 19,881 20,712 15,177 Prior period tax adjustments (133) 673 98 Total current income tax 19,748 21,385 15,275 Deferred tax (2,779) (2,408) (137) Income tax expense on continuing operations 16,969 18,977 15,138 Tax effect from the discontinued operations (Note 10) — — (192) Total tax expense for the period 16,969 18,977 14,946 The statutory income tax rates in jurisdictions in which the Group operates for 2018, 2017 and 2016 were as follows: Russia and Armenia – 20%, Ukraine – 18%, Turkmenistan – 8%, Czech Republic - 19%. The Russian statutory income tax rate of 20% reconciled to the Group’s effective income tax rate for the years ended December 31, 2018, 2017 and 2016 as follows: 2018 2017 2016 Statutory income tax rate for the year 20.0 % 20.0 % 20.0 % Adjustments: Expenses not deductible for tax purposes 0.9 1.7 2.1 Prior periods tax effects (0.2) 0.8 0.1 Different tax rate of foreign subsidiaries (0.3) — (0.5) Earnings distribution from subsidiaries 0.1 0.9 0.2 Change in fair value of derivative financial instruments — 0.4 0.3 Derecognition of deferred tax assets 0.1 0.7 — Other (0.4) 0.6 0.2 Effective income tax rate 20.2 % 25.1 % 22.4 % The Group reported the following deferred income tax assets and liabilities in the consolidated statement of financial position: December 31, December 31, 2018 2017 Deferred tax assets 11,190 5,545 Deferred tax liabilities (24,439) (23,773) Net deferred tax liabilities (13,249) (18,228) Movements in the deferred tax assets and liabilities for the year ended December 31, 2017 were as follows: Recognised in other January 1, Recognised in comprehensive Effect of Effect of December 31, 2017 profit / loss income acquisitions derecognition 2017 Assets / (liabilities) arising from tax effect of: Depreciation of property, plant and equipment (19,301) 599 (39) — (180) (18,921) Other intangible assets (7,094) (290) (8) (59) (3) (7,454) Potential distributions from/ to Group’s subsidiaries/ associates (3,987) (175) 119 — — (4,043) Licenses (2,099) 80 25 — — (1,994) Customer base (660) 124 — — — (536) Accrued expenses for services 6,382 761 (9) — (3) 7,131 Lease obligations 2,199 164 — — — 2,363 Loss carryforward 1,917 226 — — — 2,143 Provision for investment in Delta Bank in Ukraine 653 — (52) — — 601 Deferred connection fees 540 33 (11) — — 562 Hedge and other 989 1,077 (141) — (5) 1,920 Net deferred tax liability (20,461) 2,599 (116) (59) (191) (18,228) Movements in the deferred tax assets and liabilities for the year ended December 31, 2018 were as follows: Adjustment on Recognised in initial application other December 31, of new IFRS Recognised in comprehensive Effect of December 31, 2017 standards profit/loss income acquisitions 2018 Assets / (liabilities) arising from tax effect of: Depreciation of property, plant and equipment (18,921) 1,632 513 143 395 (16,238) Other intangible assets (7,454) — 1,218 9 147 (6,080) Potential distributions from/ to Group’s subsidiaries/ associates (4,043) — 418 (394) — (4,019) Licenses (1,994) — 148 (71) — (1,917) Customer base (536) — 279 — (449) (706) Capitalization of cost to obtain and fulfill contracts — (1,290) (31) — — (1,321) Accrued expenses for services 7,131 — (603) 51 426 7,005 Right-of-use assets and lease obligations 2,363 (1,632) 1,833 — — 2,564 Loss carryforward 2,143 — 1,362 — 751 4,256 Provision for investment in Delta Bank in Ukraine 601 — (319) 85 — 367 Contract liabilities 562 717 (340) 15 — 954 Debt modification — (597) (478) — — (1,075) Hedge and other 1,920 142 (1,221) 58 2,062 2,961 Net deferred tax liability (18,228) (1,028) 2,779 (104) 3,332 (13,249) The Group recognizes deferred income tax on future dividend distributions from foreign subsidiaries and associates which are based on the cumulative undistributed earnings of those foreign subsidiaries in accordance with local statutory accounting regulations. The Group recognizes deferred tax assets in respect of tax losses carried forward to the extent that realization of tax losses against future taxable profit is probable. Deferred tax assets related to tax losses of the Group’s subsidiaries are recognized according to the fact that certain tax planning opportunities are available to these subsidiaries that will create taxable profit in the period in which the unused tax losses can be utilized. The amount of the deferred tax asset considered realizable, however, could be remeasured if estimates of future taxable income are changed. Federal law 401-FZ dated November 30, 2016 cancelled the time limit of prior periods’ tax losses carryforward, which had been previously restricted to 10 years. Furthermore, the law specified that for the years 2017-2020 prior periods’ tax losses carried forward should not exeed 50% of the tax base. Unused tax losses, for which deferred tax assets were not recognized in the consolidated statement of financial position as of December 31, 2018 and 2017 amounted to RUB 42,271 million and RUB 18,003 million, respectively. The Group accrued RUB 850 and 906 million as of December 31, 2018 and 2017, respectively, as a component of income tax payable in relation to uncertain income tax positions. A provision is recognised for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 13 . EARNINGS PER SHARE The following table sets forth the computation of earnings per share for the year ended December 31, 2018, 2017 and 2016: 2018 2017 2016 Numerator: Profit for the year from continuing operations, attributable to the owners of the company (before IFRS 15 application) 65,722 56,042 51,841 Profit for the year from continuing operations attributable to the owners of the company 65,898 56,042 51,841 Loss for the year from discontinued operations attributable to the owners of the company (59,050) — (3,367) Denominator, in thousands: Weighted-average ordinary shares outstanding 1,873,563 1,953,779 1,989,282 Employee stock options 2,158 1,779 1,412 Weighted-average diluted shares outstanding 1,875,721 1,955,558 1,990,694 Earnings per share – basic, RUB (before the application of IFRS 15) 3.56 28.68 24.37 Basic EPS from continuing operations 35.08 28.68 26.06 Basic EPS from discontinued operations (31.52) — (1.69) Earnings per share – diluted, RUB (before the application of IFRS 15) 3.56 28.66 24.35 Diluted EPS from continuing operations 35.04 28.66 26.04 Diluted EPS from discontinued operations (31.48) — (1.69) Earnings per share – basic, RUB 3.65 28.68 24.37 Basic EPS from continuing operations 35.17 28.68 26.06 Basic EPS from discontinued operations (31.52) — (1.69) Earnings per share – diluted, RUB 3.65 28.66 24.35 Diluted EPS from continuing operations 35.13 28.66 26.04 Diluted EPS from discontinued operations (31.48) — (1.69) |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 12 Months Ended |
Dec. 31, 2018 | |
CASH AND CASH EQUIVALENTS | |
CASH AND CASH EQUIVALENTS | 14. CASH AND CASH EQUIVALENTS Cash and cash equivalents represent cash on hand and in bank accounts, as well as short-term bank deposits, which have original maturities of less than three months. Other short-term highly liquid investments are treated as cash equivalents only if they are held for the purpose of meeting short-term cash commitments, are readily convertible to known amounts of cash and are subject to insignificant risk of change in value. Cash and cash equivalents comprised the following: December 31, December 31, 2018 2017 Cash and cash equivalents at banks and on hand in: Russian Rubles 17,012 16,879 US Dollars 4,873 1,119 Euro 2,073 983 Ukraine Hryvna 1,548 403 Turkmenian Manat 721 1,267 Other 954 318 Short-term deposits with an original maturity of less than 92 days: Russian Rubles 52,764 6,595 Ukraine Hryvna 3,215 352 Euro 915 — US Dollars — 2,603 Other 67 Total cash and cash equivalents |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
SHORT-TERM INVESTMENTS | |
SHORT-TERM INVESTMENTS | 15. SHORT-TERM INVESTMENTS Short-term investments represent investments in loans and time deposits, which have original maturities of longer than three months and are repayable in less than twelve months, as well as investment in debt and equity securities. Deposits, loans and debt securities are carried at amortized cost as they are held to collect contractual cash flows in the form of payments of principal and interest. Assets in Sistema Capital trust management are carried at fair value through profit and loss, as this portfolio of assets is neither held to collect contractial cash flows nor held both to collect contractual cash flows and to sell financial assets. Short-term investments are presented net of allowance for Expected Credit Losses (“ECL”). Loans to customers issued by MTS Bank are presented separately within Bank deposits and loans. The Group’s short-term investments comprised the following: December 31, December 31, Category 2018 2017 Notes At amortized cost 15,191 7,605 Deposits At amortized cost 14,388 27,826 Assets in Sistema Capital trust management (Notes 28, 31) Financial asset at fair value through profit and loss 11,644 9,600 Loans At amortized cost 7,050 5,669 Notes Financial asset at fair value through other comprehensive income 70 57 Short-term investments (Gross) 48,343 50,757 Allowance for ECL (480) (1) — Total short-term investments 47,863 50,757 (1) ECL Allowance related to loan granted to Mr. Pierre and Mr. Moussa Fattouche recognized at January 1, 2018 as a result of IFRS 9 implemetation . The loans amount generally consists of a loan issued to Mr. Pierre Fattouche and Mr. Moussa Fattouche. |
INVESTMENTS IN ASSOCIATES AND J
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | 16. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES Associates are those entities where the Group exercises significant influence, and they are accounted for using the equity method. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not equate to control or joint control over those policies. These entities are recognized at cost at the time of acquisition and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income. The carrying amount of the investment in such entities may include goodwill as the positive difference between the cost of the investment and Group’s proportionate share in the fair-values of the entity’s identifiable assets and liabilities. The Group presents its share in profits or losses in associates within operating profit if those interests are viewed as part of Group’s core operations. As of December 31, 2018, only MTS Belarus was considered as part of Group’s core operating activity. Shares in profits and losses of other Group’s associates were presented as non-operating items. Joint ventures are joint arrangements whereby the parties that have joint control of the arrangement and have rights to the net assets of the arrangement. The Group recognizes its interest in a joint venture where it has joint control of the investment and accounts for that investment using the equity method. Share in profit and loss of the Group’s joint venture was presented as non-operating item. The Group’s investments in associates and joint ventures comprised the following: Country of December 31, December 31, operations Operating activity 2018 2017 MTS Belarus Belarus telecommunications 4,051 3,660 MTS Bank Russia banking — 2,902 OZON Holdings Ltd Russia e-commerce 4,797 2,517 Equity investments in other unquoted companies Russia digital TV, asset management, etc. 1,887 373 Total investments in associates 10,735 9,452 The reconciliation of summarized financial information of MTS Belarus to the carrying amount of the Group’s interest in associate is presented as follows: December 31, December 31, 2018 2017 Assets Non-current assets 17,659 9,819 Current assets 11,652 8,117 Liabilities Non-current liabilities (7,089) (703) Current liabilities (13,955) (9,764) Total identifiable net assets 8,267 7,469 The Group’s share in associate 49 % 49 % The Group’s share of identifiable net assets 4,051 3,660 Carrying amount of the Group’s interest 4,051 3,660 The composition of the Group’s share of income of MTS Belarus is as follows: Year ended December 31, 2018 2017 2016 Revenue (27,695) (23,037) (22,256) Net profit for the year (7,752) (6,552) (6,356) The Group’s share of the profit of the associate for the year (3,799) (3,210) (3,115) Other comprehensive loss for the year (currency translation adjustment) (648) 525 2,292 Total comprehensive income for the year (8,400) (6,027) (4,064) The Group’s share of total comprehensive income of the associate for the year (4,116) (2,953) (1,991) Dividends received 3,691 3,590 2,795 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, 2017 Total assets 142,405 Total liabilities (121,169) Non-controlling interests — Total identifiable net assets attributable to the Group 21,236 The Group’s share in associate 26.6 % The Group’s share of identifiable net assets 6,127 Impairment of investment in associate (3,225) Carrying amount of the Group’s interest 2,902 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 lost 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. In July 2018, the Group increased its ownership share in MTS Bank from 26.6% to 55.4% and obtained control over the entity (Note 2). The Group discontinued the use of the equity method for accounting of investment in MTS Bank and accounted for the acquisition as a transaction under common control directly in equity. 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 the following: Year ended December 31, 2018* 2017 2016 Total interest income (9,289) (14,204) (16,555) Total interest expense 3,799 6,505 8,364 Net loss for the period 609 593 4,495 The Group’s share of the loss of the associate for the period 162 109 1,179 Other comprehensive loss for the period 614 2,000 1,614 Total comprehensive loss for the period 1,223 2,593 6,109 The Group’s share of the total comprehensive loss for the period 326 690 1,608 * Prior to discontinuing use of the equity method OZON Holdings Limited The Group holds less than 20% of the equity interests in OZON Holdings Limited, nevertheless it has significant influence over the investee through the representation of the Group on the investee’s Board of Directors and a number of veto rights. In 2017 and 2018 the Group acquired additional equity interests in OZON Holdings Limited through several transactions, which resulted in increase of the Group’s share in OZON Holdings Limited from 10.8% to 11.2% as of December 31, 2017 and from 11.2% to 18.69% as of December 31, 2018. The details on these transactions are summarized below: Number of ordinary Increase of Consideration shares the Group’s Date of transaction Substance of transaction paid, RUB mln acquired share September 2017 Participation in additional share issuance 19 5,193 0.16 % October 2017 Participation in additional share issuance 28 7,698 0.23 % March 2018 Participation in additional share issuance 1,158 141,498 2.5 % May 2018 Purchase from non-controlling shareholder 943 114,616 3.0 % July 2018 Purchase from non-controlling shareholder 85 11,209 0.32 % September 2018 Exercise of the put option 575 70,978 0.86 % September 2018 Purchase from non-controlling shareholder 289 31,810 0.81 % Sistema Capital In September 2017, the Group acquired a 30% ownership interest in Sistema Capital, a trust management company, through a cash contribution of RUB 356 million into its authorized share capital. YouDo In September 2018, the Group acquired a 13.68% ownership interest in Youdo Web Technologies Limited (YouDo), a Russian online service provider matching freelance labor supply to demand for everyday and business tasks, for a cash contribution of RUB 824 million. Though the Group holds less than 20% of the equity interests in YouDo, nevertheless it has significant influence over the investee based on its ownership of equity shares, representation on the investee’s Board of Directors and certain additional rights related to the decision-making process on key issues. Sistema-Rentnaya Nedvizhimost In December 2018, MTS Bank sold 40.26% share in a property investments mutual fund «Sistema-Rentnaya Nedvizhimost» to Business Nedvizhimost, subsidiary of Sistema, for cash consideration of RUB 450 million. The Group classified the remaining investment in the mutual fund as investment in joint venture, based on the existence of a joint decision-making process and the rights to net assets of the mutual fund. The Group applied the equity method of accounting to its remaining share in the mutual fund. The following table is the aggregate financial information of investments in Ozon Holdings Ltd and other individually insignificant associates and joint ventures, held by the Group: Year ended December 31, 2018 2017 2016 Net loss for the year 4,600 1,760 1,172 The Group’s share of the loss of the associate for the year 747 327 108 Other comprehensive income for the year — — — Total comprehensive loss for the year 4,600 1,760 1,172 The Group’s share of total comprehensive loss of the associate for the year 747 327 108 |
OTHER INVESTMENTS
OTHER INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
OTHER INVESTMENTS | |
OTHER INVESTMENTS | 17 . OTHER INVESTMENTS Other investments consist primarily of long-term deposits, which are repayable in more than a year, loans, debt securities and equity holdings in private companies. Deposits, loans and notes are carried at amortized cost as they are held to collect contractual cash flows in the form of payments of principal and interest. Loans to customers issued by MTS Bank are presented separately within Bank deposits and loans. Investments in shares of the companies over which the Group does not have control or an ability to exercise significant influence are accounted for at amortized cost. Other investments are presented net of allowance for ECL. Other investments of the Group comprised the following: December 31, December 31, Category 2018 2017 Notes At amortized cost 15,327 — Deposits At amortized cost 139 9 Loans and unquoted notes At amortized cost 12 621 Other At amortized cost 1,397 1,323 Other investments (Gross) 16,875 1,953 Allowance for ECL (2) — Total other investments 16,873 1,953 |
TRADE AND OTHER RECEIVABLES
TRADE AND OTHER RECEIVABLES | 12 Months Ended |
Dec. 31, 2018 | |
TRADE AND OTHER RECEIVABLES | |
TRADE AND OTHER RECEIVABLES | 18 . TRADE AND OTHER RECEIVABLES Trade and other receivables are carried at transaction price. The carrying value of all trade receivables is reduced by appropriate allowances for ECL. For trade receivables the Group applies a simplified approach and calculates ECL based on lifetime expected credit losses. For receivables from subscribers and dealers and partialy for other trade receivables the allowance for ECL is computed using the provision matrix. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome and all reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Generally, receivables from subscribers are written-off if past due for more than 150 days. Receivables other than from subscribers are written-off upon the expiration of the limitation period or before based on results of internal investigations. Trade and other receivables current and non-current comprised the following: December 31, December 31, 2018 2017 Receivables from handset sales financing 14,252 — Subscribers 13,495 11,723 Other trade receivables 4,049 3,119 Roaming 3,763 7,650 Interconnect 2,193 2,121 Other receivables 1,641 1,254 Integration services 1,190 721 Bonuses from suppliers 492 569 Dealers 386 3,204 Allowance for ECL (IFRS 9) (4,318) — Allowance for doubtful accounts (IAS 39) — (2,344) Trade and other receivables total 37,143 28,017 Less non-current portion (2,600) — Trade and other receivables current 28,017 The analysis of the age of trade and other accounts receivables and the respective allowance for ECL as of December 31, 2018: Receivables from subscribers and dealers and other trade receivables Weighted- Gross Loss allowance assesed for impairement based on average carrying (based on provision matrix loss rate amount provision matrix) Credit-impaired Current 1 % 1,300 (5) No 1 - 30 days past due 8 % 9,707 (761) No 31 - 60 days past due 14 % 1,963 (285) No 60 - 90 days past due 29 % 719 (227) No More than 90 days past due 60 % 1,282 (817) Yes Total 14 % 14,971 (2,095) Receivables other than from Weighted- Gross Loss allowance subscribers and dealers assesed for average carrying (individually impairement based on individual basis loss rate amount assessed) Credit-impaired Current 1 % 6,656 (11) No 1 - 30 days past due 1 % 1,147 (3) No 31 - 60 days past due 1 % 615 (5) No 60 - 90 days past due 2 % 396 (9) No More than 90 days past due 19 % 3,424 (689) Yes Total 5 % 12,238 (717) Weighted- Loss allowance average Gross carrying (collectively Receivables from handset sales financing loss rate amount assessed) Credit-impaired Current 2 % 12,352 (205) No 1 - 30 days past due 13 % 414 (52) No 31 - 60 days past due 43 % 93 (40) No 60 - 90 days past due 58 % 68 (39) No More than 90 days past due 88 % 1,325 (1,170) Yes Total 11 % 14,252 (1,506) The following table summarizes changes in the allowance for expected credit losses for the year ended December 31, 2018: Year ended December 31, 2018 Balance, beginning of the year calculated under IAS 39 (2,344) Additional allowance required under IFRS 9 (233) Balance, beginning of the year, calculated under IFRS 9 (2,577) Allowance for ECL (3,210) Accounts receivable written off 2,948 Acquisition of subsidiaries (1,479) Balance, end of the year (4,318) Comparative information under IAS 39: The analysis of the age of trade and other accounts receivables past due but not impaired: December 31, 2017 Neither past due nor impaired 22,551 Past due, but not impaired: Less than 60 days 3,265 61-150 days 872 More than 150 days 1,329 Total 28,017 The following table summarizes changes in the allowance for doubtful accounts receivable: Year ended Year ended December 31, December 31, 2017 2016 Balance, beginning of the year (2,160) (2,928) Allowance for doubtful accounts (2,880) (2,863) Accounts receivable written off 2,696 3,459 Disposal of subsidiary — 172 Balance, end of the year (2,344) (2,160) |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORIES | |
INVENTORIES | 19. INVENTORIES Inventories are stated at the lower of cost or net realizable value. Inventory cost is determined using the weighted average cost method. Handsets and accessories held for sale are expensed when sold. The Group regularly assesses its inventories for obsolete and slow-moving stock. Inventory and spare parts comprised the following: December 31, December 31, 2018 2017 Handsets and accessories 15,191 7,836 SIM cards and prepaid phone cards 1,167 784 Advertising and other materials 916 561 TV equipment for resale 676 350 Software and equipment for installation and resale 491 309 Spare parts for telecommunication equipment 213 155 Total inventories 18,654 9,995 Other materials mainly consist of automotive and IT components, advertising, stationery, fuel and auxiliary materials. Spare parts for telecommunication equipment included in the inventory are expected to be utilized within twelve months of the year end. Expenses for inventory obsolescence provision were included in cost of goods in the consolidated statement of profit or loss. For the years ended December 31, 2018, 2017 and 2016, cost of goods comprised the following expenses: Year ended Year ended Year ended December 31, December 31, December 31, 2018 2017 2016 Amount of inventories recognized as an expense 60,543 43,440 44,026 Inventory obsolescence provision 3,697 2,692 2,159 Reversal of obsolescence provision (371) (509) (611) Total cost of goods 63,869 45,623 45,574 The reversal of the inventory obsolescence provision relates to handsets and accessories sold over the course of the Group’s promotion campaigns. Inventories have been sold with a positive margin. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 20. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, including improvements, are stated at cost. Property, plant and equipment with a useful life of more than one year is capitalized at historical cost and depreciated on a straight-line basis over its expected useful life, as follows: Network and base station equipment: Network infrastructure 5-44 years Other 1.5-21 years Land and buildings: Buildings 20-150 years Leasehold improvements the term of the lease Office equipment, vehicles and other: Office equipment 3-21 years Vehicles 2-7 years Other 2-25 years The estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The gain or loss arising on the disposal of an item of property, plant and equipment is determined as the difference between any sale proceeds and the carrying amount of the asset and is recognised in the consolidated statement of profit or loss. Construction in progress and equipment held for installation is not depreciated until the constructed or installed asset is ready for its intended use. Maintenance and repair costs are expensed as incurred, while upgrades and improvements are capitalized. Borrowing costs – Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset during the construction phase that necessarily takes a substantial period of time are capitalized as part of property, plant and equipment until the asset is substantially ready for its intended use. The Group considers a construction period of more than six months to be substantial. The net book value of property, plant and equipment as of December 31, 2018, December 31, 2017, December 31, 2016 and January 1, 2016 was as follows: Construction in progress Office and Network and equipment, equipment base station Land and vehicles and for equipment buildings other installation Total Cost January 1, 2016 542,530 27,321 49,692 28,966 648,509 Additions 1,350 32 — 47,340 48,722 Transferred into use 47,894 1,550 5,278 (54,722) — Disposal of UMS (Note 10) (4,152) (1,309) (452) (2,444) (8,357) Transfer to assets held for sale (1,557) — (5) — (1,562) Disposal (20,321) (426) (3,201) (374) (24,322) Other (118) (200) 269 55 6 Foreign exchange differences (17,568) (1,525) (2,331) (1,455) (22,879) December 31, 2016 548,058 25,443 49,250 17,366 640,117 Additions 2,094 15 302 57,170 59,581 Transferred into use 48,689 281 4,522 (53,492) — Arising on business combinations 10 2 5 — 17 Transfer to assets held for sale (1,408) — (22) — (1,430) Disposal (27,092) (684) (5,460) (1,315) (34,551) Other 327 (69) (452) 7 (187) Foreign exchange differences (4,320) 36 (315) (242) (4,841) December 31, 2017 566,358 25,024 47,830 19,494 658,706 Additions 2,777 4,887 777 63,047 71,488 Transferred into use 48,780 1,807 5,939 (56,526) — Arising on business combinations 123 3,912 1,323 18 5,376 Transfer to assets held for sale (752) (1,656) (36) — (2,444) Disposal (25,963) (322) (2,712) 26 (28,971) Transfer of financial leasing (10,124) — (110) — (10,234) Other (1,043) (536) (319) — (1,898) Foreign exchange differences 12,977 718 1,595 162 15,452 December 31, 2018 593,133 33,834 54,287 26,221 707,475 Accumulated amortisation and impairment January 1, 2016 (300,509) (7,455) (37,883) — (345,847) Charge for the year (53,371) (1,262) (5,323) — (59,956) Disposal of UMS (Note 10) 1,121 62 214 — 1,397 Transfer to assets held for sale 846 — 5 — 851 Disposal 19,126 134 2,768 — 22,028 Other (222) (182) 227 — (177) Foreign exchange differences 12,061 551 1,816 — 14,428 December 31, 2016 (320,948) (8,152) (38,176) — (367,276) Charge for the year (53,258) (1,114) (3,929) — (58,301) Impairment (2,175) (393) (295) (764) (3,627) Transfer to assets held for sale 940 — 22 — 962 Disposal 24,248 284 5,053 — 29,585 Other (458) 33 395 — (30) Foreign exchange differences 2,892 (79) 231 — 3,044 December 31, 2017 (348,759) (9,421) (36,699) (764) (395,643) Charge for the year (50,056) (941) (4,126) — (55,123) Arising on business combinations (13) (368) (922) — (1,303) Impairment — 361 151 — 512 Transfer to assets held for sale 223 455 37 — 715 Disposal 25,116 175 2,464 — 27,755 Transfer of financial leasing 2,070 — 41 — 2,111 Other 553 22 309 — 884 Foreign exchange differences (9,148) (500) (1,292) — (10,940) December 31, 2018 (380,014) (10,217) (40,037) (764) (431,032) Net book value January 1, 2016 242,021 19,866 11,809 28,966 302,662 December 31, 2016 227,110 17,291 11,074 17,366 272,841 December 31, 2017 217,599 15,603 11,131 18,730 263,063 December 31, 2018 213,119 23,617 14,250 25,457 276,443 The amount of the compensation from third parties for items of property, plant and equipment that were accidentally damaged during construction in Moscow for the years ended December 31, 2018, 2017 and 2016 totaled RUB 1,304 million, RUB 1,231 million and RUB 1,350 million, respectively. This was included in the accompanying consolidated statements of profit or loss as component of other operating income. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2018 | |
GOODWILL | |
GOODWILL | 21. GOODWILL Goodwill represents an excess of consideration transferred plus the fair value of any non-controlling interest (“NCI”) in the acquiree at the acquisition date over the fair values of the identifiable net assets of the acquired entity. Goodwill is not amortized, but is tested for impairment (Note 22). The change in the net carrying amount of goodwill for the years ended December 31, 2018 and 2017 by reportable segments was as follows: Russia Moscow Convergent fixed line Ukraine Other Total Balance at January 1, 2017 Gross amount of goodwill 30,266 1,083 95 7,223 38,667 Accumulated impairment loss (1,466) — — (3,516) (4,982) 28,800 1,083 95 3,707 33,685 Acquisitions (Note 5) 62 — — 732 794 Reclassification (81) 81 — — — Currency translation adjustment — — (8) (190) (198) Balance at December 31, 2017 Gross amount of goodwill 30,247 1,164 87 7,765 39,263 Accumulated impairment loss (1,466) — — (3,516) (4,982) 28,781 1,164 87 4,249 34,281 Acquisitions (Note 5) 1,877 213 — 2,512 4,602 Impairment (Note 22) — — — (524) (524) Currency translation adjustment — — 19 729 748 Balance at December 31, 2018 Gross amount of goodwill 32,124 1,377 106 11,006 44,613 Accumulated impairment loss (1,466) — — (4,040) (5,506) 30,658 1,377 106 6,966 39,107 |
IMPAIRMENT REVIEW
IMPAIRMENT REVIEW | 12 Months Ended |
Dec. 31, 2018 | |
IMPAIRMENT REVIEW | |
IMPAIRMENT REVIEW | 22. IMPAIRMENT REVIEW Goodwill – The management of the Group performs impairment tests for the goodwill assigned to the cash-generating units at least annually, and also when there are any indications that the carrying amount of the cash generating unit (“CGU”) is impaired. Investments in associates and joint ventures - The carrying amount of the investment accounted for using the equity method is tested for impairment provided there are indications of impairment. If the carrying amount of the investment exceeds its recoverable amount, an impairment loss is recognized in the amount of the difference. The recoverable amount is measured at the higher of fair value less costs of disposal and value in use. Tangible and intangible assets excluding goodwill - At the end of each reporting period, the management of the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss. When reviewing for indicators of impairment the management of the Group considers the relationship between its market capitalization and book value, changes in country risk premiums and other factors. When the carrying amount of the CGU exceeds its recoverable amount, assets allocated to this CGU must be impaired. The recoverable amounts of the CGUs are determined based on their value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU. The discount rate applied to measure free cash flow is the weighted average cost of capital according to the finance structure established for each CGU. Future cash flows calculations are based on a five-year operations plan, which is prepared and approved by the management of the Group. Estimation of future cash flows requires assumptions to be made in respect to uncertain factors, including the management’s expectations of the following: OIBDA margin, timing and amount of future capital expenditure, terminal growth rates and appropriate discount rates to reflect the risks involved. Therefore, OIBDA margin and capital expenditures used for value in use calculation are primarily derived from internal sources, based on past experience and extended to include management expectations. Oblachniy Retail During the year ended December 31, 2018 the Group recognized impairment charges in the amount of RUB 677 million in respect of the goodwill and non-current assets of the CGU “Oblachniy Retail”. CGU “Oblachniy Retail” operates as retail software developer, cash register distributor and provider of integrated digital cash management solutions for business to business (“B2B”) clients. The impairment in the CGU “Oblachniy Retail” reflects lower operating performance and uncertainty in respect to the ability to meet its operational targets. The recoverable amount of the CGU “Oblachny Retail” was equal to RUB 765 million as of December 31, 2018, which includes inventory stock measured at net realizable value and related tax balances. NVision Czech Republic During the year ended December 31, 2017 the Group recognized impairment charges of RUB 571 million in respect of the non-current assets of the CGU “NVision Czech Republic”, whereas during the year ended December 31, 2018 the imparment charges in the amount of RUB 507 million was reversed as a result of the improvement in its operating performance. CGU “NVision Czech Republic” tailors in-house software solutions, provides support and managed services to telecom operators, delivers electronic and mechanical manufacturing services. The recoverable amount of the CGU “NVision Czech Republic” was RUB 1,778 million as of December 31, 2018 compared to RUB 954 million as of December 31, 2017. However, the impairment charge was only reversed to the extent that it does not increase the carrying amount above what it would have been if the impairment charge had never been recognized. MTS Turkmenistan During the year ended December 31, 2017 the Group recognized impairment charges in the amount of RUB 3,204 million in respect of the non-current assets of the CGU “Turkmenistan”. CGU “Turkmenistan” provided mobile services across multiple regions of Turkmenistan. The impairment in the CGU “Turkmenistan” reflects uncertainty in respect of the ability to continue operations in Turkmenistan. In September, 2017, the Group’s subsidiary in Turkmenistan suspended the provision of telecommucation services to its subscribers, due to the termination by Turkmen state-owned companies and state authorities of line rental, frequency allocation, interconnect, and other agreements necessary to servicing clients. The recoverable amount of the CGU “Turkmenistan” was equal to nil as of December 31, 2017 and as of December 31, 2018. Impairment loss and reversal of the impairment charges recognized during the year ended December 31, 2018 and 2017 are attributable to operating segments of the Group, reported as a part of the “Other” category, which does not constitute a reportable segment (Note 6). The total amount of the impairment loss and reversal of impairment charges for the year ended December 31, 2018 was allocated to the carrying amounts of property, plant and equipment and other intangible assets as follows: NVision Czech Oblachniy Retail Republic Goodwill 524 Property, plant and equipment 13 (505) Other intangible assets 140 (2) Total 677 (507) The total amount of the impairment loss for the year ended December 31, 2017 was allocated to the carrying amounts of property, plant and equipment and other intangible assets as follows: NVision Czech Turkmenistan Republic Property, plant and equipment 3,063 564 Other intangible assets 141 7 Total 3,204 571 Key assumptions used for value in use calculation: The table below presents OIBDA margin utilized for value in use calculation of related CGUs: December 31, December 31, CGU 2018 2017 Russia Convergent 42.4% - 42.9% 38.0% - 39.1% Armenia 45.0% - 47.4% 40.2% - 41.2% Moscow fixed line 56.0% - 59.2% 41.0% - 48.5% Ukraine 50.0% - 51.6% 31.4% - 40.6% NVision Czech Republic 4.9% - 5.5% 4.2% Oblachniy retail negative — The table below presents capital expenditure as a percentage of revenue utilized for value-in-use calculations of related CGUs: December 31, December 31, CGU 2018 2017 Russia Convergent 19.0 % 17.2 % Armenia 16.9 % 17.8 % Moscow fixed line 21.6 % 20.6 % Ukraine 18.4 % 22.7 % NVision Czech Republic 1.3 % 2.5 % Oblachniy retail 0.9 % — The terminal growth rate into perpetuity has been determined based on the nominal gross domestic product rates for the country of operation, adjusted for specific characteristic of the CGUs business. The table below presents terminal growth rates utilized for value-in-use calculations of related CGUs: December 31, December 31, CGU 2018 2017 Russia Convergent 1 % 1 % Armenia nil nil Moscow fixed line 1 % 1 % Ukraine 3 % 3 % NVision Czech Republic 2 % 2 % Oblachniy retail 3 % — The table below presents pre-tax rates for the discounting of cash flows in functional currencies of related CGUs: December 31, December 31, CGU 2018 2017 Russia Convergent 16.0 % 16.0 % Armenia 15.2 % 15.2 % Moscow fixed line 14.5 % 14.5 % Ukraine 20.8 % 20.8 % NVision Czech Republic 8.7 % 8.7 % Oblachniy retail 20.1 % — Sensitivity analysis Management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of any cash-generating unit to materially exceed its recoverable amount. After the recognition of the impairment of non-current assets in which the carrying value of the CGU “Oblachny Retail” is equal to the estimated recoverable amount, any adverse change in key assumptions would not, in isolation, cause a further impairment loss to be recognized. |
OTHER INTANGIBLE ASSETS
OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
OTHER INTANGIBLE ASSETS | |
OTHER INTANGIBLE ASSETS | 23. OTHER INTANGIBLE ASSETS Other intangible assets primarily consist of billing, telecommunication, accounting and office software as well as numbering capacity, customer base and licenses. These assets are assets with finite useful lives. They are initially recognized at cost and amortized on a straight-line basis over their estimated useful lives. Net book value of other intangible assets as at December 31, 2018, December 31, 2017 and December 31, 2016 and January 1, 2016 was as follows: Right to Billing and Cost-to- use radio other Numbering obtain Licenses frequencies software Client base capacity contracts Other Total Useful life, years 1 to 20 1 to 15 1 to 25 4 to 31 2 to 15 2 to 5 1 to 10 Cost January 1, 2016 28,490 9,326 93,134 7,537 3,208 — 9,767 151,462 Additions 3,382 245 27,658 — 65 — 232 31,582 Arising on business combinations (Note 5) 323 — — — — — — 323 Disposal of UMS (Note 10) — — (1,891) — — — (3,687) (5,578) Disposal (2) (582) (10,509) (164) (160) — (2,842) (14,259) Other 44 (40) (87) — (4) — (40) (127) Foreign exchange differences (5,101) — (3,763) — (39) — (1,187) (10,090) December 31, 2016 27,136 8,949 104,542 7,373 3,070 — 2,243 153,313 Additions 1,647 13 24,686 — 12 — 219 26,577 Arising on business combinations (Note 5) 260 — 163 — — — 150 573 Disposal (93) (1,112) (8,429) (50) (158) — (166) (10,008) Other (2) 1 (6) — — — 57 50 Foreign exchange differences (1,207) — (980) — (9) — (23) (2,219) December 31, 2017 27,741 7,851 119,976 7,323 2,915 — 2,480 168,286 Additions 7,479 19 20,884 — 10 3,961 401 32,754 Arising on business combinations (Note 5) — — 3,021 1,530 1 — 909 5,461 Effect on adoption of IFRS 15 (Note 7) — — — — — 19,197 19,197 Impairment — — (168) — — — (20) (188) Disposal (223) (1,223) (8,215) (63) (82) — (198) (10,004) Other — 1 89 — — — (46) 44 Foreign exchange differences 4,630 — 2,977 — 22 202 80 7,913 December 31, 2018 39,627 6,648 138,564 8,790 2,866 23,360 3,606 223,463 Accumulated amortisation and impairment January 1, 2016 (9,873) (4,261) (50,557) (3,619) (2,996) — (5,560) (76,866) Charge for the year (2,092) (1,170) (18,002) (620) (46) — (1,389) (23,319) Disposal of UMS (Note 10) — — 494 — — — 2,162 2,656 Disposal 2 582 10,193 164 160 — 2,836 13,937 Other (7) 20 43 — (13) — (42) 1 Foreign exchange differences 2,007 — 2,697 — 34 — 668 5,406 December 31, 2016 (9,963) (4,829) (55,132) (4,075) (2,861) — (1,325) (78,185) Charge for the year (2,180) (1,042) (17,614) (616) (57) — (224) (21,733) Impairment — — (148) — — — — (148) Disposal 92 1,108 8,345 50 158 — 157 9,910 Other — 2 (17) — (4) — (31) (50) Foreign exchange differences 570 — 726 — 8 — 13 1,317 December 31, 2017 (11,481) (4,761) (63,840) (4,641) (2,756) — (1,410) (88,889) Charge for the year (2,711) (796) (20,941) (680) (57) (3,876) (427) (29,488) Arising on business combinations — — (1,785) — — — — (1,785) Effect on adoption of IFRS 15 (Note 7) — — — — — (12,368) — (12,368) Effect on assets impairment — — 44 — — — 6 50 Disposal 193 971 7,994 63 82 — 180 9,483 Other — — (70) — — — 26 (44) Foreign exchange differences (2,114) — (2,187) — (21) (99) (37) (4,458) December 31, 2018 (16,113) (4,586) (80,785) (5,258) (2,752) (16,343) (1,662) (127,499) Net book value January 1, 2016 18,617 5,065 42,577 3,918 212 — 4,207 74,596 December 31, 2016 17,173 4,120 49,410 3,298 209 — 918 75,128 December 31, 2017 16,260 3,090 56,136 2,682 159 — 1,070 79,397 December 31, 2018 23,514 2,062 57,779 3,532 114 7,017 1,944 95,962 In connection with providing telecommunication services, the Group has been issued with various GSM operating licenses by the Russian Ministry of Information Technologies and Communications. In addition to the licenses received directly from the Russian Ministry of Information Technologies and Communications, the Group has been granted access to various telecommunication licenses through acquisitions. In foreign subsidiaries, the licenses are granted by the local communication authorities. Operating licenses contain several conditions specified by legislation which generally include the required date of services provision, territorial coverage and expiration date. Management believes that the Group is in compliance with all material terms of its licenses. The Group’s operating licenses do not provide for automatic renewal. All licenses covering the territories of the Russian Federation expired as of December 31, 2018 were renewed. The cost to renew the licenses was not significant. Weighted-average period until the next renewal of licenses in the Russian Federation is five years. The license for the provision of telecommunication services in Ukraine was renewed in 2013 and is valid until 2026. The license for the provision of telecommunication services in Armenia is valid until 2019. Contractual obligations to purchase intangible assets are disclosed in the Note 34. The amount of intangible assets generated internally was not significant. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
BORROWINGS | |
BORROWINGS | 24. BORROWINGS Group’s borrowings represent interest bearing bank loans and bonds issued in the capital markets. Borrowings are initially recorded at fair value plus transaction costs that are directly attributable to the issue of the financial liability and subsequently measured at amortized cost, using the effective interest rate method. The Group’s borrowings comprise the following: December 31, December 31, 2018 2017 Bank and other loans 250,780 182,937 Notes 117,355 108,776 Total borrowings 368,135 291,713 Less: current portion (3,063) (63,673) Total borrowings, non-current 365,072 228,040 Notes – The Group’s notes consisted of the following: Interest rate (actual at December 31, December 31, December 31, Currency 2018) 2018 2017 MTS International Notes due 2023 (Note 2) USD 31,090 26,187 MTS International Notes due 2020 (Note 2) USD 20,870 17,621 MTS PJSC Notes due 2022 RUB 14,958 14,947 MTS PJSC Notes due 2023 RUB 9,348 9,997 MTS PJSC Notes due 2031 RUB 1,080 9,994 MTS PJSC Notes due 2022 RUB 9,993 9,991 MTS PJSC Notes due 2021 RUB 9,990 9,986 MTS PJSC Notes due 2021 RUB 9,988 — MTS PJSC Notes due 2025 RUB 9,986 — MTS PJSC Notes due 2018 RUB — 9,986 MTS PJSC Notes due 2020 RUB 40 49 Other notes due 2022 RUB 12 18 Total notes 117,355 108,776 Less: current portion (1,017) (29,979) Total notes, non-current 116,338 78,797 The Group has an unconditional obligation to repurchase certain MTS PJSC Notes at par value if claimed by the noteholders subsequent to the announcement of the sequential coupon. The dates of the announcement for each particular note issue are as follows: MTS PJSC Notes due 2031 September 2019 MTS PJSC Notes due 2023 March 2020 The Group discloses these notes as maturing in 2019 (MTS PJSC Notes due 2031) and in 2020 (MTS PJSC Notes due 2023) in the aggregated maturities schedule as the noteholders have the unilateral right to demand repurchase of the notes at par value upon announcement of new coupons. As of December 31, 2018 the Group had no outstanding repurchase transactions. Bank and other loans – The Group’s loans from banks and financial institutions consisted of the following: Interest rate (actual at December 31, December 31, December 31, Maturity 2018) 2018 2017 USD-denominated: Calyon, ING Bank N.V, Nordea Bank AB, Raiffeisen Zentralbank Osterreich AG 2018 LIBOR + 1.15% (2.994%) — 17,077 Citibank 2019 - 2024 LIBOR + 0.9% (3.776%) 10,980 10,592 10,980 27,669 RUB-denominated: Sberbank 2020 - 2022 7.50% - 8.59% 139,515 149,890 VTB 2020 - 2021 7.20% - 8.65% 100,000 5,000 Other 2024 Various 210 247 239,725 155,137 Other currencies: Various financial institutions 2019 - 2020 Various 75 131 75 131 Total bank and other loans 250,780 182,937 Less: current portion (2,046) (33,694) Total bank and other loans, non-current 248,734 149,243 Compliance with covenants – Bank loans and notes of the Group are subject to certain covenants limiting the Group’s ability to incur debt, carry out transactions with related parties, create liens on properties, dispose of assets, including GSM and 3G licenses for several license areas, issue guarantees, grant loans to employees and entities, delist notes, delay coupon payments, merge or consolidate MTS PJSC with another entity or be a subject to a court decision to pay over USD 75 million (RUB 5,210 million as of the reporting date, which remains unsatisfied for more than 60 days) or be a subject to a court decision to pay over USD 250 million (RUB 17,368 million as of the reporting date, which remains unsatisfied for more than 180 days) without being appealed, discharged or waived. The Group is required to comply with certain financial ratios and maintain ownership stakes in certain subsidiaries. The noteholders of MTS International Notes due 2020 and MTS International Notes due 2023 have the right to require the Group to redeem the notes at 101% of their principal amount and related interest, if the Group experiences a change in control. If the Group fails to meet these covenants, after certain notice and cure periods, the debtholders are entitled to demand accelerated principal repayment. The Group was in compliance with all existing notes and bank loans covenants as of December 31, 2018. Available credit facilities – As of December 31, 2018, the Group’s total available unused credit facilities amounted to RUB 21,000 million and related to the following credit lines: Available Currency Maturity Interest rate Available till amount Sberbank RUB 2024 To be agreed May 2024 5,000 VTB RUB 2028 To be agreed August 2028 5,000 Rosselhozbank RUB/USD/EUR 2019 To be agreed November 2019 5,000 Absolut Bank RUB 2019 CBR 1 auction rate + 1.25%-1.8% December 2019 3,000 SPB Bank RUB 2020 To be agreed March 2020 3,000 Total 21,000 (1) CBR – Central Bank of Russia In addition, the Group has a credit facility made available by Citibank at an interest rate of MosPrime + 1.50%, with the available amount set up on request and to be repaid within 182 days. The following table presents the aggregated scheduled maturities of principal and interests on notes and bank loans (gross of debt issuance costs) outstanding for the five years ending December 31, 2023 and thereafter: As of December 31, 2018 Bank loans Notes and other debt Payments due in the year ending December 31, 2019 12,401 21,849 2020 38,964 107,600 2021 25,670 150,558 2022 29,061 22,756 2023 32,738 2,131 Thereafter 11,085 1,068 Contractual undiscounted cash flows 149,919 305,962 Less: unamortized debt issuance costs (179) (408) Less: interest (32,385) (49,289) Less: debt modification — (5,485) Total debt 117,355 250,780 |
RIGHTS-OF-USE ASSETS AND LEASE
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2018 | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | 25. RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS The Group’s lease contracts largely relate to leases of cellular sites (i.e. land, space in cell towers or rooftop surface areas), network infrastructure, and retail stores as well as buildings used for administrative or technical purposes. The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease aggreements (including sub-lease and lease of intangible assets), which conveys the right to control the use of identified assets for a period of time in exchange for consideration, except for short-term leases (with a lease term of 12 months or less). For these leases, the Group recognizes the lease payments as operating expenses over the term of the lease. When identifying the lease, the Group uses practical expedient of IFRS 16 permitting the lessee not to separate the non-lease components of the contract and, instead, to account for any lease and associated non-lease components as a single arrangements. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate of the Group. The incremental borrowing rate of the Group is determined based on the credit spreads of the Group debt instruments in relation to the zero-coupon yield curve for government securities. The lease payments include fixed payments, variable payments that depend on index or rate, amounts expected to be paid under residual value guarantee, the execise price under a purchase option the Group is reasonably certain to exercise as well as early termination fees unless the Group is reasonably certain not to terminate earlier. Variable payments that depend on external factors (such as sale volume of a particular retail store) are expensed as incurred. Lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. A corresponding adjustment is made to the carrying amount of the right-of-use assets, or is recorded in profit or loss if the carrying amount of right-of-use asset had been reduced to zero. Right-of-use assets are initially measured at cost, which is the initial amount of lease liability adjusted for any lease payments made at or before the commencement date, plus any direct costs incurred and an estimate of costs to dismantle, remove or restore the underlying asset less any lease incentives received. Right-of-use assets are subsequently amortized on a straight-line basis over the expected lease term. The lease term corresponds to the non-cancellable period of each contract except in cases where the Group is reasonably certain of exercising renewal or termination options. When assessing the lease term, the Group considers all facts and circumstances that create an economic incentive for the Group to exercise the option to extend the lease, such as useful life of the asset located on the leased site, sites replacement statistics, sequence of technology change, profitability of our retail stores as well as costs to terminate or enter into lease contracts. The table below summarises the estimated terms, over which the right-of-use assets are amortized: Lease of: sites for placement of network equipment and base stations inside the buildings 10 years sites for placement of network equipment and base stations on land 20 years fiber-optic lines 2 years retail stores Up to 8 years administrative offices, warehouses, parking garages not less than 3 years vehicles 4 – 5 years Right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets. This replace the previous requirement to recognize a provision for onerous lease contracts. The following table presents a summary of net book value of rights-of-use assets: December 31, Lease of: 2018 Sites for placement of network and base station equipment 92,500 Land and buildings 53,792 Vehicles and other 1,210 Exclusive rights for trademarks 1,505 Rights-of-use assets, net 149,007 Depreciation of the rights-of-use assets for the twelve months ended December 31, 2018 included in depreciation and amortization expense in the accompanying consolidated statement of profit or loss was as follows: Lease of: 2018 Sites for network and base station equipment 7,784 Land and buildings 10,955 Vehicles and other 135 Exclusive rights for trademarks 694 Depreciation charge, total 19,568 Additions to the assets leased during the twelve months ended December 31, 2018 amounted to RUB 22,572 million. Interest expense accrued on lease obligations for the the twelve months ended December 31, 2018 totaled RUB 13,917 million and was included in finance costs in the accompanying consolidated statements of profit or loss. As of December 31, 2018, expenses recognized in respect of variable lease payments not included on the measurement of lease liabilities and short-term leases amounted to RUB 209 million and RUB 173 million, respectively. The following table presents future minimum lease payments under lease arrangements together with the present value of the net minimum lease payments as at December 31, 2018: December 31, 2018 Minimum lease payments, including: Current portion (less than 1 year) 30,220 More than 1 to 5 years 107,403 Over 5 years 116,420 Total minimum lease payments 254,043 Less amount representing interest (93,491) Present value of net minimum lease payments, including: Current portion (less than 1 year) 15,812 More than 1 to 5 years 62,468 Over 5 years 82,272 Total present value of net minimum lease payments 160,552 Less current portion of lease obligations (15,812) Non-current portion of lease obligations 144,740 Total cash outflows for leases for the year ended December 31, 2018 totaled to RUB 27,643 million, of which 13,684 million was included in interest paid. A minor part of the Group’s lease contracts for retail stores include variable payments that depend on sales volume of the respective store. A 1% increase in the sales of the respective stores is not expected to have any material effect on the Group’s profit or loss. The Group’s lease contracts include typical restrictions and covenants common for local business practice, such as the responsibility of the Group for regular maintenance and repair of the lease assets and their insurance, redesign and conduction of permanent improvements only with the consent of the lessor, and use of the leased asset in accordance with current legislation. Comparative information under IAS 17 Leases Accounting policy – Under IAS 17 leases were classified as finance or operating. Leases were classified as finance whenever the terms of the lease transfered substantially all risks and rewards incidental to ownership of the leased asset to the Group. At the commencement of the lease term, the leased asset was measured at the lower of fair value or present value of the future minimum lease payments and was depreciated over the lease term. The corresponding liability was recognized in the consolidated statement of financial position within borrowings. The discount rate used in the calculating the present value of minimum lease payments was the interest rate implicit in the lease. If there was no interest rate in the lease, the Group’s incremental borrowing rate was used. Payments for lease contracts classified as operating were expensed on a straight-line basis over the term of the lease. The following table presents a summary of net book value of leased property, plant and equipment: December 31, 2017 Network and base station equipment 8,098 Office equipment, vehicles and other 63 Leased assets, net 8,161 Additions under finance lease agreements for the years ended December 31, 2017 and 2016 amounted to RUB 3,339 million and RUB 1,117 million, respectively. Depreciation of the assets under finance leases for the years ended December 31, 2017 and 2016 amounted to RUB 702 million and RUB 603 million, respectively, and was included in depreciation and amortization expense in the accompanying consolidated statement of profit or loss. Interest expense accrued on finance lease obligations for the year ended December 31, 2017 and 2016 amounted to RUB 954 million and RUB 855 million, respectively, and was included in finance costs in the accompanying consolidated statement of profit or loss. The following tables present future minimum lease payments under capital leases together with the present value of the net minimum lease payments as at December 31, 2017: December 31, 2017 Minimum lease payments, including: Current portion (less than 1 year) 1,763 More than 1 to 5 years 6,837 Over 5 years 12,845 Total minimum lease payments 21,445 Less amount representing interest (9,588) Present value of net minimum lease payments, including: Current portion (less than 1 year) 801 More than 1 to 5 years 3,138 Over 5 years 7,918 Total present value of net minimum lease payments 11,857 Less current portion of lease obligations (801) Non-current portion of lease obligations 11,056 Leased assets included transponders which are installed on a satellite and used for provision of satellite television services, network equipment and automobiles. The lease term of the transponders is twelve years. The lease term of network equipment is fifteen years. The average lease term of the automobiles is three years. The Group has an obligation to purchase these automobiles under the respective finance lease agreements at the end of the lease term. |
RECONCILIATION OF LIABILITIES A
RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2018 | |
RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES | |
RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES | 26. RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES Effect of new Foreign Other standards December 31, Financing Operating exchange comprehensive Change on opening Other December 31, 2017 cash flows cash flows Acquisitions movement income in fair value balance changes (1) 2018 Notes (Note 24) 108,776 (472) — — 8,967 — — — 84 117,355 Bank and other loans (Note 24) 182,937 70,657 167 2,250 22 (2,983) (2,270) 250,780 Lease obligation (Note 25) 11,857 (13,577) (13,684) 690 (1,456) 1,821 — 140,736 34,166 160,553 Credit guarantee agreement related to foreign-currency hedge (Note 30) 996 (981) — — (15) — — — — — Contingent consideration (Note 28) 180 (65) — 940 — — — — (115) 940 Payables related to repurchase of common stock (Note 32) — (22,655) — — — — — — 22,655 — Dividends payable (Note 32) 125 (50,054) — — — — — — 50,075 146 Payable related to purchase of noncontrolling interests — (101) — — — — — — 101 — Payables related to transactions under common control — (13,242) — 13,362 — — — — — 120 Liability under put option agreement (Note 33) 2,424 — — — — 592 719 — — 3,735 Receivables related to sale of own shares — 89 — — — — — — (89) — Неdge asset (net) (8,129) 4,477 (752) — (2,837) 129 — — 4,316 (2,796) Total liabilities arising from financial activities 299,166 (25,924) (14,436) 15,159 6,909 2,564 719 137,753 108,923 530,833 (1) Including accrual of liabilities related to dividends declared, repurchase of common stock, additions under lease agreements, depreciation of debt issuance cost, modification gain and others changes. Foreign Other December 31, Financing cash Operating cash exchange comprehensive Change in fair Other December 31, 2016 flows flows Acquisitions movement income value changes (1) 2017 Notes (Note 24) 78,186 32,860 — — (2,339) — — 69 108,776 Bank and other loans (Note 24) 195,088 (10,530) — 27 (2,051) (12) — 415 182,937 Finance lease obligation (Note 25) 11,046 (774) (854) — (368) — — 2,807 11,857 Credit guarantee agreement related to foreign-currency hedge (Note 30) 2,907 (1,766) — — (145) — — — 996 Contingent consideration (Note 28) 3 — — 175 2 — — — 180 Payables related to repurchase of common stock — (21,896) — — — — — 21,896 — Dividends payable (Note 32) 87 (51,759) — — — — — 51,797 125 Payable related to purchase of noncontrolling interests — (7) — — — — — 7 — Liability under put option agreement (Note 33) 2,243 — — 402 — (101) (120) — 2,424 Hedge asset (net) (13,632) 3,427 (1,233) 145 3,164 (8,129) Total liabilities arising from financial activities 275,958 (50,445) (2,087) 604 (4,756) (3,051) (120) 76,991 299,166 (1) Including accrual of liabilities related to dividends declared, repurchase of common stock, additions under lease agreements, depreciation of debt issuance cost, modification gain and others changes. |
PROVISIONS
PROVISIONS | 12 Months Ended |
Dec. 31, 2018 | |
PROVISIONS | |
PROVISIONS | 27. PROVISIONS Provisions – Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of past event, and it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the managements’ best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect is material. The main provisions the Group holds are in relation to employees’ bonuses and other rewards (including retirement benefits and cash-settled share based payments), decommissioning and restoration obligation, tax provisions as well as legal claims. Provision for decommissioning and restoration – The Group calculates a provision for decommissioning and restoration when the Group has a legal or constructive obligation in connection with the retirement of tangible long-lived assets. The Group’s obligations relate primarily to the cost of removing its equipment from sites. The Group records the present value of provision for decommissioning and restoration as non-current provisions in the consolidated statement of financial position. Retirement benefits – MGTS, a subsidiary of the Group, has historically offered its employees certain benefits upon and after retirement, which form a defined benefit plan. The cost of providing benefits is determined using the projected unit credit method with actuarial valuation being carried out at the end of each reporting period. Share based settlement programs – For cash-settled share-based payment transactions, the fair value of the obligation is newly determined at each reporting date and at the settlement date, and the changes in the fair value are recognized in profit or loss, until the liability is settled. The following table summarizes the movement in provisions for the year ended December 31, 2018, 2017 and 2016: Tax provisions Provision for Employee other than decommissioning bonuses for income and and other SEC Other Total tax restoration rewards Provision provisions provisions At 1 January 2016 (525) (1,459) (8,237) — (207) (10,428) Arising during the year (1,058) (45) (14,085) — (275) (15,463) Utilised 374 8 12,482 — 223 13,087 Discount rate adjustment and imputed interest (change in estimates) — (142) (51) — — (193) Unused amounts reversed 742 430 1,096 — 34 2,302 Disposal of a subsidiary — 91 — — 91 Translation adjustments and other 10 17 152 — — 179 At 31 December 2016 (457) (1,191) (8,552) — (225) (10,425) Current 2016 (457) — (7,393) — (225) (8,075) Non-current 2016 — (1,191) (1,159) — — (2,350) At 1 January 2017 (457) (1,191) (8,552) — (225) (10,425) Arising during the year (229) (108) (15,181) — (534) (16,052) Utilised 342 5 12,203 — 92 12,642 Discount rate adjustment and imputed interest (change in estimates) — (103) 41 — — (62) Unused amounts reversed 33 338 1,233 — 101 1,705 Translation adjustments and other 1 10 99 — (79) 31 At 31 December 2017 (310) (1,049) (10,157) — (645) (12,161) Current 2017 (310) — (8,897) — (645) (9,852) Non-current 2017 — (1,049) (1,260) — — (2,309) At 1 January 2018 (310) (1,049) (10,157) — (645) (12,161) Arising during the year (374) (1,912) (14,259) (55,752) (1) (941) (73,238) Utilised 336 18 13,873 — 393 14,620 Discount rate adjustment and imputed interest (change in estimates) — (223) 177 — — (46) Unused amounts reversed 211 89 1,079 — 872 2,251 Arising due to acquisitions of subsidiaries (113) — (984) — (1,165) (2,262) Translation adjustments and other (2) (32) (107) (3,298) (27) (3,466) At 31 December 2018 (252) (3,109) (10,378) (59,050) (1,513) (74,302) Current 2018 (252) — (10,096) (59,050) (1,513) (70,911) Non-current 2018 — (3,109) (282) — — (3,391) (1) See information relating to SEC provision in Note 34. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | 28. FAIR VALUE OF FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets include, in particular, cash and cash equivalents, trade and other receivables, bank loans to customers, investments (mainly deposits with original maturity of more than three months, originated loans other than bank loans to customers as well as debt securities) and derivative financial assets. Financial liabilities generally substantiate claims for repayment in cash or another financial asset. In particular, this includes bonds, trade and other payables, bank loans, lease obligations and derivative financial liabilities. Financial instruments are recognized as soon as the Group becomes a party to the contractual provision of the instrument. Financial assets and financial liabilities are recognized initially at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability, except for a financial asset or liability accounted for at fair value through profit or loss, in which case transaction costs are expensed. Subsequently they are measured either at amortized cost or fair value depending on the classification of those assets and liabilities. Financial assets can be classified as 1) financial assets at amortized cost; 2) financial assets at fair value through other comprehensive income; 3) financial assets at fair value through profit or loss. If the financial assets are held for collecting contractual cash flows in the form of principal and interest on the specified dates, it is classified as carried at amortized cost. If the financial assets are held not only for collecting contractual cash flows in the form of principal and interest on the specified dates, but also for potential sale, they are classified as measured at fair value through other comprehensive income. All other financial assets are classified as measured at fair value through profit or loss. Financial liabilities can be classified as measured at fair value or at amortized costs. The Group measures its derivative instruments, contingent consideration recognized in business combination as well as liability under put option agreement at fair value. All other financial liabilities of the Group are measured at amortized cost. Hedging activities – The Group uses derivative instruments, including interest rate and foreign currency swaps, to manage foreign currency and interest rate risk exposures. The Group measures derivatives at fair value and recognizes them as either other current or other non-current financial assets or liabilities in the consolidated statement of financial position. Cash flows from derivatives are classified according to their nature. The Group reviews related fair value hierarchy classifications on a quarterly basis. The fair value measurement of the Group’s derivative instruments is based on the observable yield curves for similar instruments. The Group determines the existence of an economic relationship between the hedging instruments and hedged item based on the currency, amount and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item using the qualitative method. The hedge ratio applied by the Group is the same as that resulting from the quantity of the hedged item and the quantity of the hedging instrument actually used to hedge that quantity of the hedged item. The Group designates derivatives as either fair value hedges or cash flow hedges in case the required criteria are met. Fair value hedges – Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in profit or loss immediately together with any changes in the fair value of the hedged asset or liability that are attributed to the hedged risk. Cash flow hedges – The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges are recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss. Gains or losses accumulated in other comprehensive income are immediately reclassified into the consolidated statement of profit or loss when related hedged transactions affects earnings. For derivatives that do not meet the conditions for hedge accounting, gains and losses from changes in the fair value are recorded immediately in profit or loss. Assets and liabilities related to multiple derivative contracts with one counterparty are not offset by the Group. Liability under put option agreement – To optimize the structure of business acquisitions and to defer payment of the purchase price, the Group enters into put and call option agreements to acquire the remaining non-controlling stakes in newly acquired subsidiaries. Upon initial recognition, the commitment to purchase non-controlling interests is recognized as a financial liability for the present value of the redemption amount, which approximates its fair value. Subsequent changes in the value of the commitment are recognized in profit or loss for the reporting period. Netting – The Group offsets its financial assets and financial liabilities only if it has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Fair value of financial instruments – Fair value of financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows: · Level 1 – Quoted prices in active markets for identical assets or liabilities; · Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities; · Level 3 – No observable pricing inputs in the market. Financial assets and financial liabilities are classified in the three-tier hierarchy based on the lowest level of input that is significant to the fair value measurements. The Group’s assessment of the significance of a particular input to the fair value measurements requires judgment which may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. As of December 31, 2018 and 2017 financial assets and financial liabilities of the Group comprise of: 1. Financial assets December 31, December 31, 2018 2017 Trade and other receivables (Note 18) 37,143 28,017 Accounts receivable, related parties (Note 31) 8,930 11,360 Cash and Cash equivalents (Note 14) 84,075 30,586 Other financial assets: Financial assets at fair value through profit or loss: Securities held by MTS Bank 22,487 — Assets in Sistema Capital trust management 11,644 9,600 Currency forwards and options not designated as hedges 2,200 — Cross-currency swaps not designated as hedges 1,077 — Total financial assets at fair value through profit or loss 37,408 9,600 Financial assets at fair value through OCI: Cross-currency swaps designated as cash flow hedges 2,797 8,403 Notes 70 57 Total financial assets at fair value through OCI 2,867 8,460 Financial assets at amortized cost: Deposits and loans issued 83,865 33,251 Notes 31,165 8,480 Other 2,579 1,810 Total financial assets at amortized cost 117,609 43,541 Total other financial assets 157,884 61,601 Total financial assets 288,032 131,564 Total current financial assets (230,642) (120,719) Total non-current financial assets 57,390 10,845 2. Financial liabilities December 31, December 31, 2018 2017 Trade and other payables 53,623 47,314 Accounts payable, related parties (Note 31) 1,301 1,102 Financial liabilities at amortized cost: Loans and borrowings: Bank and other loans 250,780 182,937 Lease obligations 160,552 11,857 Notes 117,355 108,776 MTS Bank deposits and liabilities 111,454 — Total loans and borrowings 640,141 303,570 Guarantee payment received — 996 Total financial liabilities at amortized cost 640,141 304,566 Other financial liabilities at fair value: Financial liabilities at fair value through profit or loss: Liabilities under option agreements (Note 33) 3,735 2,424 Contingent consideration and other liabilities 936 — Interest rate swaps not designated as hedges 265 — Currency forwards not designated as hedges 85 — Interest rate swaps designated as cash flow hedges — 390 Total financial liabilities at fair value through profit or loss 5,021 2,814 Financial liabilities at fair value through OCI: Cross-currency swaps designated as cash flow hedges — 274 Total financial liabilities at fair value through OCI — 274 Total other financial liabilities at fair value 5,021 3,088 Total financial liabilities 700,086 356,070 Total current financial liabilities (187,160) (115,926) Total non-current financial liabilities 512,926 240,144 The fair value measurement of the Group’s derivative instruments and investments in Sistema Capital trust management is based on the observable yield curves for similar instruments and represents the estimated amount the Group would receive or pay to terminate these agreements at the reporting date, taking into account current interest rates, foreign exchange spot and forward rates. The table below presents the fair value of financial instruments carried at fair value within the statement of financial position: Level of December 31, December 31, inputs 2018 2017 Assets Sistema International Funding S.A. Bonds due in 2019 (related party) (Note 15, 31) Level 1 70 57 Securities held by MTS Bank Level 1 22,487 — Derivative instruments Level 2 6,074 8,403 Currency forwards and options 2,200 — Cross-currency interest rate swaps 3,874 8,403 Assets in Sistema Capital trust management (related party) (Note 15, 31) Level 2 11,644 9,600 Liabilities Derivative instruments Level 2 (350) (664) Interest rate swaps (265) (390) Cross-currency interest rate swaps — (274) Currency forwards (85) — Liabilities under option agreements Level 3 (3,735) (2,424) Contingent consideration Level 3 (940) (180) For the year ended December 31, 2018, 2017 and 2016, net realized gains and losses of Level 3 liabilities resulting from fair value measurements amounted to RUB 719 million loss, RUB 120 million gain and a RUB 199 million gain, respectively and were recognized as a part of change in fair value of financial instruments’ in the consolidated statement of profit or loss. No unrealized gains or losses of Level 3 liabilities resulting from fair value measurements were recognized during the years ended December 31, 2018, 2017 and 2016. The liability under put option agreement for redeemable non-controlling interests in MTS Armenia in the amount of RUB 3,629 million and RUB 2,012 million as of December 31, 2018 and 2017, respectively, is measured at fair value using a discounted cash flow technique. The most significant quantitative inputs used to measure its fair value are presented in the table below: December 31, December 31, Unobservable inputs 2018 2017 Post-tax discount rate Revenue growth rate 0.3 - 2.0% (av. 0.9%) 0.0 - (0.5)% (av. -0.2%) OIBDA margin 40.5 - 43.2% (av. 41.5%) 40.2 - 41.2% (av. 40.7%) The liability under option agreement for redeemable non-controlling interests in Oblachny Retail amounted to nil and RUB 412 million as of December 31, 2018 and 2017, respectively, and calculated based on an agreed fixed formula, which includes future operating and financial indicators. The most significant quantitative inputs used to measure the fair value of the liability under option agreement are presented in the table below: December 31, December 31, Unobservable inputs 2018 2017 Discount rate 16.7 % 10 % Revenue, average amount per year 660 632 OIBDA/EBITDA margin, average rate (68) % 13 % Net debt, average amount per year (3,079) (129) Other liability under option agreement relates to redeemable non-controlling interests in Kulturnaya Sluzhba and is insignificant. The carrying value of the Group’s financial instruments accounted for at amortized cost approximates their fair value due to their short-term nature and market interest rates, except for borrowings, gross of debt issuance cost, as disclosed in the table below: December 31, 2018 December 31, 2017 Level of Carrying Carrying inputs Fair value value Fair value value Notes (Note 24) Level 1 (115,698) (117,534) (112,531) (109,000) Bank and other loans (Note 24) Level 3 (251,189) (251,188) (183,543) (183,787) (366,887) (368,722) (296,074) (292,787) The fair value of the Group’s bank and other loans is measured using a discounted cash flow technique. The discount rate used in the discounted cash flow analysis is determined on the base of the market rate for bank loans available to the Group. The carrying value of the Group's bank and other loans approximates their fair value as of December 31, 2018. While management has used available market information in estimating the fair value of its financial instruments, the market information may not be fully reflective of the value that could be realized in the current circumstances. There were no transfers between levels of inputs within the hierarchy during the years ended December 31, 2018, 2017 and 2016. There were no transfers between the accounting categories of financial instruments during the years ended December 31, 2018, 2017 and 2016. |
BANK FINANCIAL ASSETS AND LIABI
BANK FINANCIAL ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
BANK FINANCIAL ASSETS AND LIABILITIES | 29. BANK FINANCIAL ASSETS AND LIABILITIES Bank deposits and loans to customers The table below represents the structure and amounts of current and non current bank deposits and loans to customers as of December 31, 2018. December 31, 2018 Loans to customers 68,132 Due from banks 2,635 Allowance for impairment losses (7,729) Total bank deposits and loans to customers, net 63,038 Less: current portion (32,385) Bank deposits and loans to customers, non-current 30,653 The structure and amounts of bank loans to customers as of December 31, 2018 is presented in the table below: December 31, 2018 Loans to legal entities Corporations 27,414 Medium-sized enterprises and small businesses 1,941 Total loans to legal entities 29,355 Loans to individuals Mortgage loans 11,668 Consumer loans 17,307 Credit cards 9,778 Other 24 Total loans to individuals 38,777 Due from banks Time deposits with banks 1,659 Obligatory reserves with the Central Bank of Russia 976 Total due from banks 2,635 Total bank deposits and loans to customers 70,767 Less: allowance for impairment losses (7,729) Total bank deposits and loans to customers, net 63,038 The table below summarizes carrying value of loans to customers aggregated by types of collateral obtained by the Group: December 31, 2018 Loans collateralized by guaranties 17,984 Loans collateralized by pledge of real estate 14,237 Loans collateralized by pledge of own promissory notes 326 Loans collateralized by pledge of equipment 143 Loans collateralized by securities 32 Loans collateralized by rights of claim 15 Loans collateralized by pledge of inventories 12 Unsecured loans 35,383 Allowance for impairment losses (7,689) Total loans to customers, net 60,443 The balances above do not necessarily reflect the fair value of collateral received. Movements in the allowance for impairment losses attributable to bank deposits and loans to customers for the year ended December 31, 2018 are presented in the table below: Loans to customers Due from banks Total Balance as at the date of acquisition 8,444 42 8,486 Provision charge/release 636 (2) 634 Recovery of bad debt written-off 430 — 430 Bad debt written-off (1,817) — (1,817) Foreign currency revaluation effect (4) — (4) Balance as at December 31, 2018 7,689 40 7,729 Movements in provision for impairment losses on loans to legal entities for the year ended December 31, 2018 were as follows: Stage 1 Stage 2 Stage 3 POCI* TOTAL Balance as at the date of acquisition 325 306 3,714 182 4,527 - Transfer to stage 1 — — — — — - Transfer to stage 2 (2) — 2 — — - Transfer to stage 3 — (29) 29 — — New financial assets originated or purchased 54 65 — 9 128 Change due to change of credit risk (55) 144 (79) 64 74 Write-offs — — (637) — (637) Recovery of previously written-off assets — — 124 — 124 Foreign exchange difference (4) — — — (4) Balance as at December 31, 2018 318 486 3,153 255 4,212 * POCI - financial assets purchased or originated credit-impaired Movements in provision for impairment losses attributable to loans to individuals for the year ended December 31, 2018 were as follows: Stage 1 Stage 2 Stage 3 POCI TOTAL Balance as at the date of acquisition 683 388 2,468 378 3,917 - Transfer to stage 1 243 (162) (81) — — - Transfer to stage 2 (48) 66 (18) — — - Transfer to stage 3 (2) (291) 293 — — New financial assets originated or purchased 355 — — — 355 Change due to change of credit risk (475) 317 217 20 79 Write-offs — — (1,180) — (1,180) Recovery of previously written-off assets — — 306 — 306 Balance as at December 31, 2018 756 318 2,005 398 3,477 The following valuation categories represent the Group’s classification of credit quality of the loans: · Low to fair risk – loans of high credit quality and low probability of default, not past due or immaterially overdue; · Monitoring – loans with increased probability of default including restructured loans; · Impaired – impaired loans including more than 90 days overdue. The table below summarizes information regarding the quality of loans to individuals: Stage 1 Stage 2 Stage 3 POCI December 31, 2018 Low to fair risk 34,581 445 — — 35,026 Monitoring — 534 5 — 539 Impaired — — 2,814 398 3,212 Loss allowance (756) (318) (2,005) (398) (3,477) Total 33,825 661 814 — 35,300 The table below summarizes information regarding the quality of loans to legal entities: Stage 1 Stage 2 Stage 3 POCI December 31, 2018 Low to fair risk 22,083 1,555 — — 23,638 Monitoring — 1,871 — — 1,871 Impaired — — 3,586 260 3,846 Loss allowance (327) (477) (3,153) (255) (4,212) Total 21,756 2,949 433 5 25,143 Analysis by credit quality of loans to individuals outstanding as of December 31, 2018 is as follows: Provision for Provision for impairment to As at December 31, 2018 Gross loans impairment Net loans gross loans Collectively assessed Not past due 34,582 (756) 33,826 2 % Overdue: up to 30 days 445 (80) 365 18 % 31 to 60 days 197 (84) 113 43 % 61 to 90 days 136 (77) 59 57 % 91 to 180 days 340 (245) 95 72 % over 180 days 2,079 (1,579) 500 76 % Total collectively assessed loans 37,779 (2,821) 34,958 7 % Individually impaired Not past due 599 (475) 124 79 % Overdue: up to 30 days — — — — 31 to 60 days 4 (1) 3 25 % 61 to 90 days 1 — 1 0 % 91 to 180 days 27 — 27 0 % over 180 days 367 (180) 187 49 % Total individually impaired loans 998 (656) 342 66 % Total 38,777 (3,477) 35,300 9 % Analysis by credit quality of loans to medium-sized enterprises and small businesses outstanding as of December 31, 2018 is as follows: Provision for Provision for impairment to As at December 31, 2018 Gross loans impairment Net loans gross loans Collectively assessed Not past due 1,224 (24) 1,200 2 % Overdue: up to 30 days 7 (1) 6 16 % 31 to 60 days 2 (1) 1 40 % 61 to 90 days 4 (2) 2 40 % 91 to 180 days 15 (7) 8 47 % over 180 days 689 (414) 275 60 % Total collectively assessed loans 1,941 (449) 1,492 23 % Bank deposits and liabilities The table below represents the structure and amounts of current and non-current bank deposits and liabilities as of December 31, 2018. December 31, 2018 Customer accounts 100,209 Due to banks and other financial institutions 7,750 Debt securities issued 1,717 Financial liabilities at fair value through profit or loss 767 Other financial liabilities 1,011 Total bank deposits and liabilities 111,454 Less: current portion (108,821) Total bank deposits and liabilities, non-current 2,633 The structure and amounts of customer accounts of December 31, 2018 are presented below: December 31, 2018 Legal entities - Current/settlement accounts 19,408 - Term deposits 8,188 Individuals - Current/settlement accounts 13,364 - Term deposits 59,249 Total customer accounts 100,209 The structure and amounts of due to banks as of December 31, 2018 are presented below: December 31, 2018 Loans under repurchase agreements 5,315 Loans and term deposits from banks and other financial institutions 1,268 Correspondent accounts of other banks 1,167 Total due to banks 7,750 As of December 31, 2018, loans under repurchase agreements were secured by the following collaterals: · securities measured at amortized cost with the value of RUB 2,283 million; · Federal Loan Bonds (OFZ) received from Deposit Insurance Agency (DIA) as a subordinated securities loan in the amount of RUB 3,539 million. In November 2015 MTS Bank received a subordinated debt of RUB 7,246 million in the form of OFZ from the state corporation DIA with the date of maturity January 22, 2025. In accordance with the terms of the contract, MTS Bank should return the securities to the creditor at the end of the contract period. The Group does not recognize the securities and the obligation to return them to the creditor in the consolidated statement of financial position as of December 31, 2018. In accordance with the contract, MTS Bank should comply with certain covenants with respect to capital, loan portfolio, employee benefits. If the above conditions are not met, DIA may apply penalties to MTS Bank. The contract also includes certain restrictions on sale or repledge of the securities by MTS Bank. An analysis of liquidity and interest rate risk inherent to bank assets as of December 31, 2018 is presented in the following table. The maturity corresponds to the contractual terms. However, individuals are entitled to terminate the deposit agreement ahead of schedule. December31, Up to 1 month to 3 months to 1 year to Over Maturity 2018 1 month 3 months 1 year 5 years 5 years undefined Total Financial assets Financial assets at fair value through profit or loss 13,680 — — — — — 13,680 Due from banks 477 — — — — — 477 Loans to customers 5,182 9,113 25,525 25,922 1,104 6,344 73,190 Investments in securities 111 4,233 10,838 14,032 1,300 — 30,514 Total interest bearing financial assets 19,450 13,346 36,363 39,954 2,404 6,344 117,861 Cash and cash equivalents 10,117 — — — — — 10,117 Financial assets at fair value through profit or loss — — — — — 8,806 8,806 Due from banks 483 61 1,928 13 — — 2,485 Currency forwards and options not designated as hedges — 45 183 — — — 228 Other financial assets* 522 335 25 — — 4 886 Total non-interest bearing financial assets 11,122 441 2,136 13 — 8,810 22,522 Total financial assets 30,572 13,787 38,499 39,967 2,404 15,154 140,383 December31, Up to 1 month to 3 months to 1 year to Over Maturity 2018 1 month 3 months 1 year 5 years 5 years undefined Total Financial liabilities Due to banks and other financial institutions (1,268) — — — — — (1,268) Customer accounts* (13,012) (7,239) (45,971) (1,599) — — (67,821) Debt securities issued (12) (314) (333) (771) (287) — (1,717) Total interest bearing financial liabilities (14,292) (7,553) (46,304) (2,370) (287) (70,806) Currency forwards and options not designated as hedges — (45) (328) — — — (373) Obligation to deliver securities (394) (394) Due to banks and other financial institutions (6,482) — — — — — (6,482) Customer accounts* (48,854) — — — — — (48,854) Other financial liabilities (1,620) (541) (1,851) — — — (4,012) Lease obligations* (21) (37) (144) (200) (6) — (408) Total non-interest bearing financial liabilities (57,371) (623) (2,323) (200) (6) — (60,523) Total financial liabilities (71,663) (8,176) (48,627) (2,570) (293) — (131,329) Liquidity gap (41,091) 5,611 (10,128) 37,397 2,111 Stable sources of funding 40,689 (13,182) 22,667 (8,128) (42,046) Net liquidity gap (402) (7,571) 12,539 29,269 (39,935) Cumulative liquidity gap (402) (7,973) 4,566 33,835 (6,100) Cumulative interest sensitivity gap (5,158) (10,951) (1,110) 38,594 40,711 * Including intercompany balances (16,402) (5) (17) (3) — — (16,427) Analysis of the liquidity and interest rate risks is presented in the following table. The amounts in the table below represent future aggregate undiscounted cash flows. Weighted December31, average Up to 1 month to 3 months to 1 year to Over Maturity 2018 interest rate 1 month 3 months 1 year 5 years 5 years undefined Total Interest bearing financial liablities Due to banks 1,262 8 — — — — 1,270 Customer accounts* 12,410 7,900 47,490 1,644 — — 69,444 Debt securities issued 12 316 258 912 857 — 2,355 Total interest bearing financial liabilities 13,685 8,224 47,748 2,556 857 73,070 Non-interest bearing financial liablities Financial liabilities at fair value through profit or loss — — 373 — — — 373 Due to banks 6,482 — — — — — 6,482 Customer accounts* 48,854 — — — — — 48,854 Other financial liabilities 750 159 1,655 — — — 2,564 Total non-interest bearing financial liabilities and commitments 56,086 159 2,028 — — — 58,273 Total financial liabilities 69,771 8,383 49,776 2,556 857 — 131,343 * Including intercompany balances (16,465) — — — — — (16,465) The Group issued guaranties to the customers in the amount of RUB 10,587 million. These instruments, involving varying degrees of credit risk, are not reflected in the consolidated statement of financial position.The Group’s maximum exposure to credit risk in relation to these financial instruments is represented by their contractual amounts. |
FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL RISK MANAGEMENT | |
FINANCIAL RISK MANAGEMENT | 30 . FINANCIAL RISK MANAGEMENT As part of its business the Group is exposed to several types of financial risks: capital risk (mainly by MTS Bank), market risks, credit (or counterparty) risks, and liquidity risks. Risks mitigating activities are mainly performed at the Group headquarters by the corporate finance personnel and are subject to the approval of the Group’s supervisory bodies – the Board of Directors and Budget Committee. Capital risk MTS Bank, the Group's subsidiary, is subject to regulations of the Central Bank of Russia. That requires that banks comply with the minimum capital adequacy ratios of 8% calculated on the basis of statutory standalone financial statements. MTS Bank met the requirements established by the CBR. As of December 31, 2018, MTS Bank's capital adequacy ratio in accordance with CBR requirements was 11.9%. Basel Capital Accord (Basel 1) requires that banks that operate internationally have a capital adequacy risk ratio of 8% of their risk-weighted assets for the total amount of capital and 4% – for the tier 1 capital. MTS Bank met the requirements established by the Accord. As of December 31, 2018, MTS Bank's capital adequacy ratio was 18.38% and 13.34% respectively. Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market prices. The Group is primarily exposed to the following types of market risks: interest rate risk and currency exchange rates fluctuations. Financial instruments affected by market risk include loans and borrowings, deposits, and derivative financial instruments. The sensitivity analyses in the following sections relate to the financial position as of December 31, 2018, 2017 and 2016. Interest rate risks Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. · Variable interest rate The Group’s bank loans denominated in US Dollars and Euros primarily bear floating interest rate. To eliminate the exposure of changes in variable interest rates related to its debt obligations, the Group enters into variable-to-fixed cross-currency interest rate swap agreements, so that cross-currency interest rate swaps matches the exact maturity dates of the underlying debt allowing for highly-effective cash flow hedges. In aggregate, the Group entered into variable-to-fixed cross-currency interest rate swap agreements designated to manage the exposure of changes in variable interest rates related to 100% and 100% of the Group’s bank loans with variable rates outstanding as of December 31, 2018 and 2017, respectively. · Fixed interest rate risk The Group’s Notes and bank loans denominated in Russian Rubles bear primarily fixed interest rates. To eliminate the exposure of changes in the value of debt obligations, the Group enters into fixed-to-variable cross-currency and interest rate swap agreements. In aggregate, the Group entered into fixed-to-variable cross-currency and interest rate swap agreements designated to manage the exposure of changes in value of the debt related to 5.8% and 7.9% of the Group’s Notes and bank loans with fixed rates outstanding as of December 31, 2018 and 2017, respectively. The notional amounts of interest rate derivative instruments outstanding amounted to RUB 44,187 million and RUB 49,429 million as of December 31, 2018 and 2017, respectively. Sensitivity analysis A reasonably possible increase of 100 basis points in short term interest rates would have resulted in RUB 201 million, RUB 44 million and RUB 704 million future increases of interest expense for the years ended December 31, 2018, 2017 and 2016, respectively. The same decrease in short term interest rates would have resulted in RUB 201 million, RUB 44 million and RUB 704 million future decreases of finance cost for the years ended December 31, 2018, 2017 and 2016, respectively. There will be no material impact on equity. The interest rate sensitivity analysis was performed based on a constant level of fixed and floating rate debt. Foreign currency risks Foreign currency risk is the risk that the fair value or future cash flows will fluctuate because of changes in foreign exchange rates. The Group’s exposure to these changes in foreign exchange rates relates primarily to the Group’s financing activities. The Group manages its currency risk by hedging significant foreign currency cash outflows with derivatives and by using money market instruments. The Group has entered into several cross-currency swap agreements. These contracts are mainly designated to manage the exposure of changes in currency exchange rate. The contracts assumed periodic exchange of interest or principal, and interest payments from RUB-denominated amounts to USD-denominated amounts at a specified rate. The rate was determined by the market spot rate upon issuance. Cross-currency interest rate swap contracts mature in 2019‑2024. In aggregate the Group entered into cross-currency interest rate swap agreements designated to manage the exposure of changes in currency exchange rate for 50.8% and 39.6% of its USD-denominated Notes and bank loans outstanding as of December 31, 2018 and 2017 respectively. The notional amounts of currency derivative instruments amounted to RUB 34,115 million and RUB 28,669 million as of December 31, 2018 and 2017, respectively. The Group has entered into currency forward agreements to minimize the foreign currency risk exposure for operating activities. The contracts assumed the purchase or sale of the agreed amount of currency at a specified exchange rate and on a specific date. The rate was determined by the market spot rate upon issuance. As the result of currency forward agreements, unfulfilled as of December 31, 2018, 2017 and 2016, the Group recognized RUB 1,937 million gain, nil and RUB 142 million loss in the consolidated statement of profit and loss for the years ended December 31, 2018, 2017 and 2016, respectively. The notional amounts of currency forward instruments, unfulfilled as of December 31, 2018 and 2017, amounted to RUB 51,002 million and nil, respectively. In 2018, several of the Group’s swap agreements were early terminated early due to the early redemption of loans from Calyon, ING Bank N.V, Nordea Bank AB, Raiffeisen Zentralbank Osterreich AG. Loans and swaps were due in 2019 - 2020. The amount of RUB 505 million, net of tax, was immediately reclassified from accumulated other comprehensive income to profit for the year during the period and recognized as a part of change in fair value of financial instruments’ in consolidated statement of profit or loss. The following table presents the effect of the Group’s swap agreements designated as cash flow hedges in accumulated other comprehensive income for the years ended December 31, 2018, 2017 and 2016. 2018 2017 2016 Accumulated derivatives income / (loss), beginning of the year, net of tax of 85 and (26) and 261, respectively 340 (103) 1,045 Fair value adjustments on hedging derivatives, net of tax of 840 and (628) and (2,279), respectively 3,362 (2,512) (9,116) Amounts reclassified to profit for the year during the period – forecast transaction no longer expected to occur, net of tax of (126) and nil and nil, respectively (505) — — Amounts reclassified to (profit) / loss for the year during the period – hedged item has affected profit or loss, net of tax of (740) and 739 and 1,992, respectively (2,960) 2,955 7,968 Accumulated derivatives income / (loss), end of the year, net of tax of 59 and 85 and (26), respectively 237 340 (103) The following tables demonstrate the sensitivity to a reasonably possible change in USD and EUR exchange rates, with all other variables held constant. USD-effect on EUR-effect on Change profit before tax profit before tax in rate RUB mln, RUB mln 2018 +1% (176) 152 -1% 176 (152) 2017 +5% (447) 830 -5% 447 (830) 2016 +20% (6,722) 2,274 -20% 6,722 (2,274) The movement in the pre-tax effect is a result of a change in monetary assets and liabilities denominated in US dollars and Euro, where the functional currency of the entity is a currency other than US dollars and Euro. There will be no material impact on equity. The Group’s exposure to foreign currency changes for all other currencies is not material. MTS Bank MTS Bank credit limits committee determines stop-loss limits related to security portfolio and to foreign exchange transactions, as well as limits for net foreign exchange position.The limits for net foreign exchange position conform fully to CBR requirements. Monitoring of adherence to the limits restricting the amount of MTS Bank's market risk is performed day-to-day. Liquidity risk Liquidity risk is the risk of a shortage of funds. The Group’s policy is to borrow centrally using a mixture of long-term and short-term borrowing facilities. These borrowings, together with cash generated from operations are utilized to meet anticipated funding requirements. The Group assessed the concentration of risk with respect to refinancing its debt and determined it to be of low level. The Group manages liquidity risk on long-term borrowings by maintaining a varied maturity profile and a required net debt position, therefore minimizing the refinancing risk. Long-term borrowings mature between one and 7 years. Securities held by MTS Bank which are accounted for at fair value through profit and loss and investments at amortized cost are included in liquidity analysis on the basis of remaining maturity. Most of these securities are included in the CBR Lombard list and if required may be used to obtain REPO financing from the CBR. MTS Bank's demand for medium-term liquidity is fully satisfied by the availability of interbank loans and customer deposits (obtaining new and prolongating existing deposits), secured loans and conclusion of REPO agreements. As at December 31, 2018, current liabilities exceeded current assets by RUB 26,538 million. The management believes the Group has sufficient existing and continuing access to liquidity through both operating cash flows and the availability of committed credit facilities of RUB 21,000 million (Note 24). Credit risk Credit risk is the risk that the counterparty will not meet its obligations arising from entering into financial instrument, leading to a financial loss. In accordance with IFRS 9 the Group recods an allowance for expected credit losses (ECL) for all financial assets not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due under the contract and all cash flows that the Group expects to receive. The shortfall is discounted at an approximation to the asset’s original effective interest rate. The expected credit-loss approach uses three stages for allocating impairment losses: Stage 1: expected credit losses within the next twelve months Stage 1 includes all contracts with no significant increase in credit risk since initial recognition and usually contains new contracts that are fewer than 31 days past due date. The portion of the lifetime expected credit losses resulting from default events possible within the next 12 months is recognized. Stage 2: expected lifetime credit losses – not credit impaired If a financial asset has a significant increase in credit risk since initial recognition but is not yet credit impaired, it is moved to stage 2 and measured at lifetime expected credit loss. This is defined as the expected credit loss that results from all possible default events over the expected life of the financial instrument. In all cases, the Group considers that there has been a significant increase in credit risk when the contractual payment is more than 30 days past due. Stage 3: expected lifetime credit losses – credit impaired If a financial asset is defined as credit impaired or in default, it is transferred to stage 3 and measured at lifetime expected credit loss. Objective evidence for a credit-impaired financial asset includes 91 days past due date as well as other information indicating significant financial difficulties of the borrower. The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realizing security (if any is held). The determination of whether a financial asset has experienced a significant increase in credit risk is based on an assessment of the probability of default, which is made at least quarterly, incorporating external credit rating information as well as internal information on the credit quality of the financial asset. For debt instruments that are not receivables from financial services, a significant increase in credit risk is assessed mainly based on past-due information. For contract assets, trade and other receivables, a simplified approach is applied whereby ECL are initially measured over the lifetime of the instrument. The Group considers its exposure to credit risk as of December 31, 2018, and 2017 to be as follows: December 31, December 31, 2018 2017 Trade and other receivables 37,143 28,017 Deposits and loans issued 83,865 33,251 Notes 31,235 8,537 Securities held by MTS Bank 22,487 — Assets in Sistema Capital trust management 11,644 9,600 Derivative financial instruments 6,074 8,403 In accordance with the Group’s financial instruments management policy, the aggregate credit risk exposure that the Group may have to one counterparty is limited. The Group maintains a mixture of cash and cash equivalents, investments, derivatives and certain other financial instruments with financial institutions. The relevant financial institutions are located in different geographical regions and the Group’s policy is designed to limit its exposure to any single institution or geographical region. As part of its risk management processes, the Group performs periodic evaluations of the relative credit standing of these financial institutions. MTS Bank performs daily monitoring of future expected cash flows on the operations of both clients and banks, which is a part of the management process of assets and liabilities. The credit risk exposure is monitored on a regular basis to ensure that the credit limits and credit worthiness guidelines established by the MTS Bank's risk management policy are not breached. On December 15, 2015, Barclays Bank and the Group signed an addendum to existing cross currency swap agreements. According to the terms of the addendum parties agreed to set credit exposure limits to one another, which permits a mitigation of their respective credit risk by requiring the other party to transfer collateral payments. The balance of Barclays bank's transfer of collateral payments to the Group is nil and RUB 1.0 billion as of December 31, 2018 and 2017, respectively. Concentrations of credit risk with respect to trade receivables are limited given that the Group’s customer base is large and unrelated. Therefore, management believes there is no further credit risk provision required in excess of the normal provision for bad and doubtful receivables. |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTIES | |
RELATED PARTIES | 31. RELATED PARTIES Related parties include entities under common ownership with the Group, affiliated companies and associated companies. The aggregated impact of transactions with related parties to the Group’s statements of financial position as of December 31, 2018 and 2017 and statements of profit or loss for the years then ended was the following: December 31, December 31, 2018 2017 Statements of financial position Short-term investments 12,086 10,064 Accounts receivable, current 6,385 11,358 Accounts receivable, non-current 2,545 2 Bank loans to customers, current 2,244 — Advances for property, plant and equipment 1,380 1 Right-of-use assets 1,359 — Cash and cash equivalents 938 19,715 Bank loans to customers, non-current 612 — Other investments 149 767 Bank deposits and liabilities, current (42,642) — Accounts payable (1,301) (1,102) Bank deposits and liabilities, non-current (1,044) — Lease obligations, non-current (1,007) — Lease obligations, current (185) — 2018 2017 Statements of profit or loss Revenue (4,352) (3,349) Operating expenses / (income) 2,396 4,053 Finance (income) / expenses (1,398) (1,267) Interest expenses under lease arrangements (135) — Terms and conditions of transactions with related parties – Outstanding balances as of December 31, 2018 were unsecured and settlements are made on a cash basis. There have been no guarantees provided or received for any related party receivables or payables. As of December 31, 2018 and December 31, 2017, the Group had no impairment of receivables relating to significant amounts owed by related parties or expenses recognized during the years ended December 31, 2018 and 2017 in respect to bad or doubtful debts from related parties. Accounts receivable from and accounts payable to related parties were as follows: December 31, December 31, 2018 2017 Accounts receivable MTS Belarus, the Group’s associate 4,095 4,835 Business Nedvizhimost, a subsidiary of Sistema 2,561 4,052 Sitronics, a subsidiary of Sistema 1,107 317 Zifrovoe TV, the Group’s associate 764 702 MTS Bank, the Group's associate — 1,232 Other related parties 403 222 Total accounts receivable, related parties 8,930 11,360 Less non-current portion (2,545) (2) Accounts receivable, related parties – current 6,385 11,358 Accounts payable MTS Belarus, the Group’s associate 678 828 TelecomCapStroi, a subsidiary of Sistema 237 — Moscow Business Incubator, a subsidiary of Sistema 152 — Other related parties 234 274 Total accounts payable, related parties 1,301 1,102 The Group has neither the intent nor the ability to offset the outstanding accounts payable and accounts receivable with related parties under the terms of existing agreements. The Group makes December 31, December 31, 2018 2017 Advances given for property, plant and equipment: TelecomCapStroi, a subsidiary of Sistema 1,317 — Other related parties 63 1 Total advances given for property, plant and equipment 1,380 1 2018 2017 Purchases of property, plant and equipment, intangible assets and other assets: Moscow Business Incubator, a subsidiary of Sistema 4,450 — Mosdachtrest, a subsidiary of Sistema 1,711 — Business Nedvizhimost, a subsidiary of Sistema 328 — Other related parties 158 — Total purchases of property, plant and equipment, intangible assets and other assets 6,647 — Rights-of-use assets and lease obligations – The following table represents carrying value of right-of-use assets leased from related parties as of December 31, 2018: December 31, 2018 Carrying value of right-of-use assets: Business Nedvizhimost, a subsidiary of Sistema 919 Kronshtadt, a subsidiary of Sistema 121 Other related parties 319 Total carrying value of right-of-use assets 1,359 The following table presents summary of lease obligations which arose from lease arrangements with related parties as of December 31, 2018: December 31, 2018 Lease obligations: Business Nedvizhimost, a subsidiary of Sistema 793 Kronshtadt, a subsidiary of Sistema 109 Other related parties 290 Total lease obligations 1,192 Less non-current portion Lease obligations, related parties – current Interest expense accrued on these lease obligations for the year 2018 amounted to RUB 135 million and was included in finance costs in the accompanying consolidated statements of profit or loss Bank loans to customers, interbank loans due – The following table presents loans given by MTS-Bank to related parties as of December 31, 2018: December 31, 2018 Bank loans due, related parties Kronshtadt, a subsidiary of Sistema 802 Leader-Invest, a subsidiary of Sistema 612 Binofarm, a subsidiary of Sistema 412 Kronshtadt Technology, a subsidiary of Sistema 440 Sistema, parent company 254 Sistema-finance, a subsidiary of Sistema 183 Technology for Aviation, a subsidiary of Sistema 153 Total bank loans due, related parties 2,856 Less non-current portion (612) Bank loans due, related parties – current 2,244 Bank deposits and liabilities – The following table presents deposits in MTS Bank held by related parties as of December 31, 2018: 2018 Bank deposits and liabilities: Key management personnel of the Group and its parent 29,658 Sistema, parent company 4,610 Sistema Telecom Activy, a subsidiary of Sistema 1,542 Project Michurinskiy, a subsidiary of Sistema 952 Medsi Group, a subsidiary of Sistema 745 Sistema Real Estate, a subsidiary of Sistema 599 CTV, a subsidiary of Sistema 536 Sitronics, a subsidiary of Sistema 525 Leader-Invest, a subsidiary of Sistema 433 Sistema-Invest, a subsidiary of Sistema 338 RTI, a subsidiary of Sistema 323 Sistema Venture Capital, a subsidiary of Sistema 319 BashRES, a subsidiary of Sistema 309 Sistema Capital, a subsidiary of Sistema 239 TelecomCapStroi, a subsidiary of Sistema 238 BF-Sistema, a subsidiary of Sistema 233 Business Nedvizhimost, a subsidiary of Sistema 226 MBI, a subsidiary of Sistema 138 Intourautoservice, a subsidiary of Sistema 128 Detskii Mir, a subsidiary of Sistema 113 Other related parties 1,485 Total bank deposits and liabilities 43,686 Less non-current portion (1,044) Total bank deposits and liabilities - current 42,642 Investing transactions – The Group holds certain investments in related parties which are summarized as follows: December 31, December 31, 2018 2017 Short-term investments Sistema Capital, a subsidiary of Sistema (assets management) 11,644 9,600 Promissory notes of Intellect Telecom, a subsidiary of Sistema 283 257 Other loans receivable 159 207 Total short-term investments in related parties 12,086 10,064 Other investments Promissory notes issued by Sistema — 618 Total other investments to related parties — 618 Other investments in shares Sistema Venture Capital, a subsidiary of Sistema 117 117 Other investments 32 32 Total investments in shares of related parties 149 149 Operating transactions – For the years ended December 31, 2018, 2017 and 2016, operating transactions with related parties were as follows: 2018 2017 2016 Revenues from related parties MTS Bank, the former Group’s associate (telecommunication and call center services, bank cards distribution commission) 1,271 1,507 900 Sitronics, subsidiary of Sistema (construction of a fiber optic lines) 1,195 303 — Zifrovoe TV, the Group’s associate (subscriber acquisition services) 508 724 55 MTS Belarus, the Group’s associate (roaming and interconnect services) 296 248 276 Detsky Mir, subsidiary of Sistema (telecommunication services) 175 188 129 Medsi Group, subsidiary of Sistema (telecommunication and call center services) 166 156 242 Other related parties 741 223 576 Total revenues from related parties 4,352 3,349 2,178 Operating expenses / (income) incurred on transactions with related parties MTS Bank, the Group’s associate (commission related expenses) 1,217 2,259 347 Koncel, a subsidiary of Sistema (sale of scrap metal) (1,141) — — Key management personnel of the Group and its parent (interest expense) 705 — — Sistema-invest, a subsidiary of Sistema (change in fair value of financial instruments held by MTS-Bank) 325 — — AB Safety, a subsidiary of Sistema (security services) 324 302 271 Sistema, parent company (interest expense) 284 — — Jet Air Group, subsidiary of Sistema (transportation services) 135 172 183 MTS Belarus, the Group’s associate (roaming and interconnect services) 104 121 161 Business Nedvizhimost, a subsidiary of Sistema (rent and sale of real estate) 39 821 246 Maxima, a subsidiary of Sistema (advertising services) 19 143 1,018 Other related parties 385 235 888 Total operating expenses / (income) incurred on transactions with related parties 2,396 4,053 3,114 Finance income, which arose from investment transactions with related parties for the years ended December 31, 2018, 2017 and 2016 was the following: 2018 2017 2016 Finance income from related parties Sistema Capital, a subsidiary of Sistema (assets management) 465 369 128 Business Nedvizhimost, a subsidiary of Sistema 353 359 491 MTS Bank, the former Group's associate 448 345 285 Other related parties 132 194 81 Total finance income from related parties 1,398 1,267 985 MTS Bank – On July 05, 2018 the Group acquired the controlling stake in MTS-Bank and thus it ceased to be a related party to the Group since the acquisition date (Note 5). East-West United Bank - The Group maintains certain bank accounts with East-West United Bank, a subsidiary of Sistema. As of December 31, 2018 and December 31, 2017, the Group’s cash position at East-West United Bank amounted to RUB 938 million and RUB 5,969 million, respectively, including short-term deposits in the amount of RUB nil and 5,810, respectively. Sistema - In November 2009, the Group accepted a promissory note, issued by Sistema, as repayment of the loan principal and interest accrued to date under an agreement with Sistema-Hals. The note was interest free and was repayed in fourth quarter of 2018. In October 2014 the Group acquired 2,501,350 Sistema Notes due in 2016 (series 04) and 1,000 Sistema International Funding S.A. bonds due in 2019 for RUB 519 million and RUB 32 million, respectively. The acquired bonds were classified as available for sale and accounted for at fair value to recognize changes in fair value in other comprehensive income. In March 2016 the Group received principal and coupon of Sistema Notes due in 2016 (series 04) in the amount of RUB 201 million. As of December 31, 2018 and December 31, 2017, the balance of Sistema International Funding S.A. bonds due in 2019 amounted to RUB 70 million and RUB 57 million respectively. Business Nedvizhimost -- In February 2015 and further in May 2015, the Group sold its 100% stake in Rent Nedvizhimost to Business Nedvizhimost, a subsidiary of Sistema, for RUB 8,500 million in total. As of December 31, 2018 and December 31, 2017 the balance of accounts receivable amounted to RUB 2,561 million and RUB 4,052 million, respectively. The amount as of December 31, 2018 is due before December 31, 2021 and bears interest of CBR Key rate + 1.5% p.a. In December 2018 the Group sold its 40.26% stake in a mutual investment fund «Sistema-Rentnaya Nedvizhimost» to Business Nedvizhimost for RUB 450 million. At the reporting date the Group accounted its share in the joint venture in sum of RUB 690 mln (Note 16). Sistema Capital – In 2016 and 2017 the Group entered into trust agreements with the asset management company Sistema Capital. As of December 31, 2018 and December 31, 2017, the balance of assets under trust management amounted to RUB 11,614 million and RUB 9,600 million respectively. Remuneration of key management personnel – Key management personnel of the Group are members of the Board of Directors and Management Board. During the years ended December 31 2018, 2017 and 2016 their total remuneration amounted to RUB 816 million, RUB 739 million and RUB 760 million, respectively. These amounts comprised of RUB 504 million, RUB 490 million and RUB 470 million in base salaries and 312 RUB million, RUB 249 million and RUB 290 million in bonuses paid pursuant to a bonus plan, respectively. The management and directors are also entitled to cash-settled and equity-settled share-based payments. Related compensation accrued during the years ended December 31 2018, 2017 and 2016 amounted to RUB 554 million, RUB 486 million and RUB 481 million, respectively. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 32. SHAREHOLDERS’ EQUITY Share capital (ordinary shares) – The Group had 1,998,381,575 authorized ordinary shares with par value 0.1 RUB as of December 31, 2018 and 2017. Preferred shares have not been issued. Shares of common stock repurchased by the Group are recorded at cost as treasury stock and reduce the shareholders’ equity in the Group’s consolidated financial statements. As of December 31, 2018, the total shares in treasury stock comprised 167,638,899 and 1,830,742,676 shares were outstanding. As of December 31, 2017, the total shares in treasury stock comprised 86,339,156, and 1,912,042,419 shares were outstanding. Mobile TeleSystems’ Level III American Depositary Shares (ADS) were successfully placed during the Company’s initial public offering on the New York Stock Exchange on June 30, 2000. Each ADS represents 2 ordinary shares. As of December 31, 2015 the Group repurchased 33,997,667 ADSs, which were used to decrease the Group’s charter capital in 2016. MTS ordinary shares have been traded on the Moscow Exchange (previously, Moscow Interbank Currency Exchange (MICEX)) since October 2003 under the ticker symbol MTSI. In 2016, the Group launched a Tender Offer, aiming to return cash of up to RUB 4,935 million to the holders of ordinary shares and ADSs. During the year ended December 31, 2016, through the Tender Offer the Group has repurchased 3,060,409 ordinary shares for RUB 747 million (including 1,550,495 ordinary shares purchased from Sistema for RUB 335 million). In 2017 the Group launched a Tender Offer, aiming to repurchase its ordinary shares (including shares represented by ADSs) for up to RUB 4,647 million. Through the Tender Offer, during the year ended December 31, 2017, the Group purchased a total of 16,022,364 shares (including shares represented by ADSs) at a price per share of RUB 290, for a total cost of RUB 4,646 million. Simultaneously, the Group purchased 16,038,892 shares from Sistema Finance under the Sistema Purchase Agreement for an aggregate purchase price of RUB 4,651 million. In 2017, the Group announced that Board of Directors has approved the repurchase of shares and ADSs by means of a share repurchase plan in the total amount of up to RUB 20,000,000,000 (the “Repurchase Plan”). This amount includes funds used for purchasing the Company’s shares from Sistema Finance until April 2019. During the year ended December 31, 2017, the Group purchased 43,647,128 shares (including shares represented by ADSs) under the Repurchase Plan at prices from RUB 257 up to RUB 305 for a total cost of RUB 12,475 million. In 2018 (under the 2017 Repurchase plan) the Group purchased 8,057,356 shares (including shares represented by ADSs) for RUB 2,837 million. Additionally the Group purchased 17,339,848 shares from Sistema Finance under the Sistema Purchase Agreement for an aggregate purchase price of RUB 4,882 million. In July 2018, the Group announced that Board of Directors has approved the repurchase of shares and ADSs by means of a share repurchase plan in the total amount of up to RUB 30,000,000,000 (the “Repurchase Plan”), the amount includes funds used for purchasing the Company’s shares from Sistema Finance. During the year ended December 31, 2018, the Group purchased 55,854,178 shares (including shares represented by ADSs) under the Repurchase Plan at prices from RUB 191 up to RUB 338, for a total cost of RUB 14,903 million. This includes 27,929,870 of shares purchased from Sistema Finance for a total amount of RUB 7,412 million. Nature and purpose of reserves Additional paid in capital is used to recognize equity-settled share-based payment transactions, results of capital transactions under common control; changes in ownership interest in subsidiaries that do not result in gain/loss of control and the excess of cash received over the acquisition cost of treasury shares. Share-based payment programs – Equity-settled share-based payment transactions are measured at fair value on the grant date. The fair value of the obligation is recognized as personnel costs over the vesting period and offset against capital reserves. Foreign currency translation reserve is used to record exchange differences arising from the translation of foreign subsidiaries financial statements from functional to the presentation currency. Cash flow hedging reserve is used to record the accumulated impact of derivatives designated as cash flow hedges and revaluation of investments available for sale. Remeasurements of the net defined benefit liability is used to recognize actuarial gains and losses related to the pension program set for employees of the Group’s subsidiary MGTS. The following table represents roll forward of reserves balances for the years ended December 31, 2018, 2017 and 2016: Foreign currency Cash Remeasurements translation flow hedging of the net defined reserve reserve benefit liability Balances at January 1, 2016 9,638 1,045 493 Other comprehensive (loss) / income for the year (13,970) (11,324) 50 Less: tax benefit — 2,219 — Amounts reclassified to profit for the year (2,086) 9,897 — Less: tax expense — (1,992) — Net other comprehensive (loss) / income for the year (16,056) (1,200) 50 Balances at December 31, 2016 (6,418) (155) 543 Other comprehensive (loss) for the year (2,620) (3,140) (40) Less: tax benefit — 628 — Amounts reclassified to profit for the year — 3,748 — Less: tax expense — (741) — Amounts reclassified to additional paid in capital (659) — — Less: tax expense — — — Net other comprehensive (loss) / income for the year (3,279) 495 (40) Balances at December 31, 2017 (9,697) 340 503 Other comprehensive income for the year 7,726 4,202 167 Less: tax expense — (840) — Amounts reclassified to profit for the year — (4,331) — Less: tax benefit — 866 — Net other comprehensive income / (loss) for the year 7,726 (103) 167 Balances at December 31, 2018 (1,971) 237 670 Non-controlling interest As of December 31, 2018, MGTS and MTS Bank were the only subsidiaries of the Group, which had material non-controlling interests. The summarized financial information of MGTS PJSC and MTS Bank PJSC is presented as follows: Year ended December 31, MGTS 2018 2017 2016 Non-controlling interest opening balance (4,180) (4,787) (5,191) Profit for the year attributable to non-controlling interest (619) (554) (727) Dividends to non-controlling interest 1,165 1,175 1,120 Other (15) (14) 11 Non-controlling interest closing balance (3,649) (4,180) (4,787) Year ended December 31, MTS Bank 2018 2017 2016 Non-controlling interest opening balance — — — Profit for the year attributable to non-controlling interest (378) — — Acquisitions under common control (8,320) — — Non-controlling interest closing balance (8,698) — — December 31 2018 2017 Current assets 123,879 22,595 Non-current assets 84,093 42,204 Current liabilities (141,359) (8,959) Non-current liabilities (18,269) (7,250) Year ended December 31, 2018 2017 2016 Revenue, gross of intercompany (51,246) (39,565) (40,210) Profit for the year, gross of intercompany (11,314) (9,719) (12,167) Dividends As a leading telecommunications group with a home base in developing markets, MTS’ primary need is to maintain sufficient resources and flexibility to meet financial and operational requirements. At the same time, the Group continually seeks ways to create shareholder value through both its commercial and financial strategies, including organic and non organic development as well as the Group’s capital management practices. MTS continues to include dividend payments as part of its commitment to maximizing shareholder value. Decisions on dividends are proposed by the Board of Directors and voted upon thereafter at a General Meeting of Shareholders. In determining the Company’s dividend payout, the Board of Directors considers a variety of factors, including: · Macroeconomic factors and levels of competitiveness in core markets, · Cash flow from operations, · The outlook for earnings growth, · Capital expenditure requirements, · Potential acquisition opportunities, · The state of capital markets and the Group’s liquidity position, and · The Group’s overall debt position. In 2016, the Board of Directors approved a dividend policy for the calendar years 2016 – 2018, committing to a minimum cumulative dividend payout of RUB 20.0 per ordinary share through two semi-annual payments. In addition, the Group will aim for a target payout of RUB 25.0 – 26.0 per ordinary share in each calendar year. The Group may take decisions on the dividend payout based not only on annual results but also on interim results for three, six or nine months of the fiscal year. Annual and interim dividend payments, if any, must be recommended by the Board of Directors and approved by the shareholders. In accordance with Russian laws, earnings available for dividends are limited to profits determined under Russian statutory accounting regulations, denominated in Russian Rubles, after certain deductions. The following table summarizes the Group’s declared cash dividends for the years ended December 31, 2018, 2017 and 2016: 2018 2017 2016 Dividends declared (including dividends on treasury shares of 3,037, 1,337 and 220 respectively) 51,958 51,958 51,958 Dividends, RUB per ADS 52.00 52.00 52.00 Dividends, RUB per share 26.00 26.00 26.00 As of December 31, 2018 and 2017, dividends payable were RUB 146.2 and 125.4 million, respectively, and included in the trade and other payables within the consolidated statement of financial position. |
LIABILITY UNDER PUT OPTION AGRE
LIABILITY UNDER PUT OPTION AGREEMENT | 12 Months Ended |
Dec. 31, 2018 | |
LIABILITY UNDER PUT OPTION AGREEMENT | |
LIABILITY UNDER PUT OPTION AGREEMENT | 33. LIABILITY UNDER PUT OPTION AGREEMENT In September 2007, the Group acquired a 80% stake in International Cell Holding Ltd (“ICH”), the 100% indirect owner of MTS Armenia (formerly CJSC “K-Telecom”), Armenia’s mobile phone operator, and signed a call and put option agreement to acquire the remaining 20% stake in ICH. In 2016 ICH was liquidated after all its legal interest in MTS Armenia was transferred to Aramayo Investments Limited, a Cyprus subsidiary of the Group, in which the Group held 80% of its entire share capital, and remaining 20% stake became subject to the aforementioned option agreement. According to the option agreement, the price for the remaining 20% stake option is to be determined by a pre-agreed by the parties independent investment bank. In accordance with the option agreement as amended the call option could be exercised by the Group up to December 31, 2018. In December 2018 the Group served a call notice on the minority shareholders of MTS Armenia to purchase the remaining 20% stake in Aramayo (and indirectly in MTS Armenia). The liability under the option agreement amounted to RUB 3,629 million and RUB 2,012 million as of December 31, 2018 and December 31, 2017 respectively (Note 28). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 34. COMMITMENTS AND CONTINGENCIES Capital commitments – As of December 31, 2018, the Group had executed purchase agreements of approximately RUB 36,875 million to acquire property, plant and equipment, intangible assets and costs related thereto. Agreement with Apple – In April 2017, the Group entered into an unconditional purchase agreement with Apple Rus LLC (“Purchase agreement”) to buy 615 thousand iPhone handsets at list prices at the dates of respective purchases over a period ending June 30, 2019. Pursuant to the agreement the Group is also required to incur certain iPhone advertising and promotion costs. As of December 31, 2018 the Group fully completed total purchase installment outlined by the agreement. Taxation – Russia and other CIS countries currently have several laws related to various taxes imposed by both federal and regional governmental authorities. Applicable taxes include VAT, corporate income tax (profits tax), a number of turnover-based taxes, and payroll (social) taxes. Laws related to these taxes have not been in force for significant periods, in contrast to more developed market economies; therefore, the government’s implementation of these regulations is often inconsistent or non-existent. Accordingly, few precedents regarding tax rulings have been established. Tax declarations, together with other legal compliance areas (for example, customs and currency control matters), are subject to review and investigation by a number of authorities, which are enabled by law to impose extremely severe fines, penalties and interest charges. These facts create tax risks in Russia and the CIS countries that are more significant than those typically found in countries with more developed tax systems. Generally, according to Russian and Ukrainian tax legislation, tax declarations remain open and subject to inspection for a period of three years following the respective tax year. As of December 31, 2018, the tax declarations of MTS PJSC and other subsidiaries in Russia and Ukraine for the preceding three fiscal years were open for further review. Since 2016, MTS PJSC communicates with tax authorities through the Tax Monitoring regime, which enables it to disclose information and documents related to the calculation of its tax liabilities on-line. In 2017, the Russian tax authorities completed a tax audit of MTS PJSC for the years ended December 31, 2015 and 2014. As of December 31, 2018 additional taxes, fines and penalties resulting from the tax audit in total amount of RUB 591 million were fully settled by the Group. Рricing of goods and services provided within the Group is subject to transfer pricing rules. The management believes that it has adequately provided for tax liabilities in the accompanying consolidated financial statements. However, the risk remains that the relevant tax authorities could take different positions with regarding interpretive issues which could have a significant effect. The Group assessed the following contingent liabilities in respect of additional tax settlements: December 31, December 31, 2018 2017 Contingent liabilities for additional taxes other than income tax 730 732 Contingent liabilities for additional income taxes 2,051 2,591 Licenses – In May 2007, the Federal Service for Supervision in the Area of Communications, Information Technologies and Mass Media awarded MTS a license to provide 3G services in Russia. The 3G license was granted subject to certain capital and other commitments. In July 2012, the Federal Service for Supervision in the Area of Communications, Information Technologies and Mass Media allocated MTS the necessary license and frequencies to provide LTE telecommunication services in Russia. Under the terms and conditions of the LTE license, the Group is obligated to fully deploy LTE networks within seven years, starting from January 1, 2013, and deliver LTE services in each population center with over 50,000 inhabitants in Russia by 2019. Also, the Group is obligated to invest at least RUB 15 billion annually in the LTE roll-out until the network is fully deployed. In March 2015, MTS-Ukraine acquired a nationwide license for the provision of UMTS (3G) telecommunications services through an open tender. The cost of the license was UAH 2,715 million (RUB 6,015 million at the acquisition date) and this was granted for 15 years. In accordance with the terms of the license, MTS-Ukraine was required to launch UMTS services in Ukraine by October 2016, and provide coverage throughout Ukraine by April 2020. In accordance with the terms of the license, MTS-Ukraine also concluded agreements to convert the provided frequencies for commercial use with the Ministry of Defense of Ukraine, Ministry of Internal Affairs of Ukraine and State Service of Special Communications and Information Protection of Ukraine. For the conversion of frequencies, MTS-Ukraine paid UAH 358 million (RUB 865 million as of the payment date) in 2015 and UAH 299 million (RUB 645 million as of the payment date) in 2017, UAH 230 million (RUB 535 million as of the payment date) in 2018. In January and March 2018, VF Ukraine PrJSC secured a 4G LTE licenses in the 2510-2520 / 2630-2640 and 1780-1785 / 1875-1880 MHz bands as the result of a national auction. Under the terms and conditions of the LTE licenses, VF Ukraine is obligated to deliver LTE services to not less than 90% of the population in each regional center of Ukraine (with certain exceptions) within 12 months from the date when the licenses were effective. VF Ukraine is also obligated to deliver LTE services to at least 90% of the population in each population center with over 10 000 inhabitants (with certain exceptions) within 42 months from the issuance of the licences. For the conversion of frequencies, MTS-Ukraine paid UAH 130 million (RUB 271 million as of the payment dates) in 2018. The management believes that as of December 31, 2018, the Group is in compliance with conditions of the aforementioned licenses. Litigation – In the ordinary course of business, the Group is a party to various legal, tax and customs proceedings, and subject to claims, some of which relate to developing markets and evolving fiscal and regulatory environments within MTS's markets of operation. In 2017, Federal Antimonopoly Service of the Russian Federation (FAS Russia) issued a warning to MTS and some other federal operators on termination of actions containing signs of violation of the antimonopoly laws in respect of establishing unreasonable differences in tariffication of communication services for subscribers in home region and outside. Following non-compliance with the warning, FAS Russia has opened antimonopoly proceeding against MTS. FAS Russia has also opened antimonopoly proceeding against MTS for establishing high prices for communication services in national roaming. In 2018, MTS changed the principles and terms of tariffication when travelling about the country. FAS Russia held MTS administratively liable and imposed administrative fines on MTS in amount of RUB 1 million in respect of each proceeding. In August 2018, FAS Russia has charged MTS and other federal operators with violation of antimonopoly laws in respect to establishing distinguished terms and conditions for SMS pricing for the entities with state-owned equity interest as compared to the terms and conditions for the other entities and establishing unreasonably high SMS prices. Investigation is currently in process. Following the case examination a fine may be imposed on MTS or illegally obtained income may be recovered. FAS Russia determines the amount of illegally obtained income as the difference between the amount of revenue received from applying monopolistically high prices and the amount of revenue that could have been received if “reasonable” prices were applied. There is no information regarding the level of prices that FAS Russia considers economically justified. It is not possible to make a reliable estimation of amount of fine that could be imposed. Potential adverse effects of economic instability and sanctions in Russia – In 2014 political and economic sanctions targeting certain Russian economic sectors were introduced by the EU, US and other countries. Sanctions were subsequently extended and there is significant uncertainty regarding the extent and timing of further sanctions. Furthermore, the Russian Ruble has materially depreciated against the U.S. Dollar and Euro and Ruble interest rates have increased significantly after the Central Bank of Russia raised its key rate to 17% in December, 2014. In 2018 due to Russia’s ability to remain stable amid severe external shocks, Russia’s sovereign credit ratings were increased from “stable” to “positive”. The Central Bank of Russia has gradually decreased its key rate to 7.75% as of December 31, 2018. These factors resulted in a lower cost of capital and a stable rate of inflation. However, in Russia there is an uneven growth dynamics, which could have a negative impact on the Group’s business including ability to obtain financing on commercially reasonable terms. The management believes it is acting appropriately to support the sustainability of the Group’s business in the current circumstances. The Group has a hedging policy in place, which partly mitigates the variability of cash outflows, denominated in foreign currencies. Political and economic crisis in Ukraine – During the year ended December 31, 2014, a deterioration in the political environment of Ukraine has led to general instability, economic deterioration and armed conflict in eastern Ukraine. In 2014 The National Bank of Ukraine (“NBU”) passed a decree prohibiting Ukrainian companies to pay dividends to foreign investors. The decree was extended several times and its edition effective as of December 31, 2018 allows payment of dividends for the FY 2017 and all preceding periods, subject to certain restrictions. Furthermore, since 2014 the Group established a provision in respect of cash balances in several Ukrainian banks, whose liquidity was affected by the economic downturn. The Group believes that these circumstances, despite the recent improvement, combined with political and economic instability in the country, could result in further negative impact on the Group’s business including financial position and results of operations. As of December 31, 2018, the Group held RUB 6,596 million in current accounts and deposits in Ukrainian banks. Anti-terror law – On July 7, 2016 a series of anti-terror laws (also known as “Yarovaya-Ozerov bundle of laws”) was enacted by the signature of the President of Russia. In general terms, the laws mandate that operators store and record phone conversations, text messages of subscribers, images, sounds, video and other types of communications by telecommunications operators for defined periods of time. These requirements are effective starting July 1, 2018. Compliance with the laws require the construction of additional storage, processing and indexing centers.The Group expects the increase in related capital expenditures, which cannot be measured reliably. Investigations into former operations in Uzbekistan – In March 2019, the Group reached a resolution with the United States Securities and Exchange Commission (“SEC”) and the United States Department of Justice (“DOJ”) relating to the previously disclosed investigation of the Group’s former subsidiary in Uzbekistan. The Group consented to the entry of an administrative cease-and-desist order (the “Order”) by the SEC. The United States District Court for the Southern District of New York approved a deferred prosecution agreement (“DPA“) entered by the Group and a plea agreement entered into a subsidiary of the Group in Uzbekistan. Under the agreements with the DOJ, the Group agreed to pay a total criminal penalty of USD 850 million (RUR 59.1 billion as of December 31, 2018) to the United States. The Group provided a provision of USD 850 million (RUB 55.8 billion as of the date of accrual), which was recognized as a part of discontinued operations in the consolidated statements of profit or loss for the year ended December 31, 2018. Under the DPA and the Order, the Group agreed to appoint an independent compliance monitor. Pursuant to the DPA and the Order, the monitorship will continue for a period of three years, and the term of the monitorship may be terminated early or extended depending on certain circumstances, as ultimately determined and approved by the DOJ and SEC. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 35. SUBSEQUENT EVENTS Ruble bonds placement – In January 2019, MTS issued exchange-traded bonds totaling RUB 10 billion with a coupon rate of 8.70% and a maturity of 5 years. Purchase of additional stake in MTS Bank – In February 2019 the Group purchased additional 39.48% stake in MTS Bank from Sistema for RUB 11.4 billion. Consequently, the Group’s share in MTS Bank increased to 94.92%. This acquisition allows the Group to fully integrate its FinTech business. Sale of investment in Ozon Holdings Limited - In March 2019 the Group sold its 18.69% stake in Ozon Holdings Limited to Sistema for RUB 7.9 billion. Acquisition of shares under Share Repurchase Plan – Since the end of the reporting period the Group acquired 35,679,838 MTS shares of Common Stock representing 1.79% of share capital issued by MTS. The Group purchased MTS shares of common stock under the Share Repurchase Plan announced in 2018. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS | |
Basis of preparation | Basis of preparation – These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements have been prepared on a historical cost basis, unless disclosed otherwise. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Amounts in the consolidated financial statements are stated in millions of Russian Rubles (“RUB million”), unless indicated otherwise. These consolidated financial statements have been prepared on the assumption that the Group is a going concern and will continue in operation for the foreseeable future. |
Basis of consolidation | Basis of consolidation – The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved only where the Company has power over the entity, is exposed and has rights to variable returns, and is able to use the power to affect its amount of variable returns. The results of the controlled entities acquired or disposed of during the reporting period are included in the consolidated financial statements from the date the Group achieves control over the entity, or until the date on which the Company ceases to control the entity. If necessary, the accounting policies of controlled entities are aligned with the accounting policy applied by the Group. All intra-group balances, income, expenses and cash flows are eliminated on consolidation. Effective ownership interests in the Group’s significant subsidiaries were the following: Accounting December 31, December 31, method 2018 2017 RTC Consolidated 100.0 % 100.0 % Vodafone Ukraine (VF Ukraine) Consolidated 100.0 % 100.0 % MTS Turkmenistan (Note 11) Consolidated 100.0 % 100.0 % Sibintertelecom Consolidated 100.0 % 100.0 % NVision Group Consolidated 100.0 % 100.0 % Sitronics Telecom Solutions Consolidated 100.0 % 100.0 % NVision Czech Republic Consolidated 100.0 % 100.0 % Sputnikovoe TV Consolidated 100.0 % 100.0 % Stream Consolidated 100.0 % 100.0 % Dega Consolidated 100.0 % 100.0 % Stream Digital Consolidated 100.0 % 100.0 % MTS Energo Consolidated 100.0 % 100.0 % Bashkortostan Cellular Communications (BCC) (1) Consolidated — 100.0 % Praliss Enterprises Limited Consolidated 100.0 % 100.0 % MDTZK LLC (Ticketland) Consolidated 100.0 % — IT Grad Consolidated 100.0 % — Metro-Telecom Consolidated 95.0 % 95.0 % MGTS Group Consolidated 94.7 % 94.7 % MTS Armenia Consolidated 80.0 % 80.0 % Kulturnaya Sluzhba (Ponominalu) Consolidated 78.2 % — Navigation Information Systems Group Consolidated 77.7 % 77.7 % MTS Bank (Note 5) Consolidated 55.4 % 26.6 % Oblachny Retail LLC Consolidated 50.8 % 50.8 % MTS International Funding Limited (2) (“MTS International”) Consolidated SE SE MTS Belarus (Note 16) Equity 49.0 % 49.0 % Sistema Capital Equity 30.0 % 30.0 % Zifrovoe TV Equity 20.0 % 20.0 % OZON Holdings Limited (Note 16) Equity 18.7 % 11.2 % YOUDO Web Technologies (Note 16) Equity 13.7 % — (1) A wholly-owned subsidiary, through which the Group repurchases its own shares. (2) Merged with MTS PJSC on November 15, 2018 (3) A company organized and existing as a private limited company under the laws of Ireland. The Group does not have any equity in MTS International. It was established for the purpose of raising capital through the issuance of debt securities on the Irish Stock Exchange followed by transferring the proceeds through a loan facility to the Group. In 2010 and 2013, MTS International issued USD 750 million 8.625% notes due in 2020 and USD 500 million 5.0% notes due in 2023, respectively (Note 15). The notes are guaranteed by MTS PJSC in the event of default. MTS International does not perform any other activities except those required for notes servicing. The Group bears all costs incurred by MTS International in connection with the notes’ maintenance activities. Accordingly, the Group concluded that it exercises control over the entity. |
Acquisitions from entities under common control | Acquisitions from entities under common control – Business combinations arising from transfers of interests in entities that are under common control with the Group are consolidated prospectively starting from the date that the control over those entities is passed to the Group. The assets and liabilities acquired are recognized at the carrying values recorded previously in the counterparty’s financial statements, with the resulting gain or loss recognized directly in equity. |
Joint operations | Joint operations – The Group has joint operations with Megafon and Vimpelcom, relating to the construction of LTE base stations. Joint operations are characterized by the fact that the operators that have joint control over the arrangement each have both a right to the assets, and obligations for the liabilities, according to the arrangement. Respectively, each operator accounts for its share of the joint assets and its agreed share of any liabilities, and recognizes its share of the output, revenues and expenses incurred under the arrangement. |
Functional currency translation methodology | Functional currency translation methodology – As of December 31, 2018, the functional currencies of Group entities were as follows: · For entities incorporated in the Russian Federation, Dega and MTS International – the Russian Ruble (“RUB”); · For VF Ukraine – the Ukrainian Hryvna; · For MTS Armenia – the Armenian Dram; · For MTS Turkmenistan – the Turkmenian Manat; · For MTS Belarus – the Belarusian Ruble; · For NVision Czech Republic – the Czech Crown. Foreign-currency transactions are translated into the functional currency at the exchange rates at the dates of the transactions. At the reporting date, monetary items denominated in foreign currencies are translated at the closing rate, whereas non-monetary items are stated at the exchange rate at the date of their recognition. Exchange rate differences are recognized in profit or loss. For entities whose records are maintained in their functional currency, which is other than the reporting currency, all year-end assets and liabilities have been translated into U.S. Dollars (“USD”) at the period-end exchange rate set by local central banks. Subsequently, U.S. Dollars balances have been translated into Russian Rubles at the period-end exchange rate set by the Central Bank of Russia. Revenues and expenses have been translated at the average exchange rate for the period using the cross-currency exchange rate via the U.S. Dollar as described above. Translation differences resulting from the use of these rates are reported as a component of other comprehensive income. |
Standards, interpretations and amendments adopted | Standards, interpretations and amendments adopted on January 1, 2018 Starting from January 1, 2018 the Group has applied IFRS 9, “ Financial Instruments ” , IFRS 15, “ Revenue from Contracts with Customers ” , and IFRS 16, “ Leases ” . IFRS 9, “ Financial Instruments” – IFRS 9 replaces the existing standard IAS 39 in regulating the classification and measurement of financial assets and liabilities and requires certain additional disclosures. The primary changes relate to the assessment of hedging arrangements and provisioning for potential future credit losses on financial assets as well as recognition of modification gain or loss for all revisions of estimated payments or receipts, including changes in cash flows arising from a modification or exchange of a financial liability, that does not result in its derecognition. Resulting from the adoption of the IFRS 9 standard, the Group recognized RUB 3.0 billion (RUB 2.4 billion net of tax) gain relating to modification of its financial liabilities , which did not result in extinguishment of the original liabilities, and RUB 1.2 billion (1.0 billion net of tax) loss related to expected losses on financial assets. The new guidance on the classification of financial assets did not results in any changes in the measurement and presentation of the Group’s financial assets. The following table compares the classification of financial assets in accordance with IFRS 9 and IAS 39: Classification December 31, January 1, IAS 39 IFRS 9 2017 2018 Trade and other receivables Loans and receivables At amortized cost 28,017 28,017 Accounts receivable, related parties Loans and receivables At amortized cost 11,358 11,358 Cash and Cash equivalents At amortized cost At amortized cost 30,586 30,586 Assets in Sistema Capital trust management At fair value through profit or loss At fair value through profit or loss 9,600 9,600 Notes Available-for-sale At fair value through OCI 57 57 Cross-currency swap designated as cash flow hedge At fair value through OCI At fair value through OCI 8,403 8,403 Bank deposits Loans and receivables At amortized cost 27,836 27,836 Loans Loans and receivables At amortized cost 5,415 4,935 Notes Loans and receivables At amortized cost 8,480 8,480 Other Loans and receivables At amortized cost 1,810 1,810 Total 131,562 131,082 The Group recognized the cumulative effect arising from the transition to IFRS 9 as an adjustment to the opening balance of equity. Prior period comparatives have not been restated. IFRS 15, “ Revenue from Contracts with Customers ” – The standard establishes a single comprehensive framework for the determination and recognition of revenue to be applied to all contracts with customers. IFRS 15 replaces the existing standards IAS 18, “ Revenue ” , and IAS 11, “Construction Contracts ” . The core principle of IFRS 15 is that an entity should recognize revenue to accurately reflect the transfer of promised goods or services to customers in an amount that is equal to the consideration to which the entity expects to be entitled in exchange for those goods or services. The most significant impact of the adoption of IFRS 15 on the Group’s consolidated financial statements related to the deferral of certain incremental costs, which were incurred in acquiring or fullfilling a contracts with a customers. The Group utilized the option for simplified initial application, meaning that those contracts that were not completed by January 1, 2018 were recognized as if they had been accounted for under IFRS 15 from the very beginning. The cumulative effect arising from the transition amounted to RUB 3.1 billion gain (2.5 billion net of tax) and was recognized as an adjustment to the opening balance of equity. The prior period comparatives were not restated. The effects of implementation of IFRS 15 on the Group financial statements as of December 31, 2018 are summarized in Note 3. IFRS 16, “Leases ” – The standard requires lessees to recognize assets and liabilities for all leases and to present the rights and obligations associated with these leases in the statement of financial position. The standard also includes a new definition of a lease and requirements for its presentation, new disclosures requirements and changes in the accounting for sale and leaseback transactions. The Group elected for an early adoption of the IFRS 16 standard effective as of January 1, 2018 concurrent with the adoption of the new IFRS 15 standard on revenue recognition. In applying IFRS 16 for the first time, the Group used the following practical expedients permitted by the standard: · Relief from the requirement to reassess whether a contract is, or contains the lease for contracts existing as of january 1, 2018; · The use of a single discount rate to a portfolio of leases with reasonably similar characteristics; reliance on previous assessments on whether leases are onerous; · Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and · Use of hindsight in determining the lease term if the contract contains options to extend or terminate the lease. As a result of the application of the IFRS 16 standard the Group has recognised an additional lease liability and right-of-use assets in the amount of RUB 141 billion. On initial application the balance relating to leased equipment previously included in property, plant and equipment was reclassified to right-of-use assets. The lease liability previously presented within borrowings has been presented separately. As of January 1, 2018 the weighted average borrowing rate applied by the Group to discount its lease liabilities amounted to 8.83%. The reconciliation between the operating lease commitments disclosed under IAS 17 as of December 31, 2017 discounted at the weighted average rate and lease liability recognized under IFRS 16 at January 1, 2018 is presented below: January 1, 2018 Operating lease commitments 15,135 Operating lease commitments discounted at 8.83% 10,530 Lease liability under IFRS 16 148,897 Difference 138,367 Thereof: Finance lease liability recognized at December 31, 2017 11,056 Lease liability related to exclusive right to use trademark 1,808 Extention options reasonably certain to be exercised 125,503 The most significant difference between the discounted value of the operating lease commitments as of December 31, 2017 and the value of lease liability under IFRS 16 recognised at January 1, 2018, pertains to the requirements of the previously applied standard IAS 17 that in determining its lease operating commitments, the Group only considers future payments under the non-cancellable period of leases. Under the new lease standard, when determining a lease liability, the Group is required to consider existing extension options which are reasonably certain to be exercised. Prior period comparatives were not restated. Lease liabilities as of December 31, 2017 include financial lease obligations recognized in accordance with IAS 17 Leases. Other standards, interpretations and amendments adopted by the Group on January 1, 2018 had no effect on the Group’s consolidated financial statements. Standards, interpretations and amendments in issue but not yet effective The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective: Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures (1) IFRIC 23 Uncertainty over Income Tax Treatments (1) Amendments to IFRS 9 Prepayment Features With Negative Compensation (1) Amendments IFRSs Annual Improvements to IFRSs 2015-2017 Cycle (1) Amendments to Conceptual Framework Conceptual Framework in IFRS standards (2) IFRS 17 Insurance Contracts (3) Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (4) (1) Effective for annual periods beginning on or after January 1, 2019, with earlier application permitted. (2) Effective for annual periods beginning on or after January 1, 2020, with earlier application permitted. (3) Effective for annual periods beginning on or after January 1, 2021, with earlier application permitted. (4) The effective date for these amendments was deferred indefinitely. Early adoption continues to be permitted. These IFRS pronouncements are not expected to have a material impact on the Group's consolidated financial statements. |
Revenue recognition | Revenue is recognized to the extent that the Group has delivered goods or rendered services under an agreement, the amount of revenue can be reliably measured and it is probable that the economic benefits associated with the transaction will flow to the Group. Revenue is measured at the fair value of the consideration receivable, exclusive of value added taxes and discounts. The Group obtains revenue from providing mobile and fixed telecommunication services (access charges, voice and video calls, messaging, interconnect fees, fixed and mobile broadband, tv and musical content and connection fees), financial services, integration services as well as selling equipment, accessories and software. Products and services may be sold separately or in bundle packages. The most significant part of our revenue relates to prepaid contracts. Revenue for access charges, voice and video calls, messaging, interconnect fees and fixed and mobile broadband is recognized as services are rendered. This is based upon either usage (minutes of traffic processed, volume of data transmitted) or passage of time (monthly subscription fees). Revenue from the sale of prepaid credit is deferred until such time as the customer consumes the services or the credit expires. Revenue from the provision of TV and music content is recognized as the Group renders the service and is recorded either at the gross amount billed to the customers or in the amount of commission fee receivable by the Group. Revenue from sales of goods (mainly mobile handsets and other mobile devices) is recognized when the significant risks and rewards of ownership have been transferred to the customer For bundled packages, the Group accounts for individual products and services separately if they are distinct, which means that a product or service, as well as the customer benefit, is separately identifiable from other items in the bundled package and a customer can benefit from it. The arrangement consideration is allocated to each separate product and service, based on its relative fair value. The determined fair value of individual elements is generally based on prices at which the deliverable is regularly sold on a stand-alone basis after considering any appropriate volume discounts. The Group provides retrospective volume discounts under roaming agreements with international and local mobile operators. To estimate the variable consideration in relation to these discounts, the Group uses original data traffic adjusted adjusted on a monthly basis to reflect newly-available information. The resulting liability for the expected future discounts is recognized as a reduction of revenue within trade and other payables in the accompanying consolidated statement of financial position. For contracts that permit customers to return acquired mobile devices, the amount of recognized revenue is adjusted for expected product return or refunds, which are estimated based on the basis of historical data. The respective refund liability is recorded as provision in the accompanying consolidated statement of financial position. Revenue from the provision of financial services mainly relates to interest bearing assets of MTS Bank. Such revenue is recognized on an accrual basis using the effective interest method. Revenue from integration services mainly relates to project type contracts and is determined by reference to the stage of completion of each respective projects. The stage of completion is calculated using the input method – based on the proportion of costs incurred for work performed to date to the estimated total contract costs. Revenue is recognized cumulatively as total revenue under the project multiplied by percentage of completion as at reporting date. When it is probable that total contract costs will exceed the total contract revenue, the expected loss is recognized as an expense immediately. Disaggregation of revenue for the years ended December 31, 2018, 2017 and 2016 is dislosed in the tables below. Disaggregation of revenue: HQ and Year ended December 31, 2018: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 312,649 28,828 6,687 (3,274) 344,889 Fixed line services 60,401 255 199 (59) 60,796 Finance services 11,851 — 0 — 11,851 Integration services 7,392 — 0 (655) 6,737 Sales of goods 69,174 634 643 (1,048) 69,403 Other services 1,269 — — — 1,269 Eliminations (14,652) — — (14,652) Total revenue 448,083 29,717 7,529 (5,037) 480,293 * Comprised of the following segments: Russia convergent, Moscow fixed line, MTS Bank and Other (excluding MTS Armenia) HQ and Year ended December 31, 2017: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 303,991 25,815 9,588 (3,819) 335,575 Fixed line services 60,782 226 160 (68) 61,101 Finance services — — — — — Integration services 5,571 — — (916) 4,655 Sales of goods 52,536 62 381 (829) 52,149 Other services — — — — — Eliminations (10,568) — — — (10,568) Total revenue 412,312 26,103 10,129 (5,632) 442 911 HQ and Year ended December 31, 2016: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 294,988 28,851 12,695 (5,288) 331,246 Fixed line services 61,166 277 98 (56) 61,485 Finance services — — — — — Integration services 5,603 — — (996) 4,607 Sales of goods 49,648 59 319 (821) 49,205 Other services — — — — — Eliminations (10,851) — — — (10,851) Total revenue 400,554 29,187 13,111 (7,160) 435,692 |
Contract balances | Contract balances include trade receivables related to the recognized revenue, contract assets and contract liabilities. Trade receivables represent an unconditional right to receive consideration (primarily in cash). Contract assets represent accrued revenues that have not yet been billed to customers due to certain contractual terms other than the passage of time. This is the case in a bundled offering which combines the sale of a mobile device and the provision of mobile services for a fixed-period, where the mobile device is invoiced at a reduced price leading to the reallocation of a portion of amounts invoiced for mobile communication services to the supply of the mobile phone. The excess of the amount allocated to the mobile phone over the price invoiced is recognized as a contract asset and is thus transferred to trade receivables as the service is invoiced. The other part of contract assets relates to the Group’s rights to consideration for work completed but not yet billed for integration services projects. Contract liabilities represent amounts paid by customers to the Group before receiving the goods and/or services promised in the contract. This is the case for advances received from customers or amounts invoiced or amounts invoiced and paid for goods or services that are yet to be transferred. |
Cost to obtain and fulfill a contract | The Group capitalizes certain incremental costs incurred in acquiring or fullfilling a contract with a customer if the management expects these costs to be recoverable. Costs of acquiring a contract include commissions paid to a third-party distrubutors as well as the associated remuneration of the Group’s commercial employees for obtaining a contract with a customer. These costs are amortized on a straight-line basis over the average subscriber life. Costs to fulfill a contract mainly relate to costs of equipment transferred to the subscribers required for the provision of services. These costs are amortized on a straight-line basis for the shorter of equipment useful life or average subscriber life. |
Income tax | Income taxes of the Group’s Russia-incorporated entities have been calculated in accordance with Russian legislation and are based on the taxable profit for the period. The corporate income tax rate in Russia is 20%. The withholding tax rate on dividends paid within Russia is 13%. The foreign subsidiaries of the Group pay withholding taxes in their respective jurisdictions. Deferred tax assets and liabilities are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases of assets and liabilities that will result in future taxable or deductible amounts. The deferred tax assets and liabilities are measured using the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. |
Cash and cash equivalents | Cash and cash equivalents represent cash on hand and in bank accounts, as well as short-term bank deposits, which have original maturities of less than three months. Other short-term highly liquid investments are treated as cash equivalents only if they are held for the purpose of meeting short-term cash commitments, are readily convertible to known amounts of cash and are subject to insignificant risk of change in value. |
Short-term investments | Short-term investments represent investments in loans and time deposits, which have original maturities of longer than three months and are repayable in less than twelve months, as well as investment in debt and equity securities. Deposits, loans and debt securities are carried at amortized cost as they are held to collect contractual cash flows in the form of payments of principal and interest. Assets in Sistema Capital trust management are carried at fair value through profit and loss, as this portfolio of assets is neither held to collect contractial cash flows nor held both to collect contractual cash flows and to sell financial assets. Short-term investments are presented net of allowance for Expected Credit Losses (“ECL”). Loans to customers issued by MTS Bank are presented separately within Bank deposits and loans. |
Investments in associates and joint ventures | Associates are those entities where the Group exercises significant influence, and they are accounted for using the equity method. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not equate to control or joint control over those policies. These entities are recognized at cost at the time of acquisition and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income. The carrying amount of the investment in such entities may include goodwill as the positive difference between the cost of the investment and Group’s proportionate share in the fair-values of the entity’s identifiable assets and liabilities. The Group presents its share in profits or losses in associates within operating profit if those interests are viewed as part of Group’s core operations. As of December 31, 2018, only MTS Belarus was considered as part of Group’s core operating activity. Shares in profits and losses of other Group’s associates were presented as non-operating items. Joint ventures are joint arrangements whereby the parties that have joint control of the arrangement and have rights to the net assets of the arrangement. The Group recognizes its interest in a joint venture where it has joint control of the investment and accounts for that investment using the equity method. Share in profit and loss of the Group’s joint venture was presented as non-operating item. |
Other investments | Other investments consist primarily of long-term deposits, which are repayable in more than a year, loans, debt securities and equity holdings in private companies. Deposits, loans and notes are carried at amortized cost as they are held to collect contractual cash flows in the form of payments of principal and interest. Loans to customers issued by MTS Bank are presented separately within Bank deposits and loans. Investments in shares of the companies over which the Group does not have control or an ability to exercise significant influence are accounted for at amortized cost. Other investments are presented net of allowance for ECL. |
Trade and other receivables | Trade and other receivables are carried at transaction price. The carrying value of all trade receivables is reduced by appropriate allowances for ECL. For trade receivables the Group applies a simplified approach and calculates ECL based on lifetime expected credit losses. For receivables from subscribers and dealers and partialy for other trade receivables the allowance for ECL is computed using the provision matrix. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome and all reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Generally, receivables from subscribers are written-off if past due for more than 150 days. Receivables other than from subscribers are written-off upon the expiration of the limitation period or before based on results of internal investigations. |
Inventories | Inventories are stated at the lower of cost or net realizable value. Inventory cost is determined using the weighted average cost method. Handsets and accessories held for sale are expensed when sold. The Group regularly assesses its inventories for obsolete and slow-moving stock. |
Property, plant and equipment | Property, plant and equipment, including improvements, are stated at cost. Property, plant and equipment with a useful life of more than one year is capitalized at historical cost and depreciated on a straight-line basis over its expected useful life, as follows: Network and base station equipment: Network infrastructure 5-44 years Other 1.5-21 years Land and buildings: Buildings 20-150 years Leasehold improvements the term of the lease Office equipment, vehicles and other: Office equipment 3-21 years Vehicles 2-7 years Other 2-25 years The estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The gain or loss arising on the disposal of an item of property, plant and equipment is determined as the difference between any sale proceeds and the carrying amount of the asset and is recognised in the consolidated statement of profit or loss. Construction in progress and equipment held for installation is not depreciated until the constructed or installed asset is ready for its intended use. Maintenance and repair costs are expensed as incurred, while upgrades and improvements are capitalized. |
Goodwill | Goodwill represents an excess of consideration transferred plus the fair value of any non-controlling interest (“NCI”) in the acquiree at the acquisition date over the fair values of the identifiable net assets of the acquired entity. Goodwill is not amortized, but is tested for impairment (Note 22). |
Other intangible assets | Other intangible assets primarily consist of billing, telecommunication, accounting and office software as well as numbering capacity, customer base and licenses. These assets are assets with finite useful lives. They are initially recognized at cost and amortized on a straight-line basis over their estimated useful lives. |
Borrowings | Group’s borrowings represent interest bearing bank loans and bonds issued in the capital markets. Borrowings are initially recorded at fair value plus transaction costs that are directly attributable to the issue of the financial liability and subsequently measured at amortized cost, using the effective interest rate method. |
Rights-of-use assets and lease obligations | The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease aggreements (including sub-lease and lease of intangible assets), which conveys the right to control the use of identified assets for a period of time in exchange for consideration, except for short-term leases (with a lease term of 12 months or less). For these leases, the Group recognizes the lease payments as operating expenses over the term of the lease. When identifying the lease, the Group uses practical expedient of IFRS 16 permitting the lessee not to separate the non-lease components of the contract and, instead, to account for any lease and associated non-lease components as a single arrangements. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate of the Group. The incremental borrowing rate of the Group is determined based on the credit spreads of the Group debt instruments in relation to the zero-coupon yield curve for government securities. The lease payments include fixed payments, variable payments that depend on index or rate, amounts expected to be paid under residual value guarantee, the execise price under a purchase option the Group is reasonably certain to exercise as well as early termination fees unless the Group is reasonably certain not to terminate earlier. Variable payments that depend on external factors (such as sale volume of a particular retail store) are expensed as incurred. Lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. A corresponding adjustment is made to the carrying amount of the right-of-use assets, or is recorded in profit or loss if the carrying amount of right-of-use asset had been reduced to zero. Right-of-use assets are initially measured at cost, which is the initial amount of lease liability adjusted for any lease payments made at or before the commencement date, plus any direct costs incurred and an estimate of costs to dismantle, remove or restore the underlying asset less any lease incentives received. Right-of-use assets are subsequently amortized on a straight-line basis over the expected lease term. The lease term corresponds to the non-cancellable period of each contract except in cases where the Group is reasonably certain of exercising renewal or termination options. When assessing the lease term, the Group considers all facts and circumstances that create an economic incentive for the Group to exercise the option to extend the lease, such as useful life of the asset located on the leased site, sites replacement statistics, sequence of technology change, profitability of our retail stores as well as costs to terminate or enter into lease contracts. |
Leases accounted for under IAS 17 | Under IAS 17 leases were classified as finance or operating. Leases were classified as finance whenever the terms of the lease transfered substantially all risks and rewards incidental to ownership of the leased asset to the Group. At the commencement of the lease term, the leased asset was measured at the lower of fair value or present value of the future minimum lease payments and was depreciated over the lease term. The corresponding liability was recognized in the consolidated statement of financial position within borrowings. The discount rate used in the calculating the present value of minimum lease payments was the interest rate implicit in the lease. If there was no interest rate in the lease, the Group’s incremental borrowing rate was used. Payments for lease contracts classified as operating were expensed on a straight-line basis over the term of the lease. |
Provisions | Provisions – Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of past event, and it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the managements’ best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect is material. The main provisions the Group holds are in relation to employees’ bonuses and other rewards (including retirement benefits and cash-settled share based payments), decommissioning and restoration obligation, tax provisions as well as legal claims. |
Provision for decommissioning and restoration | Provision for decommissioning and restoration – The Group calculates a provision for decommissioning and restoration when the Group has a legal or constructive obligation in connection with the retirement of tangible long-lived assets. The Group’s obligations relate primarily to the cost of removing its equipment from sites. The Group records the present value of provision for decommissioning and restoration as non-current provisions in the consolidated statement of financial position. |
Retirement benefits | Retirement benefits – MGTS, a subsidiary of the Group, has historically offered its employees certain benefits upon and after retirement, which form a defined benefit plan. The cost of providing benefits is determined using the projected unit credit method with actuarial valuation being carried out at the end of each reporting period. |
Hedging activities | Hedging activities – The Group uses derivative instruments, including interest rate and foreign currency swaps, to manage foreign currency and interest rate risk exposures. The Group measures derivatives at fair value and recognizes them as either other current or other non-current financial assets or liabilities in the consolidated statement of financial position. Cash flows from derivatives are classified according to their nature. The Group reviews related fair value hierarchy classifications on a quarterly basis. The fair value measurement of the Group’s derivative instruments is based on the observable yield curves for similar instruments. The Group determines the existence of an economic relationship between the hedging instruments and hedged item based on the currency, amount and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item using the qualitative method. The hedge ratio applied by the Group is the same as that resulting from the quantity of the hedged item and the quantity of the hedging instrument actually used to hedge that quantity of the hedged item. The Group designates derivatives as either fair value hedges or cash flow hedges in case the required criteria are met. Fair value hedges – Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in profit or loss immediately together with any changes in the fair value of the hedged asset or liability that are attributed to the hedged risk. Cash flow hedges – The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges are recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss. Gains or losses accumulated in other comprehensive income are immediately reclassified into the consolidated statement of profit or loss when related hedged transactions affects earnings. For derivatives that do not meet the conditions for hedge accounting, gains and losses from changes in the fair value are recorded immediately in profit or loss. Assets and liabilities related to multiple derivative contracts with one counterparty are not offset by the Group. |
Liability under put option agreement | Liability under put option agreement – To optimize the structure of business acquisitions and to defer payment of the purchase price, the Group enters into put and call option agreements to acquire the remaining non-controlling stakes in newly acquired subsidiaries. Upon initial recognition, the commitment to purchase non-controlling interests is recognized as a financial liability for the present value of the redemption amount, which approximates its fair value. Subsequent changes in the value of the commitment are recognized in profit or loss for the reporting period. |
Netting | Netting – The Group offsets its financial assets and financial liabilities only if it has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. |
Fair value of financial instruments | Fair value of financial instruments – Fair value of financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows: · Level 1 – Quoted prices in active markets for identical assets or liabilities; · Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities; · Level 3 – No observable pricing inputs in the market. Financial assets and financial liabilities are classified in the three-tier hierarchy based on the lowest level of input that is significant to the fair value measurements. The Group’s assessment of the significance of a particular input to the fair value measurements requires judgment which may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS | |
Summary of ownership interests in significant subsidiaries | Accounting December 31, December 31, method 2018 2017 RTC Consolidated 100.0 % 100.0 % Vodafone Ukraine (VF Ukraine) Consolidated 100.0 % 100.0 % MTS Turkmenistan (Note 11) Consolidated 100.0 % 100.0 % Sibintertelecom Consolidated 100.0 % 100.0 % NVision Group Consolidated 100.0 % 100.0 % Sitronics Telecom Solutions Consolidated 100.0 % 100.0 % NVision Czech Republic Consolidated 100.0 % 100.0 % Sputnikovoe TV Consolidated 100.0 % 100.0 % Stream Consolidated 100.0 % 100.0 % Dega Consolidated 100.0 % 100.0 % Stream Digital Consolidated 100.0 % 100.0 % MTS Energo Consolidated 100.0 % 100.0 % Bashkortostan Cellular Communications (BCC) (1) Consolidated — 100.0 % Praliss Enterprises Limited Consolidated 100.0 % 100.0 % MDTZK LLC (Ticketland) Consolidated 100.0 % — IT Grad Consolidated 100.0 % — Metro-Telecom Consolidated 95.0 % 95.0 % MGTS Group Consolidated 94.7 % 94.7 % MTS Armenia Consolidated 80.0 % 80.0 % Kulturnaya Sluzhba (Ponominalu) Consolidated 78.2 % — Navigation Information Systems Group Consolidated 77.7 % 77.7 % MTS Bank (Note 5) Consolidated 55.4 % 26.6 % Oblachny Retail LLC Consolidated 50.8 % 50.8 % MTS International Funding Limited (2) (“MTS International”) Consolidated SE SE MTS Belarus (Note 16) Equity 49.0 % 49.0 % Sistema Capital Equity 30.0 % 30.0 % Zifrovoe TV Equity 20.0 % 20.0 % OZON Holdings Limited (Note 16) Equity 18.7 % 11.2 % YOUDO Web Technologies (Note 16) Equity 13.7 % — (1) A wholly-owned subsidiary, through which the Group repurchases its own shares. (2) Merged with MTS PJSC on November 15, 2018 (3) A company organized and existing as a private limited company under the laws of Ireland. The Group does not have any equity in MTS International. It was established for the purpose of raising capital through the issuance of debt securities on the Irish Stock Exchange followed by transferring the proceeds through a loan facility to the Group. In 2010 and 2013, MTS International issued USD 750 million 8.625% notes due in 2020 and USD 500 million 5.0% notes due in 2023, respectively (Note 15). The notes are guaranteed by MTS PJSC in the event of default. MTS International does not perform any other activities except those required for notes servicing. The Group bears all costs incurred by MTS International in connection with the notes’ maintenance activities. Accordingly, the Group concluded that it exercises control over the entity. |
Schedule of classification of financial assets in accordance with IFRS 9 and IAS 39 | Classification December 31, January 1, IAS 39 IFRS 9 2017 2018 Trade and other receivables Loans and receivables At amortized cost 28,017 28,017 Accounts receivable, related parties Loans and receivables At amortized cost 11,358 11,358 Cash and Cash equivalents At amortized cost At amortized cost 30,586 30,586 Assets in Sistema Capital trust management At fair value through profit or loss At fair value through profit or loss 9,600 9,600 Notes Available-for-sale At fair value through OCI 57 57 Cross-currency swap designated as cash flow hedge At fair value through OCI At fair value through OCI 8,403 8,403 Bank deposits Loans and receivables At amortized cost 27,836 27,836 Loans Loans and receivables At amortized cost 5,415 4,935 Notes Loans and receivables At amortized cost 8,480 8,480 Other Loans and receivables At amortized cost 1,810 1,810 Total 131,562 131,082 |
Summary of reconciliation between operating lease commitments discounted at the weighted average rate and lease liability recognized | January 1, 2018 Operating lease commitments 15,135 Operating lease commitments discounted at 8.83% 10,530 Lease liability under IFRS 16 148,897 Difference 138,367 Thereof: Finance lease liability recognized at December 31, 2017 11,056 Lease liability related to exclusive right to use trademark 1,808 Extention options reasonably certain to be exercised 125,503 |
Schedule of not applied new and revised IFRSs that have been issued but not yet effective | Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures (1) IFRIC 23 Uncertainty over Income Tax Treatments (1) Amendments to IFRS 9 Prepayment Features With Negative Compensation (1) Amendments IFRSs Annual Improvements to IFRSs 2015-2017 Cycle (1) Amendments to Conceptual Framework Conceptual Framework in IFRS standards (2) IFRS 17 Insurance Contracts (3) Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (4) (1) Effective for annual periods beginning on or after January 1, 2019, with earlier application permitted. (2) Effective for annual periods beginning on or after January 1, 2020, with earlier application permitted. (3) Effective for annual periods beginning on or after January 1, 2021, with earlier application permitted. (4) The effective date for these amendments was deferred indefinitely. Early adoption continues to be permitted. |
EFFECT FROM IFRS 15 IMPLEMENT_2
EFFECT FROM IFRS 15 IMPLEMENTATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
EFFECT FROM IFRS 15 IMPLEMENTATION | |
Statement of financial position after adoption of new standards | As if IFRS 15 was not IFRS 15 As applied adjustments reported ASSETS NON-CURRENT ASSETS: Property, plant and equipment 278,002 (1,559) 276,443 Other intangible assets 88,945 7,017 95,962 Investments in associates 10,772 (37) 10,735 Other non financial assets 3,424 1,614 5,038 Total non-current assets 640,024 7,035 647,059 CURRENT ASSETS: Other non financial assets 1,238 100 1,338 Total current assets 268,834 100 268,934 TOTAL ASSETS 908,858 7,135 915,993 EQUITY AND LIABILITIES EQUITY: Retained earnings 108,243 2,703 110,946 Accumulated other comprehensive loss (1,158) 94 (1,064) Equity attributable to owners of the Company 62,477 2,797 65,274 Non-controlling interests 12,269 22 12,291 Total equity 74,746 2,819 77,565 NON-CURRENT LIABILITIES: Deferred tax liabilities 23,740 699 24,439 Total non-current liabilities 542,258 699 542,957 CURRENT LIABILITIES: Contract liabilities Total current liabilities TOTAL EQUITY AND LIABILITIES |
Statement of profit or loss after adoption of new standards | As if IFRS 15 was not IFRS 15 As applied adjustments reported Service revenue 413,067 (2,177) 410,890 Revenue 482,470 (2,177) 480,293 Cost of services 114,458 (2,057) 112,401 Cost of goods 64,169 (300) 63,869 Selling, general and administrative expenses 91,887 (3,941) 87,946 Depreciation and amortization 100,687 3,901 104,588 Operating profit 115,965 220 116,185 Profit before tax 83,631 220 83,851 Income tax expense 16,925 44 16,969 Profit for the year 66,706 176 66,882 Profit for the period attributable to: Owners of the Company 6,672 176 6,848 |
Statement of cash flows after adoption of new standards | As if IFRS 15 was not IFRS 15 As applied adjustments reported CASH FLOWS FROM OPERATING ACTIVITIES: Profit for the year 7,656 176 7,832 Adjustments for: Depreciation and amortization 100,687 3,901 104,588 Income tax expense 16,925 44 16,969 Movements in operating assets and liabilities: Decrease in trade and other payables and other current liabilities (10,896) (266) (11,162) NET CASH PROVIDED BY OPERATING ACTIVITIES 150,535 3,855 154,390 CASH FLOWS FROM INVESTING ACTIVITIES: Cost to obtain and fulfill contracts, paid — (4,764) (4,764) Other investing activities (909) 909 — NET CASH USED IN INVESTING ACTIVITIES (74,534) (3,855) (78,389) |
BUSINESS ACQUISITIONS AND DIS_2
BUSINESS ACQUISITIONS AND DISPOSALS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
BUSINESS ACQUISITIONS AND DISPOSALS | |
Schedule of liabilities and indemnification assets in respect to deferred payments | KS MDTZK ProgTech Expected timing of deferred payment January, 2019 February, 2019 August, 2019 – August, 2020 Deferred payment per agreement 78 60 32 Provision for tax liabilities related to pre-acquisition period as of acquisition date (134) (125) (29) Liability on deferred payment — — (3) Indemnification asset 56 65 — The Group recognized the following liabilities and indemnification assets in respect to deferred payments on aforementioned acquisitions as of December 31, 2018: KS MDTZK ProgTech Deferred payment per agreement 78 60 32 Provision for tax liabilities related to the pre-acquisition period as of December 31, 2018 (49) (67) (29) Liability on deferred payment (29) — (3) Indemnification asset — 7 — |
Schedule of details of acquisitions of subsidiaries | The following table summarizes the details of acquisitions of subsidiaries under common control finalized in 2018: Consideration Assets paid net acquired of cash Cash other than Liabilities Acquired company acquired* acquired cash assumed Dekart 4,658 — 3,406 125 Serebryaniy Bor 1,711 — 383 — MTS Bank 6,873 1,401 * 126,180 128,165 * Included in consolidated statement of cash flows within cash flows from financing activities as transactions with entities under common control |
Schedule of business acquisitions proforma financial data | 2018 (MTS Bank, MDTZK, Kulturnaya Sluzhba, Progtech, Dekart, IT Grad, 2017 (BCC, 2016 Serebryaniy Oblachny Retail, (SMARTS- Pro forma: Bor) Praliss) Yoshkar-Ola) Net revenues 491,936 443,178 435,694 Net income 8,194 55,881 48,465 |
Companies acquired in 2018 | |
BUSINESS ACQUISITIONS AND DISPOSALS | |
Schedule of purchase price allocation | KS MDTZK ProgTech IT-Grad Goodwill 479 2,033 213 1,877 Customer base 37 727 123 643 Trademark 129 779 — — Other non-current assets 43 145 172 32 Current assets 117 202 15 44 Cash and cash equivalents 39 542 28 13 Current liabilities (383) (868) (80) (59) Liability under put option agreement over non-controlling interests (106) — — — Non-current liabilities (34) (370) (76) (128) Total consideration 321 3,190 395 2,422 Including: Fair value of contingent consideration — 3 907 Cash paid 1,515 |
Companies acquired in 2017 | |
BUSINESS ACQUISITIONS AND DISPOSALS | |
Schedule of purchase price allocation | BCC Oblachny Retail Praliss Goodwill 62 524 208 Licenses 260 — — Other non-current assets 21 181 132 Current assets 5 23 — Cash and cash equivalents 13 420 — Current liabilities (15) (123) — Liability under put option agreement over non-controlling interests — (402) — Non‑current liabilities (54) (33) (27) Total consideration 292 590 313 Including: Fair value of contingent consideration and earn-out payments 72 10 93 Additional contribution — 420 Cash paid 220 160 220 |
Companies acquired in 2016 | |
BUSINESS ACQUISITIONS AND DISPOSALS | |
Schedule of purchase price allocation | Smarts- Yoshkar-Ola Cash and cash equivalents 5 Current assets 5 Licenses 323 Other non-current assets 14 Current liabilities (30) Non-current liabilities (69) Gain from bargain purchase (included in other operating income in the consolidated statement of profit or loss) (235) Total consideration 13 Including: Contingent consideration 3 Cash paid 10 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
Schedule of financial information by reportable segments | Year ended December 31, 2018: Russia Moscow MTS HQ and Convergent fixed line Ukraine Bank Total Other elimination Consolidated Revenue External customers 386,838 34,348 28,826 11,313 19,550 (582) 480,293 Intersegment 6,258 4,498 891 538 12,780 (24,965) — Total revenue 393,096 38,846 29,717 11,851 32,330 (25,547) 480,293 Operating profit 106,296 12,695 6,658 1,291 1,072 (11,827) 116,185 Depreciation and amortization (82,457) (10,867) (9,346) (547) (103,217) (3,620) 2,249 (104,588) Other disclosure: Capital expenditures 67,863 6,306 15,151 683 13,596 — 103,599 Year ended December 31, 2017: Russia Moscow HQ and Convergent fixed line Ukraine Total Other elimination Consolidated Revenue External customers 365,846 34,350 24,992 425,188 17,618 105 442,911 Intersegment 5,136 4,683 1,111 10,930 12,785 (23,715) — Total revenue 370,982 39,033 26,103 436,118 30,403 (23,610) 442,911 Operating profit 93,821 8,801 5,258 107,880 (871) (10,909) 96,100 Depreciation and amortization 59,942 10,642 6,106 76,690 3,481 (259) 79,912 Other disclosure: Capital expenditures 65,790 7,403 10,573 83,766 2,392 — 86,158 Year ended December 31, 2016: Russia Moscow HQ and Convergent fixed line Ukraine Total Other elimination Consolidated Revenue External customers 355,056 34,796 27,026 416,878 18,689 125 435,692 Intersegment 4,849 4,871 2,161 11,881 14,423 (26,304) — Total revenue 359,905 39,667 29,187 428,759 33,112 (26,179) 435,692 Operating profit 81,484 10,850 3,599 95,933 3,523 (11,787) 87,669 Depreciation and amortization 60,087 10,900 6,304 77,291 4,395 (104) 81,582 Other disclosure: Capital expenditures 61,208 7,316 7,666 76,190 3,995 — 80,185 |
Schedule of financial information by geographic areas | For the year ended December 31, Revenue 2018 2017 2016 Russia 440,899 405,365 392,764 Other 39,394 37,546 42,928 Total revenue 480,293 442,911 435,692 As of As of December 31, December 31, Non-current assets (1) 2018 2017 Russia 357,361 339,693 Other 54,151 37,048 Total non-current assets: 411,512 376,741 (1) Comprises property, plant and equipment, goodwill and other intangible assets. |
Schedule of disaggregation of revenue | Year ended Russia Moscow HQ and December 31, 2018: Convergent fixed line Ukraine MTS Bank Total Other elimination Consolidated Revenue Mobile services 304,049 1,487 27,951 — 333,487 6,663 104 340,254 Fixed line services 22,939 32,739 241 — 55,919 377 — 56,296 Finance services — — — 11,313 11,313 — 240 11,553 Integration services 444 5 — — 449 1,089 — 1,538 Sales of goods 59,406 117 634 — 60,157 10,172 (926) 69,403 Other services — — — — — 1,249 — 1,249 External Customers 386,838 34,348 28,826 11,313 461,325 19,550 (582) 480,293 Intersegment 6,258 4,498 891 538 12,185 12,780 (24,965) — Total revenue 393,096 38,846 29,717 11,851 473,510 32,330 (25,547) 480,293 Thereof: Recognised over time 327,432 34,231 28,192 11,313 401,168 9,378 (582) 409,964 Recognised at point of time 59,406 117 634 — 60,157 10,172 — 70,329 386,838 34,348 28,826 11,313 461,325 19,550 (582) 480,293 Year ended Russia Moscow HQ and December 31, 2017: Convergent fixed line Ukraine MTS Bank Total Other elimination Consolidated Revenue Mobile services 297,273 798 24,722 — 322,793 10,237 105 333,135 Fixed line services 22,358 33,453 208 — 56,019 353 — 56,372 Finance services — — — — — — — — Integration services 191 — — — 191 1,062 — 1,253 Sales of goods 46,024 99 62 — 46,185 5,966 — 52,151 Other services — — — — — — — — External Customers 365,846 34,350 24,992 — 425,188 17,618 105 442,911 Intersegment 5,136 4,683 1,111 — 10,930 12,785 (23,715) — Total revenue 370,982 39,033 26,103 — 436,118 30,403 (23,610) 442,911 Thereof: Recognised over time 319,822 34,251 24,930 — 379,003 11,652 105 390,760 Recognised at point of time 46,024 99 62 — 46,185 5,966 — 52,151 365,846 34,350 24,992 — 425,188 17,618 105 442,911 Year ended Russia Moscow HQ and December 31, 2016: Convergent fixed line Ukraine MTS Bank Total Other elimination Consolidated Revenue Mobile services 288,547 425 26,724 — 315,696 12,395 125 328,216 Fixed line services 21,685 34,346 243 — 56,274 284 — 56,558 Finance services — — — — — — — — Integration services 185 — — — 185 1,527 — 1,712 Sales of goods 44,639 25 59 — 44,723 4,483 — 49,206 Other services — — — — — — — — External Customers 355,056 34,796 27,026 — 416,878 18,689 125 435,692 Intersegment 4,849 4,871 2,161 — 11,881 14,423 (26,304) — Total revenue 359,905 39,667 29,187 — 428,759 33,112 (26,179) 435,692 Thereof: Recognised over time 310,417 34,771 26,967 — 372,155 14,206 125 386,486 Recognised at point of time 44,639 25 59 — 44,723 4,483 — 49,206 355,056 34,796 27,026 — 416,878 18,689 125 435,692 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Schedule of disaggregation of revenue | HQ and Year ended December 31, 2018: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 312,649 28,828 6,687 (3,274) 344,889 Fixed line services 60,401 255 199 (59) 60,796 Finance services 11,851 — 0 — 11,851 Integration services 7,392 — 0 (655) 6,737 Sales of goods 69,174 634 643 (1,048) 69,403 Other services 1,269 — — — 1,269 Eliminations (14,652) — — (14,652) Total revenue 448,083 29,717 7,529 (5,037) 480,293 * Comprised of the following segments: Russia convergent, Moscow fixed line, MTS Bank and Other (excluding MTS Armenia) HQ and Year ended December 31, 2017: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 303,991 25,815 9,588 (3,819) 335,575 Fixed line services 60,782 226 160 (68) 61,101 Finance services — — — — — Integration services 5,571 — — (916) 4,655 Sales of goods 52,536 62 381 (829) 52,149 Other services — — — — — Eliminations (10,568) — — — (10,568) Total revenue 412,312 26,103 10,129 (5,632) 442 911 HQ and Year ended December 31, 2016: Russia* Ukraine Other elimination Consolidated Revenue Mobile services 294,988 28,851 12,695 (5,288) 331,246 Fixed line services 61,166 277 98 (56) 61,485 Finance services — — — — — Integration services 5,603 — — (996) 4,607 Sales of goods 49,648 59 319 (821) 49,205 Other services — — — — — Eliminations (10,851) — — — (10,851) Total revenue 400,554 29,187 13,111 (7,160) 435,692 |
Schedule of receivables, contract assets and contract liabilities from contracts with customer | As of December 31, January 1, 2018 2018 Receivables 28,097 14,271 Contract assets 105 — Total assets 28,202 14,271 Less current portion (28,192) (14,271) Total non-current assets 10 — Contract liabilities (22,155) (18,461) Thereof: Mobile and fixed telecommunication services (20,094) (17,156) Other services (1,741) (1,084) Loyalty programme (320) (221) Total liabilities (22,155) (18,461) Less current portion 21,597 17,696 Total non-current liabilities (558) (765) |
Schedule of changes in the contract assets and the contract liabilities | Contract Contract assets liabilities Balance as of January 1, 2018 (18,461) Revenue recognised that was included in the contract liability balance at the beginning of the period — 10,999 Increase due to cash received, excluding amount recognised as revenue during the period — (14,390) Transfers from contract assets to receivables Effect of changes in estimates 105 — Business combinations — (303) Balance as of December 31, 2018 105 (22,155) |
Schedule of revenue related to performance obligations that are unsatisfied | 2019 2020-2024 2025-2029 After 2029 Total Mobile telecommunication services (19,536) (541) (17) — (20,094) Other services (1,741) (1,741) Loyalty programme (320) — — — (320) |
Schedule of capitalized cost to obtain and fulfill contracts | December 31, January 1, 2018 2018 Cost to obtain contracts 7,017 6,829 Cost to fulfull contracts 1,614 966 |
SELLING, GENERAL AND ADMINIST_2
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | |
Schedule of selling, general and administrative expenses | 2018 2017 2016 Salaries and social contributions 46,769 44,605 44,347 Advertising and marketing expenses 10,090 9,185 10,480 General and administrative expenses 8,127 8,321 7,007 Taxes other than income tax 4,010 3,896 3,806 Cash collection commission 3,724 3,689 3,311 Universal service fund 3,535 3,462 3,412 Dealers commission 3,387 6,718 6,740 Utilities and maintenance 2,852 9,361 9,092 Consulting expenses 2,067 1,975 1,618 Billing and data processing 1,243 1,292 1,485 Other 2,142 2,682 2,748 Total 87,946 95,186 94,046 |
FINANCE INCOME AND COSTS (Table
FINANCE INCOME AND COSTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FINANCE INCOME AND COSTS | |
Schedule of finance income and costs | 2018 2017 2016 Interest expense: – Loans and notes 25,613 22,131 22,982 – Amortization of debt issuance costs 415 623 683 – Lease obligations (1) 13,917 954 855 – Provisions: unwinding of discount 223 91 94 Total interest expense 40,168 23,799 24,614 Loss on financial instruments 1,008 2,486 25 Other finance costs 63 86 2,885 Total finance costs 41,239 26,371 27,524 Less: amounts capitalized on qualifying assets (2) (460) (307) (388) Less: debt modification and other gain (2,614) — — Finance costs 38,165 26,064 27,136 Finance income on loans and receivables – Interest income on bank deposits 5,182 4,818 4,277 – Interest income on loans issued 357 330 510 – Other finance income 442 400 486 Finance income 5,981 5,548 5,273 Net finance costs 32,184 20,516 21,863 (1) Starting from January 1, 2018 the Group has applied IFRS 16, “Leases” (2) The annual weighted average capitalization rates of 8.2%, 8.2% and 8.3% were used to determine the amount of capitalized interest for the years ended December 31, 2018, 2017 and 2016, respectively . |
OPERATIONS IN UZBEKISTAN (Table
OPERATIONS IN UZBEKISTAN (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OPERATIONS IN UZBEKISTAN | |
Schedule of discontinued operations accompanying in the consolidated statements of profit and loss and cash flows | Results of discontinued operation Year ended December 31, 2016 Revenue 5,115 Expenses (6,602) Loss before tax (1,487) Income tax gain (note 12) 192 Loss for the period (1,295) Loss on sale of discontinued operations (2,726) Loss from discontinued operations (4,021) Loss attributable to non-controlling interests (654) Loss to owners of the Company (3,367) Basic loss per share (1.69) Diluted loss per share (1.69) Cash flows from (used in) discontinued operation Year ended December 31, 2016 Net cash used in operating activities (543) Net cash used in investing activities (1,253) Net cash provided by financing activities 1,234 |
Schedule of carrying amounts of UMS's net assets and reconciliation of the loss on disposal | As of August 5, 2016, the carrying amounts of UMS’s net assets and reconciliation of the loss on disposal were as follows: Property, plant and equipment (6,960) Other intangible assets (2,922) Other non-current assets (2,577) Cash and cash equivalents (378) Other current assets (1,359) Non-current liabilities 5,113 Current liabilities 2,484 Non-controlling interest 1,787 Accumulated other comprehensive income 2,086 Consideration received — Loss on disposal of UMS (2,726) |
OPERATIONS IN TURKMENISTAN (Tab
OPERATIONS IN TURKMENISTAN (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OPERATIONS IN TURKMENISTAN | |
Schedule of total effect of impairment charges on the Group's statement of profit or loss | Impairment of long-lived assets 3,204 Current provision for income tax 100 Provision for doubtful accounts 74 Other operating expenses 37 Taxes other than income tax 20 Deferred income tax (69) 3,366 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAX | |
Schedule of significant components of income tax expense | 2018 2017 2016 Current income tax charge 19,881 20,712 15,177 Prior period tax adjustments (133) 673 98 Total current income tax 19,748 21,385 15,275 Deferred tax (2,779) (2,408) (137) Income tax expense on continuing operations 16,969 18,977 15,138 Tax effect from the discontinued operations (Note 10) — — (192) Total tax expense for the period 16,969 18,977 14,946 |
Reconciliation of the effective income tax rate to the statutory income tax rate | 2018 2017 2016 Statutory income tax rate for the year 20.0 % 20.0 % 20.0 % Adjustments: Expenses not deductible for tax purposes 0.9 1.7 2.1 Prior periods tax effects (0.2) 0.8 0.1 Different tax rate of foreign subsidiaries (0.3) — (0.5) Earnings distribution from subsidiaries 0.1 0.9 0.2 Change in fair value of derivative financial instruments — 0.4 0.3 Derecognition of deferred tax assets 0.1 0.7 — Other (0.4) 0.6 0.2 Effective income tax rate 20.2 % 25.1 % 22.4 % |
Schedule of deferred income tax assets and liabilities | December 31, December 31, 2018 2017 Deferred tax assets 11,190 5,545 Deferred tax liabilities (24,439) (23,773) Net deferred tax liabilities (13,249) (18,228) |
Schedule of movements in deferred tax assets and liabilities | Recognised in other January 1, Recognised in comprehensive Effect of Effect of December 31, 2017 profit / loss income acquisitions derecognition 2017 Assets / (liabilities) arising from tax effect of: Depreciation of property, plant and equipment (19,301) 599 (39) — (180) (18,921) Other intangible assets (7,094) (290) (8) (59) (3) (7,454) Potential distributions from/ to Group’s subsidiaries/ associates (3,987) (175) 119 — — (4,043) Licenses (2,099) 80 25 — — (1,994) Customer base (660) 124 — — — (536) Accrued expenses for services 6,382 761 (9) — (3) 7,131 Lease obligations 2,199 164 — — — 2,363 Loss carryforward 1,917 226 — — — 2,143 Provision for investment in Delta Bank in Ukraine 653 — (52) — — 601 Deferred connection fees 540 33 (11) — — 562 Hedge and other 989 1,077 (141) — (5) 1,920 Net deferred tax liability (20,461) 2,599 (116) (59) (191) (18,228) Adjustment on Recognised in initial application other December 31, of new IFRS Recognised in comprehensive Effect of December 31, 2017 standards profit/loss income acquisitions 2018 Assets / (liabilities) arising from tax effect of: Depreciation of property, plant and equipment (18,921) 1,632 513 143 395 (16,238) Other intangible assets (7,454) — 1,218 9 147 (6,080) Potential distributions from/ to Group’s subsidiaries/ associates (4,043) — 418 (394) — (4,019) Licenses (1,994) — 148 (71) — (1,917) Customer base (536) — 279 — (449) (706) Capitalization of cost to obtain and fulfill contracts — (1,290) (31) — — (1,321) Accrued expenses for services 7,131 — (603) 51 426 7,005 Right-of-use assets and lease obligations 2,363 (1,632) 1,833 — — 2,564 Loss carryforward 2,143 — 1,362 — 751 4,256 Provision for investment in Delta Bank in Ukraine 601 — (319) 85 — 367 Contract liabilities 562 717 (340) 15 — 954 Debt modification — (597) (478) — — (1,075) Hedge and other 1,920 142 (1,221) 58 2,062 2,961 Net deferred tax liability (18,228) (1,028) 2,779 (104) 3,332 (13,249) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
EARNINGS PER SHARE | |
Schedule of computation of earnings per share | 2018 2017 2016 Numerator: Profit for the year from continuing operations, attributable to the owners of the company (before IFRS 15 application) 65,722 56,042 51,841 Profit for the year from continuing operations attributable to the owners of the company 65,898 56,042 51,841 Loss for the year from discontinued operations attributable to the owners of the company (59,050) — (3,367) Denominator, in thousands: Weighted-average ordinary shares outstanding 1,873,563 1,953,779 1,989,282 Employee stock options 2,158 1,779 1,412 Weighted-average diluted shares outstanding 1,875,721 1,955,558 1,990,694 Earnings per share – basic, RUB (before the application of IFRS 15) 3.56 28.68 24.37 Basic EPS from continuing operations 35.08 28.68 26.06 Basic EPS from discontinued operations (31.52) — (1.69) Earnings per share – diluted, RUB (before the application of IFRS 15) 3.56 28.66 24.35 Diluted EPS from continuing operations 35.04 28.66 26.04 Diluted EPS from discontinued operations (31.48) — (1.69) Earnings per share – basic, RUB 3.65 28.68 24.37 Basic EPS from continuing operations 35.17 28.68 26.06 Basic EPS from discontinued operations (31.52) — (1.69) Earnings per share – diluted, RUB 3.65 28.66 24.35 Diluted EPS from continuing operations 35.13 28.66 26.04 Diluted EPS from discontinued operations (31.48) — (1.69) |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CASH AND CASH EQUIVALENTS | |
Schedule of cash and cash equivalents | December 31, December 31, 2018 2017 Cash and cash equivalents at banks and on hand in: Russian Rubles 17,012 16,879 US Dollars 4,873 1,119 Euro 2,073 983 Ukraine Hryvna 1,548 403 Turkmenian Manat 721 1,267 Other 954 318 Short-term deposits with an original maturity of less than 92 days: Russian Rubles 52,764 6,595 Ukraine Hryvna 3,215 352 Euro 915 — US Dollars — 2,603 Other 67 Total cash and cash equivalents |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SHORT-TERM INVESTMENTS | |
Schedule of short-term investments | December 31, December 31, Category 2018 2017 Notes At amortized cost 15,191 7,605 Deposits At amortized cost 14,388 27,826 Assets in Sistema Capital trust management (Notes 28, 31) Financial asset at fair value through profit and loss 11,644 9,600 Loans At amortized cost 7,050 5,669 Notes Financial asset at fair value through other comprehensive income 70 57 Short-term investments (Gross) 48,343 50,757 Allowance for ECL (480) (1) — Total short-term investments 47,863 50,757 (1) ECL Allowance related to loan granted to Mr. Pierre and Mr. Moussa Fattouche recognized at January 1, 2018 as a result of IFRS 9 implemetation . |
INVESTMENTS IN ASSOCIATES AND_2
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments in associates and joint ventures | |
Schedule of investments in associates and joint ventures | Country of December 31, December 31, operations Operating activity 2018 2017 MTS Belarus Belarus telecommunications 4,051 3,660 MTS Bank Russia banking — 2,902 OZON Holdings Ltd Russia e-commerce 4,797 2,517 Equity investments in other unquoted companies Russia digital TV, asset management, etc. 1,887 373 Total investments in associates 10,735 9,452 |
Schedule of details of substance of transaction | Number of ordinary Increase of Consideration shares the Group’s Date of transaction Substance of transaction paid, RUB mln acquired share September 2017 Participation in additional share issuance 19 5,193 0.16 % October 2017 Participation in additional share issuance 28 7,698 0.23 % March 2018 Participation in additional share issuance 1,158 141,498 2.5 % May 2018 Purchase from non-controlling shareholder 943 114,616 3.0 % July 2018 Purchase from non-controlling shareholder 85 11,209 0.32 % September 2018 Exercise of the put option 575 70,978 0.86 % September 2018 Purchase from non-controlling shareholder 289 31,810 0.81 % |
MTS Bank | |
Investments in associates and joint ventures | |
Schedule of reconciliation of summarized financial information to the carrying amount of the Group's interest in associate | December 31, 2017 Total assets 142,405 Total liabilities (121,169) Non-controlling interests — Total identifiable net assets attributable to the Group 21,236 The Group’s share in associate 26.6 % The Group’s share of identifiable net assets 6,127 Impairment of investment in associate (3,225) Carrying amount of the Group’s interest 2,902 |
Schedule of the composition of the Group's share of loss/(income) of associate | Year ended December 31, 2018* 2017 2016 Total interest income (9,289) (14,204) (16,555) Total interest expense 3,799 6,505 8,364 Net loss for the period 609 593 4,495 The Group’s share of the loss of the associate for the period 162 109 1,179 Other comprehensive loss for the period 614 2,000 1,614 Total comprehensive loss for the period 1,223 2,593 6,109 The Group’s share of the total comprehensive loss for the period 326 690 1,608 * Prior to discontinuing use of the equity method |
MTS Belarus | |
Investments in associates and joint ventures | |
Schedule of reconciliation of summarized financial information to the carrying amount of the Group's interest in associate | December 31, December 31, 2018 2017 Assets Non-current assets 17,659 9,819 Current assets 11,652 8,117 Liabilities Non-current liabilities (7,089) (703) Current liabilities (13,955) (9,764) Total identifiable net assets 8,267 7,469 The Group’s share in associate 49 % 49 % The Group’s share of identifiable net assets 4,051 3,660 Carrying amount of the Group’s interest 4,051 3,660 |
Schedule of the composition of the Group's share of loss/(income) of associate | Year ended December 31, 2018 2017 2016 Revenue (27,695) (23,037) (22,256) Net profit for the year (7,752) (6,552) (6,356) The Group’s share of the profit of the associate for the year (3,799) (3,210) (3,115) Other comprehensive loss for the year (currency translation adjustment) (648) 525 2,292 Total comprehensive income for the year (8,400) (6,027) (4,064) The Group’s share of total comprehensive income of the associate for the year (4,116) (2,953) (1,991) Dividends received 3,691 3,590 2,795 |
Investments in Ozon Holdings Ltd and other individually insignificant associates and joint venture | |
Investments in associates and joint ventures | |
Schedule of the composition of the Group's share of loss/(income) of associate | Year ended December 31, 2018 2017 2016 Net loss for the year 4,600 1,760 1,172 The Group’s share of the loss of the associate for the year 747 327 108 Other comprehensive income for the year — — — Total comprehensive loss for the year 4,600 1,760 1,172 The Group’s share of total comprehensive loss of the associate for the year 747 327 108 |
OTHER INVESTMENTS (Table)
OTHER INVESTMENTS (Table) | 12 Months Ended |
Dec. 31, 2018 | |
OTHER INVESTMENTS | |
Schedule of other investments | December 31, December 31, Category 2018 2017 Notes At amortized cost 15,327 — Deposits At amortized cost 139 9 Loans and unquoted notes At amortized cost 12 621 Other At amortized cost 1,397 1,323 Other investments (Gross) 16,875 1,953 Allowance for ECL (2) — Total other investments 16,873 1,953 |
TRADE AND OTHER RECEIVABLES (Ta
TRADE AND OTHER RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
TRADE AND OTHER RECEIVABLES | |
Schedule of trade and other receivables | December 31, December 31, 2018 2017 Receivables from handset sales financing 14,252 — Subscribers 13,495 11,723 Other trade receivables 4,049 3,119 Roaming 3,763 7,650 Interconnect 2,193 2,121 Other receivables 1,641 1,254 Integration services 1,190 721 Bonuses from suppliers 492 569 Dealers 386 3,204 Allowance for ECL (IFRS 9) (4,318) — Allowance for doubtful accounts (IAS 39) — (2,344) Trade and other receivables total 37,143 28,017 Less non-current portion (2,600) — Trade and other receivables current 28,017 |
Analysis of the age of trade and other accounts receivables | Receivables from subscribers and dealers and other trade receivables Weighted- Gross Loss allowance assesed for impairement based on average carrying (based on provision matrix loss rate amount provision matrix) Credit-impaired Current 1 % 1,300 (5) No 1 - 30 days past due 8 % 9,707 (761) No 31 - 60 days past due 14 % 1,963 (285) No 60 - 90 days past due 29 % 719 (227) No More than 90 days past due 60 % 1,282 (817) Yes Total 14 % 14,971 (2,095) Receivables other than from Weighted- Gross Loss allowance subscribers and dealers assesed for average carrying (individually impairement based on individual basis loss rate amount assessed) Credit-impaired Current 1 % 6,656 (11) No 1 - 30 days past due 1 % 1,147 (3) No 31 - 60 days past due 1 % 615 (5) No 60 - 90 days past due 2 % 396 (9) No More than 90 days past due 19 % 3,424 (689) Yes Total 5 % 12,238 (717) Weighted- Loss allowance average Gross carrying (collectively Receivables from handset sales financing loss rate amount assessed) Credit-impaired Current 2 % 12,352 (205) No 1 - 30 days past due 13 % 414 (52) No 31 - 60 days past due 43 % 93 (40) No 60 - 90 days past due 58 % 68 (39) No More than 90 days past due 88 % 1,325 (1,170) Yes Total 11 % 14,252 (1,506) |
Analysis of the age of trade and other accounts receivables past due but not impaired | December 31, 2017 Neither past due nor impaired 22,551 Past due, but not impaired: Less than 60 days 3,265 61-150 days 872 More than 150 days 1,329 Total 28,017 |
Schedule of changes in the allowance for expected credit losses | Year ended December 31, 2018 Balance, beginning of the year calculated under IAS 39 (2,344) Additional allowance required under IFRS 9 (233) Balance, beginning of the year, calculated under IFRS 9 (2,577) Allowance for ECL (3,210) Accounts receivable written off 2,948 Acquisition of subsidiaries (1,479) Balance, end of the year (4,318) |
Schedule of changes in the allowance for doubtful accounts receivable | Year ended Year ended December 31, December 31, 2017 2016 Balance, beginning of the year (2,160) (2,928) Allowance for doubtful accounts (2,880) (2,863) Accounts receivable written off 2,696 3,459 Disposal of subsidiary — 172 Balance, end of the year (2,344) (2,160) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORIES | |
Schedule of inventory and spare parts | December 31, December 31, 2018 2017 Handsets and accessories 15,191 7,836 SIM cards and prepaid phone cards 1,167 784 Advertising and other materials 916 561 TV equipment for resale 676 350 Software and equipment for installation and resale 491 309 Spare parts for telecommunication equipment 213 155 Total inventories 18,654 9,995 |
Summary of cost of goods | Year ended Year ended Year ended December 31, December 31, December 31, 2018 2017 2016 Amount of inventories recognized as an expense 60,543 43,440 44,026 Inventory obsolescence provision 3,697 2,692 2,159 Reversal of obsolescence provision (371) (509) (611) Total cost of goods 63,869 45,623 45,574 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
Summary of property, plant and equipment expected useful lives | Network and base station equipment: Network infrastructure 5-44 years Other 1.5-21 years Land and buildings: Buildings 20-150 years Leasehold improvements the term of the lease Office equipment, vehicles and other: Office equipment 3-21 years Vehicles 2-7 years Other 2-25 years |
Schedule of net book value of property, plant and equipment | Construction in progress Office and Network and equipment, equipment base station Land and vehicles and for equipment buildings other installation Total Cost January 1, 2016 542,530 27,321 49,692 28,966 648,509 Additions 1,350 32 — 47,340 48,722 Transferred into use 47,894 1,550 5,278 (54,722) — Disposal of UMS (Note 10) (4,152) (1,309) (452) (2,444) (8,357) Transfer to assets held for sale (1,557) — (5) — (1,562) Disposal (20,321) (426) (3,201) (374) (24,322) Other (118) (200) 269 55 6 Foreign exchange differences (17,568) (1,525) (2,331) (1,455) (22,879) December 31, 2016 548,058 25,443 49,250 17,366 640,117 Additions 2,094 15 302 57,170 59,581 Transferred into use 48,689 281 4,522 (53,492) — Arising on business combinations 10 2 5 — 17 Transfer to assets held for sale (1,408) — (22) — (1,430) Disposal (27,092) (684) (5,460) (1,315) (34,551) Other 327 (69) (452) 7 (187) Foreign exchange differences (4,320) 36 (315) (242) (4,841) December 31, 2017 566,358 25,024 47,830 19,494 658,706 Additions 2,777 4,887 777 63,047 71,488 Transferred into use 48,780 1,807 5,939 (56,526) — Arising on business combinations 123 3,912 1,323 18 5,376 Transfer to assets held for sale (752) (1,656) (36) — (2,444) Disposal (25,963) (322) (2,712) 26 (28,971) Transfer of financial leasing (10,124) — (110) — (10,234) Other (1,043) (536) (319) — (1,898) Foreign exchange differences 12,977 718 1,595 162 15,452 December 31, 2018 593,133 33,834 54,287 26,221 707,475 Accumulated amortisation and impairment January 1, 2016 (300,509) (7,455) (37,883) — (345,847) Charge for the year (53,371) (1,262) (5,323) — (59,956) Disposal of UMS (Note 10) 1,121 62 214 — 1,397 Transfer to assets held for sale 846 — 5 — 851 Disposal 19,126 134 2,768 — 22,028 Other (222) (182) 227 — (177) Foreign exchange differences 12,061 551 1,816 — 14,428 December 31, 2016 (320,948) (8,152) (38,176) — (367,276) Charge for the year (53,258) (1,114) (3,929) — (58,301) Impairment (2,175) (393) (295) (764) (3,627) Transfer to assets held for sale 940 — 22 — 962 Disposal 24,248 284 5,053 — 29,585 Other (458) 33 395 — (30) Foreign exchange differences 2,892 (79) 231 — 3,044 December 31, 2017 (348,759) (9,421) (36,699) (764) (395,643) Charge for the year (50,056) (941) (4,126) — (55,123) Arising on business combinations (13) (368) (922) — (1,303) Impairment — 361 151 — 512 Transfer to assets held for sale 223 455 37 — 715 Disposal 25,116 175 2,464 — 27,755 Transfer of financial leasing 2,070 — 41 — 2,111 Other 553 22 309 — 884 Foreign exchange differences (9,148) (500) (1,292) — (10,940) December 31, 2018 (380,014) (10,217) (40,037) (764) (431,032) Net book value January 1, 2016 242,021 19,866 11,809 28,966 302,662 December 31, 2016 227,110 17,291 11,074 17,366 272,841 December 31, 2017 217,599 15,603 11,131 18,730 263,063 December 31, 2018 213,119 23,617 14,250 25,457 276,443 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
GOODWILL | |
Summary of change in the net carrying amount of goodwill | Russia Moscow Convergent fixed line Ukraine Other Total Balance at January 1, 2017 Gross amount of goodwill 30,266 1,083 95 7,223 38,667 Accumulated impairment loss (1,466) — — (3,516) (4,982) 28,800 1,083 95 3,707 33,685 Acquisitions (Note 5) 62 — — 732 794 Reclassification (81) 81 — — — Currency translation adjustment — — (8) (190) (198) Balance at December 31, 2017 Gross amount of goodwill 30,247 1,164 87 7,765 39,263 Accumulated impairment loss (1,466) — — (3,516) (4,982) 28,781 1,164 87 4,249 34,281 Acquisitions (Note 5) 1,877 213 — 2,512 4,602 Impairment (Note 22) — — — (524) (524) Currency translation adjustment — — 19 729 748 Balance at December 31, 2018 Gross amount of goodwill 32,124 1,377 106 11,006 44,613 Accumulated impairment loss (1,466) — — (4,040) (5,506) 30,658 1,377 106 6,966 39,107 |
IMPAIRMENT REVIEW (Tables)
IMPAIRMENT REVIEW (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
IMPAIRMENT REVIEW | |
Schedule of impairment loss by CGU | The total amount of the impairment loss and reversal of impairment charges for the year ended December 31, 2018 was allocated to the carrying amounts of property, plant and equipment and other intangible assets as follows: NVision Czech Oblachniy Retail Republic Goodwill 524 Property, plant and equipment 13 (505) Other intangible assets 140 (2) Total 677 (507) The total amount of the impairment loss for the year ended December 31, 2017 was allocated to the carrying amounts of property, plant and equipment and other intangible assets as follows: NVision Czech Turkmenistan Republic Property, plant and equipment 3,063 564 Other intangible assets 141 7 Total 3,204 571 |
Schedule of OIBDA margin utilized for value-in-use calculation of related CGUs | December 31, December 31, CGU 2018 2017 Russia Convergent 42.4% - 42.9% 38.0% - 39.1% Armenia 45.0% - 47.4% 40.2% - 41.2% Moscow fixed line 56.0% - 59.2% 41.0% - 48.5% Ukraine 50.0% - 51.6% 31.4% - 40.6% NVision Czech Republic 4.9% - 5.5% 4.2% Oblachniy retail negative — |
Schedule of capital expenditure as a percentage of revenue utilized for value-in-use calculations of related CGUs | December 31, December 31, CGU 2018 2017 Russia Convergent 19.0 % 17.2 % Armenia 16.9 % 17.8 % Moscow fixed line 21.6 % 20.6 % Ukraine 18.4 % 22.7 % NVision Czech Republic 1.3 % 2.5 % Oblachniy retail 0.9 % — |
Schedule of terminal growth rate utilized for value in-use-calculation of related CGUs | December 31, December 31, CGU 2018 2017 Russia Convergent 1 % 1 % Armenia nil nil Moscow fixed line 1 % 1 % Ukraine 3 % 3 % NVision Czech Republic 2 % 2 % Oblachniy retail 3 % — |
Schedule of pre-tax rates for discounting cash flows in functional currencies of related CGUs | December 31, December 31, CGU 2018 2017 Russia Convergent 16.0 % 16.0 % Armenia 15.2 % 15.2 % Moscow fixed line 14.5 % 14.5 % Ukraine 20.8 % 20.8 % NVision Czech Republic 8.7 % 8.7 % Oblachniy retail 20.1 % — |
OTHER INTANGIBLE ASSETS (Tables
OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OTHER INTANGIBLE ASSETS | |
Schedule of net book value of other intangible assets | Right to Billing and Cost-to- use radio other Numbering obtain Licenses frequencies software Client base capacity contracts Other Total Useful life, years 1 to 20 1 to 15 1 to 25 4 to 31 2 to 15 2 to 5 1 to 10 Cost January 1, 2016 28,490 9,326 93,134 7,537 3,208 — 9,767 151,462 Additions 3,382 245 27,658 — 65 — 232 31,582 Arising on business combinations (Note 5) 323 — — — — — — 323 Disposal of UMS (Note 10) — — (1,891) — — — (3,687) (5,578) Disposal (2) (582) (10,509) (164) (160) — (2,842) (14,259) Other 44 (40) (87) — (4) — (40) (127) Foreign exchange differences (5,101) — (3,763) — (39) — (1,187) (10,090) December 31, 2016 27,136 8,949 104,542 7,373 3,070 — 2,243 153,313 Additions 1,647 13 24,686 — 12 — 219 26,577 Arising on business combinations (Note 5) 260 — 163 — — — 150 573 Disposal (93) (1,112) (8,429) (50) (158) — (166) (10,008) Other (2) 1 (6) — — — 57 50 Foreign exchange differences (1,207) — (980) — (9) — (23) (2,219) December 31, 2017 27,741 7,851 119,976 7,323 2,915 — 2,480 168,286 Additions 7,479 19 20,884 — 10 3,961 401 32,754 Arising on business combinations (Note 5) — — 3,021 1,530 1 — 909 5,461 Effect on adoption of IFRS 15 (Note 7) — — — — — 19,197 19,197 Impairment — — (168) — — — (20) (188) Disposal (223) (1,223) (8,215) (63) (82) — (198) (10,004) Other — 1 89 — — — (46) 44 Foreign exchange differences 4,630 — 2,977 — 22 202 80 7,913 December 31, 2018 39,627 6,648 138,564 8,790 2,866 23,360 3,606 223,463 Accumulated amortisation and impairment January 1, 2016 (9,873) (4,261) (50,557) (3,619) (2,996) — (5,560) (76,866) Charge for the year (2,092) (1,170) (18,002) (620) (46) — (1,389) (23,319) Disposal of UMS (Note 10) — — 494 — — — 2,162 2,656 Disposal 2 582 10,193 164 160 — 2,836 13,937 Other (7) 20 43 — (13) — (42) 1 Foreign exchange differences 2,007 — 2,697 — 34 — 668 5,406 December 31, 2016 (9,963) (4,829) (55,132) (4,075) (2,861) — (1,325) (78,185) Charge for the year (2,180) (1,042) (17,614) (616) (57) — (224) (21,733) Impairment — — (148) — — — — (148) Disposal 92 1,108 8,345 50 158 — 157 9,910 Other — 2 (17) — (4) — (31) (50) Foreign exchange differences 570 — 726 — 8 — 13 1,317 December 31, 2017 (11,481) (4,761) (63,840) (4,641) (2,756) — (1,410) (88,889) Charge for the year (2,711) (796) (20,941) (680) (57) (3,876) (427) (29,488) Arising on business combinations — — (1,785) — — — — (1,785) Effect on adoption of IFRS 15 (Note 7) — — — — — (12,368) — (12,368) Effect on assets impairment — — 44 — — — 6 50 Disposal 193 971 7,994 63 82 — 180 9,483 Other — — (70) — — — 26 (44) Foreign exchange differences (2,114) — (2,187) — (21) (99) (37) (4,458) December 31, 2018 (16,113) (4,586) (80,785) (5,258) (2,752) (16,343) (1,662) (127,499) Net book value January 1, 2016 18,617 5,065 42,577 3,918 212 — 4,207 74,596 December 31, 2016 17,173 4,120 49,410 3,298 209 — 918 75,128 December 31, 2017 16,260 3,090 56,136 2,682 159 — 1,070 79,397 December 31, 2018 23,514 2,062 57,779 3,532 114 7,017 1,944 95,962 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
BORROWINGS | |
Schedule of the Group's borrowings | December 31, December 31, 2018 2017 Bank and other loans 250,780 182,937 Notes 117,355 108,776 Total borrowings 368,135 291,713 Less: current portion (3,063) (63,673) Total borrowings, non-current 365,072 228,040 |
Schedule of the Group's notes | Interest rate (actual at December 31, December 31, December 31, Currency 2018) 2018 2017 MTS International Notes due 2023 (Note 2) USD 31,090 26,187 MTS International Notes due 2020 (Note 2) USD 20,870 17,621 MTS PJSC Notes due 2022 RUB 14,958 14,947 MTS PJSC Notes due 2023 RUB 9,348 9,997 MTS PJSC Notes due 2031 RUB 1,080 9,994 MTS PJSC Notes due 2022 RUB 9,993 9,991 MTS PJSC Notes due 2021 RUB 9,990 9,986 MTS PJSC Notes due 2021 RUB 9,988 — MTS PJSC Notes due 2025 RUB 9,986 — MTS PJSC Notes due 2018 RUB — 9,986 MTS PJSC Notes due 2020 RUB 40 49 Other notes due 2022 RUB 12 18 Total notes 117,355 108,776 Less: current portion (1,017) (29,979) Total notes, non-current 116,338 78,797 |
Schedule of dates of the announcement of the sequential coupon for note issuances | MTS PJSC Notes due 2031 September 2019 MTS PJSC Notes due 2023 March 2020 |
Schedule of the Group's loans from banks and financial institutions | Interest rate (actual at December 31, December 31, December 31, Maturity 2018) 2018 2017 USD-denominated: Calyon, ING Bank N.V, Nordea Bank AB, Raiffeisen Zentralbank Osterreich AG 2018 LIBOR + 1.15% (2.994%) — 17,077 Citibank 2019 - 2024 LIBOR + 0.9% (3.776%) 10,980 10,592 10,980 27,669 RUB-denominated: Sberbank 2020 - 2022 7.50% - 8.59% 139,515 149,890 VTB 2020 - 2021 7.20% - 8.65% 100,000 5,000 Other 2024 Various 210 247 239,725 155,137 Other currencies: Various financial institutions 2019 - 2020 Various 75 131 75 131 Total bank and other loans 250,780 182,937 Less: current portion (2,046) (33,694) Total bank and other loans, non-current 248,734 149,243 |
Schedule of total available unused credit facilities | Available Currency Maturity Interest rate Available till amount Sberbank RUB 2024 To be agreed May 2024 5,000 VTB RUB 2028 To be agreed August 2028 5,000 Rosselhozbank RUB/USD/EUR 2019 To be agreed November 2019 5,000 Absolut Bank RUB 2019 CBR 1 auction rate + 1.25%-1.8% December 2019 3,000 SPB Bank RUB 2020 To be agreed March 2020 3,000 Total 21,000 (1) CBR – Central Bank of Russia |
Schedule of aggregated scheduled maturities of principal on notes and bank loans | As of December 31, 2018 Bank loans Notes and other debt Payments due in the year ending December 31, 2019 12,401 21,849 2020 38,964 107,600 2021 25,670 150,558 2022 29,061 22,756 2023 32,738 2,131 Thereafter 11,085 1,068 Contractual undiscounted cash flows 149,919 305,962 Less: unamortized debt issuance costs (179) (408) Less: interest (32,385) (49,289) Less: debt modification — (5,485) Total debt 117,355 250,780 |
Schedule of capital leases future minimum lease payments and present value of the net minimum lease payments | December 31, 2018 Minimum lease payments, including: Current portion (less than 1 year) 30,220 More than 1 to 5 years 107,403 Over 5 years 116,420 Total minimum lease payments 254,043 Less amount representing interest (93,491) Present value of net minimum lease payments, including: Current portion (less than 1 year) 15,812 More than 1 to 5 years 62,468 Over 5 years 82,272 Total present value of net minimum lease payments 160,552 Less current portion of lease obligations (15,812) Non-current portion of lease obligations 144,740 December 31, 2017 Minimum lease payments, including: Current portion (less than 1 year) 1,763 More than 1 to 5 years 6,837 Over 5 years 12,845 Total minimum lease payments 21,445 Less amount representing interest (9,588) Present value of net minimum lease payments, including: Current portion (less than 1 year) 801 More than 1 to 5 years 3,138 Over 5 years 7,918 Total present value of net minimum lease payments 11,857 Less current portion of lease obligations (801) Non-current portion of lease obligations 11,056 |
RIGHTS-OF-USE ASSETS AND LEAS_2
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Summary of estimated terms over which right-of-use assets are amortised | Lease of: sites for placement of network equipment and base stations inside the buildings 10 years sites for placement of network equipment and base stations on land 20 years fiber-optic lines 2 years retail stores Up to 8 years administrative offices, warehouses, parking garages not less than 3 years vehicles 4 – 5 years |
Summary of net book value of rights-of-use assets | December 31, Lease of: 2018 Sites for placement of network and base station equipment 92,500 Land and buildings 53,792 Vehicles and other 1,210 Exclusive rights for trademarks 1,505 Rights-of-use assets, net 149,007 Depreciation of the rights-of-use assets for the twelve months ended December 31, 2018 included in depreciation and amortization expense in the accompanying consolidated statement of profit or loss was as follows: Lease of: 2018 Sites for network and base station equipment 7,784 Land and buildings 10,955 Vehicles and other 135 Exclusive rights for trademarks 694 Depreciation charge, total 19,568 |
Schedule of capital leases future minimum lease payments and present value of the net minimum lease payments | December 31, 2018 Minimum lease payments, including: Current portion (less than 1 year) 30,220 More than 1 to 5 years 107,403 Over 5 years 116,420 Total minimum lease payments 254,043 Less amount representing interest (93,491) Present value of net minimum lease payments, including: Current portion (less than 1 year) 15,812 More than 1 to 5 years 62,468 Over 5 years 82,272 Total present value of net minimum lease payments 160,552 Less current portion of lease obligations (15,812) Non-current portion of lease obligations 144,740 December 31, 2017 Minimum lease payments, including: Current portion (less than 1 year) 1,763 More than 1 to 5 years 6,837 Over 5 years 12,845 Total minimum lease payments 21,445 Less amount representing interest (9,588) Present value of net minimum lease payments, including: Current portion (less than 1 year) 801 More than 1 to 5 years 3,138 Over 5 years 7,918 Total present value of net minimum lease payments 11,857 Less current portion of lease obligations (801) Non-current portion of lease obligations 11,056 |
Property, plant and equipment | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Summary of net book value of rights-of-use assets | December 31, 2017 Network and base station equipment 8,098 Office equipment, vehicles and other 63 Leased assets, net 8,161 |
RECONCILIATION OF LIABILITIES_2
RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES | |
Schedule of Reconciliation of liabilities arising from financial activities | Effect of new Foreign Other standards December 31, Financing Operating exchange comprehensive Change on opening Other December 31, 2017 cash flows cash flows Acquisitions movement income in fair value balance changes (1) 2018 Notes (Note 24) 108,776 (472) — — 8,967 — — — 84 117,355 Bank and other loans (Note 24) 182,937 70,657 167 2,250 22 (2,983) (2,270) 250,780 Lease obligation (Note 25) 11,857 (13,577) (13,684) 690 (1,456) 1,821 — 140,736 34,166 160,553 Credit guarantee agreement related to foreign-currency hedge (Note 30) 996 (981) — — (15) — — — — — Contingent consideration (Note 28) 180 (65) — 940 — — — — (115) 940 Payables related to repurchase of common stock (Note 32) — (22,655) — — — — — — 22,655 — Dividends payable (Note 32) 125 (50,054) — — — — — — 50,075 146 Payable related to purchase of noncontrolling interests — (101) — — — — — — 101 — Payables related to transactions under common control — (13,242) — 13,362 — — — — — 120 Liability under put option agreement (Note 33) 2,424 — — — — 592 719 — — 3,735 Receivables related to sale of own shares — 89 — — — — — — (89) — Неdge asset (net) (8,129) 4,477 (752) — (2,837) 129 — — 4,316 (2,796) Total liabilities arising from financial activities 299,166 (25,924) (14,436) 15,159 6,909 2,564 719 137,753 108,923 530,833 (1) Including accrual of liabilities related to dividends declared, repurchase of common stock, additions under lease agreements, depreciation of debt issuance cost, modification gain and others changes. Foreign Other December 31, Financing cash Operating cash exchange comprehensive Change in fair Other December 31, 2016 flows flows Acquisitions movement income value changes (1) 2017 Notes (Note 24) 78,186 32,860 — — (2,339) — — 69 108,776 Bank and other loans (Note 24) 195,088 (10,530) — 27 (2,051) (12) — 415 182,937 Finance lease obligation (Note 25) 11,046 (774) (854) — (368) — — 2,807 11,857 Credit guarantee agreement related to foreign-currency hedge (Note 30) 2,907 (1,766) — — (145) — — — 996 Contingent consideration (Note 28) 3 — — 175 2 — — — 180 Payables related to repurchase of common stock — (21,896) — — — — — 21,896 — Dividends payable (Note 32) 87 (51,759) — — — — — 51,797 125 Payable related to purchase of noncontrolling interests — (7) — — — — — 7 — Liability under put option agreement (Note 33) 2,243 — — 402 — (101) (120) — 2,424 Hedge asset (net) (13,632) 3,427 (1,233) 145 3,164 (8,129) Total liabilities arising from financial activities 275,958 (50,445) (2,087) 604 (4,756) (3,051) (120) 76,991 299,166 Including accrual of liabilities related to dividends declared, repurchase of common stock, additions under lease agreements, depreciation of debt issuance cost, modification gain and others changes. |
PROVISIONS (Tables)
PROVISIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PROVISIONS | |
Schedule of the movement in provisions | Tax provisions Provision for Employee other than decommissioning bonuses for income and and other SEC Other Total tax restoration rewards Provision provisions provisions At 1 January 2016 (525) (1,459) (8,237) — (207) (10,428) Arising during the year (1,058) (45) (14,085) — (275) (15,463) Utilised 374 8 12,482 — 223 13,087 Discount rate adjustment and imputed interest (change in estimates) — (142) (51) — — (193) Unused amounts reversed 742 430 1,096 — 34 2,302 Disposal of a subsidiary — 91 — — 91 Translation adjustments and other 10 17 152 — — 179 At 31 December 2016 (457) (1,191) (8,552) — (225) (10,425) Current 2016 (457) — (7,393) — (225) (8,075) Non-current 2016 — (1,191) (1,159) — — (2,350) At 1 January 2017 (457) (1,191) (8,552) — (225) (10,425) Arising during the year (229) (108) (15,181) — (534) (16,052) Utilised 342 5 12,203 — 92 12,642 Discount rate adjustment and imputed interest (change in estimates) — (103) 41 — — (62) Unused amounts reversed 33 338 1,233 — 101 1,705 Translation adjustments and other 1 10 99 — (79) 31 At 31 December 2017 (310) (1,049) (10,157) — (645) (12,161) Current 2017 (310) — (8,897) — (645) (9,852) Non-current 2017 — (1,049) (1,260) — — (2,309) At 1 January 2018 (310) (1,049) (10,157) — (645) (12,161) Arising during the year (374) (1,912) (14,259) (55,752) (1) (941) (73,238) Utilised 336 18 13,873 — 393 14,620 Discount rate adjustment and imputed interest (change in estimates) — (223) 177 — — (46) Unused amounts reversed 211 89 1,079 — 872 2,251 Arising due to acquisitions of subsidiaries (113) — (984) — (1,165) (2,262) Translation adjustments and other (2) (32) (107) (3,298) (27) (3,466) At 31 December 2018 (252) (3,109) (10,378) (59,050) (1,513) (74,302) Current 2018 (252) — (10,096) (59,050) (1,513) (70,911) Non-current 2018 — (3,109) (282) — — (3,391) (1) See information relating to SEC provision in Note 34. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of financial assets | December 31, December 31, 2018 2017 Trade and other receivables (Note 18) 37,143 28,017 Accounts receivable, related parties (Note 31) 8,930 11,360 Cash and Cash equivalents (Note 14) 84,075 30,586 Other financial assets: Financial assets at fair value through profit or loss: Securities held by MTS Bank 22,487 — Assets in Sistema Capital trust management 11,644 9,600 Currency forwards and options not designated as hedges 2,200 — Cross-currency swaps not designated as hedges 1,077 — Total financial assets at fair value through profit or loss 37,408 9,600 Financial assets at fair value through OCI: Cross-currency swaps designated as cash flow hedges 2,797 8,403 Notes 70 57 Total financial assets at fair value through OCI 2,867 8,460 Financial assets at amortized cost: Deposits and loans issued 83,865 33,251 Notes 31,165 8,480 Other 2,579 1,810 Total financial assets at amortized cost 117,609 43,541 Total other financial assets 157,884 61,601 Total financial assets 288,032 131,564 Total current financial assets (230,642) (120,719) Total non-current financial assets 57,390 10,845 |
Schedule of financial liabilities | December 31, December 31, 2018 2017 Trade and other payables 53,623 47,314 Accounts payable, related parties (Note 31) 1,301 1,102 Financial liabilities at amortized cost: Loans and borrowings: Bank and other loans 250,780 182,937 Lease obligations 160,552 11,857 Notes 117,355 108,776 MTS Bank deposits and liabilities 111,454 — Total loans and borrowings 640,141 303,570 Guarantee payment received — 996 Total financial liabilities at amortized cost 640,141 304,566 Other financial liabilities at fair value: Financial liabilities at fair value through profit or loss: Liabilities under option agreements (Note 33) 3,735 2,424 Contingent consideration and other liabilities 936 — Interest rate swaps not designated as hedges 265 — Currency forwards not designated as hedges 85 — Interest rate swaps designated as cash flow hedges — 390 Total financial liabilities at fair value through profit or loss 5,021 2,814 Financial liabilities at fair value through OCI: Cross-currency swaps designated as cash flow hedges — 274 Total financial liabilities at fair value through OCI — 274 Total other financial liabilities at fair value 5,021 3,088 Total financial liabilities 700,086 356,070 Total current financial liabilities (187,160) (115,926) Total non-current financial liabilities 512,926 240,144 |
Schedule of fair value of financial instruments | Level of December 31, December 31, inputs 2018 2017 Assets Sistema International Funding S.A. Bonds due in 2019 (related party) (Note 15, 31) Level 1 70 57 Securities held by MTS Bank Level 1 22,487 — Derivative instruments Level 2 6,074 8,403 Currency forwards and options 2,200 — Cross-currency interest rate swaps 3,874 8,403 Assets in Sistema Capital trust management (related party) (Note 15, 31) Level 2 11,644 9,600 Liabilities Derivative instruments Level 2 (350) (664) Interest rate swaps (265) (390) Cross-currency interest rate swaps — (274) Currency forwards (85) — Liabilities under option agreements Level 3 (3,735) (2,424) Contingent consideration Level 3 (940) (180) |
Schedule of significant quantitative inputs used to measure the fair value of the liability under put option agreement | December 31, December 31, Unobservable inputs 2018 2017 Post-tax discount rate Revenue growth rate 0.3 – 2.0% 0.0 – (0.5)% OIBDA margin 40.5-43.2% 40.2-41.2% December 31, December 31, Unobservable inputs 2018 2017 Discount rate 16.7 % 10 % Revenue, average amount per year 660 632 OIBDA/EBITDA margin, average rate (68) % 13 % Net debt, average amount per year (3,079) (129) |
Schedule of borrowings, gross of debt issuance costs, where carrying value does not approximate fair value | December 31, 2018 December 31, 2017 Level of Carrying Carrying inputs Fair value value Fair value value Notes (Note 24) Level 1 (115,698) (117,534) (112,531) (109,000) Bank and other loans (Note 24) Level 3 (251,189) (251,188) (183,543) (183,787) (366,887) (368,722) (296,074) (292,787) |
BANK FINANCIAL ASSETS AND LIA_2
BANK FINANCIAL ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial instruments | |
Schedule of the structure and amounts of current and non current bank deposits and loans to customers | December 31, 2018 Loans to customers 68,132 Due from banks 2,635 Allowance for impairment losses (7,729) Total bank deposits and loans to customers, net 63,038 Less: current portion (32,385) Bank deposits and loans to customers, non-current 30,653 |
Schedule of structure and amounts of bank loans to customers | December 31, 2018 Loans to legal entities Corporations 27,414 Medium-sized enterprises and small businesses 1,941 Total loans to legal entities 29,355 Loans to individuals Mortgage loans 11,668 Consumer loans 17,307 Credit cards 9,778 Other 24 Total loans to individuals 38,777 Due from banks Time deposits with banks 1,659 Obligatory reserves with the Central Bank of Russia 976 Total due from banks 2,635 Total bank deposits and loans to customers 70,767 Less: allowance for impairment losses (7,729) Total bank deposits and loans to customers, net 63,038 |
Schedule of carrying value of loans to customers by types of collateral | December 31, 2018 Loans collateralized by guaranties 17,984 Loans collateralized by pledge of real estate 14,237 Loans collateralized by pledge of own promissory notes 326 Loans collateralized by pledge of equipment 143 Loans collateralized by securities 32 Loans collateralized by rights of claim 15 Loans collateralized by pledge of inventories 12 Unsecured loans 35,383 Allowance for impairment losses (7,689) Total loans to customers, net 60,443 |
Schedule of movements in the allowance for impairment losses attributable to bank deposits and loans to customers | Loans to customers Due from banks Total Balance as at the date of acquisition 8,444 42 8,486 Provision charge/release 636 (2) 634 Recovery of bad debt written-off 430 — 430 Bad debt written-off (1,817) — (1,817) Foreign currency revaluation effect (4) — (4) Balance as at December 31, 2018 7,689 40 7,729 |
Schedule of bank deposits and liabilities | December 31, 2018 Customer accounts 100,209 Due to banks and other financial institutions 7,750 Debt securities issued 1,717 Financial liabilities at fair value through profit or loss 767 Other financial liabilities 1,011 Total bank deposits and liabilities 111,454 Less: current portion (108,821) Total bank deposits and liabilities, non-current 2,633 |
Schedule of deposits from customers | December 31, 2018 Legal entities - Current/settlement accounts 19,408 - Term deposits 8,188 Individuals - Current/settlement accounts 13,364 - Term deposits 59,249 Total customer accounts 100,209 |
Schedule of due to banks | December 31, 2018 Loans under repurchase agreements 5,315 Loans and term deposits from banks and other financial institutions 1,268 Correspondent accounts of other banks 1,167 Total due to banks 7,750 |
Schedule of Group's liquidity analysis for non-derivative financial assets and liabilities | December31, Up to 1 month to 3 months to 1 year to Over Maturity 2018 1 month 3 months 1 year 5 years 5 years undefined Total Financial assets Financial assets at fair value through profit or loss 13,680 — — — — — 13,680 Due from banks 477 — — — — — 477 Loans to customers 5,182 9,113 25,525 25,922 1,104 6,344 73,190 Investments in securities 111 4,233 10,838 14,032 1,300 — 30,514 Total interest bearing financial assets 19,450 13,346 36,363 39,954 2,404 6,344 117,861 Cash and cash equivalents 10,117 — — — — — 10,117 Financial assets at fair value through profit or loss — — — — — 8,806 8,806 Due from banks 483 61 1,928 13 — — 2,485 Currency forwards and options not designated as hedges — 45 183 — — — 228 Other financial assets* 522 335 25 — — 4 886 Total non-interest bearing financial assets 11,122 441 2,136 13 — 8,810 22,522 Total financial assets 30,572 13,787 38,499 39,967 2,404 15,154 140,383 December31, Up to 1 month to 3 months to 1 year to Over Maturity 2018 1 month 3 months 1 year 5 years 5 years undefined Total Financial liabilities Due to banks and other financial institutions (1,268) — — — — — (1,268) Customer accounts* (13,012) (7,239) (45,971) (1,599) — — (67,821) Debt securities issued (12) (314) (333) (771) (287) — (1,717) Total interest bearing financial liabilities (14,292) (7,553) (46,304) (2,370) (287) (70,806) Currency forwards and options not designated as hedges — (45) (328) — — — (373) Obligation to deliver securities (394) (394) Due to banks and other financial institutions (6,482) — — — — — (6,482) Customer accounts* (48,854) — — — — — (48,854) Other financial liabilities (1,620) (541) (1,851) — — — (4,012) Lease obligations* (21) (37) (144) (200) (6) — (408) Total non-interest bearing financial liabilities (57,371) (623) (2,323) (200) (6) — (60,523) Total financial liabilities (71,663) (8,176) (48,627) (2,570) (293) — (131,329) Liquidity gap (41,091) 5,611 (10,128) 37,397 2,111 Stable sources of funding 40,689 (13,182) 22,667 (8,128) (42,046) Net liquidity gap (402) (7,571) 12,539 29,269 (39,935) Cumulative liquidity gap (402) (7,973) 4,566 33,835 (6,100) Cumulative interest sensitivity gap (5,158) (10,951) (1,110) 38,594 40,711 * Including intercompany balances (16,402) (5) (17) (3) — — (16,427) |
Schedule of future aggregate undiscounted cash flows | Weighted December31, average Up to 1 month to 3 months to 1 year to Over Maturity 2018 interest rate 1 month 3 months 1 year 5 years 5 years undefined Total Interest bearing financial liablities Due to banks 1,262 8 — — — — 1,270 Customer accounts* 12,410 7,900 47,490 1,644 — — 69,444 Debt securities issued 12 316 258 912 857 — 2,355 Total interest bearing financial liabilities 13,685 8,224 47,748 2,556 857 73,070 Non-interest bearing financial liablities Financial liabilities at fair value through profit or loss — — 373 — — — 373 Due to banks 6,482 — — — — — 6,482 Customer accounts* 48,854 — — — — — 48,854 Other financial liabilities 750 159 1,655 — — — 2,564 Total non-interest bearing financial liabilities and commitments 56,086 159 2,028 — — — 58,273 Total financial liabilities 69,771 8,383 49,776 2,556 857 — 131,343 * Including intercompany balances (16,465) — — — — — (16,465) |
Loans to legal entities | |
Financial instruments | |
Schedule of quality of loans | Stage 1 Stage 2 Stage 3 POCI December 31, 2018 Low to fair risk 22,083 1,555 — — 23,638 Monitoring — 1,871 — — 1,871 Impaired — — 3,586 260 3,846 Loss allowance (327) (477) (3,153) (255) (4,212) Total 21,756 2,949 433 5 25,143 |
Loans to legal entities | Accumulated impairment | |
Financial instruments | |
Schedule of movements in provision for impairment losses on loans | Stage 1 Stage 2 Stage 3 POCI* TOTAL Balance as at the date of acquisition 325 306 3,714 182 4,527 - Transfer to stage 1 — — — — — - Transfer to stage 2 (2) — 2 — — - Transfer to stage 3 — (29) 29 — — New financial assets originated or purchased 54 65 — 9 128 Change due to change of credit risk (55) 144 (79) 64 74 Write-offs — — (637) — (637) Recovery of previously written-off assets — — 124 — 124 Foreign exchange difference (4) — — — (4) Balance as at December 31, 2018 318 486 3,153 255 4,212 * POCI - financial assets purchased or originated credit-impaired |
Loans to individuals | |
Financial instruments | |
Schedule of quality of loans | Stage 1 Stage 2 Stage 3 POCI December 31, 2018 Low to fair risk 34,581 445 — — 35,026 Monitoring — 534 5 — 539 Impaired — — 2,814 398 3,212 Loss allowance (756) (318) (2,005) (398) (3,477) Total 33,825 661 814 — 35,300 |
Analysis of credit quality of loans | Provision for Provision for impairment to As at December 31, 2018 Gross loans impairment Net loans gross loans Collectively assessed Not past due 34,582 (756) 33,826 2 % Overdue: up to 30 days 445 (80) 365 18 % 31 to 60 days 197 (84) 113 43 % 61 to 90 days 136 (77) 59 57 % 91 to 180 days 340 (245) 95 72 % over 180 days 2,079 (1,579) 500 76 % Total collectively assessed loans 37,779 (2,821) 34,958 7 % Individually impaired Not past due 599 (475) 124 79 % Overdue: up to 30 days — — — — 31 to 60 days 4 (1) 3 25 % 61 to 90 days 1 — 1 0 % 91 to 180 days 27 — 27 0 % over 180 days 367 (180) 187 49 % Total individually impaired loans 998 (656) 342 66 % Total 38,777 (3,477) 35,300 9 % |
Loans to individuals | Accumulated impairment | |
Financial instruments | |
Schedule of movements in provision for impairment losses on loans | Stage 1 Stage 2 Stage 3 POCI TOTAL Balance as at the date of acquisition 683 388 2,468 378 3,917 - Transfer to stage 1 243 (162) (81) — — - Transfer to stage 2 (48) 66 (18) — — - Transfer to stage 3 (2) (291) 293 — — New financial assets originated or purchased 355 — — — 355 Change due to change of credit risk (475) 317 217 20 79 Write-offs — — (1,180) — (1,180) Recovery of previously written-off assets — — 306 — 306 Balance as at December 31, 2018 756 318 2,005 398 3,477 |
Medium-sized enterprises and small businesses | |
Financial instruments | |
Analysis of credit quality of loans | Provision for Provision for impairment to As at December 31, 2018 Gross loans impairment Net loans gross loans Collectively assessed Not past due 1,224 (24) 1,200 2 % Overdue: up to 30 days 7 (1) 6 16 % 31 to 60 days 2 (1) 1 40 % 61 to 90 days 4 (2) 2 40 % 91 to 180 days 15 (7) 8 47 % over 180 days 689 (414) 275 60 % Total collectively assessed loans 1,941 (449) 1,492 23 % |
FINANCIAL RISK MANAGEMENT (Tabl
FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL RISK MANAGEMENT | |
Schedule of effect of the Group's swap agreements designated as cash flow hedges in accumulated other comprehensive income | 2018 2017 2016 Accumulated derivatives income / (loss), beginning of the year, net of tax of 85 and (26) and 261, respectively 340 (103) 1,045 Fair value adjustments on hedging derivatives, net of tax of 840 and (628) and (2,279), respectively 3,362 (2,512) (9,116) Amounts reclassified to profit for the year during the period – forecast transaction no longer expected to occur, net of tax of (126) and nil and nil, respectively (505) — — Amounts reclassified to (profit) / loss for the year during the period – hedged item has affected profit or loss, net of tax of (740) and 739 and 1,992, respectively (2,960) 2,955 7,968 Accumulated derivatives income / (loss), end of the year, net of tax of 59 and 85 and (26), respectively 237 340 (103) |
Schedule of sensitivity to a reasonably possible change in USD and EUR exchange rates | USD-effect on EUR-effect on Change profit before tax profit before tax in rate RUB mln, RUB mln 2018 +1% (176) 152 -1% 176 (152) 2017 +5% (447) 830 -5% 447 (830) 2016 +20% (6,722) 2,274 -20% 6,722 (2,274) |
Schedule of exposure to credit risk | December 31, December 31, 2018 2017 Trade and other receivables 37,143 28,017 Deposits and loans issued 83,865 33,251 Notes 31,235 8,537 Securities held by MTS Bank 22,487 — Assets in Sistema Capital trust management 11,644 9,600 Derivative financial instruments 6,074 8,403 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTIES | |
Schedule of transactions with related parties | December 31, December 31, 2018 2017 Statements of financial position Short-term investments 12,086 10,064 Accounts receivable, current 6,385 11,358 Accounts receivable, non-current 2,545 2 Bank loans to customers, current 2,244 — Advances for property, plant and equipment 1,380 1 Right-of-use assets 1,359 — Cash and cash equivalents 938 19,715 Bank loans to customers, non-current 612 — Other investments 149 767 Bank deposits and liabilities, current (42,642) — Accounts payable (1,301) (1,102) Bank deposits and liabilities, non-current (1,044) — Lease obligations, non-current (1,007) — Lease obligations, current (185) — 2018 2017 Statements of profit or loss Revenue (4,352) (3,349) Operating expenses / (income) 2,396 4,053 Finance (income) / expenses (1,398) (1,267) Interest expenses under lease arrangements (135) — |
Schedule of accounts receivable from and accounts payable to related parties | December 31, December 31, 2018 2017 Accounts receivable MTS Belarus, the Group’s associate 4,095 4,835 Business Nedvizhimost, a subsidiary of Sistema 2,561 4,052 Sitronics, a subsidiary of Sistema 1,107 317 Zifrovoe TV, the Group’s associate 764 702 MTS Bank, the Group's associate — 1,232 Other related parties 403 222 Total accounts receivable, related parties 8,930 11,360 Less non-current portion (2,545) (2) Accounts receivable, related parties – current 6,385 11,358 Accounts payable MTS Belarus, the Group’s associate 678 828 TelecomCapStroi, a subsidiary of Sistema 237 — Moscow Business Incubator, a subsidiary of Sistema 152 — Other related parties 234 274 Total accounts payable, related parties 1,301 1,102 |
Schedule of advances for the purchase of property, plant and equipment, Intangible Assets and other assets to related parties | December 31, December 31, 2018 2017 Advances given for property, plant and equipment: TelecomCapStroi, a subsidiary of Sistema 1,317 — Other related parties 63 1 Total advances given for property, plant and equipment 1,380 1 2018 2017 Purchases of property, plant and equipment, intangible assets and other assets: Moscow Business Incubator, a subsidiary of Sistema 4,450 — Mosdachtrest, a subsidiary of Sistema 1,711 — Business Nedvizhimost, a subsidiary of Sistema 328 — Other related parties 158 — Total purchases of property, plant and equipment, intangible assets and other assets 6,647 — |
Schedule of lease transactions, related parties | December 31, 2018 Carrying value of right-of-use assets: Business Nedvizhimost, a subsidiary of Sistema 919 Kronshtadt, a subsidiary of Sistema 121 Other related parties 319 Total carrying value of right-of-use assets 1,359 December 31, 2018 Lease obligations: Business Nedvizhimost, a subsidiary of Sistema 793 Kronshtadt, a subsidiary of Sistema 109 Other related parties 290 Total lease obligations 1,192 Less non-current portion Lease obligations, related parties – current |
Schedule of bank loans to customers, interbank loans provided to related parties | December 31, 2018 Bank loans due, related parties Kronshtadt, a subsidiary of Sistema 802 Leader-Invest, a subsidiary of Sistema 612 Binofarm, a subsidiary of Sistema 412 Kronshtadt Technology, a subsidiary of Sistema 440 Sistema, parent company 254 Sistema-finance, a subsidiary of Sistema 183 Technology for Aviation, a subsidiary of Sistema 153 Total bank loans due, related parties 2,856 Less non-current portion (612) Bank loans due, related parties – current 2,244 |
Schedule of bank deposits and liabilities from related parties | 2018 Bank deposits and liabilities: Key management personnel of the Group and its parent 29,658 Sistema, parent company 4,610 Sistema Telecom Activy, a subsidiary of Sistema 1,542 Project Michurinskiy, a subsidiary of Sistema 952 Medsi Group, a subsidiary of Sistema 745 Sistema Real Estate, a subsidiary of Sistema 599 CTV, a subsidiary of Sistema 536 Sitronics, a subsidiary of Sistema 525 Leader-Invest, a subsidiary of Sistema 433 Sistema-Invest, a subsidiary of Sistema 338 RTI, a subsidiary of Sistema 323 Sistema Venture Capital, a subsidiary of Sistema 319 BashRES, a subsidiary of Sistema 309 Sistema Capital, a subsidiary of Sistema 239 TelecomCapStroi, a subsidiary of Sistema 238 BF-Sistema, a subsidiary of Sistema 233 Business Nedvizhimost, a subsidiary of Sistema 226 MBI, a subsidiary of Sistema 138 Intourautoservice, a subsidiary of Sistema 128 Detskii Mir, a subsidiary of Sistema 113 Other related parties 1,485 Total bank deposits and liabilities 43,686 Less non-current portion (1,044) Total bank deposits and liabilities - current 42,642 |
Schedule of investments in related parties | December 31, December 31, 2018 2017 Short-term investments Sistema Capital, a subsidiary of Sistema (assets management) 11,644 9,600 Promissory notes of Intellect Telecom, a subsidiary of Sistema 283 257 Other loans receivable 159 207 Total short-term investments in related parties 12,086 10,064 Other investments Promissory notes issued by Sistema — 618 Total other investments to related parties — 618 Other investments in shares Sistema Venture Capital, a subsidiary of Sistema 117 117 Other investments 32 32 Total investments in shares of related parties 149 149 |
Schedule of revenue and operating transactions with related parties | 2018 2017 2016 Revenues from related parties MTS Bank, the former Group’s associate (telecommunication and call center services, bank cards distribution commission) 1,271 1,507 900 Sitronics, subsidiary of Sistema (construction of a fiber optic lines) 1,195 303 — Zifrovoe TV, the Group’s associate (subscriber acquisition services) 508 724 55 MTS Belarus, the Group’s associate (roaming and interconnect services) 296 248 276 Detsky Mir, subsidiary of Sistema (telecommunication services) 175 188 129 Medsi Group, subsidiary of Sistema (telecommunication and call center services) 166 156 242 Other related parties 741 223 576 Total revenues from related parties 4,352 3,349 2,178 Operating expenses / (income) incurred on transactions with related parties MTS Bank, the Group’s associate (commission related expenses) 1,217 2,259 347 Koncel, a subsidiary of Sistema (sale of scrap metal) (1,141) — — Key management personnel of the Group and its parent (interest expense) 705 — — Sistema-invest, a subsidiary of Sistema (change in fair value of financial instruments held by MTS-Bank) 325 — — AB Safety, a subsidiary of Sistema (security services) 324 302 271 Sistema, parent company (interest expense) 284 — — Jet Air Group, subsidiary of Sistema (transportation services) 135 172 183 MTS Belarus, the Group’s associate (roaming and interconnect services) 104 121 161 Business Nedvizhimost, a subsidiary of Sistema (rent and sale of real estate) 39 821 246 Maxima, a subsidiary of Sistema (advertising services) 19 143 1,018 Other related parties 385 235 888 Total operating expenses / (income) incurred on transactions with related parties 2,396 4,053 3,114 |
Schedule of finance income from related parties | 2018 2017 2016 Finance income from related parties Sistema Capital, a subsidiary of Sistema (assets management) 465 369 128 Business Nedvizhimost, a subsidiary of Sistema 353 359 491 MTS Bank, the former Group's associate 448 345 285 Other related parties 132 194 81 Total finance income from related parties 1,398 1,267 985 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SHAREHOLDERS' EQUITY | |
Schedule of roll forward of reserves balances | Foreign currency Cash Remeasurements translation flow hedging of the net defined reserve reserve benefit liability Balances at January 1, 2016 9,638 1,045 493 Other comprehensive (loss) / income for the year (13,970) (11,324) 50 Less: tax benefit — 2,219 — Amounts reclassified to profit for the year (2,086) 9,897 — Less: tax expense — (1,992) — Net other comprehensive (loss) / income for the year (16,056) (1,200) 50 Balances at December 31, 2016 (6,418) (155) 543 Other comprehensive (loss) for the year (2,620) (3,140) (40) Less: tax benefit — 628 — Amounts reclassified to profit for the year — 3,748 — Less: tax expense — (741) — Amounts reclassified to additional paid in capital (659) — — Less: tax expense — — — Net other comprehensive (loss) / income for the year (3,279) 495 (40) Balances at December 31, 2017 (9,697) 340 503 Other comprehensive income for the year 7,726 4,202 167 Less: tax expense — (840) — Amounts reclassified to profit for the year — (4,331) — Less: tax benefit — 866 — Net other comprehensive income / (loss) for the year 7,726 (103) 167 Balances at December 31, 2018 (1,971) 237 670 |
Schedule of declared cash dividends | 2018 2017 2016 Dividends declared (including dividends on treasury shares of 3,037, 1,337 and 220 respectively) 51,958 51,958 51,958 Dividends, RUB per ADS 52.00 52.00 52.00 Dividends, RUB per share 26.00 26.00 26.00 |
MGTS Group | |
SHAREHOLDERS' EQUITY | |
Schedule of financial information for non-controlling interest | Year ended December 31, MGTS 2018 2017 2016 Non-controlling interest opening balance (4,180) (4,787) (5,191) Profit for the year attributable to non-controlling interest (619) (554) (727) Dividends to non-controlling interest 1,165 1,175 1,120 Other (15) (14) 11 Non-controlling interest closing balance (3,649) (4,180) (4,787) |
MTS Bank | |
SHAREHOLDERS' EQUITY | |
Schedule of financial information for non-controlling interest | Year ended December 31, MTS Bank 2018 2017 2016 Non-controlling interest opening balance — — — Profit for the year attributable to non-controlling interest (378) — — Acquisitions under common control (8,320) — — Non-controlling interest closing balance (8,698) — — |
MGTS Group and MTS Bank | |
SHAREHOLDERS' EQUITY | |
Schedule of financial information for non-controlling interest in balance sheet | December 31 2018 2017 Current assets 123,879 22,595 Non-current assets 84,093 42,204 Current liabilities (141,359) (8,959) Non-current liabilities (18,269) (7,250) |
Schedule of financial information for non-controlling interest in profit and loss | Year ended December 31, 2018 2017 2016 Revenue, gross of intercompany (51,246) (39,565) (40,210) Profit for the year, gross of intercompany (11,314) (9,719) (12,167) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of contingent liabilities in respect of additional tax settlements | December 31, December 31, 2018 2017 Contingent liabilities for additional taxes other than income tax 730 732 Contingent liabilities for additional income taxes 2,051 2,591 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS - Investments in significant entities (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2010 | |
MTS Belarus | |||||||
Disclosure of investments in significant entities | |||||||
Proportion of ownership interest | 49.00% | 49.00% | |||||
Sistema Capital | |||||||
Disclosure of investments in significant entities | |||||||
Proportion of ownership interest | 30.00% | 30.00% | 30.00% | ||||
Zifrovoe TV | |||||||
Disclosure of investments in significant entities | |||||||
Proportion of ownership interest | 20.00% | 20.00% | |||||
OZON Holdings Ltd | |||||||
Disclosure of investments in significant entities | |||||||
Proportion of ownership interest | 18.69% | 11.20% | 10.80% | ||||
YOUDO Web Technologies | |||||||
Disclosure of investments in significant entities | |||||||
Proportion of ownership interest | 13.68% | 13.70% | |||||
RTC | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Vodafone Ukraine (VF Ukraine) | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
MTS Turkmenistan | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Sibintertelecom | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
NVision | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Sitronics Telecom Solutions | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
NVision Czech Republic | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Sputnikovoe TV | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Stream | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Dega | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Stream Digital | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
MTS Energo | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
Bashkortostan Cellular Communication OJSC (BCC) | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | ||||||
Praliss Enterprises Limited | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | 100.00% | |||||
MDTZK LLC (Ticketland) | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | ||||||
IT Grad | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 100.00% | ||||||
Metro-Telecom | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 95.00% | 95.00% | |||||
MGTS Group | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 94.70% | 94.70% | |||||
MTS Armenia | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 80.00% | 80.00% | |||||
Kulturnaya Sluzhba (Ponominalu) | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 78.20% | ||||||
Navigation Information Systems Group (NIS) | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 77.70% | 77.70% | |||||
MTS Bank | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 55.40% | 26.60% | |||||
Oblachny Retail LLC | |||||||
Disclosure of investments in significant entities | |||||||
Ownership interest in subsidiary (as a percentage) | 50.80% | 50.80% | |||||
MTS International Funding Limited ("MTS International") | Notes issued in 2010 | |||||||
Borrowings | |||||||
Notional amount | $ 750 | ||||||
MTS International Funding Limited ("MTS International") | Notes issued in 2013 | |||||||
Borrowings | |||||||
Notional amount | $ 500 | ||||||
USD | MTS International Funding Limited ("MTS International") | Notes issued in 2010 | |||||||
Borrowings | |||||||
Interest rate | 8.625% | ||||||
USD | MTS International Funding Limited ("MTS International") | Notes issued in 2013 | |||||||
Borrowings | |||||||
Interest rate | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS - Standards, interpretations and amendments (Details) - RUB (₽) ₽ in Millions | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | ₽ 131,562 | ||
Financial assets after adoption of IFRS 9 | 131,082 | ||
Leases | |||
Additional right-of-use assets | ₽ 22,572 | ||
Weighted average lessee's incremental borrowing rate applied to lease liabilities recognised at date of initial application of IFRS 16 | 8.83% | ||
Reconciliation between operating lease commitments and lease liability recognized | |||
Minimum lease payments payable under non-cancellable operating lease | ₽ 15,135 | ||
There of: | |||
Finance lease liabilities | 11,056 | ||
Lease liability related to exclusive right to use trademark | 1,808 | ||
Extention options reasonably certain to be exercised | 125,503 | ||
Adjustment on initial application of IFRS 9 | |||
Financial instruments | |||
Gain related to modification of financial liabilities | 3,000 | ||
Gain, net of tax, related to modification of financial liabilities | 2,400 | ||
Future losses recognised on financial assets due to adoption of IFRS 9 | 1,200 | ||
Future losses recognised on financial assets (net of tax) due to adoption of IFRS 9 | 1,000 | ||
IFRS 15 adjustments | |||
Revenue from contracts with customers | |||
Cumulative effect before tax from the transition adjusted to opening balance of equity | 3,100 | ||
Cumulative effect net of tax from the transition adjusted to opening balance of equity | ₽ 2,500 | ||
Adjustment on initial application of IFRS 16 | |||
Leases | |||
Additional lease liability | 141,000 | ||
Additional right-of-use assets | 141,000 | ||
Reconciliation between operating lease commitments and lease liability recognized | |||
Minimum lease payments payable under non-cancellable operating lease | 10,530 | ||
Lease liabilities | 148,897 | ||
Difference | ₽ 138,367 | ||
Trade and other receivables | Loans and receivables | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 28,017 | ||
Trade and other receivables | At amortized cost | |||
Financial instruments | |||
Financial assets after adoption of IFRS 9 | 28,017 | ||
Accounts receivable, related parties | Loans and receivables | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 11,358 | ||
Accounts receivable, related parties | At amortized cost | |||
Financial instruments | |||
Financial assets after adoption of IFRS 9 | 11,358 | ||
Cash and Cash equivalents | At amortized cost | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 30,586 | ||
Financial assets after adoption of IFRS 9 | 30,586 | ||
Assets in Sistema Capital trust management | At fair value through profit or loss | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 9,600 | ||
Financial assets after adoption of IFRS 9 | 9,600 | ||
Cross-currency swaps designated as cash flow hedges | At fair value through other comprehensive income | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 8,403 | ||
Financial assets after adoption of IFRS 9 | 8,403 | ||
Notes | Available-for-sale | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 57 | ||
Notes | At fair value through other comprehensive income | |||
Financial instruments | |||
Financial assets after adoption of IFRS 9 | 57 | ||
Bank deposits | Loans and receivables | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 27,836 | ||
Bank deposits | At amortized cost | |||
Financial instruments | |||
Financial assets after adoption of IFRS 9 | 27,836 | ||
Loans and receivables | Loans and receivables | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 5,415 | ||
Loans and receivables | At amortized cost | |||
Financial instruments | |||
Financial assets after adoption of IFRS 9 | 4,935 | ||
Notes | Loans and receivables | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 8,480 | ||
Notes | At amortized cost | |||
Financial instruments | |||
Financial assets after adoption of IFRS 9 | 8,480 | ||
Other | Loans and receivables | |||
Financial instruments | |||
Financial assets prior to adoption of IFRS 9 | 1,810 | ||
Other | At amortized cost | |||
Financial instruments | |||
Financial assets after adoption of IFRS 9 | ₽ 1,810 |
EFFECT FROM IFRS 15 IMPLEMENT_3
EFFECT FROM IFRS 15 IMPLEMENTATION - Statement of financial position (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
NON-CURRENT ASSETS: | ||||
Property, plant and equipment | ₽ 276,443 | ₽ 263,063 | ₽ 272,841 | ₽ 302,662 |
Other intangible assets | 95,962 | 79,397 | 75,128 | 74,596 |
Investment in associates | 10,735 | 9,452 | ||
Other non-financial assets | 5,038 | 2,048 | ||
Total non-current assets | 647,059 | 405,038 | ||
CURRENT ASSETS: | ||||
Other non financial assets | 1,338 | |||
Total current assets | 268,934 | 146,032 | ||
TOTAL ASSETS | 915,993 | 551,070 | ||
EQUITY: | ||||
Retained earnings | 110,946 | 151,043 | ||
Accumulated other comprehensive loss | (1,064) | (8,854) | ||
Equity attributable to owners of the Company | 65,274 | 120,126 | ||
Non-controlling interests | 12,291 | 4,079 | ||
Total equity | 77,565 | 124,205 | ₽ 143,948 | ₽ 168,371 |
NON-CURRENT LIABILITIES: | ||||
Deferred tax liabilities | 24,439 | 23,773 | ||
Total non-current liabilities | 542,957 | 270,194 | ||
CURRENT LIABILITIES: | ||||
Contract liabilities | 21,597 | 17,696 | ||
Total current liabilities | 295,471 | 156,671 | ||
TOTAL EQUITY AND LIABILITIES | 915,993 | ₽ 551,070 | ||
As if IFRS 15 was not applied | ||||
NON-CURRENT ASSETS: | ||||
Property, plant and equipment | 278,002 | |||
Other intangible assets | 88,945 | |||
Investment in associates | 10,772 | |||
Other non-financial assets | 3,424 | |||
Total non-current assets | 640,024 | |||
CURRENT ASSETS: | ||||
Other non financial assets | 1,238 | |||
Total current assets | 268,834 | |||
TOTAL ASSETS | 908,858 | |||
EQUITY: | ||||
Retained earnings | 108,243 | |||
Accumulated other comprehensive loss | (1,158) | |||
Equity attributable to owners of the Company | 62,477 | |||
Non-controlling interests | 12,269 | |||
Total equity | 74,746 | |||
NON-CURRENT LIABILITIES: | ||||
Deferred tax liabilities | 23,740 | |||
Total non-current liabilities | 542,258 | |||
CURRENT LIABILITIES: | ||||
Contract liabilities | 17,980 | |||
Total current liabilities | 291,854 | |||
TOTAL EQUITY AND LIABILITIES | 908,858 | |||
IFRS 15 adjustments | ||||
NON-CURRENT ASSETS: | ||||
Property, plant and equipment | (1,559) | |||
Other intangible assets | 7,017 | |||
Investment in associates | (37) | |||
Other non-financial assets | 1,614 | |||
Total non-current assets | 7,035 | |||
CURRENT ASSETS: | ||||
Other non financial assets | 100 | |||
Total current assets | 100 | |||
TOTAL ASSETS | 7,135 | |||
EQUITY: | ||||
Retained earnings | 2,703 | |||
Accumulated other comprehensive loss | 94 | |||
Equity attributable to owners of the Company | 2,797 | |||
Non-controlling interests | 22 | |||
Total equity | 2,819 | |||
NON-CURRENT LIABILITIES: | ||||
Deferred tax liabilities | 699 | |||
Total non-current liabilities | 699 | |||
CURRENT LIABILITIES: | ||||
Contract liabilities | 3,617 | |||
Total current liabilities | 3,617 | |||
TOTAL EQUITY AND LIABILITIES | ₽ 7,135 |
EFFECT FROM IFRS 15 IMPLEMENT_4
EFFECT FROM IFRS 15 IMPLEMENTATION - Statement of profit or loss (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS | |||
Service revenue | ₽ 410,890 | ₽ 390,761 | ₽ 386,486 |
Revenue | 480,293 | 442,911 | 435,692 |
Cost of services | 112,401 | 123,779 | 130,158 |
Cost of goods | 63,869 | 45,623 | 45,574 |
Selling, general and administrative expenses | 87,946 | 95,186 | 94,046 |
Depreciation and amortization | 104,588 | 79,912 | 81,582 |
Operating profit | 116,185 | 96,100 | 87,669 |
Profit before tax | 83,851 | 75,567 | 67,609 |
Income tax expense | 16,969 | 18,977 | 15,138 |
Profit for the year | 66,882 | 56,590 | 52,471 |
Profit for the period attributable to: | |||
Owners of the Company | 6,848 | ₽ 56,042 | ₽ 48,474 |
As if IFRS 15 was not applied | |||
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS | |||
Service revenue | 413,067 | ||
Revenue | 482,470 | ||
Cost of services | 114,458 | ||
Cost of goods | 64,169 | ||
Selling, general and administrative expenses | 91,887 | ||
Depreciation and amortization | 100,687 | ||
Operating profit | 115,965 | ||
Profit before tax | 83,631 | ||
Income tax expense | 16,925 | ||
Profit for the year | 66,706 | ||
Profit for the period attributable to: | |||
Owners of the Company | 6,672 | ||
IFRS 15 adjustments | |||
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS | |||
Service revenue | (2,177) | ||
Revenue | (2,177) | ||
Cost of services | (2,057) | ||
Cost of goods | (300) | ||
Selling, general and administrative expenses | (3,941) | ||
Depreciation and amortization | 3,901 | ||
Operating profit | 220 | ||
Profit before tax | 220 | ||
Income tax expense | 44 | ||
Profit for the year | 176 | ||
Profit for the period attributable to: | |||
Owners of the Company | ₽ 176 |
EFFECT FROM IFRS 15 IMPLEMENT_5
EFFECT FROM IFRS 15 IMPLEMENTATION - Statements of cash flows (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Profit for the year | ₽ 7,832 | ₽ 56,590 | ₽ 48,450 |
Adjustments for: | |||
Depreciation and amortization | 104,588 | 79,912 | 83,259 |
Income tax expense | 16,969 | 18,977 | 14,954 |
Movements in operating assets and liabilities: | |||
Decrease in trade and other payables and other current liabilities | (11,162) | (6,715) | (9,086) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 154,390 | 144,640 | 130,565 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cost to obtain and fulfill contracts, paid | (4,764) | ||
NET CASH USED IN INVESTING ACTIVITIES | (78,389) | ₽ (81,510) | ₽ (57,302) |
As if IFRS 15 was not applied | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Profit for the year | 7,656 | ||
Adjustments for: | |||
Depreciation and amortization | 100,687 | ||
Income tax expense | 16,925 | ||
Movements in operating assets and liabilities: | |||
Decrease in trade and other payables and other current liabilities | (10,896) | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 150,535 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Other investing activities | 909 | ||
NET CASH USED IN INVESTING ACTIVITIES | (74,534) | ||
IFRS 15 adjustments | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Profit for the year | 176 | ||
Adjustments for: | |||
Depreciation and amortization | 3,901 | ||
Income tax expense | 44 | ||
Movements in operating assets and liabilities: | |||
Decrease in trade and other payables and other current liabilities | (266) | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 3,855 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cost to obtain and fulfill contracts, paid | (4,764) | ||
Other investing activities | (909) | ||
NET CASH USED IN INVESTING ACTIVITIES | ₽ (3,855) |
BUSINESS ACQUISITIONS AND DIS_3
BUSINESS ACQUISITIONS AND DISPOSALS - Acquisition of Kulturnaya Sluzhba, MDTZK, ProgTech and IT-Grad (Details) ₽ in Millions | 1 Months Ended | |||
Dec. 31, 2018RUB (₽)Y | Aug. 31, 2018RUB (₽)Y | Feb. 28, 2018RUB (₽)Y | Jan. 31, 2018RUB (₽) | |
Kulturnaya Sluzhba LLC | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 78.20% | |||
Contingent consideration payable due (in months) | 12 months | |||
Purchase price allocation | ||||
Goodwill | ₽ 479 | |||
Customer base | 37 | |||
Other non-current assets | 43 | |||
Current assets | 117 | |||
Cash and cash equivalents | 39 | |||
Current liabilities | (383) | |||
Liability under put option agreement over non-controlling interests | (106) | |||
Non-current liabilities | (34) | |||
Total consideration | 321 | |||
Fair value of contingent consideration and earn-out payments | 54 | |||
Cash paid | 267 | |||
Kulturnaya Sluzhba LLC | Trademark | ||||
Purchase price allocation | ||||
Trademark | ₽ 129 | |||
Amortisation period | Y | 10 | |||
MDTZK LLC | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 100.00% | |||
Contingent consideration payable due (in months) | 12 months | |||
Purchase price allocation | ||||
Goodwill | ₽ 2,033 | |||
Customer base | 727 | |||
Other non-current assets | 145 | |||
Current assets | 202 | |||
Cash and cash equivalents | 542 | |||
Current liabilities | (868) | |||
Non-current liabilities | (370) | |||
Total consideration | 3,190 | |||
Cash paid | 3,190 | |||
MDTZK LLC | Trademark | ||||
Purchase price allocation | ||||
Trademark | ₽ 779 | |||
Amortisation period | Y | 10 | |||
ProgTech | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 99.00% | |||
Deferred payment payable first payment | ₽ 11 | |||
Deferred payment payable first payment period | 12 months | |||
Deferred payment payable second payment | ₽ 21 | |||
Deferred payment payable second payment period | 24 months | |||
Purchase price allocation | ||||
Goodwill | ₽ 213 | |||
Customer base | 123 | |||
Other non-current assets | 172 | |||
Current assets | 15 | |||
Cash and cash equivalents | 28 | |||
Current liabilities | (80) | |||
Non-current liabilities | (76) | |||
Total consideration | 395 | |||
Fair value of contingent consideration and earn-out payments | 3 | |||
Cash paid | ₽ 392 | |||
ProgTech | Customer base | ||||
Purchase price allocation | ||||
Amortisation period | Y | 15 | |||
IT-Grad | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 100.00% | |||
Contingent consideration payable first payment | ₽ 691 | |||
Contingent consideration payable first payment period | 8 months | |||
Contingent consideration payable second payment | ₽ 249 | |||
Contingent consideration payable second payment period | 18 months | |||
Purchase price allocation | ||||
Goodwill | ₽ 1,877 | |||
Customer base | 643 | |||
Other non-current assets | 32 | |||
Current assets | 44 | |||
Cash and cash equivalents | 13 | |||
Current liabilities | (59) | |||
Non-current liabilities | (128) | |||
Total consideration | 2,422 | |||
Fair value of contingent consideration and earn-out payments | 907 | |||
Cash paid | ₽ 1,515 | |||
IT-Grad | Customer base | ||||
Purchase price allocation | ||||
Amortisation period | Y | 7 |
BUSINESS ACQUISITIONS AND DIS_4
BUSINESS ACQUISITIONS AND DISPOSALS - Liabilities and indemnification assets in respect to deferred payments (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Aug. 31, 2018 | Feb. 28, 2018 | Jan. 31, 2018 |
Kulturnaya Sluzhba LLC | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Deferred payment per agreement | ₽ 78 | ₽ 78 | ||
Provision for tax liabilities related to the pre-acquisition period | (49) | (134) | ||
Liability on deferred payment | (29) | |||
Indemnification asset | ₽ 56 | |||
MDTZK LLC | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Deferred payment per agreement | 60 | ₽ 60 | ||
Provision for tax liabilities related to the pre-acquisition period | (67) | (125) | ||
Indemnification asset | 7 | ₽ 65 | ||
ProgTech | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Deferred payment per agreement | 32 | ₽ 32 | ||
Provision for tax liabilities related to the pre-acquisition period | (29) | (29) | ||
Liability on deferred payment | ₽ (3) | ₽ (3) |
BUSINESS ACQUISITIONS AND DIS_5
BUSINESS ACQUISITIONS AND DISPOSALS - Acquisitions of subsidiaries under common control (Details) - RUB (₽) ₽ in Millions | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2018 | Dec. 31, 2018 | Oct. 31, 2018 | Jun. 30, 2018 | |
Dekart | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Amount of consideration | ₽ 5,242 | |||
Consideration paid net of cash acquired | ₽ 4,658 | |||
Assets acquired other than cash | 3,406 | |||
Liabilities assumed | 125 | |||
MTS Bank | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 26.60% | |||
Ownership interest in subsidiary (as a percentage) | 55.40% | |||
Amount of consideration | ₽ 8,273 | |||
Consideration paid net of cash acquired | 6,873 | |||
Cash acquired | 1,401 | |||
Assets acquired other than cash | 126,180 | |||
Liabilities assumed | 128,165 | |||
Serebryaniy Bor | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Amount of consideration | 1,711 | |||
Consideration paid net of cash acquired | 1,711 | |||
Assets acquired other than cash | ₽ 383 |
BUSINESS ACQUISITIONS AND DIS_6
BUSINESS ACQUISITIONS AND DISPOSALS - Acquisition of BCC, Oblachny Retail and Praliss Enterprises (Details) - RUB (₽) ₽ in Millions | 1 Months Ended | |||
Dec. 31, 2017 | Oct. 31, 2017 | Jul. 31, 2017 | Dec. 31, 2018 | |
Bashkortostan Cellular Communication OJSC (BCC) | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 100.00% | |||
Contingent consideration payable due (in months) | 12 months | |||
Purchase price allocation | ||||
Goodwill | ₽ 62 | |||
Licenses | 260 | |||
Other non-current assets | 21 | |||
Current assets | 5 | |||
Cash and cash equivalents | 13 | |||
Current liabilities | (15) | |||
Non-current liabilities | (54) | |||
Total consideration | 292 | |||
Fair value of contingent consideration and earn-out payments | 72 | |||
Cash paid | 220 | |||
Goodwill expected to be deductible for tax purposes | ₽ 0 | |||
Average remaining useful life of licenses | 15 years | |||
Oblachny Retail LLC | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 50.82% | |||
Contingent consideration payable due (in months) | 12 months | |||
Purchase price allocation | ||||
Goodwill | ₽ 524 | |||
Other non-current assets | 181 | |||
Current assets | 23 | |||
Cash and cash equivalents | 420 | |||
Current liabilities | (123) | |||
Liability under put option agreement over non-controlling interests | (402) | |||
Non-current liabilities | (33) | |||
Total consideration | 590 | |||
Fair value of contingent consideration and earn-out payments | 10 | |||
Additional contribution | 420 | |||
Cash paid | 160 | |||
Goodwill expected to be deductible for tax purposes | ₽ 0 | |||
Average remaining useful life of software | 5 years | |||
Oblachny Retail LLC | Call and put option agreement | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Remaining stake to be acquired | 49.18% | |||
Praliss Enterprises Limited | ||||
BUSINESS ACQUISITIONS AND DISPOSALS | ||||
Ownership interest acquired (in percentage) | 100.00% | |||
Contingent consideration payable due (in months) | 12 months | |||
Earn-out payment period | 2 years | |||
Purchase price allocation | ||||
Goodwill | ₽ 208 | |||
Other non-current assets | 132 | |||
Non-current liabilities | (27) | |||
Total consideration | 313 | |||
Fair value of contingent consideration and earn-out payments | 93 | ₽ 13 | ||
Cash paid | 220 | |||
Goodwill expected to be deductible for tax purposes | ₽ 0 |
BUSINESS ACQUISITIONS AND DIS_7
BUSINESS ACQUISITIONS AND DISPOSALS - Acquisition of Smarts-Yoshkar-Ola (Details) - RUB (₽) ₽ in Millions | 1 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2016 | |
Smarts-Yoshkar-Ola | ||
BUSINESS ACQUISITIONS AND DISPOSALS | ||
Ownership interest acquired (in percentage) | 100.00% | |
Purchase price allocation for business acquired | ||
Cash and cash equivalents | ₽ 5 | |
Current assets | 5 | |
Licenses | 323 | |
Other non-current assets | 14 | |
Current liabilities | (30) | |
Non-current liabilities | (69) | |
Gain from bargain purchase (included in other operating income in the consolidated statement of profit or loss) | (235) | |
Total consideration | 13 | |
Contingent consideration | 3 | |
Cash paid | ₽ 10 | |
Universal Mobile Systems LLC | ||
Purchase price allocation for business acquired | ||
Percentage of voting rights disposed | 50.01% |
BUSINESS ACQUISITIONS AND DIS_8
BUSINESS ACQUISITIONS AND DISPOSALS - Pro forma results of operations (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Companies acquired in 2016 | |||
Pro forma: | |||
Net revenues | ₽ 435,694 | ||
Net income | 48,465 | ||
Revenue of acquired entities since acquisition | 1 | ||
Net income (loss) of acquired entities since acquisition | ₽ (15) | ||
Companies acquired in 2017 | |||
Pro forma: | |||
Net revenues | ₽ 443,178 | ||
Net income | 55,881 | ||
Revenue of acquired entities since acquisition | 37 | ||
Net income (loss) of acquired entities since acquisition | ₽ (105) | ||
Companies acquired in 2018 | |||
Pro forma: | |||
Net revenues | ₽ 491,936 | ||
Net income | 8,194 | ||
Revenue of acquired entities since acquisition | 13,261 | ||
Net income (loss) of acquired entities since acquisition | ₽ 615 |
SEGMENT INFORMATION - Financial
SEGMENT INFORMATION - Financial information by reportable segments (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | |||
Revenue | ₽ 480,293 | ₽ 442,911 | ₽ 435,692 |
Operating profit | 116,185 | 96,100 | 87,669 |
Depreciation and amortization | 104,588 | 79,912 | 81,582 |
Other disclosure: | |||
Capital expenditures | 103,599 | 86,158 | 80,185 |
Operating segments | |||
Revenue | |||
Revenue | 480,293 | 442,911 | 435,692 |
External Customers | |||
Revenue | |||
Revenue | 480,293 | 442,911 | 435,692 |
Total | |||
Revenue | |||
Revenue | 461,325 | 425,188 | 416,878 |
Operating profit | 126,940 | 107,880 | 95,933 |
Depreciation and amortization | 103,217 | 76,690 | 77,291 |
Other disclosure: | |||
Capital expenditures | 90,003 | 83,766 | 76,190 |
Total | Intersegment elimination | |||
Revenue | |||
Revenue | 12,185 | 10,930 | 11,881 |
Total | Operating segments | |||
Revenue | |||
Revenue | 473,510 | 436,118 | 428,759 |
Total | External Customers | |||
Revenue | |||
Revenue | 461,325 | 425,188 | 416,878 |
Russia Convergent | |||
Revenue | |||
Revenue | 386,838 | 365,846 | 355,056 |
Operating profit | 106,296 | 93,821 | 81,484 |
Depreciation and amortization | 82,457 | 59,942 | 60,087 |
Other disclosure: | |||
Capital expenditures | 67,863 | 65,790 | 61,208 |
Russia Convergent | Intersegment elimination | |||
Revenue | |||
Revenue | 6,258 | 5,136 | 4,849 |
Russia Convergent | Operating segments | |||
Revenue | |||
Revenue | 393,096 | 370,982 | 359,905 |
Russia Convergent | External Customers | |||
Revenue | |||
Revenue | 386,838 | 365,846 | 355,056 |
Moscow fixed line | |||
Revenue | |||
Revenue | 34,348 | 34,350 | 34,796 |
Operating profit | 12,695 | 8,801 | 10,850 |
Depreciation and amortization | 10,867 | 10,642 | 10,900 |
Other disclosure: | |||
Capital expenditures | 6,306 | 7,403 | 7,316 |
Moscow fixed line | Intersegment elimination | |||
Revenue | |||
Revenue | 4,498 | 4,683 | 4,871 |
Moscow fixed line | Operating segments | |||
Revenue | |||
Revenue | 38,846 | 39,033 | 39,667 |
Moscow fixed line | External Customers | |||
Revenue | |||
Revenue | 34,348 | 34,350 | 34,796 |
Ukraine | |||
Revenue | |||
Revenue | 28,826 | 24,992 | 27,026 |
Operating profit | 6,658 | 5,258 | 3,599 |
Depreciation and amortization | 9,346 | 6,106 | 6,304 |
Other disclosure: | |||
Capital expenditures | 15,151 | 10,573 | 7,666 |
Ukraine | Intersegment elimination | |||
Revenue | |||
Revenue | 891 | 1,111 | 2,161 |
Ukraine | Operating segments | |||
Revenue | |||
Revenue | 29,717 | 26,103 | 29,187 |
Ukraine | External Customers | |||
Revenue | |||
Revenue | 28,826 | 24,992 | 27,026 |
MTS Bank | |||
Revenue | |||
Revenue | 11,313 | ||
Operating profit | 1,291 | ||
Depreciation and amortization | 547 | ||
Other disclosure: | |||
Capital expenditures | 683 | ||
MTS Bank | Intersegment elimination | |||
Revenue | |||
Revenue | 538 | ||
MTS Bank | Operating segments | |||
Revenue | |||
Revenue | 11,851 | ||
MTS Bank | External Customers | |||
Revenue | |||
Revenue | 11,313 | ||
Other | |||
Revenue | |||
Revenue | 19,550 | 17,618 | 18,689 |
Operating profit | 1,072 | (871) | 3,523 |
Depreciation and amortization | 3,620 | 3,481 | 4,395 |
Other disclosure: | |||
Capital expenditures | 13,596 | 2,392 | 3,995 |
Other | Intersegment elimination | |||
Revenue | |||
Revenue | 12,780 | 12,785 | 14,423 |
Other | Operating segments | |||
Revenue | |||
Revenue | 32,330 | 30,403 | 33,112 |
Other | External Customers | |||
Revenue | |||
Revenue | 19,550 | 17,618 | 18,689 |
HQ and elimination | |||
Revenue | |||
Revenue | (582) | 105 | 125 |
Operating profit | (11,827) | (10,909) | (11,787) |
Depreciation and amortization | (2,249) | (259) | (104) |
HQ and elimination | Intersegment elimination | |||
Revenue | |||
Revenue | (24,965) | (23,715) | (26,304) |
HQ and elimination | Operating segments | |||
Revenue | |||
Revenue | (25,547) | (23,610) | (26,179) |
HQ and elimination | External Customers | |||
Revenue | |||
Revenue | ₽ (582) | ₽ 105 | ₽ 125 |
SEGMENT INFORMATION - Financi_2
SEGMENT INFORMATION - Financial information by geographic areas (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | |||
Revenue | ₽ 480,293 | ₽ 442,911 | ₽ 435,692 |
Non-current assets | |||
Non-current assets: | 411,512 | 376,741 | |
Russia | |||
Revenue | |||
Revenue | 440,899 | 405,365 | 392,764 |
Non-current assets | |||
Non-current assets: | 357,361 | 339,693 | |
Other | |||
Revenue | |||
Revenue | 39,394 | 37,546 | ₽ 42,928 |
Non-current assets | |||
Non-current assets: | ₽ 54,151 | ₽ 37,048 |
SEGMENT INFORMATION - Disaggreg
SEGMENT INFORMATION - Disaggregation of revenue (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of revenue | |||
Revenue | ₽ 480,293 | ₽ 442,911 | ₽ 435,692 |
Recognised over time | |||
Disaggregation of revenue | |||
Revenue | 409,964 | 390,760 | 386,486 |
Recognised at point of time | |||
Disaggregation of revenue | |||
Revenue | 70,329 | 52,151 | 49,206 |
External Customers | |||
Disaggregation of revenue | |||
Revenue | 480,293 | 442,911 | 435,692 |
Mobile services | |||
Disaggregation of revenue | |||
Revenue | 340,254 | 333,135 | 328,216 |
Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 56,296 | 56,372 | 56,558 |
Finance services | |||
Disaggregation of revenue | |||
Revenue | 11,553 | ||
Integration services | |||
Disaggregation of revenue | |||
Revenue | 1,538 | 1,253 | 1,712 |
Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 69,403 | 52,151 | 49,206 |
Other services | |||
Disaggregation of revenue | |||
Revenue | 1,249 | ||
Total | |||
Disaggregation of revenue | |||
Revenue | 461,325 | 425,188 | 416,878 |
Total | Recognised over time | |||
Disaggregation of revenue | |||
Revenue | 401,168 | 379,003 | 372,155 |
Total | Recognised at point of time | |||
Disaggregation of revenue | |||
Revenue | 60,157 | 46,185 | 44,723 |
Total | External Customers | |||
Disaggregation of revenue | |||
Revenue | 461,325 | 425,188 | 416,878 |
Total | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 333,487 | 322,793 | 315,696 |
Total | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 55,919 | 56,019 | 56,274 |
Total | Finance services | |||
Disaggregation of revenue | |||
Revenue | 11,313 | ||
Total | Integration services | |||
Disaggregation of revenue | |||
Revenue | 449 | 191 | 185 |
Total | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 60,157 | 46,185 | 44,723 |
Russia Convergent | |||
Disaggregation of revenue | |||
Revenue | 386,838 | 365,846 | 355,056 |
Russia Convergent | Recognised over time | |||
Disaggregation of revenue | |||
Revenue | 327,432 | 319,822 | 310,417 |
Russia Convergent | Recognised at point of time | |||
Disaggregation of revenue | |||
Revenue | 59,406 | 46,024 | 44,639 |
Russia Convergent | External Customers | |||
Disaggregation of revenue | |||
Revenue | 386,838 | 365,846 | 355,056 |
Russia Convergent | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 304,049 | 297,273 | 288,547 |
Russia Convergent | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 22,939 | 22,358 | 21,685 |
Russia Convergent | Integration services | |||
Disaggregation of revenue | |||
Revenue | 444 | 191 | 185 |
Russia Convergent | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 59,406 | 46,024 | 44,639 |
Moscow fixed line | |||
Disaggregation of revenue | |||
Revenue | 34,348 | 34,350 | 34,796 |
Moscow fixed line | Recognised over time | |||
Disaggregation of revenue | |||
Revenue | 34,231 | 34,251 | 34,771 |
Moscow fixed line | Recognised at point of time | |||
Disaggregation of revenue | |||
Revenue | 117 | 99 | 25 |
Moscow fixed line | External Customers | |||
Disaggregation of revenue | |||
Revenue | 34,348 | 34,350 | 34,796 |
Moscow fixed line | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 1,487 | 798 | 425 |
Moscow fixed line | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 32,739 | 33,453 | 34,346 |
Moscow fixed line | Integration services | |||
Disaggregation of revenue | |||
Revenue | 5 | ||
Moscow fixed line | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 117 | 99 | 25 |
Ukraine | |||
Disaggregation of revenue | |||
Revenue | 28,826 | 24,992 | 27,026 |
Ukraine | Recognised over time | |||
Disaggregation of revenue | |||
Revenue | 28,192 | 24,930 | 26,967 |
Ukraine | Recognised at point of time | |||
Disaggregation of revenue | |||
Revenue | 634 | 62 | 59 |
Ukraine | External Customers | |||
Disaggregation of revenue | |||
Revenue | 28,826 | 24,992 | 27,026 |
Ukraine | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 27,951 | 24,722 | 26,724 |
Ukraine | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 241 | 208 | 243 |
Ukraine | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 634 | 62 | 59 |
MTS Bank | |||
Disaggregation of revenue | |||
Revenue | 11,313 | ||
MTS Bank | Recognised over time | |||
Disaggregation of revenue | |||
Revenue | 11,313 | ||
MTS Bank | External Customers | |||
Disaggregation of revenue | |||
Revenue | 11,313 | ||
MTS Bank | Finance services | |||
Disaggregation of revenue | |||
Revenue | 11,313 | ||
Other | |||
Disaggregation of revenue | |||
Revenue | 19,550 | 17,618 | 18,689 |
Other | Recognised over time | |||
Disaggregation of revenue | |||
Revenue | 9,378 | 11,652 | 14,206 |
Other | Recognised at point of time | |||
Disaggregation of revenue | |||
Revenue | 10,172 | 5,966 | 4,483 |
Other | External Customers | |||
Disaggregation of revenue | |||
Revenue | 19,550 | 17,618 | 18,689 |
Other | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 6,663 | 10,237 | 12,395 |
Other | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 377 | 353 | 284 |
Other | Integration services | |||
Disaggregation of revenue | |||
Revenue | 1,089 | 1,062 | 1,527 |
Other | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 10,172 | 5,966 | 4,483 |
Other | Other services | |||
Disaggregation of revenue | |||
Revenue | 1,249 | ||
HQ and elimination | |||
Disaggregation of revenue | |||
Revenue | (582) | 105 | 125 |
HQ and elimination | Recognised over time | |||
Disaggregation of revenue | |||
Revenue | (582) | 105 | 125 |
HQ and elimination | External Customers | |||
Disaggregation of revenue | |||
Revenue | (582) | 105 | 125 |
HQ and elimination | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 104 | 105 | 125 |
HQ and elimination | Finance services | |||
Disaggregation of revenue | |||
Revenue | 240 | ||
HQ and elimination | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | (926) | ||
Intersegment elimination | Total | |||
Disaggregation of revenue | |||
Revenue | 12,185 | 10,930 | 11,881 |
Intersegment elimination | Russia Convergent | |||
Disaggregation of revenue | |||
Revenue | 6,258 | 5,136 | 4,849 |
Intersegment elimination | Moscow fixed line | |||
Disaggregation of revenue | |||
Revenue | 4,498 | 4,683 | 4,871 |
Intersegment elimination | Ukraine | |||
Disaggregation of revenue | |||
Revenue | 891 | 1,111 | 2,161 |
Intersegment elimination | MTS Bank | |||
Disaggregation of revenue | |||
Revenue | 538 | ||
Intersegment elimination | Other | |||
Disaggregation of revenue | |||
Revenue | 12,780 | 12,785 | 14,423 |
Intersegment elimination | HQ and elimination | |||
Disaggregation of revenue | |||
Revenue | (24,965) | (23,715) | (26,304) |
Operating segments | |||
Disaggregation of revenue | |||
Revenue | 480,293 | 442,911 | 435,692 |
Operating segments | Mobile services | |||
Disaggregation of revenue | |||
Revenue | (3,274) | (3,819) | (5,288) |
Operating segments | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | (59) | (68) | (56) |
Operating segments | Integration services | |||
Disaggregation of revenue | |||
Revenue | (655) | (916) | (996) |
Operating segments | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | (1,048) | (829) | (821) |
Operating segments | Total | |||
Disaggregation of revenue | |||
Revenue | 473,510 | 436,118 | 428,759 |
Operating segments | Russia Convergent | |||
Disaggregation of revenue | |||
Revenue | 393,096 | 370,982 | 359,905 |
Operating segments | Moscow fixed line | |||
Disaggregation of revenue | |||
Revenue | 38,846 | 39,033 | 39,667 |
Operating segments | Ukraine | |||
Disaggregation of revenue | |||
Revenue | 29,717 | 26,103 | 29,187 |
Operating segments | MTS Bank | |||
Disaggregation of revenue | |||
Revenue | 11,851 | ||
Operating segments | Other | |||
Disaggregation of revenue | |||
Revenue | 32,330 | 30,403 | 33,112 |
Operating segments | HQ and elimination | |||
Disaggregation of revenue | |||
Revenue | ₽ (25,547) | ₽ (23,610) | ₽ (26,179) |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of revenue (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of revenue | |||
Revenue | ₽ 480,293 | ₽ 442,911 | ₽ 435,692 |
Mobile services | |||
Disaggregation of revenue | |||
Revenue | 340,254 | 333,135 | 328,216 |
Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 56,296 | 56,372 | 56,558 |
Finance services | |||
Disaggregation of revenue | |||
Revenue | 11,553 | ||
Integration services | |||
Disaggregation of revenue | |||
Revenue | 1,538 | 1,253 | 1,712 |
Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 69,403 | 52,151 | 49,206 |
Other services | |||
Disaggregation of revenue | |||
Revenue | 1,249 | ||
Russia* | |||
Disaggregation of revenue | |||
Revenue | 448,083 | 412,312 | 400,554 |
Ukraine | |||
Disaggregation of revenue | |||
Revenue | 29,717 | 26,103 | 29,187 |
Other | |||
Disaggregation of revenue | |||
Revenue | 7,529 | 10,129 | 13,111 |
Consolidated | |||
Disaggregation of revenue | |||
Revenue | 480,293 | 442,911 | 435,692 |
Intersegment elimination | Russia* | |||
Disaggregation of revenue | |||
Revenue | (14,652) | (10,568) | (10,851) |
Intersegment elimination | Consolidated | |||
Disaggregation of revenue | |||
Revenue | (14,652) | (10,568) | (10,851) |
Operating segments | |||
Disaggregation of revenue | |||
Revenue | 480,293 | 442,911 | 435,692 |
Operating segments | Mobile services | |||
Disaggregation of revenue | |||
Revenue | (3,274) | (3,819) | (5,288) |
Operating segments | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | (59) | (68) | (56) |
Operating segments | Integration services | |||
Disaggregation of revenue | |||
Revenue | (655) | (916) | (996) |
Operating segments | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | (1,048) | (829) | (821) |
Operating segments | Russia* | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 312,649 | 303,991 | 294,988 |
Operating segments | Russia* | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 60,401 | 60,782 | 61,166 |
Operating segments | Russia* | Finance services | |||
Disaggregation of revenue | |||
Revenue | 11,851 | ||
Operating segments | Russia* | Integration services | |||
Disaggregation of revenue | |||
Revenue | 7,392 | 5,571 | 5,603 |
Operating segments | Russia* | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 69,174 | 52,536 | 49,648 |
Operating segments | Russia* | Other services | |||
Disaggregation of revenue | |||
Revenue | 1,269 | ||
Operating segments | Ukraine | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 28,828 | 25,815 | 28,851 |
Operating segments | Ukraine | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 255 | 226 | 277 |
Operating segments | Ukraine | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 634 | 62 | 59 |
Operating segments | Other | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 6,687 | 9,588 | 12,695 |
Operating segments | Other | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 199 | 160 | 98 |
Operating segments | Other | Finance services | |||
Disaggregation of revenue | |||
Revenue | 0 | ||
Operating segments | Other | Integration services | |||
Disaggregation of revenue | |||
Revenue | 0 | ||
Operating segments | Other | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 643 | 381 | 319 |
Operating segments | Consolidated | Mobile services | |||
Disaggregation of revenue | |||
Revenue | 344,889 | 335,575 | 331,246 |
Operating segments | Consolidated | Fixed line services | |||
Disaggregation of revenue | |||
Revenue | 60,796 | 61,101 | 61,485 |
Operating segments | Consolidated | Finance services | |||
Disaggregation of revenue | |||
Revenue | 11,851 | ||
Operating segments | Consolidated | Integration services | |||
Disaggregation of revenue | |||
Revenue | 6,737 | 4,655 | 4,607 |
Operating segments | Consolidated | Sales of goods | |||
Disaggregation of revenue | |||
Revenue | 69,403 | 52,149 | 49,205 |
Operating segments | Consolidated | Other services | |||
Disaggregation of revenue | |||
Revenue | 1,269 | ||
HQ and elimination | |||
Disaggregation of revenue | |||
Revenue | ₽ (5,037) | ₽ (5,632) | ₽ (7,160) |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract balances (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Receivables | ₽ 28,097 | ₽ 14,271 | |
Contract assets | ₽ 105 | 105 | |
Total assets | 28,202 | 14,271 | |
Less current portion | (28,192) | (14,271) | |
Total non-current assets | 10 | ||
Contract liabilities | (18,461) | (22,155) | (18,461) |
Less current portion | 21,597 | 17,696 | |
Total non-current liabilities | (558) | (765) | |
Significant changes in the contract assets and the contract liabilities balances | |||
Revenue recognised that was included in the contract liability balance at the beginning of the period | 10,999 | ||
Increase due to cash payment, excluding amount recognised as revenue during the period | (14,390) | ||
Transfers from contract assets to receivables Effect of changes in estimates | 105 | ||
Contract assets at end of period | 105 | ||
Contract liabilities at beginning of period | (18,461) | ||
Business combinations | (303) | ||
Contract liabilities at end of period | (22,155) | ||
Mobile telecommunication services | |||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | (20,094) | ||
Mobile telecommunication services | 2019 | |||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | (19,536) | ||
Mobile telecommunication services | More than 1 to 5 years | |||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | (541) | ||
Mobile telecommunication services | 2025 - 2029 | |||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | (17) | ||
Mobile and fixed telecommunication services | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Contract liabilities | (17,156) | (20,094) | (17,156) |
Significant changes in the contract assets and the contract liabilities balances | |||
Contract liabilities at beginning of period | (17,156) | ||
Contract liabilities at end of period | (20,094) | ||
Other services | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Contract liabilities | (1,084) | (1,741) | (1,084) |
Significant changes in the contract assets and the contract liabilities balances | |||
Contract liabilities at beginning of period | (1,084) | ||
Contract liabilities at end of period | (1,741) | ||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | (1,741) | ||
Other services | 2019 | |||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | (1,741) | ||
Loyalty programme | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Contract liabilities | (221) | (320) | ₽ (221) |
Significant changes in the contract assets and the contract liabilities balances | |||
Contract liabilities at beginning of period | (221) | ||
Contract liabilities at end of period | ₽ (320) | ||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | (320) | ||
Loyalty programme | 2019 | |||
revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | |||
Revenue related to performance obligations that are unsatisfied (or partially unsatisfied) | ₽ (320) |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Cost to obtain and fulfill a contract (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of assets recognised from costs to obtain or fulfil contracts with customers [line items] | ||
Amortization expense related to cost to obtain or fulfill contracts | ₽ 4,371 | |
Impairment loss related to costs capitalized | 0 | |
Cost-to-obtain contracts | ||
Disclosure of assets recognised from costs to obtain or fulfil contracts with customers [line items] | ||
Balance of cost to obtain and fulfill contracts capitalized | 7,017 | ₽ 6,829 |
Accumulated amortization expense related to cost to obtain or fulfill contracts | 16,908 | |
Cost to fulfill contracts | ||
Disclosure of assets recognised from costs to obtain or fulfil contracts with customers [line items] | ||
Balance of cost to obtain and fulfill contracts capitalized | 1,614 | ₽ 966 |
Accumulated amortization expense related to cost to obtain or fulfill contracts | ₽ 12,420 |
SELLING, GENERAL AND ADMINIST_3
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | |||
Salaries and social contributions | ₽ 46,769 | ₽ 44,605 | ₽ 44,347 |
Advertising and marketing expenses | 10,090 | 9,185 | 10,480 |
General and administrative expenses | 8,127 | 8,321 | 7,007 |
Taxes other than income tax | 4,010 | 3,896 | 3,806 |
Cash collection commission | 3,724 | 3,689 | 3,311 |
Universal service fund | 3,535 | 3,462 | 3,412 |
Dealers commission | 3,387 | 6,718 | 6,740 |
Utilities and maintenance | 2,852 | 9,361 | 9,092 |
Consulting expenses | 2,067 | 1,975 | 1,618 |
Billing and data processing | 1,243 | 1,292 | 1,485 |
Other | 2,142 | 2,682 | 2,748 |
Total | ₽ 87,946 | ₽ 95,186 | ₽ 94,046 |
FINANCE INCOME AND COSTS (Detai
FINANCE INCOME AND COSTS (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest expense: | |||
Loans and notes | ₽ 25,613 | ₽ 22,131 | ₽ 22,982 |
Amortization of debt issuance costs | 415 | 623 | 683 |
Lease obligations | 13,917 | 954 | 855 |
Provisions: unwinding of discount | 223 | 91 | 94 |
Total interest expense | 40,168 | 23,799 | 24,614 |
Loss on financial instruments | 1,008 | 2,486 | 25 |
Other finance costs | 63 | 86 | 2,885 |
Total finance costs | 41,239 | 26,371 | 27,524 |
Less: amounts capitalized on qualifying assets (2) | (460) | (307) | (388) |
Less: debt modification and other gain | (2,614) | ||
Finance costs | 38,165 | 26,064 | 27,136 |
Finance income on loans and receivables | |||
Interest income on bank deposits | 5,182 | 4,818 | 4,277 |
Interest income on loans issued | 357 | 330 | 510 |
Other finance income | 442 | 400 | 486 |
Finance income | 5,981 | 5,548 | 5,273 |
Net finance costs | ₽ 32,184 | ₽ 20,516 | ₽ 21,863 |
Annual weighted average capitalization rates | 8.20% | 8.20% | 8.30% |
OPERATIONS IN UZBEKISTAN - Disp
OPERATIONS IN UZBEKISTAN - Disposal of UMS (Details) ₽ / shares in Units, ₽ in Millions | Aug. 05, 2016USD ($) | Dec. 31, 2018RUB (₽)₽ / shares | Dec. 31, 2017RUB (₽) | Dec. 31, 2016RUB (₽)₽ / shares |
Results of discontinued operation | ||||
Revenue from contracts with customers | ₽ 480,293 | ₽ 442,911 | ₽ 435,692 | |
Loss before tax | 83,851 | ₽ 75,567 | 67,609 | |
Income tax gain (note 12) | 192 | |||
Loss from discontinued operations | ₽ 59,050 | ₽ (4,021) | ||
Earnings per share from discontinued operations (basic), Russian Rubles: | ₽ / shares | ₽ (31.52) | ₽ (1.69) | ||
Earnings per share from discontinued operations (diluted), Russian Rubles: | ₽ / shares | ₽ (31.48) | ₽ (1.69) | ||
UMS | ||||
Disposal of UMS | ||||
Sale of ownership in discontinued operation (as a percentage) | 50.01% | |||
Consideration received for disposal of company | $ | $ 1 | |||
Results of discontinued operation | ||||
Revenue from contracts with customers | ₽ 5,115 | |||
Expenses | (6,602) | |||
Loss before tax | (1,487) | |||
Income tax gain (note 12) | 192 | |||
Loss for the period | (1,295) | |||
Loss on sale of discontinued operations | (2,726) | |||
Loss from discontinued operations | (4,021) | |||
Loss attributable to non-controlling interests | (654) | |||
Loss to owners of the Company | ₽ (3,367) | |||
Earnings per share from discontinued operations (basic), Russian Rubles: | ₽ / shares | ₽ (1.69) | |||
Earnings per share from discontinued operations (diluted), Russian Rubles: | ₽ / shares | ₽ (1.69) | |||
Cash flows from (used in) discontinued operation | ||||
Net cash used in operating activities | ₽ (543) | |||
Net cash used in investing activities | (1,253) | |||
Net cash provided by financing activities | ₽ 1,234 |
OPERATIONS IN UZBEKISTAN - Carr
OPERATIONS IN UZBEKISTAN - Carrying amounts of UMS net assets and reconciliation of the loss on disposal (Details) - RUB (₽) ₽ in Millions | Aug. 05, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Carrying amounts of UMS's net assets and reconciliation of the loss on disposal | |||||
Property, plant and equipment | ₽ (276,443) | ₽ (263,063) | ₽ (272,841) | ₽ (302,662) | |
Cash and cash equivalents | (84,075) | (30,586) | ₽ (18,470) | ₽ (33,464) | |
Non-current liabilities | 542,957 | 270,194 | |||
Current liabilities | 295,471 | 156,671 | |||
Non-controlling interest | 12,291 | 4,079 | |||
Accumulated other comprehensive loss | ₽ (1,064) | ₽ (8,854) | |||
UMS | |||||
Carrying amounts of UMS's net assets and reconciliation of the loss on disposal | |||||
Property, plant and equipment | ₽ (6,960) | ||||
Other intangible assets | (2,922) | ||||
Other non-current assets | (2,577) | ||||
Cash and cash equivalents | (378) | ||||
Other current assets | (1,359) | ||||
Non-current liabilities | 5,113 | ||||
Current liabilities | 2,484 | ||||
Non-controlling interest | 1,787 | ||||
Accumulated other comprehensive loss | 2,086 | ||||
Loss on disposal of UMS | ₽ (2,726) |
OPERATIONS IN TURKMENISTAN (Det
OPERATIONS IN TURKMENISTAN (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effect of impairment charges on the Statement of profit or loss | |||
Current provision for income tax | ₽ 19,881 | ₽ 20,712 | ₽ 15,177 |
Other operating expenses | (4,740) | (1,177) | (2,920) |
Deferred income tax | (2,779) | (2,408) | ₽ (137) |
Total impairment loss | 149 | 3,775 | |
Turkmenistan | |||
Effect of impairment charges on the Statement of profit or loss | |||
Impairment of long-lived assets | 3,204 | ||
Current provision for income tax | 100 | ||
Provision for doubtful accounts | 74 | ||
Other operating expenses | 37 | ||
Taxes other than income tax | 20 | ||
Deferred income tax | (69) | ||
Total impairment loss | ₽ 3,366 | ||
Provision for dismantling of terminal network equipment | ₽ 228 |
INCOME TAX (Details)
INCOME TAX (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of income tax expense | |||
Corporate income tax rate | 20.00% | 20.00% | 20.00% |
Withholding tax rate on dividends paid | 13.00% | 13.00% | 13.00% |
Current income tax charge | ₽ 19,881 | ₽ 20,712 | ₽ 15,177 |
Prior period tax adjustments | (133) | 673 | 98 |
Total current income tax | 19,748 | 21,385 | 15,275 |
Deferred tax | (2,779) | (2,408) | (137) |
Income tax expense on continuing operations | 16,969 | 18,977 | 15,138 |
Tax effect from the discontinued operations | (192) | ||
Total tax expense for the period | ₽ 16,969 | ₽ 18,977 | ₽ 14,946 |
Russia | |||
Components of income tax expense | |||
Corporate income tax rate | 20.00% | 20.00% | 20.00% |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of groups effective income tax (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income tax disclosure | |||
Statutory income tax rate for the year (as a percentage) | 20.00% | 20.00% | 20.00% |
Adjustments: | |||
Expenses not deductible for tax purposes | 0.90% | 1.70% | 2.10% |
Prior periods tax effects | (0.20%) | 0.80% | 0.10% |
Different tax rate of foreign subsidiaries | (0.30%) | (0.50%) | |
Earnings distribution from subsidiaries | 0.10% | 0.90% | 0.20% |
Change in fair value of derivative financial instruments | 0.40% | 0.30% | |
Derecognition of deferred tax assets | 0.10% | 0.70% | |
Other | (0.40%) | 0.60% | 0.20% |
Effective income tax rate | 20.20% | 25.10% | 22.40% |
Russia and Armenia | |||
Income tax disclosure | |||
Statutory income tax rate for the year (as a percentage) | 20.00% | 20.00% | 20.00% |
Ukraine | |||
Income tax disclosure | |||
Statutory income tax rate for the year (as a percentage) | 18.00% | 18.00% | 18.00% |
Turkmenistan | |||
Income tax disclosure | |||
Statutory income tax rate for the year (as a percentage) | 8.00% | 8.00% | 8.00% |
Czech Republic | |||
Income tax disclosure | |||
Statutory income tax rate for the year (as a percentage) | 19.00% | 19.00% | 19.00% |
INCOME TAX - Deferred income ta
INCOME TAX - Deferred income tax assets and liabilities (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
INCOME TAX | |||
Deferred tax assets | ₽ 11,190 | ₽ 5,545 | |
Deferred tax liabilities | (24,439) | (23,773) | |
Net deferred tax liabilities | ₽ (13,249) | ₽ (18,228) | ₽ (20,461) |
INCOME TAX - Movements in the d
INCOME TAX - Movements in the deferred tax assets and liabilities (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | ₽ (18,228) | ₽ (20,461) |
Adjustment on initial application of new IFRS standarts | (1,028) | |
Recognised in profit / loss | 2,779 | 2,599 |
Recognised in other comprehensive income | (104) | (116) |
Effect of acquisitions | 3,332 | (59) |
Effect of disposal | (191) | |
Net deferred tax liability at the end of the period | (13,249) | (18,228) |
Depreciation of property, plant and equipment | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | (18,921) | (19,301) |
Adjustment on initial application of new IFRS standarts | 1,632 | |
Recognised in profit / loss | 513 | 599 |
Recognised in other comprehensive income | 143 | (39) |
Effect of acquisitions | 395 | |
Effect of disposal | (180) | |
Net deferred tax liability at the end of the period | (16,238) | (18,921) |
Other intangible assets | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | (7,454) | (7,094) |
Recognised in profit / loss | 1,218 | (290) |
Recognised in other comprehensive income | 9 | (8) |
Effect of acquisitions | 147 | (59) |
Effect of disposal | (3) | |
Net deferred tax liability at the end of the period | (6,080) | (7,454) |
Potential distributions from / to Group's subsidiaries / associates | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | (4,043) | (3,987) |
Recognised in profit / loss | 418 | (175) |
Recognised in other comprehensive income | (394) | 119 |
Net deferred tax liability at the end of the period | (4,019) | (4,043) |
Licenses | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | (1,994) | (2,099) |
Recognised in profit / loss | 148 | 80 |
Recognised in other comprehensive income | (71) | 25 |
Net deferred tax liability at the end of the period | (1,917) | (1,994) |
Customer base | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | (536) | (660) |
Recognised in profit / loss | 279 | 124 |
Effect of acquisitions | (449) | |
Net deferred tax liability at the end of the period | (706) | (536) |
Capitalization of cost to obtain and fulfill contracts | ||
Assets / (liabilities) arising from tax effect of: | ||
Adjustment on initial application of new IFRS standarts | (1,290) | |
Recognised in profit / loss | (31) | |
Net deferred tax liability at the end of the period | (1,321) | |
Accrued expenses for services | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 7,131 | 6,382 |
Recognised in profit / loss | (603) | 761 |
Recognised in other comprehensive income | 51 | (9) |
Effect of acquisitions | 426 | |
Effect of disposal | (3) | |
Net deferred tax liability at the end of the period | 7,005 | 7,131 |
Right-of-use assets and lease obligations | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 2,363 | |
Adjustment on initial application of new IFRS standarts | (1,632) | |
Recognised in profit / loss | 1,833 | |
Net deferred tax liability at the end of the period | 2,564 | 2,363 |
Lease obligations | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 2,363 | 2,199 |
Recognised in profit / loss | 164 | |
Net deferred tax liability at the end of the period | 2,363 | |
Loss carryforward | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 2,143 | 1,917 |
Recognised in profit / loss | 1,362 | 226 |
Effect of acquisitions | 751 | |
Net deferred tax liability at the end of the period | 4,256 | 2,143 |
Provision for investment in Delta Bank in Ukraine | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 601 | 653 |
Recognised in profit / loss | (319) | |
Recognised in other comprehensive income | 85 | (52) |
Net deferred tax liability at the end of the period | 367 | 601 |
Deferred connection fees | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 562 | 540 |
Recognised in profit / loss | 33 | |
Recognised in other comprehensive income | (11) | |
Net deferred tax liability at the end of the period | 562 | |
Contract liabilities | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 562 | |
Adjustment on initial application of new IFRS standarts | 717 | |
Recognised in profit / loss | (340) | |
Recognised in other comprehensive income | 15 | |
Net deferred tax liability at the end of the period | 954 | 562 |
Debt modification | ||
Assets / (liabilities) arising from tax effect of: | ||
Adjustment on initial application of new IFRS standarts | (597) | |
Recognised in profit / loss | (478) | |
Net deferred tax liability at the end of the period | (1,075) | |
Hedge and other | ||
Assets / (liabilities) arising from tax effect of: | ||
Net deferred tax liability at the beginning of the period | 1,920 | 989 |
Adjustment on initial application of new IFRS standarts | 142 | |
Recognised in profit / loss | (1,221) | 1,077 |
Recognised in other comprehensive income | 58 | (141) |
Effect of acquisitions | 2,062 | |
Effect of disposal | (5) | |
Net deferred tax liability at the end of the period | ₽ 2,961 | ₽ 1,920 |
INCOME TAX - Recognized tax los
INCOME TAX - Recognized tax losses and uncertain income tax positions (Details) - RUB (₽) | Nov. 30, 2016 | Nov. 29, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
INCOME TAX | ||||
Tax losses carry forward period (in years) | 10 years | |||
Maximum percentage of tax base can be reduced by tax losses carry forward for years 2017 - 2020 | ₽ 50 | |||
Unused tax losses | ₽ 42,271,000,000 | ₽ 18,003,000,000 | ||
Uncertain income tax positions | ₽ 850,000,000 | ₽ 906,000,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - RUB (₽) ₽ / shares in Units, shares in Thousands, ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||
Profit for the year from continuing operations attributable to the owners of the company | ₽ 65,898 | ₽ 56,042 | ₽ 51,841 |
Loss for the year from discontinued operations attributable to the owners of the company | ₽ (59,050) | ₽ (3,367) | |
Denominator, in thousands: | |||
Weighted-average ordinary shares outstanding | 1,873,563 | 1,953,779 | 1,989,282 |
Employee stock options | 2,158 | 1,779 | 1,412 |
Weighted-average diluted shares outstanding | 1,875,721 | 1,955,558 | 1,990,694 |
Earnings per share-basic, RUB | ₽ 3.65 | ₽ 28.68 | ₽ 24.37 |
Basic EPS from continuing operations | 35.17 | 28.68 | 26.06 |
Basic EPS from discontinued operations | (31.52) | (1.69) | |
Earnings per share-diluted, RUB | 3.65 | 28.66 | 24.35 |
Diluted EPS from continuing operations | 35.13 | ₽ 28.66 | 26.04 |
Diluted EPS from discontinued operations | ₽ (31.48) | ₽ (1.69) | |
As if IFRS 15 was not applied | |||
Numerator: | |||
Profit for the year from continuing operations attributable to the owners of the company | ₽ 65,722 | ₽ 56,042 | ₽ 51,841 |
Denominator, in thousands: | |||
Earnings per share-basic, RUB | ₽ 3.56 | ₽ 28.68 | ₽ 24.37 |
Basic EPS from continuing operations | 35.08 | 28.68 | 26.06 |
Basic EPS from discontinued operations | (31.52) | (1.69) | |
Earnings per share-diluted, RUB | 3.56 | 28.66 | 24.35 |
Diluted EPS from continuing operations | 35.04 | ₽ 28.66 | 26.04 |
Diluted EPS from discontinued operations | ₽ (31.48) | ₽ (1.69) |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents | ||||
Total cash and cash equivalents | ₽ 84,075 | ₽ 30,586 | ₽ 18,470 | ₽ 33,464 |
Russian Rubles | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents at banks and on hand | 17,012 | 16,879 | ||
Short-term deposits with an original maturity of less than 92 days | 52,764 | 6,595 | ||
USD | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents at banks and on hand | 4,873 | 1,119 | ||
Short-term deposits with an original maturity of less than 92 days | 2,603 | |||
Euro | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents at banks and on hand | 2,073 | 983 | ||
Short-term deposits with an original maturity of less than 92 days | 915 | |||
Ukraine Hryvna | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents at banks and on hand | 1,548 | 403 | ||
Short-term deposits with an original maturity of less than 92 days | 3,215 | 352 | ||
Turkmenian Manat | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents at banks and on hand | 721 | 1,267 | ||
Other currencies | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents at banks and on hand | ₽ 954 | 318 | ||
Short-term deposits with an original maturity of less than 92 days | ₽ 67 |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Short-term investments | ||
Short-term investments (Gross) | ₽ 48,343 | ₽ 50,757 |
Allowance for ECL | (480) | |
Total short-term investments | 47,863 | 50,757 |
At amortized cost | ||
Short-term investments | ||
Notes | 15,191 | 7,605 |
Deposits | 14,388 | 27,826 |
Loans | 7,050 | 5,669 |
At fair value through profit or loss | ||
Short-term investments | ||
Assets in Sistema Capital trust management (Notes 18, 31) | 11,644 | 9,600 |
At fair value through other comprehensive income | ||
Short-term investments | ||
Notes | ₽ 70 | ₽ 57 |
INVESTMENTS IN ASSOCIATES AND_3
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investments in associates and joint ventures | ||
Total investments in associates | ₽ 10,735 | ₽ 9,452 |
MTS Belarus | ||
Investments in associates and joint ventures | ||
Total investments in associates | 4,051 | 3,660 |
MTS Bank | ||
Investments in associates and joint ventures | ||
Total investments in associates | 2,902 | |
OZON Holdings Ltd | ||
Investments in associates and joint ventures | ||
Total investments in associates | 4,797 | 2,517 |
Equity investments in other unquoted companies | ||
Investments in associates and joint ventures | ||
Total investments in associates | ₽ 1,887 | ₽ 373 |
INVESTMENTS IN ASSOCIATES AND_4
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES - MTS Belarus (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets | |||
Non-current assets | ₽ 647,059 | ₽ 405,038 | |
Current assets | 268,934 | 146,032 | |
Liabilities | |||
Non-current liabilities | (542,957) | (270,194) | |
Current liabilities | (295,471) | (156,671) | |
Statement of profit or loss | |||
Revenue | (480,293) | (442,911) | ₽ (435,692) |
Net loss / (profit) for the year | (7,832) | (56,590) | (48,450) |
Total comprehensive income for the year | 15,631 | 53,766 | 30,643 |
MTS Belarus | |||
Assets | |||
Non-current assets | 17,659 | 9,819 | |
Current assets | 11,652 | 8,117 | |
Liabilities | |||
Non-current liabilities | (7,089) | (703) | |
Current liabilities | (13,955) | (9,764) | |
Total identifiable net assets attributable to the Group | ₽ 8,267 | ₽ 7,469 | |
Percentage of ownership in associate | 49.00% | 49.00% | |
The Group's share of identifiable net assets | ₽ 4,051 | ₽ 3,660 | |
Carrying amount of the Group's interest | 4,051 | 3,660 | |
Statement of profit or loss | |||
Revenue | (27,695) | (23,037) | (22,256) |
Net loss / (profit) for the year | (7,752) | (6,552) | (6,356) |
The Group's share of the profit of the associate for the year | (3,799) | (3,210) | (3,115) |
Other comprehensive loss for the year (currency translation adjustment) | (648) | 525 | 2,292 |
Total comprehensive income for the year | 8,400 | 6,027 | 4,064 |
The Group's share of total comprehensive income of the associate for the year | (4,116) | (2,953) | (1,991) |
Dividends received | ₽ 3,691 | ₽ 3,590 | ₽ 2,795 |
INVESTMENTS IN ASSOCIATES AND_5
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES - MTS Bank (Details) - RUB (₽) ₽ in Millions | 1 Months Ended | 12 Months Ended | ||||||||
Jul. 31, 2018 | Jun. 30, 2017 | Nov. 30, 2016 | Oct. 31, 2016 | Feb. 29, 2016 | Jan. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 31, 2017 | |
Statement of financial position | ||||||||||
Total assets | ₽ 915,993 | ₽ 551,070 | ||||||||
Non-controlling interests | (12,291) | (4,079) | ||||||||
Total consideration | 3,871 | 723 | ₽ 4,094 | |||||||
Statement of profit or loss | ||||||||||
Total interest expense | 40,168 | 23,799 | 24,614 | |||||||
Net loss for the period | (7,832) | (56,590) | (48,450) | |||||||
Total comprehensive loss for the period | (15,631) | (53,766) | (30,643) | |||||||
MTS Bank | ||||||||||
Statement of financial position | ||||||||||
Number of shares placed | 10,000,000 | 3,588,304 | ||||||||
MTS Bank | ||||||||||
Statement of financial position | ||||||||||
Total assets | 142,405 | |||||||||
Total liabilities | (121,169) | |||||||||
Total identifiable net assets attributable to the Group | ₽ 21,236 | |||||||||
Percentage of ownership in associate | 26.60% | 26.60% | 26.80% | 26.80% | 27.00% | 26.60% | ||||
The Group's share of identifiable net assets | ₽ 6,127 | |||||||||
Impairment of investment in associate | (3,225) | |||||||||
Carrying amount of the Group's interest | 2,902 | |||||||||
Number of shares under placement acquired by the group | 2,637,310 | 946,347 | ||||||||
Total consideration | ₽ 2,769 | ₽ 1,325 | ||||||||
Ownership interest in subsidiary (as a percentage) | 55.40% | |||||||||
Statement of profit or loss | ||||||||||
Total interest income | (9,289) | (14,204) | (16,555) | |||||||
Total interest expense | 3,799 | 6,505 | 8,364 | |||||||
Net loss for the period | 609 | 593 | 4,495 | |||||||
The Group's share of the loss of the associate for the period | 162 | 109 | 1,179 | |||||||
Other comprehensive loss / (income) for the period | 614 | 2,000 | 1,614 | |||||||
Total comprehensive loss for the period | 1,223 | 2,593 | 6,109 | |||||||
The Group's share of the total comprehensive loss for the period | ₽ 326 | 690 | ₽ 1,608 | |||||||
East-West United Bank | MTS Bank | ||||||||||
Statement of financial position | ||||||||||
Percentage of voting rights disposed | 47.00% | |||||||||
East-West United Bank | MTS Bank | ||||||||||
Statement of financial position | ||||||||||
Accumulated foreign currency translation reserve | ₽ 659 | |||||||||
East-West United Bank | MTS Bank | Accumulated other comprehensive income | ||||||||||
Statement of financial position | ||||||||||
Accumulated foreign currency translation reserve | ₽ 659 | |||||||||
Maximum | East-West United Bank | MTS Bank | ||||||||||
Statement of financial position | ||||||||||
Percentage of ownership in associate | 20.00% |
INVESTMENTS IN ASSOCIATES AND_6
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES - Others (Details) - RUB (₽) ₽ in Millions | 1 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 31, 2018 | May 31, 2018 | Mar. 31, 2018 | Oct. 31, 2017 | Sep. 30, 2017 | Nov. 30, 2016 | Oct. 31, 2016 | Feb. 29, 2016 | Jan. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments in associates | ||||||||||||||
Total consideration | ₽ 3,871 | ₽ 723 | ₽ 4,094 | |||||||||||
Statement of profit or loss | ||||||||||||||
Net loss / (profit) for the year | (7,832) | (56,590) | (48,450) | |||||||||||
Total comprehensive loss for the year | ₽ (15,631) | ₽ (53,766) | ₽ (30,643) | |||||||||||
Sistema Capital | ||||||||||||||
Investments in associates | ||||||||||||||
Proportion of ownership interest | 30.00% | 30.00% | 30.00% | |||||||||||
Total consideration | ₽ 356 | |||||||||||||
OZON Holdings Ltd | ||||||||||||||
Investments in associates | ||||||||||||||
Proportion of ownership interest | 18.69% | 11.20% | 10.80% | |||||||||||
MTS Bank | ||||||||||||||
Investments in associates | ||||||||||||||
Proportion of ownership interest | 26.60% | 26.60% | 26.80% | 26.80% | 27.00% | 26.60% | ||||||||
Total consideration | ₽ 2,769 | ₽ 1,325 | ||||||||||||
Proportion of ownership interest sold in associate | 40.26% | |||||||||||||
Proceeds from sale of interest | ₽ 450 | |||||||||||||
Statement of profit or loss | ||||||||||||||
Net loss / (profit) for the year | ₽ 609 | ₽ 593 | ₽ 4,495 | |||||||||||
The Group's share of the loss of the associate for the year | 162 | 109 | 1,179 | |||||||||||
Other comprehensive income for the year | (614) | (2,000) | (1,614) | |||||||||||
Total comprehensive loss for the year | 1,223 | 2,593 | 6,109 | |||||||||||
The Group's share of total comprehensive loss of the associate for the year | ₽ 326 | 690 | 1,608 | |||||||||||
YOUDO Web Technologies | ||||||||||||||
Investments in associates | ||||||||||||||
Proportion of ownership interest | 13.68% | 13.70% | ||||||||||||
Total consideration | ₽ 824 | |||||||||||||
Investments in Ozon Holdings Ltd and other individually insignificant associates and joint venture | ||||||||||||||
Statement of profit or loss | ||||||||||||||
Net loss / (profit) for the year | ₽ 4,600 | 1,760 | 1,172 | |||||||||||
The Group's share of the loss of the associate for the year | 747 | 327 | 108 | |||||||||||
Total comprehensive loss for the year | 4,600 | 1,760 | 1,172 | |||||||||||
The Group's share of total comprehensive loss of the associate for the year | ₽ 747 | ₽ 327 | ₽ 108 | |||||||||||
Participation in additional share issuance | ||||||||||||||
Investments in associates | ||||||||||||||
Number of ordinary shares acquired | 141,498 | 7,698 | 5,193 | |||||||||||
Total consideration | ₽ 1,158 | ₽ 28 | ₽ 19 | |||||||||||
Increase of the Group's interest (as a percent) | 2.50% | 0.23% | 0.16% | |||||||||||
Purchase from non-controlling shareholder | ||||||||||||||
Investments in associates | ||||||||||||||
Number of ordinary shares acquired | 31,810 | 11,209 | 114,616 | |||||||||||
Total consideration | ₽ 289 | ₽ 85 | ₽ 943 | |||||||||||
Increase of the Group's interest (as a percent) | 0.81% | 0.32% | 3.00% | |||||||||||
Exercise of the put option | ||||||||||||||
Investments in associates | ||||||||||||||
Number of ordinary shares acquired | 70,978 | |||||||||||||
Total consideration | ₽ 575 | |||||||||||||
Increase of the Group's interest (as a percent) | 0.86% | |||||||||||||
Maximum | OZON Holdings Ltd | ||||||||||||||
Investments in associates | ||||||||||||||
Proportion of ownership interest | 20.00% | |||||||||||||
Maximum | YOUDO Web Technologies | ||||||||||||||
Investments in associates | ||||||||||||||
Proportion of ownership interest | 20.00% |
OTHER INVESTMENTS (Details)
OTHER INVESTMENTS (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other investments | ||
Other investments (Gross) | ₽ 16,875 | ₽ 1,953 |
Allowance for ECL | (2) | |
Total other investments | 16,873 | 1,953 |
At amortized cost | ||
Other investments | ||
Notes | 15,327 | |
Deposits | 139 | 9 |
Loans and unquoted notes | 12 | 621 |
Other | ₽ 1,397 | ₽ 1,323 |
TRADE AND OTHER RECEIVABLES (De
TRADE AND OTHER RECEIVABLES (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
TRADE AND OTHER RECEIVABLES | ||||
Receivables from Handset Sales Financing, Gross | ₽ 14,252 | |||
Subscribers | 13,495 | ₽ 11,723 | ||
Other trade receivables | 4,049 | 3,119 | ||
Roaming | 3,763 | 7,650 | ||
Interconnect | 2,193 | 2,121 | ||
Other receivables | 1,641 | 1,254 | ||
Integration services | 1,190 | 721 | ||
Bonuses from suppliers | 492 | 569 | ||
Dealers | 386 | 3,204 | ||
Allowance for ECL/doubtful accounts | (4,318) | (2,344) | ₽ (2,160) | ₽ (2,928) |
Trade and other receivables total | 37,143 | 28,017 | ||
Less non-current portion | (2,600) | |||
Trade and other receivables current | ₽ 34,543 | ₽ 28,017 |
TRADE AND OTHER RECEIVABLES - A
TRADE AND OTHER RECEIVABLES - Aging analysis of trade and other accounts receivables (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Age of trade and other accounts receivables that are past due but not impaired | ||
Weighted average loss rate, subscribers and dealers and other trade receivables (as a percent) | 14.00% | |
Gross carrying amount, subscribers and dealers and other trade receivables | ₽ 14,971 | |
Weighted average loss rate, receivables other then from subscribers and dealers | 5.00% | |
Gross carrying amount, receivables other then from subscribers and dealers | ₽ 12,238 | |
Weighted average loss rate, handset sales financing (as a Percent) | 11.00% | |
Gross carrying amount, handset sales financing | ₽ 14,252 | |
Trade and other receivables | 34,543 | ₽ 28,017 |
Neither past due nor impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Trade and other receivables | 22,551 | |
Provision matrix | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, subscribers and dealers and other trade receivables | (2,095) | |
Individually assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, receivables other then from subscribers and dealers | (717) | |
Collectively assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, handset sales financing | ₽ (1,506) | |
Current | Not credit impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Weighted average loss rate, subscribers and dealers and other trade receivables (as a percent) | 1.00% | |
Gross carrying amount, subscribers and dealers and other trade receivables | ₽ 1,300 | |
Weighted average loss rate, receivables other then from subscribers and dealers | 1.00% | |
Gross carrying amount, receivables other then from subscribers and dealers | ₽ 6,656 | |
Weighted average loss rate, handset sales financing (as a Percent) | 2.00% | |
Gross carrying amount, handset sales financing | ₽ 12,352 | |
Current | Not credit impaired | Provision matrix | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, subscribers and dealers and other trade receivables | (5) | |
Current | Not credit impaired | Individually assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, receivables other then from subscribers and dealers | (11) | |
Current | Not credit impaired | Collectively assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, handset sales financing | ₽ (205) | |
Up to 30 days | Not credit impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Weighted average loss rate, subscribers and dealers and other trade receivables (as a percent) | 8.00% | |
Gross carrying amount, subscribers and dealers and other trade receivables | ₽ 9,707 | |
Weighted average loss rate, receivables other then from subscribers and dealers | 1.00% | |
Gross carrying amount, receivables other then from subscribers and dealers | ₽ 1,147 | |
Weighted average loss rate, handset sales financing (as a Percent) | 13.00% | |
Gross carrying amount, handset sales financing | ₽ 414 | |
Up to 30 days | Not credit impaired | Provision matrix | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, subscribers and dealers and other trade receivables | (761) | |
Up to 30 days | Not credit impaired | Individually assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, receivables other then from subscribers and dealers | (3) | |
Up to 30 days | Not credit impaired | Collectively assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, handset sales financing | ₽ (52) | |
31 - 60 days past due | Not credit impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Weighted average loss rate, subscribers and dealers and other trade receivables (as a percent) | 14.00% | |
Gross carrying amount, subscribers and dealers and other trade receivables | ₽ 1,963 | |
Weighted average loss rate, receivables other then from subscribers and dealers | 1.00% | |
Gross carrying amount, receivables other then from subscribers and dealers | ₽ 615 | |
Weighted average loss rate, handset sales financing (as a Percent) | 43.00% | |
Gross carrying amount, handset sales financing | ₽ 93 | |
31 - 60 days past due | Not credit impaired | Provision matrix | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, subscribers and dealers and other trade receivables | (285) | |
31 - 60 days past due | Not credit impaired | Individually assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, receivables other then from subscribers and dealers | (5) | |
31 - 60 days past due | Not credit impaired | Collectively assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, handset sales financing | ₽ (40) | |
60 - 90 days past due | Not credit impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Weighted average loss rate, subscribers and dealers and other trade receivables (as a percent) | 29.00% | |
Gross carrying amount, subscribers and dealers and other trade receivables | ₽ 719 | |
Weighted average loss rate, receivables other then from subscribers and dealers | 2.00% | |
Gross carrying amount, receivables other then from subscribers and dealers | ₽ 396 | |
Weighted average loss rate, handset sales financing (as a Percent) | 58.00% | |
Gross carrying amount, handset sales financing | ₽ 68 | |
60 - 90 days past due | Not credit impaired | Provision matrix | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, subscribers and dealers and other trade receivables | (227) | |
60 - 90 days past due | Not credit impaired | Individually assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, receivables other then from subscribers and dealers | (9) | |
60 - 90 days past due | Not credit impaired | Collectively assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, handset sales financing | ₽ (39) | |
More than 90 days past due | Impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Weighted average loss rate, subscribers and dealers and other trade receivables (as a percent) | 60.00% | |
Gross carrying amount, subscribers and dealers and other trade receivables | ₽ 1,282 | |
Weighted average loss rate, receivables other then from subscribers and dealers | 19.00% | |
Gross carrying amount, receivables other then from subscribers and dealers | ₽ 3,424 | |
Weighted average loss rate, handset sales financing (as a Percent) | 88.00% | |
Gross carrying amount, handset sales financing | ₽ 1,325 | |
More than 90 days past due | Impaired | Provision matrix | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, subscribers and dealers and other trade receivables | (817) | |
More than 90 days past due | Impaired | Individually assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, receivables other then from subscribers and dealers | (689) | |
More than 90 days past due | Impaired | Collectively assessed | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Loss allowance, handset sales financing | ₽ (1,170) | |
Less than 60 days | Past due, but not impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Trade and other receivables | 3,265 | |
61-150 days | Past due, but not impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Trade and other receivables | 872 | |
More than 150 days | Past due, but not impaired | ||
Age of trade and other accounts receivables that are past due but not impaired | ||
Trade and other receivables | ₽ 1,329 |
TRADE AND OTHER RECEIVABLES - C
TRADE AND OTHER RECEIVABLES - Changes in allowance for doubtful accounts receivables (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Changes in the allowance for doubtful accounts receivable | ||||
Balance, beginning of the year | ₽ (2,160) | ₽ (2,928) | ||
Allowance for doubtful accounts | (2,880) | (2,863) | ||
Accounts receivable written off | 2,696 | 3,459 | ||
Acquisition/disposal of subsidiaries | 172 | |||
Balance, end of the year | ₽ (4,318) | (2,344) | ₽ (2,160) | |
Trade and other receivables | ||||
Changes in the allowance for doubtful accounts receivable | ||||
Balance, beginning of the year | (2,577) | |||
Additional allowance required under IFRS 9 | ₽ (233) | |||
Allowance for doubtful accounts | (3,210) | |||
Accounts receivable written off | 2,948 | |||
Acquisition/disposal of subsidiaries | (1,479) | |||
Balance, end of the year | ₽ (4,318) | ₽ (2,344) |
INVENTORIES (Details)
INVENTORIES (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
INVENTORIES | ||
Handsets and accessories | ₽ 15,191 | ₽ 7,836 |
SIM cards and prepaid phone cards | 1,167 | 784 |
Advertising and other materials | 916 | 561 |
TV equipment for resale | 676 | 350 |
Software and equipment for installation and resale | 491 | 309 |
Spare parts for telecommunication equipment | 213 | 155 |
Total inventories | ₽ 18,654 | ₽ 9,995 |
Expected utilization after year end of spare parts for telecommunication equipment, in months | 12 months |
INVENTORIES - Cost of goods (De
INVENTORIES - Cost of goods (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
INVENTORIES | |||
Amount of inventories recognized as an expense | ₽ 60,543 | ₽ 43,440 | ₽ 44,026 |
Inventory obsolescence provision | 3,697 | 2,692 | 2,159 |
Reversal of obsolescence provision | (371) | (509) | (611) |
Total cost of goods | ₽ 63,869 | ₽ 45,623 | ₽ 45,574 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Network infrastructure | Minimum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 5 years |
Network infrastructure | Maximum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 44 years |
Other | Minimum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 1 year 6 months |
Other | Maximum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 21 years |
Buildings | Minimum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 20 years |
Buildings | Maximum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 150 years |
Office equipment | Minimum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 3 years |
Office equipment | Maximum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 21 years |
Vehicles | Minimum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 2 years |
Vehicles | Maximum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 7 years |
Other | Minimum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 2 years |
Other | Maximum | |
Summary of property, plant and equipment expected useful lives | |
Expected useful life | 25 years |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Net book value (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | ₽ 263,063 | ₽ 272,841 | ₽ 302,662 |
Property, plant and equipment at end of period | 276,443 | 263,063 | 272,841 |
Amount of compensation from third parties | 1,304 | 1,231 | 1,350 |
Network and base station equipment | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 217,599 | 227,110 | 242,021 |
Property, plant and equipment at end of period | 213,119 | 217,599 | 227,110 |
Land and buildings | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 15,603 | 17,291 | 19,866 |
Property, plant and equipment at end of period | 23,617 | 15,603 | 17,291 |
Office equipment, vehicles and other | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 11,131 | 11,074 | 11,809 |
Property, plant and equipment at end of period | 14,250 | 11,131 | 11,074 |
Construction in progress and equipment for installation | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 18,730 | 17,366 | 28,966 |
Property, plant and equipment at end of period | 25,457 | 18,730 | 17,366 |
Gross amount | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 658,706 | 640,117 | 648,509 |
Additions | 71,488 | 59,581 | 48,722 |
Disposal of UMS | (8,357) | ||
Arising on business combinations | 5,376 | 17 | |
Transfer to assets held for sale | (2,444) | (1,430) | (1,562) |
Disposal | (28,971) | (34,551) | (24,322) |
Transfer of financial leasing | (10,234) | ||
Other | (1,898) | (187) | 6 |
Foreign exchange differences | 15,452 | (4,841) | (22,879) |
Property, plant and equipment at end of period | 707,475 | 658,706 | 640,117 |
Gross amount | Network and base station equipment | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 566,358 | 548,058 | 542,530 |
Additions | 2,777 | 2,094 | 1,350 |
Transferred into use | 48,780 | 48,689 | 47,894 |
Disposal of UMS | (4,152) | ||
Arising on business combinations | 123 | 10 | |
Transfer to assets held for sale | (752) | (1,408) | (1,557) |
Disposal | (25,963) | (27,092) | (20,321) |
Transfer of financial leasing | (10,124) | ||
Other | (1,043) | 327 | (118) |
Foreign exchange differences | 12,977 | (4,320) | (17,568) |
Property, plant and equipment at end of period | 593,133 | 566,358 | 548,058 |
Gross amount | Land and buildings | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 25,024 | 25,443 | 27,321 |
Additions | 4,887 | 15 | 32 |
Transferred into use | 1,807 | 281 | 1,550 |
Disposal of UMS | (1,309) | ||
Arising on business combinations | 3,912 | 2 | |
Transfer to assets held for sale | (1,656) | ||
Disposal | (322) | (684) | (426) |
Other | (536) | (69) | (200) |
Foreign exchange differences | 718 | 36 | (1,525) |
Property, plant and equipment at end of period | 33,834 | 25,024 | 25,443 |
Gross amount | Office equipment, vehicles and other | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 47,830 | 49,250 | 49,692 |
Additions | 777 | 302 | |
Transferred into use | 5,939 | 4,522 | 5,278 |
Disposal of UMS | (452) | ||
Arising on business combinations | 1,323 | 5 | |
Transfer to assets held for sale | (36) | (22) | (5) |
Disposal | (2,712) | (5,460) | (3,201) |
Transfer of financial leasing | (110) | ||
Other | (319) | (452) | 269 |
Foreign exchange differences | 1,595 | (315) | (2,331) |
Property, plant and equipment at end of period | 54,287 | 47,830 | 49,250 |
Gross amount | Construction in progress and equipment for installation | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | 19,494 | 17,366 | 28,966 |
Additions | 63,047 | 57,170 | 47,340 |
Transferred into use | (56,526) | (53,492) | (54,722) |
Disposal of UMS | (2,444) | ||
Arising on business combinations | 18 | ||
Disposal | (1,315) | (374) | |
Disposals | 26 | ||
Other | 7 | 55 | |
Foreign exchange differences | 162 | (242) | (1,455) |
Property, plant and equipment at end of period | 26,221 | 19,494 | 17,366 |
Accumulated amortisation and impairment | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | (395,643) | (367,276) | (345,847) |
Charge for the year | (55,123) | (58,301) | (59,956) |
Disposal of UMS | 1,397 | ||
Arising on business combinations | (1,303) | ||
Impairment | 512 | (3,627) | |
Transfer to assets held for sale | 715 | 962 | 851 |
Disposal | 27,755 | 29,585 | 22,028 |
Transfer of financial leasing | 2,111 | ||
Other | 884 | (30) | (177) |
Foreign exchange differences | (10,940) | 3,044 | 14,428 |
Property, plant and equipment at end of period | (431,032) | (395,643) | (367,276) |
Accumulated amortisation and impairment | Network and base station equipment | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | (348,759) | (320,948) | (300,509) |
Charge for the year | (50,056) | (53,258) | (53,371) |
Disposal of UMS | 1,121 | ||
Arising on business combinations | (13) | ||
Impairment | (2,175) | ||
Transfer to assets held for sale | 223 | 940 | 846 |
Disposal | 25,116 | 24,248 | 19,126 |
Transfer of financial leasing | 2,070 | ||
Other | 553 | (458) | (222) |
Foreign exchange differences | (9,148) | 2,892 | 12,061 |
Property, plant and equipment at end of period | (380,014) | (348,759) | (320,948) |
Accumulated amortisation and impairment | Land and buildings | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | (9,421) | (8,152) | (7,455) |
Charge for the year | (941) | (1,114) | (1,262) |
Disposal of UMS | 62 | ||
Arising on business combinations | (368) | ||
Impairment | 361 | (393) | |
Transfer to assets held for sale | 455 | ||
Disposal | 175 | 284 | 134 |
Other | 22 | 33 | (182) |
Foreign exchange differences | (500) | (79) | 551 |
Property, plant and equipment at end of period | (10,217) | (9,421) | (8,152) |
Accumulated amortisation and impairment | Office equipment, vehicles and other | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | (36,699) | (38,176) | (37,883) |
Charge for the year | (4,126) | (3,929) | (5,323) |
Disposal of UMS | 214 | ||
Arising on business combinations | (922) | ||
Impairment | 151 | (295) | |
Transfer to assets held for sale | 37 | 22 | 5 |
Disposal | 2,464 | 5,053 | 2,768 |
Transfer of financial leasing | 41 | ||
Other | 309 | 395 | 227 |
Foreign exchange differences | (1,292) | 231 | 1,816 |
Property, plant and equipment at end of period | (40,037) | (36,699) | ₽ (38,176) |
Accumulated amortisation and impairment | Construction in progress and equipment for installation | |||
Disclosure of detailed information about property, plant and equipment | |||
Property, plant and equipment at beginning of period | (764) | ||
Impairment | (764) | ||
Property, plant and equipment at end of period | ₽ (764) | ₽ (764) |
GOODWILL (Details)
GOODWILL (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | ₽ 34,281 | ₽ 33,685 |
Goodwill at end of period | 39,107 | 34,281 |
Russia Convergent | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 28,781 | 28,800 |
Goodwill at end of period | 30,658 | 28,781 |
Moscow fixed line | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 1,164 | 1,083 |
Goodwill at end of period | 1,377 | 1,164 |
Ukraine | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 87 | 95 |
Goodwill at end of period | 106 | 87 |
Other | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 4,249 | 3,707 |
Goodwill at end of period | 6,966 | 4,249 |
Gross amount | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 39,263 | 38,667 |
Acquisitions (Note 5) | 4,602 | 794 |
Impairment (Note 22) | (524) | |
Currency translation adjustment | 748 | (198) |
Goodwill at end of period | 44,613 | 39,263 |
Gross amount | Russia Convergent | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 30,247 | 30,266 |
Acquisitions (Note 5) | 1,877 | 62 |
Reclassification | (81) | |
Goodwill at end of period | 32,124 | 30,247 |
Gross amount | Moscow fixed line | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 1,164 | 1,083 |
Acquisitions (Note 5) | 213 | |
Reclassification | 81 | |
Goodwill at end of period | 1,377 | 1,164 |
Gross amount | Ukraine | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 87 | 95 |
Currency translation adjustment | 19 | (8) |
Goodwill at end of period | 106 | 87 |
Gross amount | Other | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | 7,765 | 7,223 |
Acquisitions (Note 5) | 2,512 | 732 |
Impairment (Note 22) | (524) | |
Currency translation adjustment | 729 | (190) |
Goodwill at end of period | 11,006 | 7,765 |
Accumulated impairment | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | (4,982) | (4,982) |
Goodwill at end of period | (5,506) | (4,982) |
Accumulated impairment | Russia Convergent | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | (1,466) | (1,466) |
Goodwill at end of period | (1,466) | (1,466) |
Accumulated impairment | Other | ||
Change in the net carrying amount of goodwill | ||
Goodwill at beginning of period | (3,516) | (3,516) |
Goodwill at end of period | ₽ (4,040) | ₽ (3,516) |
IMPAIRMENT REVIEW (Details)
IMPAIRMENT REVIEW (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
IMPAIRMENT REVIEW | ||
Total impairment loss | ₽ 149 | ₽ 3,775 |
Russia Convergent | ||
IMPAIRMENT REVIEW | ||
Capital expenditure as a percentage of revenue | 19.00% | 17.20% |
Terminal growth rate (as a percentage) | 1.00% | 1.00% |
Discount rate applied to cash flow projections (as a percentage) | 16.00% | 16.00% |
Armenia | ||
IMPAIRMENT REVIEW | ||
Capital expenditure as a percentage of revenue | 16.90% | 17.80% |
Terminal growth rate (as a percentage) | 0.00% | 0.00% |
Discount rate applied to cash flow projections (as a percentage) | 15.20% | 15.20% |
Moscow fixed line | ||
IMPAIRMENT REVIEW | ||
Capital expenditure as a percentage of revenue | 21.60% | 20.60% |
Terminal growth rate (as a percentage) | 1.00% | 1.00% |
Discount rate applied to cash flow projections (as a percentage) | 14.50% | 14.50% |
Ukraine | ||
IMPAIRMENT REVIEW | ||
Capital expenditure as a percentage of revenue | 18.40% | 22.70% |
Terminal growth rate (as a percentage) | 3.00% | 3.00% |
Discount rate applied to cash flow projections (as a percentage) | 20.80% | 20.80% |
Turkmenistan | ||
IMPAIRMENT REVIEW | ||
Property, plant and equipment | ₽ 3,063 | |
Other intangible assets | 141 | |
Total impairment loss | 3,204 | |
Recoverable amount | ₽ 0 | 0 |
NVision Czech Republic | ||
IMPAIRMENT REVIEW | ||
Property, plant and equipment | 564 | |
Other intangible assets | 7 | |
Total impairment loss | 571 | |
Reversal of impairment loss recognised in profit or loss, property, plant and equipment | (505) | |
Reversal of impairment loss recognised in profit or loss, other intangible assets | (2) | |
Reversal of impairment loss recognised in profit or loss | (507) | |
Recoverable amount | ₽ 1,778 | ₽ 954 |
OIBDA margin (as a percentage) | 4.20% | |
Capital expenditure as a percentage of revenue | 1.30% | 2.50% |
Terminal growth rate (as a percentage) | 2.00% | 2.00% |
Discount rate applied to cash flow projections (as a percentage) | 8.70% | 8.70% |
Oblachniy Retail | ||
IMPAIRMENT REVIEW | ||
Impairment (Note 22) | ₽ 524 | |
Property, plant and equipment | 13 | |
Other intangible assets | 140 | |
Total impairment loss | 677 | |
Recoverable amount | ₽ 765 | |
Capital expenditure as a percentage of revenue | 0.90% | |
Terminal growth rate (as a percentage) | 3.00% | |
Discount rate applied to cash flow projections (as a percentage) | 20.10% | |
Minimum | Russia Convergent | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 42.40% | 38.00% |
Minimum | Armenia | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 45.00% | 40.20% |
Minimum | Moscow fixed line | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 56.00% | 41.00% |
Minimum | Ukraine | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 50.00% | 31.40% |
Minimum | NVision Czech Republic | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 4.90% | |
Maximum | Russia Convergent | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 42.90% | 39.10% |
Maximum | Armenia | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 47.40% | 41.20% |
Maximum | Moscow fixed line | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 59.20% | 48.50% |
Maximum | Ukraine | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 51.60% | 40.60% |
Maximum | NVision Czech Republic | ||
IMPAIRMENT REVIEW | ||
OIBDA margin (as a percentage) | 5.50% |
OTHER INTANGIBLE ASSETS (Detail
OTHER INTANGIBLE ASSETS (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | ₽ 79,397 | ₽ 75,128 | ₽ 74,596 |
Intangible assets other than goodwill at end of period | 95,962 | 79,397 | 75,128 |
Gross amount | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | 168,286 | 153,313 | 151,462 |
Additions | 32,754 | 26,577 | 31,582 |
Arising on business combinations | 5,461 | 573 | 323 |
Effect on adoption of IFRS 15 | 19,197 | ||
Effect on assets impairment | (188) | ||
Disposal of UMS | (5,578) | ||
Disposal | (10,004) | (10,008) | (14,259) |
Other | 44 | 50 | (127) |
Foreign exchange differences | 7,913 | (2,219) | (10,090) |
Intangible assets other than goodwill at end of period | 223,463 | 168,286 | 153,313 |
Accumulated amortisation and impairment | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | (88,889) | (78,185) | (76,866) |
Arising on business combinations | (1,785) | ||
Effect on adoption of IFRS 15 | (12,368) | ||
Charge for the year | (29,488) | (21,733) | (23,319) |
Effect on assets impairment | 50 | (148) | |
Disposal of UMS | 2,656 | ||
Disposal | 9,483 | 9,910 | 13,937 |
Other | (44) | (50) | 1 |
Foreign exchange differences | (4,458) | 1,317 | 5,406 |
Intangible assets other than goodwill at end of period | (127,499) | (88,889) | (78,185) |
Licenses | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | 16,260 | 17,173 | 18,617 |
Intangible assets other than goodwill at end of period | ₽ 23,514 | 16,260 | 17,173 |
Weighted-average period until next renewal of operating licenses | 5 years | ||
Licenses | Minimum | |||
Other intangible assets | |||
Useful life, years | 1 year | ||
Licenses | Maximum | |||
Other intangible assets | |||
Useful life, years | 20 years | ||
Licenses | Gross amount | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | ₽ 27,741 | 27,136 | 28,490 |
Additions | 7,479 | 1,647 | 3,382 |
Arising on business combinations | 260 | 323 | |
Disposal | (223) | (93) | (2) |
Other | (2) | 44 | |
Foreign exchange differences | 4,630 | (1,207) | (5,101) |
Intangible assets other than goodwill at end of period | 39,627 | 27,741 | 27,136 |
Licenses | Accumulated amortisation and impairment | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | (11,481) | (9,963) | (9,873) |
Charge for the year | (2,711) | (2,180) | (2,092) |
Disposal | 193 | 92 | 2 |
Other | (7) | ||
Foreign exchange differences | (2,114) | 570 | 2,007 |
Intangible assets other than goodwill at end of period | (16,113) | (11,481) | (9,963) |
Right to use radio frequencies | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | 3,090 | 4,120 | 5,065 |
Intangible assets other than goodwill at end of period | ₽ 2,062 | 3,090 | 4,120 |
Right to use radio frequencies | Minimum | |||
Other intangible assets | |||
Useful life, years | 1 year | ||
Right to use radio frequencies | Maximum | |||
Other intangible assets | |||
Useful life, years | 15 years | ||
Right to use radio frequencies | Gross amount | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | ₽ 7,851 | 8,949 | 9,326 |
Additions | 19 | 13 | 245 |
Disposal | (1,223) | (1,112) | (582) |
Other | 1 | 1 | (40) |
Intangible assets other than goodwill at end of period | 6,648 | 7,851 | 8,949 |
Right to use radio frequencies | Accumulated amortisation and impairment | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | (4,761) | (4,829) | (4,261) |
Charge for the year | (796) | (1,042) | (1,170) |
Disposal | 971 | 1,108 | 582 |
Other | 2 | 20 | |
Intangible assets other than goodwill at end of period | (4,586) | (4,761) | (4,829) |
Billing and other software | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | 56,136 | 49,410 | 42,577 |
Intangible assets other than goodwill at end of period | ₽ 57,779 | 56,136 | 49,410 |
Billing and other software | Minimum | |||
Other intangible assets | |||
Useful life, years | 1 year | ||
Billing and other software | Maximum | |||
Other intangible assets | |||
Useful life, years | 25 years | ||
Billing and other software | Gross amount | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | ₽ 119,976 | 104,542 | 93,134 |
Additions | 20,884 | 24,686 | 27,658 |
Arising on business combinations | 3,021 | 163 | |
Effect on assets impairment | (168) | ||
Disposal of UMS | (1,891) | ||
Disposal | (8,215) | (8,429) | (10,509) |
Other | 89 | (6) | (87) |
Foreign exchange differences | 2,977 | (980) | (3,763) |
Intangible assets other than goodwill at end of period | 138,564 | 119,976 | 104,542 |
Billing and other software | Accumulated amortisation and impairment | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | (63,840) | (55,132) | (50,557) |
Arising on business combinations | (1,785) | ||
Charge for the year | (20,941) | (17,614) | (18,002) |
Effect on assets impairment | 44 | (148) | |
Disposal of UMS | 494 | ||
Disposal | 7,994 | 8,345 | 10,193 |
Other | (70) | (17) | 43 |
Foreign exchange differences | (2,187) | 726 | 2,697 |
Intangible assets other than goodwill at end of period | (80,785) | (63,840) | (55,132) |
Customer base | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | 2,682 | 3,298 | 3,918 |
Intangible assets other than goodwill at end of period | ₽ 3,532 | 2,682 | 3,298 |
Customer base | Minimum | |||
Other intangible assets | |||
Useful life, years | 4 years | ||
Customer base | Maximum | |||
Other intangible assets | |||
Useful life, years | 31 years | ||
Customer base | Gross amount | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | ₽ 7,323 | 7,373 | 7,537 |
Arising on business combinations | 1,530 | ||
Disposal | (63) | (50) | (164) |
Intangible assets other than goodwill at end of period | 8,790 | 7,323 | 7,373 |
Customer base | Accumulated amortisation and impairment | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | (4,641) | (4,075) | (3,619) |
Charge for the year | (680) | (616) | (620) |
Disposal | 63 | 50 | 164 |
Intangible assets other than goodwill at end of period | (5,258) | (4,641) | (4,075) |
Numbering capacity | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | 159 | 209 | 212 |
Intangible assets other than goodwill at end of period | ₽ 114 | 159 | 209 |
Numbering capacity | Minimum | |||
Other intangible assets | |||
Useful life, years | 2 years | ||
Numbering capacity | Maximum | |||
Other intangible assets | |||
Useful life, years | 15 years | ||
Numbering capacity | Gross amount | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | ₽ 2,915 | 3,070 | 3,208 |
Additions | 10 | 12 | 65 |
Arising on business combinations | 1 | ||
Disposal | (82) | (158) | (160) |
Other | (4) | ||
Foreign exchange differences | 22 | (9) | (39) |
Intangible assets other than goodwill at end of period | 2,866 | 2,915 | 3,070 |
Numbering capacity | Accumulated amortisation and impairment | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | (2,756) | (2,861) | (2,996) |
Charge for the year | (57) | (57) | (46) |
Disposal | 82 | 158 | 160 |
Other | (4) | (13) | |
Foreign exchange differences | (21) | 8 | 34 |
Intangible assets other than goodwill at end of period | (2,752) | (2,756) | (2,861) |
Cost-to-obtain contracts | |||
Other intangible assets | |||
Intangible assets other than goodwill at end of period | ₽ 7,017 | ||
Cost-to-obtain contracts | Minimum | |||
Other intangible assets | |||
Useful life, years | 2 years | ||
Cost-to-obtain contracts | Maximum | |||
Other intangible assets | |||
Useful life, years | 5 years | ||
Cost-to-obtain contracts | Gross amount | |||
Other intangible assets | |||
Additions | ₽ 3,961 | ||
Effect on adoption of IFRS 15 | 19,197 | ||
Foreign exchange differences | 202 | ||
Intangible assets other than goodwill at end of period | 23,360 | ||
Cost-to-obtain contracts | Accumulated amortisation and impairment | |||
Other intangible assets | |||
Effect on adoption of IFRS 15 | (12,368) | ||
Charge for the year | (3,876) | ||
Foreign exchange differences | (99) | ||
Intangible assets other than goodwill at end of period | (16,343) | ||
Other intangible assets | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | 1,070 | 918 | 4,207 |
Intangible assets other than goodwill at end of period | ₽ 1,944 | 1,070 | 918 |
Other intangible assets | Minimum | |||
Other intangible assets | |||
Useful life, years | 1 year | ||
Other intangible assets | Maximum | |||
Other intangible assets | |||
Useful life, years | 10 years | ||
Other intangible assets | Gross amount | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | ₽ 2,480 | 2,243 | 9,767 |
Additions | 401 | 219 | 232 |
Arising on business combinations | 909 | 150 | |
Effect on assets impairment | (20) | ||
Disposal of UMS | (3,687) | ||
Disposal | (198) | (166) | (2,842) |
Other | (46) | 57 | (40) |
Foreign exchange differences | 80 | (23) | (1,187) |
Intangible assets other than goodwill at end of period | 3,606 | 2,480 | 2,243 |
Other intangible assets | Accumulated amortisation and impairment | |||
Other intangible assets | |||
Intangible assets other than goodwill at beginning of period | (1,410) | (1,325) | (5,560) |
Charge for the year | (427) | (224) | (1,389) |
Effect on assets impairment | 6 | ||
Disposal of UMS | 2,162 | ||
Disposal | 180 | 157 | 2,836 |
Other | 26 | (31) | (42) |
Foreign exchange differences | (37) | 13 | 668 |
Intangible assets other than goodwill at end of period | ₽ (1,662) | ₽ (1,410) | ₽ (1,325) |
BORROWINGS (Details)
BORROWINGS (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
BORROWINGS | ||
Bank and other loans | ₽ 250,780 | ₽ 182,937 |
Notes | 117,355 | 108,776 |
Total borrowings | 368,135 | 291,713 |
Less: current portion | (3,063) | (63,673) |
Total borrowings, non-current | ₽ 365,072 | ₽ 228,040 |
BORROWINGS - Notes (Details)
BORROWINGS - Notes (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
BORROWINGS | ||
Total notes | ₽ 117,355 | ₽ 108,776 |
Less: current portion | (1,017) | (29,979) |
Total notes, non-current | ₽ 116,338 | 78,797 |
MTS International Notes due 2023 | USD | ||
BORROWINGS | ||
Interest rate | 5.00% | |
Total notes | ₽ 31,090 | 26,187 |
MTS International Notes due 2020 | USD | ||
BORROWINGS | ||
Interest rate | 8.625% | |
Total notes | ₽ 20,870 | 17,621 |
MTS PJSC Notes due 2022 (7.70%) | ||
BORROWINGS | ||
Interest rate | 7.70% | |
Total notes | ₽ 14,958 | 14,947 |
MTS PJSC Notes due 2023 | ||
BORROWINGS | ||
Interest rate | 6.85% | |
Total notes | ₽ 9,348 | 9,997 |
MTS PJSC Notes due 2031 | ||
BORROWINGS | ||
Interest rate | 7.85% | |
Total notes | ₽ 1,080 | 9,994 |
MTS PJSC Notes due 2022 (9.00%) | ||
BORROWINGS | ||
Interest rate | 9.00% | |
Total notes | ₽ 9,993 | 9,991 |
MTS PJSC Notes due 2021 (8.85%) | ||
BORROWINGS | ||
Interest rate | 8.85% | |
Total notes | ₽ 9,990 | 9,986 |
MTS PJSC Notes due 2021 (7.10%) | ||
BORROWINGS | ||
Interest rate | 7.10% | |
Total notes | ₽ 9,988 | |
MTS PJSC Notes Due 2025 | ||
BORROWINGS | ||
Interest rate | 7.25% | |
Total notes | ₽ 9,986 | |
MTS PJSC Notes due 2018 | ||
BORROWINGS | ||
Interest rate | 7.70% | |
Total notes | 9,986 | |
MTS PJSC Notes due 2020 | ||
BORROWINGS | ||
Interest rate | 7.90% | |
Total notes | ₽ 40 | 49 |
Other notes due 2022 | ||
BORROWINGS | ||
Interest rate | 0.25% | |
Total notes | ₽ 12 | ₽ 18 |
BORROWINGS - Loans from banks a
BORROWINGS - Loans from banks and financial institutions (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
BORROWINGS | ||
Total bank and other loans | ₽ 250,780 | ₽ 182,937 |
Less: current portion | (2,046) | (33,694) |
Total bank and other loans, non-current | 248,734 | 149,243 |
USD | ||
BORROWINGS | ||
Total bank and other loans | ₽ 10,980 | 27,669 |
USD | Calyon, ING Bank N.V, Nordea Bank AB, Raiffeisen Zentralbank Osterreich AG | ||
BORROWINGS | ||
Interest rate | 2.994% | |
Total bank and other loans | 17,077 | |
USD | Calyon, ING Bank N.V, Nordea Bank AB, Raiffeisen Zentralbank Osterreich AG | LIBOR | ||
BORROWINGS | ||
Basis spread on variable rate | 1.15% | |
USD | Citibank | ||
BORROWINGS | ||
Interest rate | 3.776% | |
Total bank and other loans | ₽ 10,980 | 10,592 |
USD | Citibank | LIBOR | ||
BORROWINGS | ||
Basis spread on variable rate | 0.90% | |
Russian Rubles | ||
BORROWINGS | ||
Total bank and other loans | ₽ 239,725 | 155,137 |
Russian Rubles | Sberbank | ||
BORROWINGS | ||
Total bank and other loans | ₽ 139,515 | 149,890 |
Russian Rubles | Sberbank | Central Bank key rate | Minimum | ||
BORROWINGS | ||
Interest rate | 7.50% | |
Russian Rubles | Sberbank | Central Bank key rate | Maximum | ||
BORROWINGS | ||
Interest rate | 8.59% | |
Russian Rubles | VTB | ||
BORROWINGS | ||
Total bank and other loans | ₽ 100,000 | 5,000 |
Russian Rubles | VTB | Central Bank key rate | Minimum | ||
BORROWINGS | ||
Interest rate | 7.20% | |
Russian Rubles | VTB | Central Bank key rate | Maximum | ||
BORROWINGS | ||
Interest rate | 8.65% | |
Russian Rubles | Other | ||
BORROWINGS | ||
Total bank and other loans | ₽ 210 | 247 |
Other currencies | ||
BORROWINGS | ||
Total bank and other loans | 75 | 131 |
Other currencies | Various financial institutions | ||
BORROWINGS | ||
Total bank and other loans | ₽ 75 | ₽ 131 |
BORROWINGS - Compliance with co
BORROWINGS - Compliance with covenants and credit facilities (Details) ₽ in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2018RUB (₽) | |
Available credit facilities | ||
Total available unused credit facilities | ₽ 21,000 | |
60 days | ||
Compliance with covenants | ||
Debt covenant maximum allowed amount for payment of court award | $ 75 | 5,210 |
Debt covenant maximum number of days allowed without appeal, discharge or waive | 60 days | |
180 days | ||
Compliance with covenants | ||
Debt covenant maximum allowed amount for payment of court award | $ 250 | 17,368 |
Debt covenant maximum number of days allowed without appeal, discharge or waive | 180 days | |
Sberbank | ||
Available credit facilities | ||
Total available unused credit facilities | 5,000 | |
VTB | ||
Available credit facilities | ||
Total available unused credit facilities | 5,000 | |
Rosselhozbank | ||
Available credit facilities | ||
Total available unused credit facilities | 5,000 | |
Absolut Bank | CBR auction rate | ||
Available credit facilities | ||
Total available unused credit facilities | ₽ 3,000 | |
Absolut Bank | CBR auction rate | Minimum | ||
Available credit facilities | ||
Basis spread on variable rate | 1.25% | 1.25% |
Absolut Bank | CBR auction rate | Maximum | ||
Available credit facilities | ||
Basis spread on variable rate | (1.80%) | (1.80%) |
SPB Bank | ||
Available credit facilities | ||
Total available unused credit facilities | ₽ 3,000 | |
Citibank | MosPrime | ||
Available credit facilities | ||
Basis spread on variable rate | 1.50% | 1.50% |
Number of days for repayment of credit facility | 182 days | |
MTS International Notes due 2020 | ||
Compliance with covenants | ||
Notes redemption price (as a percentage of principal) | 101.00% | |
MTS International Notes due 2023 | ||
Compliance with covenants | ||
Notes redemption price (as a percentage of principal) | 101.00% |
BORROWINGS - Maturities of prin
BORROWINGS - Maturities of principal on notes and bank loans (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Scheduled Debt Principal Repayments | ||
Total borrowings | ₽ 368,135 | ₽ 291,713 |
Notes | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 149,919 | |
Less: unamortized debt issuance costs | (179) | |
Less: interest | (32,385) | |
Total borrowings | 117,355 | |
Bank loans and other debt | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 305,962 | |
Less: unamortized debt issuance costs | (408) | |
Less: interest | (49,289) | |
Add: debt modification | (5,485) | |
Total borrowings | 250,780 | |
2019 | Notes | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 12,401 | |
2019 | Bank loans and other debt | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 21,849 | |
2020 | Notes | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 38,964 | |
2020 | Bank loans and other debt | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 107,600 | |
2021 | Notes | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 25,670 | |
2021 | Bank loans and other debt | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 150,558 | |
2022 | Notes | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 29,061 | |
2022 | Bank loans and other debt | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 22,756 | |
2023 | Notes | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 32,738 | |
2023 | Bank loans and other debt | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 2,131 | |
Thereafter | Notes | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | 11,085 | |
Thereafter | Bank loans and other debt | ||
Scheduled Debt Principal Repayments | ||
Contractual undiscounted cash flows | ₽ 1,068 |
RIGHTS-OF-USE ASSETS AND LEAS_3
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Sites for placement of network equipment and base stations inside the buildings | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Amortized term of right-of-use assets | 10 years |
Sites for placement of network equipment and base stations on land | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Amortized term of right-of-use assets | 20 years |
Fiber-optic lines | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Amortized term of right-of-use assets | 2 years |
Minimum | Administrative offices, warehouses, parking garages | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Amortized term of right-of-use assets | 3 years |
Minimum | Vehicles | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Amortized term of right-of-use assets | 4 years |
Maximum | Retail stores | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Amortized term of right-of-use assets | 8 years |
Maximum | Vehicles | |
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS | |
Amortized term of right-of-use assets | 5 years |
RIGHTS-OF-USE ASSETS AND LEAS_4
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS - Net book value of rights-of-use assets (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of quantitative information about right-of-use assets [abstract] | |||
Right-of-use assets | ₽ 149,007 | ||
Depreciation, right-of-use assets | 19,568 | ||
Additions to right-of-use assets | 22,572 | ||
Interest expense accrued on lease liabilities | 13,917 | ₽ 954 | ₽ 855 |
Expenses recognized in respect of variable lease payments not included in lease liabilities | 209 | ||
Expenses recognized in respect of variable lease payments not included in short-term liabilities | 173 | ||
Sites for placement of network and base station equipment | |||
Disclosure of quantitative information about right-of-use assets [abstract] | |||
Right-of-use assets | 92,500 | ||
Depreciation, right-of-use assets | 7,784 | ||
Land and buildings | |||
Disclosure of quantitative information about right-of-use assets [abstract] | |||
Right-of-use assets | 53,792 | ||
Depreciation, right-of-use assets | 10,955 | ||
Vehicles and other | |||
Disclosure of quantitative information about right-of-use assets [abstract] | |||
Right-of-use assets | 1,210 | ||
Depreciation, right-of-use assets | 135 | ||
Exclusive rights for trademarks | |||
Disclosure of quantitative information about right-of-use assets [abstract] | |||
Right-of-use assets | 1,505 | ||
Depreciation, right-of-use assets | ₽ 694 |
RIGHTS-OF-USE ASSETS AND LEAS_5
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS - Future minimum lease payments under capital leases (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating leases | ||
Total minimum lease payments | ₽ 254,043 | ₽ 21,445 |
Less amount representing interest | (93,491) | (9,588) |
Total present value of net minimum lease payments | 160,552 | 11,857 |
Less current portion of lease obligations | (15,812) | (801) |
Non-current portion of lease obligations | 144,740 | 11,056 |
Cash outflow for leases | 27,643 | |
Cash outflows for leases included in interest paid | 13,684 | |
2019 | ||
Operating leases | ||
Total minimum lease payments | 30,220 | 1,763 |
Total present value of net minimum lease payments | 15,812 | 801 |
More than 1 to 5 years | ||
Operating leases | ||
Total minimum lease payments | 107,403 | 6,837 |
Total present value of net minimum lease payments | 62,468 | 3,138 |
Thereafter | ||
Operating leases | ||
Total minimum lease payments | 116,420 | 12,845 |
Total present value of net minimum lease payments | ₽ 82,272 | ₽ 7,918 |
Transponders | ||
Operating leases | ||
Lease term | 12 years | |
Network equipment | ||
Operating leases | ||
Lease term | 15 years | |
Automobiles | ||
Operating leases | ||
Lease term | 3 years |
RIGHTS-OF-USE ASSETS AND LEAS_6
RIGHTS-OF-USE ASSETS AND LEASE OBLIGATIONS - Net book value of leased property, plant and equipment (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of net book value of leased property, plant and equipment | ||
Leased assets, net | ₽ 8,161 | |
Additions to leased assets | 3,339 | ₽ 1,117 |
Depreciation of leased assets | 702 | 603 |
Interest expense on leased assets | 954 | ₽ 855 |
Network and base station equipment | ||
Summary of net book value of leased property, plant and equipment | ||
Leased assets, net | 8,098 | |
Office equipment, vehicles and other | ||
Summary of net book value of leased property, plant and equipment | ||
Leased assets, net | ₽ 63 |
RECONCILIATION OF LIABILITIES_3
RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | ₽ 299,166 | ₽ 275,958 |
Financing cash flows | (25,924) | (50,445) |
Operating cash flows | (14,436) | (2,087) |
Acquisitions | 15,159 | 604 |
Foreign exchange movement | 6,909 | (4,756) |
Other comprehensive income | 2,564 | (3,051) |
Change in fair value | 719 | (120) |
Effect of new standards on opening balance | 137,753 | |
Other changes | 108,923 | 76,991 |
Liabilities arising from financial activities - end of year | 530,833 | 299,166 |
Notes | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | 108,776 | 78,186 |
Financing cash flows | (472) | 32,860 |
Foreign exchange movement | 8,967 | (2,339) |
Other changes | 84 | 69 |
Liabilities arising from financial activities - end of year | 117,355 | 108,776 |
Bank and other loans | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | 182,937 | 195,088 |
Financing cash flows | 70,657 | (10,530) |
Acquisitions | 167 | 27 |
Foreign exchange movement | 2,250 | (2,051) |
Other comprehensive income | 22 | (12) |
Effect of new standards on opening balance | (2,983) | |
Other changes | (2,270) | 415 |
Liabilities arising from financial activities - end of year | 250,780 | 182,937 |
Finance lease obligation | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | 11,857 | 11,046 |
Financing cash flows | (13,577) | (774) |
Operating cash flows | (13,684) | (854) |
Acquisitions | 690 | |
Foreign exchange movement | (1,456) | (368) |
Other comprehensive income | 1,821 | |
Effect of new standards on opening balance | 140,736 | |
Other changes | 34,166 | 2,807 |
Liabilities arising from financial activities - end of year | 160,553 | 11,857 |
Credit guarantee agreement related to foreign currency hedge | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | 996 | 2,907 |
Financing cash flows | (981) | (1,766) |
Foreign exchange movement | (15) | (145) |
Liabilities arising from financial activities - end of year | 996 | |
Contingent consideration | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | 180 | 3 |
Financing cash flows | (65) | |
Acquisitions | 940 | 175 |
Foreign exchange movement | 2 | |
Other changes | (115) | |
Liabilities arising from financial activities - end of year | 940 | 180 |
Payables related to repurchase of common stock | ||
Reconciliation of liabilities arising from financial activities | ||
Financing cash flows | (22,655) | (21,896) |
Other changes | 22,655 | 21,896 |
Dividends payable | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | 125 | 87 |
Financing cash flows | (50,054) | (51,759) |
Other changes | 50,075 | 51,797 |
Liabilities arising from financial activities - end of year | 146 | 125 |
Payable related to NCI purchase | ||
Reconciliation of liabilities arising from financial activities | ||
Financing cash flows | (101) | (7) |
Other changes | 101 | 7 |
Payables related to transactions under common control | ||
Reconciliation of liabilities arising from financial activities | ||
Financing cash flows | (13,242) | |
Acquisitions | 13,362 | |
Liabilities arising from financial activities - end of year | 120 | |
Liability under put option agreement | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | 2,424 | 2,243 |
Acquisitions | 402 | |
Other comprehensive income | 592 | (101) |
Change in fair value | 719 | (120) |
Liabilities arising from financial activities - end of year | 3,735 | 2,424 |
Receivables related to sale of own shares | ||
Reconciliation of liabilities arising from financial activities | ||
Financing cash flows | 89 | |
Other changes | (89) | |
Hedge asset (net) | ||
Reconciliation of liabilities arising from financial activities | ||
Liabilities arising from financial activities - beginning of year | (8,129) | (13,632) |
Financing cash flows | 4,477 | 3,427 |
Operating cash flows | (752) | (1,233) |
Foreign exchange movement | (2,837) | 145 |
Other comprehensive income | 129 | 3,164 |
Other changes | 4,316 | |
Liabilities arising from financial activities - end of year | ₽ (2,796) | ₽ (8,129) |
PROVISIONS (Details)
PROVISIONS (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in provisions | |||
Provision beginning of the period | ₽ (12,161) | ₽ (10,425) | ₽ (10,428) |
Arising during the year | (73,238) | (16,052) | (15,463) |
Utilised | 14,620 | 12,642 | 13,087 |
Discount rate adjustment and imputed interest (change in estimates) | (46) | (62) | (193) |
Unused amounts reversed | 2,251 | 1,705 | 2,302 |
Arising due to acquisitions of subsidiaries | (2,262) | ||
Disposal of a subsidiary | 91 | ||
Translation adjustments and other | (3,466) | 31 | 179 |
Provision end of the period | (74,302) | (12,161) | (10,425) |
Current | (70,911) | (9,852) | (8,075) |
Non-current | (3,391) | (2,309) | (2,350) |
Tax provisions other than for income tax | |||
Changes in provisions | |||
Provision beginning of the period | (310) | (457) | (525) |
Arising during the year | (374) | (229) | (1,058) |
Utilised | 336 | 342 | 374 |
Unused amounts reversed | 211 | 33 | 742 |
Arising due to acquisitions of subsidiaries | (113) | ||
Translation adjustments and other | (2) | 1 | 10 |
Provision end of the period | (252) | (310) | (457) |
Current | (252) | (310) | (457) |
Provision for decommissioning and restoration | |||
Changes in provisions | |||
Provision beginning of the period | (1,049) | (1,191) | (1,459) |
Arising during the year | (1,912) | (108) | (45) |
Utilised | 18 | 5 | 8 |
Discount rate adjustment and imputed interest (change in estimates) | (223) | (103) | (142) |
Unused amounts reversed | 89 | 338 | 430 |
Translation adjustments and other | (32) | 10 | 17 |
Provision end of the period | (3,109) | (1,049) | (1,191) |
Non-current | (3,109) | (1,049) | (1,191) |
Employee bonuses and other rewards | |||
Changes in provisions | |||
Provision beginning of the period | (10,157) | (8,552) | (8,237) |
Arising during the year | (14,259) | (15,181) | (14,085) |
Utilised | 13,873 | 12,203 | 12,482 |
Discount rate adjustment and imputed interest (change in estimates) | 177 | 41 | (51) |
Unused amounts reversed | 1,079 | 1,233 | 1,096 |
Arising due to acquisitions of subsidiaries | (984) | ||
Disposal of a subsidiary | 91 | ||
Translation adjustments and other | (107) | 99 | 152 |
Provision end of the period | (10,378) | (10,157) | (8,552) |
Current | (10,096) | (8,897) | (7,393) |
Non-current | (282) | (1,260) | (1,159) |
SEC Provision | |||
Changes in provisions | |||
Arising during the year | (55,752) | ||
Translation adjustments and other | (3,298) | ||
Provision end of the period | (59,050) | ||
Current | (59,050) | ||
Other provisions | |||
Changes in provisions | |||
Provision beginning of the period | (645) | (225) | (207) |
Arising during the year | (941) | (534) | (275) |
Utilised | 393 | 92 | 223 |
Unused amounts reversed | 872 | 101 | 34 |
Arising due to acquisitions of subsidiaries | (1,165) | ||
Translation adjustments and other | (27) | (79) | |
Provision end of the period | (1,513) | (645) | (225) |
Current | ₽ (1,513) | ₽ (645) | ₽ (225) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Financial instruments | ||
Total financial assets | ₽ 288,032 | ₽ 131,564 |
Total current financial assets | (230,642) | (120,719) |
Total non-current financial assets | 57,390 | 10,845 |
Total financial liabilities | 700,086 | 356,070 |
Total current financial liabilities | (187,160) | (115,926) |
Total non-current financial liabilities | 512,926 | 240,144 |
Financial liabilities at fair value through profit or loss | ||
Financial instruments | ||
Total financial liabilities | 5,021 | 2,814 |
Fair value through other comprehensive income | ||
Financial instruments | ||
Total financial liabilities | 274 | |
Trade and other payables | ||
Financial instruments | ||
Total financial liabilities | 53,623 | 47,314 |
Accounts payable, related parties | ||
Financial instruments | ||
Total financial liabilities | 1,301 | 1,102 |
Financial liabilities at amortised cost | ||
Financial instruments | ||
Total financial liabilities | 640,141 | 304,566 |
Loans and borrowings: | ||
Financial instruments | ||
Total financial liabilities | 640,141 | 303,570 |
Bank and other loans | ||
Financial instruments | ||
Total financial liabilities | 250,780 | 182,937 |
Lease obligations | ||
Financial instruments | ||
Total financial liabilities | 160,552 | 11,857 |
Notes | ||
Financial instruments | ||
Total financial liabilities | 117,355 | 108,776 |
MTS Bank deposits and liabilities | ||
Financial instruments | ||
Total financial liabilities | 111,454 | |
Guarantee payment received | ||
Financial instruments | ||
Total financial liabilities | 996 | |
Other financial liabilities at fair value: | ||
Financial instruments | ||
Total financial liabilities | 5,021 | 3,088 |
Liabilities under option agreements | Financial liabilities at fair value through profit or loss | ||
Financial instruments | ||
Total financial liabilities | 3,735 | 2,424 |
Contingent consideration and other liabilities | Financial liabilities at fair value through profit or loss | ||
Financial instruments | ||
Total financial liabilities | 936 | |
Interest rate swaps not designated as hedges | Financial liabilities at fair value through profit or loss | ||
Financial instruments | ||
Total financial liabilities | 265 | |
Currency forwards not designated as hedges | Financial liabilities at fair value through profit or loss | ||
Financial instruments | ||
Total financial liabilities | 85 | |
Interest rate swaps designated as cash flow hedges | Financial liabilities at fair value through profit or loss | ||
Financial instruments | ||
Total financial liabilities | 390 | |
Cross-currency swaps designated as cash flow hedges | Fair value through other comprehensive income | ||
Financial instruments | ||
Total financial liabilities | 274 | |
At fair value through profit or loss | ||
Financial instruments | ||
Total financial assets | 37,408 | 9,600 |
At fair value through other comprehensive income | ||
Financial instruments | ||
Total financial assets | 2,867 | 8,460 |
At amortized cost | ||
Financial instruments | ||
Total financial assets | 117,609 | 43,541 |
Trade and other receivables | ||
Financial instruments | ||
Total financial assets | 37,143 | 28,017 |
Accounts receivable, related parties | ||
Financial instruments | ||
Total financial assets | 8,930 | 11,360 |
Cash and Cash equivalents | ||
Financial instruments | ||
Total financial assets | 84,075 | 30,586 |
Other financial assets | ||
Financial instruments | ||
Total financial assets | 157,884 | 61,601 |
Securities held by MTS Bank | At fair value through profit or loss | ||
Financial instruments | ||
Total financial assets | 22,487 | |
Assets in Sistema Capital trust management | At fair value through profit or loss | ||
Financial instruments | ||
Total financial assets | 11,644 | 9,600 |
Currency forwards and options not designated as hedges | At fair value through profit or loss | ||
Financial instruments | ||
Total financial assets | 2,200 | |
Cross-currency swaps not designated as hedges | At fair value through other comprehensive income | ||
Financial instruments | ||
Total financial assets | 1,077 | |
Cross-currency swaps designated as cash flow hedges | At fair value through other comprehensive income | ||
Financial instruments | ||
Total financial assets | 2,797 | 8,403 |
Notes | At fair value through other comprehensive income | ||
Financial instruments | ||
Total financial assets | 70 | 57 |
Deposits and loans issued | At amortized cost | ||
Financial instruments | ||
Total financial assets | 83,865 | 33,251 |
Notes | At amortized cost | ||
Financial instruments | ||
Total financial assets | 31,165 | 8,480 |
Other | At amortized cost | ||
Financial instruments | ||
Total financial assets | ₽ 2,579 | ₽ 1,810 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair value of financial instruments (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Level 1 | Sistema International Funding S.A. Bonds due in 2019 | |||
Fair value measurements | |||
Assets | ₽ 70 | ₽ 57 | |
Level 1 | Securities held by MTS Bank | |||
Fair value measurements | |||
Assets | 22,487 | ||
Level 2 | Derivative financial instruments | |||
Fair value measurements | |||
Liabilities | (350) | (664) | |
Level 2 | Interest rate swaps derivative instruments | |||
Fair value measurements | |||
Liabilities | (265) | (390) | |
Level 2 | Cross-currency interest rate swaps | |||
Fair value measurements | |||
Liabilities | (274) | ||
Level 2 | Forward contracts | |||
Fair value measurements | |||
Liabilities | (85) | ||
Level 2 | Derivative financial instruments | |||
Fair value measurements | |||
Assets | 6,074 | 8,403 | |
Level 2 | Currency forwards and options | |||
Fair value measurements | |||
Assets | 2,200 | ||
Level 2 | Cross-currency interest rate swaps | |||
Fair value measurements | |||
Assets | 3,874 | 8,403 | |
Level 2 | Assets in Sistema Capital trust management | |||
Fair value measurements | |||
Assets | 11,644 | 9,600 | |
Level 3 | |||
Fair value measurements | |||
Net realized gains (loss) | (719) | 120 | ₽ 199 |
Unrealized gains or losses | 0 | 0 | ₽ 0 |
Level 3 | Liabilities under option agreements | |||
Fair value measurements | |||
Liabilities | (3,735) | (2,424) | |
Level 3 | Contingent consideration | |||
Fair value measurements | |||
Liabilities | ₽ (940) | ₽ (180) |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Put option agreement (Details) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018RUB (₽) | Dec. 31, 2017RUB (₽) | |
MTS Armenia | Liabilities under put option agreements | ||
Significant unobservable inputs | ||
Liabilities | ₽ 3,629 | ₽ 2,012 |
Oblachny Retail LLC | Liabilities under option agreements | ||
Significant unobservable inputs | ||
Liabilities | ₽ 0 | ₽ 412 |
Disclosure of significant unobservable inputs used in fair value measurement of liabilities | ||
Post-tax discount rate | 16.70% | 10.00% |
Revenue, average amount per year | ₽ 660 | ₽ 632 |
OIBDA/EBITDA margin | (68.00%) | 13.00% |
Net debt, average amount per year | ₽ (3,079) | ₽ (129) |
Level 3 | Liabilities under option agreements | ||
Significant unobservable inputs | ||
Liabilities | ₽ 3,735 | ₽ 2,424 |
Discounted cash flow technique | Level 3 | MTS Armenia | Liabilities under put option agreements | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities | ||
Post-tax discount rate | 13.00% | 13.00% |
Discounted cash flow technique | Minimum | Level 3 | MTS Armenia | Liabilities under put option agreements | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities | ||
Revenue growth rate | 0.3 | 0 |
OIBDA margin | 40.50% | 40.20% |
Discounted cash flow technique | Maximum | Level 3 | MTS Armenia | Liabilities under put option agreements | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities | ||
Revenue growth rate | 2 | (0.5) |
OIBDA margin | 43.20% | 41.20% |
Discounted cash flow technique | Weighted average | Level 3 | MTS Armenia | Liabilities under put option agreements | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities | ||
Revenue growth rate | 0.9 | (0.2) |
OIBDA margin | 41.50% | 40.70% |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying value of the groups financial instruments (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair value measurements of assets | |||
Carrying value | ₽ (700,086) | ₽ (356,070) | |
Transfer of assets at fair value from level 2 to level 1 | 0 | 0 | ₽ 0 |
Assets transfers into Level 3 fair value measurements | 0 | 0 | 0 |
Assets transfers out of Level 3 fair value measurements | 0 | 0 | 0 |
Transfer of liabilities at fair value from level 1 to level 2 | 0 | 0 | 0 |
Transfer of liabilities at fair value from level 2 to level 1 | 0 | 0 | 0 |
Liabilities transfers into Level 3 fair value measurements | 0 | 0 | 0 |
Liabilities transfers out of Level 3 fair value measurements | 0 | 0 | 0 |
Transfers in and out of categories of financial instruments | 0 | 0 | ₽ 0 |
Bank and other loans | |||
Fair value measurements of assets | |||
Carrying value | (250,780) | (182,937) | |
Fair value | |||
Fair value measurements of assets | |||
Fair value | (366,887) | (296,074) | |
Gross amount | |||
Fair value measurements of assets | |||
Carrying value | (368,722) | (292,787) | |
Level 1 | Fair value | Notes | |||
Fair value measurements of assets | |||
Fair value | (115,698) | (112,531) | |
Level 1 | Gross amount | Notes | |||
Fair value measurements of assets | |||
Carrying value | (117,534) | (109,000) | |
Level 3 | Fair value | Bank and other loans | |||
Fair value measurements of assets | |||
Fair value | (251,189) | (183,543) | |
Level 3 | Gross amount | Bank and other loans | |||
Fair value measurements of assets | |||
Carrying value | ₽ (251,188) | ₽ (183,787) |
BANK FINANCIAL ASSETS AND LIA_3
BANK FINANCIAL ASSETS AND LIABILITIES - Bank deposits and loans to customers (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
Bank deposits and loans to customers | |
Total bank deposits and loans to customers, net | ₽ 63,038 |
Less: current portion | (32,385) |
Bank deposits and loans to customers, non-current | 30,653 |
Gross amount | |
Bank deposits and loans to customers | |
Total bank deposits and loans to customers, net | 70,767 |
Accumulated impairment | |
Bank deposits and loans to customers | |
Total bank deposits and loans to customers, net | (7,729) |
Loans to customers | Gross amount | |
Bank deposits and loans to customers | |
Total bank deposits and loans to customers, net | 68,132 |
Due from banks | Gross amount | |
Bank deposits and loans to customers | |
Total bank deposits and loans to customers, net | ₽ 2,635 |
BANK FINANCIAL ASSETS AND LIA_4
BANK FINANCIAL ASSETS AND LIABILITIES - Structure and amounts of bank loans to customers (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans and advances to customers | ₽ 60,443 |
Bank Deposits and Loans | 63,038 |
Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 70,767 |
Accumulated impairment | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans and advances to customers | (7,689) |
Bank Deposits and Loans | (7,729) |
Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans and advances to customers | 25,143 |
Loans to legal entities | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 29,355 |
Loans to legal entities | Accumulated impairment | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans and advances to customers | (4,212) |
Corporations | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 27,414 |
Medium-sized enterprises and small businesses | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 1,941 |
Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans and advances to customers | 35,300 |
Loans to individuals | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 38,777 |
Loans to individuals | Accumulated impairment | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans and advances to customers | (3,477) |
Mortgage loans | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 11,668 |
Consumer loans | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 17,307 |
Credit cards | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 9,778 |
Other | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 24 |
Due from banks | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 2,635 |
Time deposits with banks | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | 1,659 |
Obligatory reserves with the Central Bank of Russia | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Bank Deposits and Loans | ₽ 976 |
BANK FINANCIAL ASSETS AND LIA_5
BANK FINANCIAL ASSETS AND LIABILITIES - Carrying value of loans to customers aggregated by types of collateral (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | ₽ 60,443 |
Accumulated impairment | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (7,689) |
Loans collateralized by guaranties | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 17,984 |
Loans collateralized by pledge of real estate | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 14,237 |
Loans collateralized by pledge of own promissory notes | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 326 |
Loans collateralized by pledge of equipment | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 143 |
Loans collateralized by securities | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 32 |
Loans collateralized by rights of claim | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 15 |
Loans collateralized by pledge of inventories | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 12 |
Unsecured loans | Gross amount | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | ₽ 35,383 |
BANK FINANCIAL ASSETS AND LIA_6
BANK FINANCIAL ASSETS AND LIABILITIES - Movements in the allowance for impairment losses attributable to bank deposits and loans (Details) - RUB (₽) ₽ in Millions | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movements in the allowance for impairment losses attributable to bank deposits and loans to customers | |||
Beginning balance | ₽ 2,160 | ₽ 2,928 | |
Provision charge | 2,880 | 2,863 | |
Bad debt written-off | (2,696) | (3,459) | |
Ending Balance | ₽ 4,318 | ₽ 2,344 | ₽ 2,160 |
Bank deposits and loans | |||
Movements in the allowance for impairment losses attributable to bank deposits and loans to customers | |||
Beginning balance | 8,486 | ||
Provision charge | 634 | ||
Recovery of bad debt written-off | 430 | ||
Bad debt written-off | (1,817) | ||
Foreign currency revaluation effect | (4) | ||
Ending Balance | 7,729 | ||
Loans to customers | |||
Movements in the allowance for impairment losses attributable to bank deposits and loans to customers | |||
Beginning balance | 8,444 | ||
Provision charge | 636 | ||
Recovery of bad debt written-off | 430 | ||
Bad debt written-off | (1,817) | ||
Foreign currency revaluation effect | (4) | ||
Ending Balance | 7,689 | ||
Due from banks | |||
Movements in the allowance for impairment losses attributable to bank deposits and loans to customers | |||
Beginning balance | 42 | ||
Provision release | (2) | ||
Ending Balance | ₽ 40 |
BANK FINANCIAL ASSETS AND LIA_7
BANK FINANCIAL ASSETS AND LIABILITIES - Movements in provision for impairment losses on loans (Details) - RUB (₽) ₽ in Millions | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | ₽ 2,160 | ₽ 2,928 | |
New financial assets originated or purchased | 2,880 | 2,863 | |
Change due to change of credit risk | 172 | ||
Write-offs | (2,696) | (3,459) | |
Ending Balance | ₽ 4,318 | ₽ 2,344 | ₽ 2,160 |
Accumulated impairment | Loans to legal entities | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 4,527 | ||
New financial assets originated or purchased | 128 | ||
Change due to change of credit risk | 74 | ||
Write-offs | (637) | ||
Recovery of previously written-off assets | 124 | ||
Foreign exchange difference | (4) | ||
Ending Balance | 4,212 | ||
Accumulated impairment | Loans to individuals | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 3,917 | ||
New financial assets originated or purchased | 355 | ||
Change due to change of credit risk | 79 | ||
Write-offs | (1,180) | ||
Recovery of previously written-off assets | 306 | ||
Ending Balance | 3,477 | ||
12-month ECL | Not credit impaired | Accumulated impairment | Loans to legal entities | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 325 | ||
- Transfer to stage 2 | (2) | ||
New financial assets originated or purchased | 54 | ||
Change due to change of credit risk | (55) | ||
Foreign exchange difference | (4) | ||
Ending Balance | 318 | ||
12-month ECL | Not credit impaired | Accumulated impairment | Loans to individuals | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 683 | ||
- Transfer to stage 1 | 243 | ||
- Transfer to stage 2 | (48) | ||
- Transfer to stage 3 | (2) | ||
New financial assets originated or purchased | 355 | ||
Change due to change of credit risk | (475) | ||
Ending Balance | 756 | ||
Lifetime ECL | Not credit impaired | Accumulated impairment | Loans to legal entities | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 306 | ||
- Transfer to stage 3 | (29) | ||
New financial assets originated or purchased | 65 | ||
Change due to change of credit risk | 144 | ||
Ending Balance | 486 | ||
Lifetime ECL | Not credit impaired | Accumulated impairment | Loans to individuals | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 388 | ||
- Transfer to stage 1 | (162) | ||
- Transfer to stage 2 | 66 | ||
- Transfer to stage 3 | (291) | ||
Change due to change of credit risk | 317 | ||
Ending Balance | 318 | ||
Lifetime ECL | Impaired | Accumulated impairment | Loans to legal entities | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 3,714 | ||
- Transfer to stage 2 | 2 | ||
- Transfer to stage 3 | 29 | ||
Change due to change of credit risk | (79) | ||
Write-offs | (637) | ||
Recovery of previously written-off assets | 124 | ||
Ending Balance | 3,153 | ||
Lifetime ECL | Impaired | Accumulated impairment | Loans to individuals | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 2,468 | ||
- Transfer to stage 1 | (81) | ||
- Transfer to stage 2 | (18) | ||
- Transfer to stage 3 | 293 | ||
Change due to change of credit risk | 217 | ||
Write-offs | (1,180) | ||
Recovery of previously written-off assets | 306 | ||
Ending Balance | 2,005 | ||
Lifetime ECL | POCI | Accumulated impairment | Loans to legal entities | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 182 | ||
New financial assets originated or purchased | 9 | ||
Change due to change of credit risk | 64 | ||
Ending Balance | 255 | ||
Lifetime ECL | POCI | Accumulated impairment | Loans to individuals | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments | |||
Beginning balance | 378 | ||
Change due to change of credit risk | 20 | ||
Ending Balance | ₽ 398 |
BANK FINANCIAL ASSETS AND LIA_8
BANK FINANCIAL ASSETS AND LIABILITIES - Information on quality of loans to individuals and legal entities (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | ₽ 60,443 |
Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 35,300 |
Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 25,143 |
Accumulated impairment | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (7,689) |
Accumulated impairment | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (3,477) |
Accumulated impairment | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (4,212) |
Low to fair risk | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 35,026 |
Low to fair risk | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 23,638 |
Monitoring | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 539 |
Monitoring | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 1,871 |
Impaired | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 3,212 |
Impaired | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 3,846 |
Stage 1 | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 33,825 |
Stage 1 | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 21,756 |
Stage 1 | Accumulated impairment | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (756) |
Stage 1 | Accumulated impairment | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (327) |
Stage 1 | Low to fair risk | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 34,581 |
Stage 1 | Low to fair risk | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 22,083 |
Stage 2 | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 661 |
Stage 2 | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 2,949 |
Stage 2 | Accumulated impairment | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (318) |
Stage 2 | Accumulated impairment | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (477) |
Stage 2 | Low to fair risk | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 445 |
Stage 2 | Low to fair risk | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 1,555 |
Stage 2 | Monitoring | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 534 |
Stage 2 | Monitoring | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 1,871 |
Stage 3 | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 814 |
Stage 3 | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 433 |
Stage 3 | Accumulated impairment | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (2,005) |
Stage 3 | Accumulated impairment | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (3,153) |
Stage 3 | Monitoring | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 5 |
Stage 3 | Impaired | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 2,814 |
Stage 3 | Impaired | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 3,586 |
POCI | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 5 |
POCI | Accumulated impairment | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (398) |
POCI | Accumulated impairment | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | (255) |
POCI | Impaired | Gross amount | Loans to individuals | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | 398 |
POCI | Impaired | Gross amount | Loans to legal entities | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Loans to customers | ₽ 260 |
BANK FINANCIAL ASSETS AND LIA_9
BANK FINANCIAL ASSETS AND LIABILITIES - Information of credit quality of loans (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Credit quality of loans | ||
Net loans | ₽ 288,032 | ₽ 131,564 |
Loans to individuals | ||
Credit quality of loans | ||
Net loans | ₽ 35,300 | |
Provision for impairment to gross loans | 9.00% | |
Loans to individuals | Gross amount | ||
Credit quality of loans | ||
Net loans | ₽ 38,777 | |
Loans to individuals | Accumulated impairment | ||
Credit quality of loans | ||
Net loans | (3,477) | |
Loans to individuals | Collectively assessed | ||
Credit quality of loans | ||
Net loans | ₽ 34,958 | |
Provision for impairment to gross loans | 7.00% | |
Loans to individuals | Collectively assessed | Not past due | ||
Credit quality of loans | ||
Net loans | ₽ 33,826 | |
Provision for impairment to gross loans | 2.00% | |
Loans to individuals | Collectively assessed | Up to 30 days | ||
Credit quality of loans | ||
Net loans | ₽ 365 | |
Provision for impairment to gross loans | 18.00% | |
Loans to individuals | Collectively assessed | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | ₽ 113 | |
Provision for impairment to gross loans | 43.00% | |
Loans to individuals | Collectively assessed | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | ₽ 59 | |
Provision for impairment to gross loans | 57.00% | |
Loans to individuals | Collectively assessed | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | ₽ 95 | |
Provision for impairment to gross loans | 72.00% | |
Loans to individuals | Collectively assessed | over 180 days | ||
Credit quality of loans | ||
Net loans | ₽ 500 | |
Provision for impairment to gross loans | 76.00% | |
Loans to individuals | Collectively assessed | Gross amount | ||
Credit quality of loans | ||
Net loans | ₽ 37,779 | |
Loans to individuals | Collectively assessed | Gross amount | Not past due | ||
Credit quality of loans | ||
Net loans | 34,582 | |
Loans to individuals | Collectively assessed | Gross amount | Up to 30 days | ||
Credit quality of loans | ||
Net loans | 445 | |
Loans to individuals | Collectively assessed | Gross amount | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | 197 | |
Loans to individuals | Collectively assessed | Gross amount | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | 136 | |
Loans to individuals | Collectively assessed | Gross amount | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | 340 | |
Loans to individuals | Collectively assessed | Gross amount | over 180 days | ||
Credit quality of loans | ||
Net loans | 2,079 | |
Loans to individuals | Collectively assessed | Accumulated impairment | ||
Credit quality of loans | ||
Net loans | (2,821) | |
Loans to individuals | Collectively assessed | Accumulated impairment | Not past due | ||
Credit quality of loans | ||
Net loans | (756) | |
Loans to individuals | Collectively assessed | Accumulated impairment | Up to 30 days | ||
Credit quality of loans | ||
Net loans | (80) | |
Loans to individuals | Collectively assessed | Accumulated impairment | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | (84) | |
Loans to individuals | Collectively assessed | Accumulated impairment | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | (77) | |
Loans to individuals | Collectively assessed | Accumulated impairment | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | (245) | |
Loans to individuals | Collectively assessed | Accumulated impairment | over 180 days | ||
Credit quality of loans | ||
Net loans | (1,579) | |
Loans to individuals | Individually assessed | ||
Credit quality of loans | ||
Net loans | ₽ 342 | |
Provision for impairment to gross loans | 66.00% | |
Loans to individuals | Individually assessed | Not past due | ||
Credit quality of loans | ||
Net loans | ₽ 124 | |
Provision for impairment to gross loans | 79.00% | |
Loans to individuals | Individually assessed | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | ₽ 3 | |
Provision for impairment to gross loans | 25.00% | |
Loans to individuals | Individually assessed | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | ₽ 1 | |
Provision for impairment to gross loans | 0.00% | |
Loans to individuals | Individually assessed | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | ₽ 27 | |
Provision for impairment to gross loans | 0.00% | |
Loans to individuals | Individually assessed | over 180 days | ||
Credit quality of loans | ||
Net loans | ₽ 187 | |
Provision for impairment to gross loans | 49.00% | |
Loans to individuals | Individually assessed | Gross amount | ||
Credit quality of loans | ||
Net loans | ₽ 998 | |
Loans to individuals | Individually assessed | Gross amount | Not past due | ||
Credit quality of loans | ||
Net loans | 599 | |
Loans to individuals | Individually assessed | Gross amount | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | 4 | |
Loans to individuals | Individually assessed | Gross amount | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | 1 | |
Loans to individuals | Individually assessed | Gross amount | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | 27 | |
Loans to individuals | Individually assessed | Gross amount | over 180 days | ||
Credit quality of loans | ||
Net loans | 367 | |
Loans to individuals | Individually assessed | Accumulated impairment | ||
Credit quality of loans | ||
Net loans | (656) | |
Loans to individuals | Individually assessed | Accumulated impairment | Not past due | ||
Credit quality of loans | ||
Net loans | (475) | |
Loans to individuals | Individually assessed | Accumulated impairment | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | (1) | |
Loans to individuals | Individually assessed | Accumulated impairment | over 180 days | ||
Credit quality of loans | ||
Net loans | (180) | |
Medium-sized enterprises and small businesses | Collectively assessed | ||
Credit quality of loans | ||
Net loans | ₽ 1,492 | |
Provision for impairment to gross loans | 23.00% | |
Medium-sized enterprises and small businesses | Collectively assessed | Not past due | ||
Credit quality of loans | ||
Net loans | ₽ 1,200 | |
Provision for impairment to gross loans | 2.00% | |
Medium-sized enterprises and small businesses | Collectively assessed | Up to 30 days | ||
Credit quality of loans | ||
Net loans | ₽ 6 | |
Provision for impairment to gross loans | 16.00% | |
Medium-sized enterprises and small businesses | Collectively assessed | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | ₽ 1 | |
Provision for impairment to gross loans | 40.00% | |
Medium-sized enterprises and small businesses | Collectively assessed | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | ₽ 2 | |
Provision for impairment to gross loans | 40.00% | |
Medium-sized enterprises and small businesses | Collectively assessed | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | ₽ 8 | |
Provision for impairment to gross loans | 47.00% | |
Medium-sized enterprises and small businesses | Collectively assessed | over 180 days | ||
Credit quality of loans | ||
Net loans | ₽ 275 | |
Provision for impairment to gross loans | 60.00% | |
Medium-sized enterprises and small businesses | Collectively assessed | Gross amount | ||
Credit quality of loans | ||
Net loans | ₽ 1,941 | |
Medium-sized enterprises and small businesses | Collectively assessed | Gross amount | Not past due | ||
Credit quality of loans | ||
Net loans | 1,224 | |
Medium-sized enterprises and small businesses | Collectively assessed | Gross amount | Up to 30 days | ||
Credit quality of loans | ||
Net loans | 7 | |
Medium-sized enterprises and small businesses | Collectively assessed | Gross amount | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | 2 | |
Medium-sized enterprises and small businesses | Collectively assessed | Gross amount | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | 4 | |
Medium-sized enterprises and small businesses | Collectively assessed | Gross amount | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | 15 | |
Medium-sized enterprises and small businesses | Collectively assessed | Gross amount | over 180 days | ||
Credit quality of loans | ||
Net loans | 689 | |
Medium-sized enterprises and small businesses | Collectively assessed | Accumulated impairment | ||
Credit quality of loans | ||
Net loans | (449) | |
Medium-sized enterprises and small businesses | Collectively assessed | Accumulated impairment | Not past due | ||
Credit quality of loans | ||
Net loans | (24) | |
Medium-sized enterprises and small businesses | Collectively assessed | Accumulated impairment | Up to 30 days | ||
Credit quality of loans | ||
Net loans | (1) | |
Medium-sized enterprises and small businesses | Collectively assessed | Accumulated impairment | 31 - 60 days past due | ||
Credit quality of loans | ||
Net loans | (1) | |
Medium-sized enterprises and small businesses | Collectively assessed | Accumulated impairment | 60 - 90 days past due | ||
Credit quality of loans | ||
Net loans | (2) | |
Medium-sized enterprises and small businesses | Collectively assessed | Accumulated impairment | 91 to 180 days | ||
Credit quality of loans | ||
Net loans | (7) | |
Medium-sized enterprises and small businesses | Collectively assessed | Accumulated impairment | over 180 days | ||
Credit quality of loans | ||
Net loans | ₽ (414) |
BANK FINANCIAL ASSETS AND LI_10
BANK FINANCIAL ASSETS AND LIABILITIES - Structure and amounts of current and non current bank deposits and liabilities (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Customer accounts | ₽ 100,209 |
Due to banks and other financial institutions | 7,750 |
Debt securities issued | 1,717 |
Financial liabilities at fair value through profit or loss | 767 |
Other financial liabilities | 1,011 |
Loans from banks and other financial institutions | 7,750 |
Total bank deposits and liabilities | 111,454 |
Less: current portion | (108,821) |
Total bank deposits and liabilities, non-current | ₽ 2,633 |
BANK FINANCIAL ASSETS AND LI_11
BANK FINANCIAL ASSETS AND LIABILITIES - Structure and amounts of customer accounts and (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Customer accounts | ₽ 100,209 |
Legal entities - Current/settlement accounts | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Customer accounts | 19,408 |
Legal entities - Term deposits | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Customer accounts | 8,188 |
Individuals - Current/settlement accounts | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Customer accounts | 13,364 |
Individuals - Term deposits | |
BANK FINANCIAL ASSETS AND LIABILITIES | |
Customer accounts | ₽ 59,249 |
BANK FINANCIAL ASSETS AND LI_12
BANK FINANCIAL ASSETS AND LIABILITIES - Structure and amounts of due to banks and loans under repurchase agreement (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Nov. 30, 2015 |
Disclosure of financial liabilities [line items] | ||
Total due to banks | ₽ 7,750 | |
Securities | ||
Disclosure of financial liabilities [line items] | ||
Collateral | 2,283 | |
Subordinated securities loan | ||
Disclosure of financial liabilities [line items] | ||
Collateral | 3,539 | |
Subordinated Debt [Member] | MTS Bank | ||
Disclosure of financial liabilities [line items] | ||
Subordinated debt | ₽ 7,246 | |
Loans under repurchase agreements | ||
Disclosure of financial liabilities [line items] | ||
Total due to banks | 5,315 | |
Loans and term deposits from banks and other financial institutions | ||
Disclosure of financial liabilities [line items] | ||
Total due to banks | 1,268 | |
Correspondent accounts of other banks | ||
Disclosure of financial liabilities [line items] | ||
Total due to banks | ₽ 1,167 |
BANK FINANCIAL ASSETS AND LI_13
BANK FINANCIAL ASSETS AND LIABILITIES - Group's liquidity analysis for its derivative financial instruments (Details) ₽ in Millions | 12 Months Ended |
Dec. 31, 2018RUB (₽) | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | ₽ 140,383 |
Financial liabilities | (131,329) |
Intercompany balances | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (16,427) |
Fixed interest rate risk | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 117,861 |
Financial liabilities | (70,806) |
Fixed interest rate risk | Due to banks and other financial institutions | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (1,268) |
Fixed interest rate risk | Customer accounts | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (67,821) |
Fixed interest rate risk | Debt securities issued | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (1,717) |
Fixed interest rate risk | Financial assets at fair value through profit or loss | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 13,680 |
Fixed interest rate risk | Due from banks | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 477 |
Fixed interest rate risk | Loans to customers | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 73,190 |
Fixed interest rate risk | Investment securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 30,514 |
Non-interest bearing financial instruments | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 22,522 |
Financial liabilities | (60,523) |
Non-interest bearing financial instruments | Currency forwards and options not designated as hedges | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (373) |
Non-interest bearing financial instruments | Obligation to deliver securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (394) |
Non-interest bearing financial instruments | Due to banks and other financial institutions | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (6,482) |
Non-interest bearing financial instruments | Customer accounts | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (48,854) |
Non-interest bearing financial instruments | Other financial liabilities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (4,012) |
Non-interest bearing financial instruments | Lease obligations | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (408) |
Non-interest bearing financial instruments | Cash and Cash equivalents | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 10,117 |
Non-interest bearing financial instruments | Financial assets at fair value through profit or loss | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 8,806 |
Non-interest bearing financial instruments | Due from banks | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 2,485 |
Non-interest bearing financial instruments | Currency forwards and options not designated as hedges | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 228 |
Non-interest bearing financial instruments | Other financial assets | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 886 |
Up to 30 days | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 30,572 |
Financial liabilities | (71,663) |
Liquidity gap | (41,091) |
Stable source of funding | 40,689 |
Net liquidity gap | (402) |
Cumulative liquidity gap | (402) |
Cumulative interest sensitivity gap | (5,158) |
Up to 30 days | Intercompany balances | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (16,402) |
Up to 30 days | Fixed interest rate risk | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 19,450 |
Financial liabilities | (14,292) |
Up to 30 days | Fixed interest rate risk | Due to banks and other financial institutions | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (1,268) |
Up to 30 days | Fixed interest rate risk | Customer accounts | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (13,012) |
Up to 30 days | Fixed interest rate risk | Debt securities issued | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (12) |
Up to 30 days | Fixed interest rate risk | Financial assets at fair value through profit or loss | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 13,680 |
Up to 30 days | Fixed interest rate risk | Due from banks | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 477 |
Up to 30 days | Fixed interest rate risk | Loans to customers | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 5,182 |
Up to 30 days | Fixed interest rate risk | Investment securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 111 |
Up to 30 days | Non-interest bearing financial instruments | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 11,122 |
Financial liabilities | (57,371) |
Up to 30 days | Non-interest bearing financial instruments | Obligation to deliver securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (394) |
Up to 30 days | Non-interest bearing financial instruments | Due to banks and other financial institutions | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (6,482) |
Up to 30 days | Non-interest bearing financial instruments | Customer accounts | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (48,854) |
Up to 30 days | Non-interest bearing financial instruments | Other financial liabilities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (1,620) |
Up to 30 days | Non-interest bearing financial instruments | Lease obligations | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (21) |
Up to 30 days | Non-interest bearing financial instruments | Cash and Cash equivalents | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 10,117 |
Up to 30 days | Non-interest bearing financial instruments | Due from banks | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 483 |
Up to 30 days | Non-interest bearing financial instruments | Other financial assets | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 522 |
1 month to 3 months | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 13,787 |
Financial liabilities | (8,176) |
Liquidity gap | 5,611 |
Stable source of funding | (13,182) |
Net liquidity gap | (7,571) |
Cumulative liquidity gap | (7,973) |
Cumulative interest sensitivity gap | (10,951) |
1 month to 3 months | Intercompany balances | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (5) |
1 month to 3 months | Fixed interest rate risk | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 13,346 |
Financial liabilities | (7,553) |
1 month to 3 months | Fixed interest rate risk | Customer accounts | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (7,239) |
1 month to 3 months | Fixed interest rate risk | Debt securities issued | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (314) |
1 month to 3 months | Fixed interest rate risk | Loans to customers | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 9,113 |
1 month to 3 months | Fixed interest rate risk | Investment securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 4,233 |
1 month to 3 months | Non-interest bearing financial instruments | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 441 |
Financial liabilities | (623) |
1 month to 3 months | Non-interest bearing financial instruments | Currency forwards and options not designated as hedges | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (45) |
1 month to 3 months | Non-interest bearing financial instruments | Other financial liabilities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (541) |
1 month to 3 months | Non-interest bearing financial instruments | Lease obligations | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (37) |
1 month to 3 months | Non-interest bearing financial instruments | Due from banks | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 61 |
1 month to 3 months | Non-interest bearing financial instruments | Currency forwards and options not designated as hedges | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 45 |
1 month to 3 months | Non-interest bearing financial instruments | Other financial assets | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 335 |
3 months to 1 year | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 38,499 |
Financial liabilities | (48,627) |
Liquidity gap | (10,128) |
Stable source of funding | 22,667 |
Net liquidity gap | 12,539 |
Cumulative liquidity gap | 4,566 |
Cumulative interest sensitivity gap | (1,110) |
3 months to 1 year | Intercompany balances | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (17) |
3 months to 1 year | Fixed interest rate risk | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 36,363 |
Financial liabilities | (46,304) |
3 months to 1 year | Fixed interest rate risk | Customer accounts | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (45,971) |
3 months to 1 year | Fixed interest rate risk | Debt securities issued | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (333) |
3 months to 1 year | Fixed interest rate risk | Loans to customers | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 25,525 |
3 months to 1 year | Fixed interest rate risk | Investment securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 10,838 |
3 months to 1 year | Non-interest bearing financial instruments | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 2,136 |
Financial liabilities | (2,323) |
3 months to 1 year | Non-interest bearing financial instruments | Currency forwards and options not designated as hedges | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (328) |
3 months to 1 year | Non-interest bearing financial instruments | Other financial liabilities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (1,851) |
3 months to 1 year | Non-interest bearing financial instruments | Lease obligations | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (144) |
3 months to 1 year | Non-interest bearing financial instruments | Due from banks | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 1,928 |
3 months to 1 year | Non-interest bearing financial instruments | Currency forwards and options not designated as hedges | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 183 |
3 months to 1 year | Non-interest bearing financial instruments | Other financial assets | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 25 |
More than 1 to 5 years | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 39,967 |
Financial liabilities | (2,570) |
Liquidity gap | 37,397 |
Stable source of funding | (8,128) |
Net liquidity gap | 29,269 |
Cumulative liquidity gap | 33,835 |
Cumulative interest sensitivity gap | 38,594 |
More than 1 to 5 years | Intercompany balances | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (3) |
More than 1 to 5 years | Fixed interest rate risk | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 39,954 |
Financial liabilities | (2,370) |
More than 1 to 5 years | Fixed interest rate risk | Customer accounts | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (1,599) |
More than 1 to 5 years | Fixed interest rate risk | Debt securities issued | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (771) |
More than 1 to 5 years | Fixed interest rate risk | Loans to customers | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 25,922 |
More than 1 to 5 years | Fixed interest rate risk | Investment securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 14,032 |
More than 1 to 5 years | Non-interest bearing financial instruments | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 13 |
Financial liabilities | (200) |
More than 1 to 5 years | Non-interest bearing financial instruments | Lease obligations | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (200) |
More than 1 to 5 years | Non-interest bearing financial instruments | Due from banks | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 13 |
Thereafter | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 2,404 |
Financial liabilities | (293) |
Liquidity gap | 2,111 |
Stable source of funding | (42,046) |
Net liquidity gap | (39,935) |
Cumulative liquidity gap | (6,100) |
Cumulative interest sensitivity gap | 40,711 |
Thereafter | Fixed interest rate risk | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 2,404 |
Financial liabilities | (287) |
Thereafter | Fixed interest rate risk | Debt securities issued | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (287) |
Thereafter | Fixed interest rate risk | Loans to customers | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 1,104 |
Thereafter | Fixed interest rate risk | Investment securities | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 1,300 |
Thereafter | Non-interest bearing financial instruments | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (6) |
Thereafter | Non-interest bearing financial instruments | Lease obligations | |
Group's liquidity analysis for its derivative financial instruments | |
Financial liabilities | (6) |
Maturity undefined | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 15,154 |
Maturity undefined | Fixed interest rate risk | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 6,344 |
Maturity undefined | Fixed interest rate risk | Loans to customers | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 6,344 |
Maturity undefined | Non-interest bearing financial instruments | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 8,810 |
Maturity undefined | Non-interest bearing financial instruments | Financial assets at fair value through profit or loss | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | 8,806 |
Maturity undefined | Non-interest bearing financial instruments | Other financial assets | |
Group's liquidity analysis for its derivative financial instruments | |
Financial assets | ₽ 4 |
BANK FINANCIAL ASSETS AND LI_14
BANK FINANCIAL ASSETS AND LIABILITIES - Group's remaining contractual maturity for its non-derivative financial liabilities (Details) ₽ in Millions | 12 Months Ended |
Dec. 31, 2018RUB (₽) | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | ₽ 131,343 |
Guaranties issued to customer | 10,587 |
Intercompany balances | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | (16,465) |
Fixed interest rate risk | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 73,070 |
Fixed interest rate risk | Due to banks | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | ₽ 1,270 |
Weighted average interest rate | 7.60% |
Fixed interest rate risk | Customer accounts | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | ₽ 69,444 |
Weighted average interest rate | 6.30% |
Fixed interest rate risk | Debt securities issued | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | ₽ 2,355 |
Weighted average interest rate | 9.50% |
Non-interest bearing financial instruments | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | ₽ 58,273 |
Non-interest bearing financial instruments | Financial liabilities at fair value through profit or loss | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 373 |
Non-interest bearing financial instruments | Due to banks | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 6,482 |
Non-interest bearing financial instruments | Customer accounts | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 48,854 |
Non-interest bearing financial instruments | Other financial liabilities | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 2,564 |
Up to 30 days | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 69,771 |
Up to 30 days | Intercompany balances | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | (16,465) |
Up to 30 days | Fixed interest rate risk | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 13,685 |
Up to 30 days | Fixed interest rate risk | Due to banks | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 1,262 |
Up to 30 days | Fixed interest rate risk | Customer accounts | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 12,410 |
Up to 30 days | Fixed interest rate risk | Debt securities issued | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 12 |
Up to 30 days | Non-interest bearing financial instruments | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 56,086 |
Up to 30 days | Non-interest bearing financial instruments | Due to banks | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 6,482 |
Up to 30 days | Non-interest bearing financial instruments | Customer accounts | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 48,854 |
Up to 30 days | Non-interest bearing financial instruments | Other financial liabilities | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 750 |
1 month to 3 months | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 8,383 |
1 month to 3 months | Fixed interest rate risk | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 8,224 |
1 month to 3 months | Fixed interest rate risk | Due to banks | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 8 |
1 month to 3 months | Fixed interest rate risk | Customer accounts | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 7,900 |
1 month to 3 months | Fixed interest rate risk | Debt securities issued | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 316 |
1 month to 3 months | Non-interest bearing financial instruments | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 159 |
1 month to 3 months | Non-interest bearing financial instruments | Other financial liabilities | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 159 |
3 months to 1 year | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 49,776 |
3 months to 1 year | Fixed interest rate risk | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 47,748 |
3 months to 1 year | Fixed interest rate risk | Customer accounts | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 47,490 |
3 months to 1 year | Fixed interest rate risk | Debt securities issued | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 258 |
3 months to 1 year | Non-interest bearing financial instruments | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 2,028 |
3 months to 1 year | Non-interest bearing financial instruments | Financial liabilities at fair value through profit or loss | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 373 |
3 months to 1 year | Non-interest bearing financial instruments | Other financial liabilities | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 1,655 |
More than 1 to 5 years | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 2,556 |
More than 1 to 5 years | Fixed interest rate risk | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 2,556 |
More than 1 to 5 years | Fixed interest rate risk | Customer accounts | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 1,644 |
More than 1 to 5 years | Fixed interest rate risk | Debt securities issued | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 912 |
Thereafter | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 857 |
Thereafter | Fixed interest rate risk | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | 857 |
Thereafter | Fixed interest rate risk | Debt securities issued | |
Analysis of the liquidity and interest rate risks | |
Financial liabilities | ₽ 857 |
FINANCIAL RISK MANAGEMENT - Int
FINANCIAL RISK MANAGEMENT - Interest rate risks (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
FINANCIAL RISK MANAGEMENT | ||
Minimum capital adequacy ratio as per CBR requirements | 8.00% | |
MTS Bank's capital adequacy ratio as per CBR requirements | 11.90% | |
Minimum capital adequacy ratio as per Basel Capital Accord (Basel 1) - Total capital | 8.00% | |
Minimum capital adequacy ratio as per Basel Capital Accord (Basel 1) - Tier 1 capital | 4.00% | |
MTS Bank's capital adequacy ratio as per Basel 1 requirements - Total capital | 18.38% | |
MTS Bank's capital adequacy ratio as per Basel 1 requirements - Tier 1 capital | 13.34% | |
Interest rate swaps derivative instruments | ||
FINANCIAL RISK MANAGEMENT | ||
Notional amount | ₽ 44,187 | ₽ 49,429 |
Interest rate swaps derivative instruments | Variable interest rate risk | ||
FINANCIAL RISK MANAGEMENT | ||
Percentage of the Group's hedged bank loans covered by swap agreements | 100.00% | 100.00% |
Interest rate swaps derivative instruments | Fixed interest rate risk | ||
FINANCIAL RISK MANAGEMENT | ||
Percentage of the Group's hedged bank loans covered by swap agreements | 5.80% | 7.90% |
FINANCIAL RISK MANAGEMENT - Sen
FINANCIAL RISK MANAGEMENT - Sensitivity analysis (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase in short term interest rate | |||
FINANCIAL RISK MANAGEMENT | |||
Reasonably possible increase in short term interest rates | 1.00% | 1.00% | 1.00% |
Increases of interest expense due to increase in risk | ₽ 201 | ₽ 44 | ₽ 704 |
Decrease in short term interest rate | |||
FINANCIAL RISK MANAGEMENT | |||
Reasonably possible decrease in short term interest rates | 1.00% | 1.00% | 1.00% |
Decreases of finance cost due to decrease in risk | ₽ 201 | ₽ 44 | ₽ 704 |
FINANCIAL RISK MANAGEMENT - For
FINANCIAL RISK MANAGEMENT - Foreign currency risks (Details) - Foreign currency - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cross currency swap agreements | |||
FINANCIAL RISK MANAGEMENT | |||
Percentage of USD- and Euro- denominated Notes and bank loans outstanding hedged for exposure to currency rate risk | 50.80% | 39.60% | |
Notionals related to interest rate derivative instruments | ₽ 34,115 | ₽ 28,669 | |
Forward contracts | |||
FINANCIAL RISK MANAGEMENT | |||
Notionals related to interest rate derivative instruments | 51,002 | 0 | |
Gain (loss) recognized in consolidated statement of profit and loss | ₽ 1,937 | ₽ 0 | ₽ (142) |
FINANCIAL RISK MANAGEMENT - F_2
FINANCIAL RISK MANAGEMENT - Foreign currency risks - effect of swap agreements on AOCI (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effect of the Group's swap agreements designated as cash flow hedges in accumulated other comprehensive income | ||||
Accumulated derivatives income / (loss) beginning of the year, net of tax of 85 and (26) and 261, respectively | ₽ (8,854) | |||
Accumulated derivatives income / (loss), end of the year, net of tax of 59 and 85 and (26), respectively | (1,064) | ₽ (8,854) | ||
Cash flow hedges | ||||
Effect of the Group's swap agreements designated as cash flow hedges in accumulated other comprehensive income | ||||
Accumulated derivatives income / (loss) beginning of the year, net of tax of 85 and (26) and 261, respectively | 340 | (103) | ₽ 1,045 | |
Fair value adjustments on hedging derivatives, net of tax of 840 and (628) and (2,279), respectively | 3,362 | (2,512) | (9,116) | |
Amounts reclassified to profit for the year during the period - forecast transaction no longer expected to occur, net of tax of (126) and nil and nil, respectively | (505) | |||
Amounts reclassified to (profit) / loss for the year during the period - hedged item has affected profit or loss, net of tax of (740) and 739 and 1,992, respectively | (2,960) | 2,955 | 7,968 | |
Accumulated derivatives income / (loss), end of the year, net of tax of 59 and 85 and (26), respectively | 237 | 340 | (103) | ₽ 1,045 |
Tax effect relating to accumulated derivatives income / (loss) | 59 | 85 | (26) | ₽ 261 |
Tax on fair value adjustments on hedging derivatives | 840 | (628) | (2,279) | |
Tax on amounts reclassified to profit for the year during the period - forecast transaction no longer expected to occur | (126) | 0 | 0 | |
Tax on amounts reclassified to (profit) / loss for the year during the period - hedged item has affected profit or loss | ₽ (740) | ₽ 739 | ₽ 1,992 |
FINANCIAL RISK MANAGEMENT - F_3
FINANCIAL RISK MANAGEMENT - Foreign currency risks and liquidity risk (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Liquidity risk | |||
Amount by which current liabilities exceed current assets | ₽ 26,538 | ||
Availability of committed credit facilities | ₽ 21,000 | ||
Minimum | |||
Liquidity risk | |||
Maturity of long term debt | 1 year | ||
Maximum | |||
Liquidity risk | |||
Maturity of long term debt | 7 years | ||
Foreign currency | |||
Foreign currency risk exposure and sensitivity analysis | |||
Increase in the currency exchange rate | 1.00% | 5.00% | 20.00% |
Decrease in the currency exchange rate | (1.00%) | (5.00%) | (20.00%) |
Foreign currency | USD | |||
Foreign currency risk exposure and sensitivity analysis | |||
Effect on profit before tax | ₽ (176) | ₽ (447) | ₽ (6,722) |
Effect on profit before tax | 176 | 447 | 6,722 |
Foreign currency | Euro | |||
Foreign currency risk exposure and sensitivity analysis | |||
Effect on profit before tax | 152 | 830 | 2,274 |
Effect on profit before tax | ₽ (152) | ₽ (830) | ₽ (2,274) |
FINANCIAL RISK MANAGEMENT - Cre
FINANCIAL RISK MANAGEMENT - Credit risk and impairment credit losses on financial assets (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Credit risk exposure | |||
Impairment credit losses o financial assets | ₽ 3,694 | ₽ 2,923 | ₽ 2,698 |
Credit risk | |||
Credit risk exposure | |||
Number of days for significant increase in credit risk | 30 days | ||
Trade and other receivables | Credit risk | |||
Credit risk exposure | |||
Exposure to credit risk | ₽ 37,143 | 28,017 | |
Deposits and loans issued | Credit risk | |||
Credit risk exposure | |||
Exposure to credit risk | 83,865 | 33,251 | |
Notes | Credit risk | |||
Credit risk exposure | |||
Exposure to credit risk | 31,235 | 8,537 | |
Securities held by MTS Bank | Credit risk | |||
Credit risk exposure | |||
Exposure to credit risk | 22,487 | ||
Assets in Sistema Capital trust management | Credit risk | |||
Credit risk exposure | |||
Exposure to credit risk | 11,644 | 9,600 | |
Derivative financial instruments | Credit risk | |||
Credit risk exposure | |||
Exposure to credit risk | 6,074 | 8,403 | |
Cross currency swap agreements | Credit risk | |||
Credit risk exposure | |||
Collateral payments received | ₽ 0 | ₽ 1,000 |
RELATED PARTIES - Transactions
RELATED PARTIES - Transactions with related parties (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
RELATED PARTIES | |||
Short-term investments | ₽ 12,086 | ₽ 10,064 | |
Accounts receivable, current | 6,385 | 11,358 | |
Accounts receivable, non-current | 2,545 | 2 | |
Bank loans to customers - current | 2,244 | ||
Advances for property, plant and equipment | 1,380 | 1 | |
Right-of-use assets | 1,359 | ||
Cash and cash equivalents | 938 | 19,715 | |
Bank loans to customers - non-current | 612 | ||
Other investments | 149 | 767 | |
Bank deposits and liabilities, current | (42,642) | ||
Accounts payable | (1,301) | (1,102) | |
Bank deposits and liabilities, non-current | (1,044) | ||
Lease obligations, non-current | (1,007) | ||
Lease obligations, current | (185) | ||
Revenue | (4,352) | (3,349) | ₽ (2,178) |
Operating expenses / (income) | 2,396 | 4,053 | 3,114 |
Finance (income) / expenses | (1,398) | ₽ (1,267) | ₽ (985) |
Interest expenses under lease arrangements | ₽ (135) |
RELATED PARTIES - Accounts rece
RELATED PARTIES - Accounts receivable from and accounts payable to related parties (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
RELATED PARTIES | ||
Impairment recognized for bad or doubtful debts from related parties | ₽ 0 | ₽ 0 |
Expenses recognized for bad or doubtful debts from related parties | 0 | 0 |
Total accounts receivable, related parties | 8,930 | 11,360 |
Less non-current portion | (2,545) | (2) |
Accounts receivable, current | 6,385 | 11,358 |
Total accounts payable, related parties | 1,301 | 1,102 |
MTS Belarus | ||
RELATED PARTIES | ||
Total accounts receivable, related parties | 4,095 | 4,835 |
Total accounts payable, related parties | 678 | 828 |
TelecomCapStroi | ||
RELATED PARTIES | ||
Total accounts payable, related parties | 237 | |
Moscow Business Incubator | ||
RELATED PARTIES | ||
Total accounts payable, related parties | 152 | |
Business Nedvizhimost | ||
RELATED PARTIES | ||
Total accounts receivable, related parties | 2,561 | 4,052 |
Sitronics | ||
RELATED PARTIES | ||
Total accounts receivable, related parties | 1,107 | 317 |
Zifrovoe TV | ||
RELATED PARTIES | ||
Total accounts receivable, related parties | 764 | 702 |
MTS Bank | ||
RELATED PARTIES | ||
Total accounts receivable, related parties | 1,232 | |
Other related parties | ||
RELATED PARTIES | ||
Total accounts receivable, related parties | 403 | 222 |
Total accounts payable, related parties | ₽ 234 | ₽ 274 |
RELATED PARTIES - Advances (Det
RELATED PARTIES - Advances (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
RELATED PARTIES | ||
Advances given for property, plant and equipment | ₽ 1,380 | ₽ 1 |
Purchases of property, plant and equipment, intangible assets and other assets | 6,647 | |
Moscow Business Incubator | ||
RELATED PARTIES | ||
Purchases of property, plant and equipment, intangible assets and other assets | 4,450 | |
Mosdachtrest | ||
RELATED PARTIES | ||
Purchases of property, plant and equipment, intangible assets and other assets | 1,711 | |
Business Nedvizhimost | ||
RELATED PARTIES | ||
Purchases of property, plant and equipment, intangible assets and other assets | 328 | |
TelecomCapStroi | ||
RELATED PARTIES | ||
Advances given for property, plant and equipment | 1,317 | |
Other related parties | ||
RELATED PARTIES | ||
Advances given for property, plant and equipment | 63 | ₽ 1 |
Purchases of property, plant and equipment, intangible assets and other assets | ₽ 158 |
RELATED PARTIES - Leases (Detai
RELATED PARTIES - Leases (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
RELATED PARTIES | |
Total carrying value of right-of-use assets | ₽ 1,359 |
Total lease obligations | 1,192 |
Less non-current portion | (1,007) |
Lease obligations, related parties - current | 185 |
Finance costs | |
RELATED PARTIES | |
Interest expense accrued on lease obligations | 135 |
Business Nedvizhimost | |
RELATED PARTIES | |
Total carrying value of right-of-use assets | 919 |
Total lease obligations | 793 |
Kronshtadt | |
RELATED PARTIES | |
Total carrying value of right-of-use assets | 121 |
Total lease obligations | 109 |
Other related parties | |
RELATED PARTIES | |
Total carrying value of right-of-use assets | 319 |
Total lease obligations | ₽ 290 |
RELATED PARTIES - Bank loans to
RELATED PARTIES - Bank loans to customers, interbank loans due (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
RELATED PARTIES | |
Less non-current portion | ₽ (612) |
Bank loans due, related parties - current | 2,244 |
MTS Bank | |
RELATED PARTIES | |
Total bank loans due, related parties | 2,856 |
Less non-current portion | (612) |
Bank loans due, related parties - current | 2,244 |
MTS Bank | Kronshtadt | |
RELATED PARTIES | |
Total bank loans due, related parties | 802 |
MTS Bank | Leader-Invest | |
RELATED PARTIES | |
Total bank loans due, related parties | 612 |
MTS Bank | Binofarm | |
RELATED PARTIES | |
Total bank loans due, related parties | 412 |
MTS Bank | Kronshtadt Technology | |
RELATED PARTIES | |
Total bank loans due, related parties | 440 |
MTS Bank | Sistema | |
RELATED PARTIES | |
Total bank loans due, related parties | 254 |
MTS Bank | Sistema Finance | |
RELATED PARTIES | |
Total bank loans due, related parties | 183 |
MTS Bank | Technology for Aviation | |
RELATED PARTIES | |
Total bank loans due, related parties | ₽ 153 |
RELATED PARTIES - Bank deposits
RELATED PARTIES - Bank deposits and liabilities (Details) ₽ in Millions | Dec. 31, 2018RUB (₽) |
RELATED PARTIES | |
Less non-current portion | ₽ 1,044 |
Total bank deposits and liabilities - current | 42,642 |
MTS Bank | |
RELATED PARTIES | |
Total bank deposits and liabilities | 43,686 |
Less non-current portion | (1,044) |
Total bank deposits and liabilities - current | 42,642 |
MTS Bank | Key management personnel of the Group and its parent | |
RELATED PARTIES | |
Total bank deposits and liabilities | 29,658 |
MTS Bank | Sistema | |
RELATED PARTIES | |
Total bank deposits and liabilities | 4,610 |
MTS Bank | Sistema Telecom Activy | |
RELATED PARTIES | |
Total bank deposits and liabilities | 1,542 |
MTS Bank | Project Michurinskiy | |
RELATED PARTIES | |
Total bank deposits and liabilities | 952 |
MTS Bank | Medsi Group | |
RELATED PARTIES | |
Total bank deposits and liabilities | 745 |
MTS Bank | Sistema Real Estate | |
RELATED PARTIES | |
Total bank deposits and liabilities | 599 |
MTS Bank | CTV | |
RELATED PARTIES | |
Total bank deposits and liabilities | 536 |
MTS Bank | Sitronics | |
RELATED PARTIES | |
Total bank deposits and liabilities | 525 |
MTS Bank | Leader-Invest | |
RELATED PARTIES | |
Total bank deposits and liabilities | 433 |
MTS Bank | Sistema-Invest | |
RELATED PARTIES | |
Total bank deposits and liabilities | 338 |
MTS Bank | RTI | |
RELATED PARTIES | |
Total bank deposits and liabilities | 323 |
MTS Bank | Sistema Venture Capital | |
RELATED PARTIES | |
Total bank deposits and liabilities | 319 |
MTS Bank | BashRES | |
RELATED PARTIES | |
Total bank deposits and liabilities | 309 |
MTS Bank | Sistema Capital | |
RELATED PARTIES | |
Total bank deposits and liabilities | 239 |
MTS Bank | TelecomCapStroi | |
RELATED PARTIES | |
Total bank deposits and liabilities | 238 |
MTS Bank | BF-Sistema | |
RELATED PARTIES | |
Total bank deposits and liabilities | 233 |
MTS Bank | Business Nedvizhimost | |
RELATED PARTIES | |
Total bank deposits and liabilities | 226 |
MTS Bank | MBI | |
RELATED PARTIES | |
Total bank deposits and liabilities | 138 |
MTS Bank | Intourautoservice | |
RELATED PARTIES | |
Total bank deposits and liabilities | 128 |
MTS Bank | Detskii Mir | |
RELATED PARTIES | |
Total bank deposits and liabilities | 113 |
MTS Bank | Other related parties | |
RELATED PARTIES | |
Total bank deposits and liabilities | ₽ 1,485 |
RELATED PARTIES - Investing tra
RELATED PARTIES - Investing transactions (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
RELATED PARTIES | ||
Total short-term investments in related parties | ₽ 12,086 | ₽ 10,064 |
Total other investments to related parties | 618 | |
Total investments in shares of related parties | 149 | 149 |
Other loans receivable | ||
RELATED PARTIES | ||
Total short-term investments in related parties | 159 | 207 |
Other investments in shares | ||
RELATED PARTIES | ||
Total investments in shares of related parties | 32 | 32 |
Sistema Capital | ||
RELATED PARTIES | ||
Total short-term investments in related parties | 11,644 | 9,600 |
Intellect Telecom | Promissory notes | ||
RELATED PARTIES | ||
Total short-term investments in related parties | 283 | 257 |
Sistema | Promissory notes | ||
RELATED PARTIES | ||
Total other investments to related parties | 618 | |
Sistema Venture Capital | ||
RELATED PARTIES | ||
Total investments in shares of related parties | ₽ 117 | ₽ 117 |
RELATED PARTIES - Revenue and o
RELATED PARTIES - Revenue and operating transactions with related parties (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
RELATED PARTIES | |||
Total revenues from related parties | ₽ 4,352 | ₽ 3,349 | ₽ 2,178 |
Total operating expenses / (income) incurred on transactions with related parties | 2,396 | 4,053 | 3,114 |
MTS Bank | |||
RELATED PARTIES | |||
Total revenues from related parties | 1,271 | 1,507 | 900 |
Total operating expenses / (income) incurred on transactions with related parties | 1,217 | 2,259 | 347 |
Sitronics | |||
RELATED PARTIES | |||
Total revenues from related parties | 1,195 | 303 | |
Zifrovoe TV | |||
RELATED PARTIES | |||
Total revenues from related parties | 508 | 724 | 55 |
Koncel | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | (1,141) | ||
Key management personnel of the Group and its parent | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | 705 | ||
Sistema-Invest | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | 325 | ||
AB Safety | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | 324 | 302 | 271 |
Sistema | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | 284 | ||
Jet Air Group | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | 135 | 172 | 183 |
MTS Belarus | |||
RELATED PARTIES | |||
Total revenues from related parties | 296 | 248 | 276 |
Total operating expenses / (income) incurred on transactions with related parties | 104 | 121 | 161 |
Detsky Mir | |||
RELATED PARTIES | |||
Total revenues from related parties | 175 | 188 | 129 |
Medsi Group | |||
RELATED PARTIES | |||
Total revenues from related parties | 166 | 156 | 242 |
Business Nedvizhimost | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | 39 | 821 | 246 |
Maxima | |||
RELATED PARTIES | |||
Total operating expenses / (income) incurred on transactions with related parties | 19 | 143 | 1,018 |
Other related parties | |||
RELATED PARTIES | |||
Total revenues from related parties | 741 | 223 | 576 |
Total operating expenses / (income) incurred on transactions with related parties | ₽ 385 | ₽ 235 | ₽ 888 |
RELATED PARTIES - Finance incom
RELATED PARTIES - Finance income from related parties (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
RELATED PARTIES | |||
Total finance income from related parties | ₽ 1,398 | ₽ 1,267 | ₽ 985 |
Sistema Capital | |||
RELATED PARTIES | |||
Total finance income from related parties | 465 | 369 | 128 |
Business Nedvizhimost | |||
RELATED PARTIES | |||
Total finance income from related parties | 353 | 359 | 491 |
MTS Bank | |||
RELATED PARTIES | |||
Total finance income from related parties | 448 | 345 | 285 |
Other related parties | |||
RELATED PARTIES | |||
Total finance income from related parties | ₽ 132 | ₽ 194 | ₽ 81 |
RELATED PARTIES - Additional in
RELATED PARTIES - Additional information of related parties (Details) - RUB (₽) | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Mar. 31, 2016 | Oct. 31, 2014 | May 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
RELATED PARTIES | |||||||
Short-term investments | ₽ 12,086,000,000 | ₽ 12,086,000,000 | ₽ 10,064,000,000 | ||||
Key management remuneration | 816,000,000 | 739,000,000 | ₽ 760,000,000 | ||||
Key management remuneration as base salaries | 504,000,000 | 490,000,000 | 470,000,000 | ||||
Key management remuneration as bonus | 312,000,000 | 249,000,000 | 290,000,000 | ||||
Cash-settled and equity-settled share-based payments | 554,000,000 | 486,000,000 | ₽ 481,000,000 | ||||
East-West United Bank | |||||||
RELATED PARTIES | |||||||
Cash position with related parties | 938,000,000 | 938,000,000 | 5,969,000,000 | ||||
Short-term deposits with related parties | 0 | 0 | 5,810,000,000 | ||||
Sistema | Sistema Notes due in 2016 (series 04) | |||||||
RELATED PARTIES | |||||||
Investment related party notes | ₽ 2,501,350 | ||||||
Acquired bonds classified as available for sale and accounted for at fair value with changes recognized in other comprehensive income | 519,000,000 | ||||||
Proceeds received on redemption as principal and coupons | ₽ 201,000,000 | ||||||
Sistema International Funding S.A. | Sistema International Funding S.A. Bonds due in 2019 | |||||||
RELATED PARTIES | |||||||
Investment related party bonds | 1,000 | ||||||
Acquired bonds classified as available for sale and accounted for at fair value with changes recognized in other comprehensive income | ₽ 32,000,000 | ||||||
Short-term investments | 70,000,000 | 70,000,000 | 57,000,000 | ||||
Business Nedvizhimost | |||||||
RELATED PARTIES | |||||||
Amount receivable | ₽ 2,561,000,000 | ₽ 2,561,000,000 | 4,052,000,000 | ||||
Interest rate | 1.50% | ||||||
Rent-Nedvizhimost | Business Nedvizhimost | |||||||
RELATED PARTIES | |||||||
Ownership interest sold (as a percent) | 100.00% | ||||||
Proceeds from sale of ownership interest | ₽ 8,500,000,000 | ||||||
Mutual investment fund - Sistema-Rentnaya Nedvizhimost | Business Nedvizhimost | |||||||
RELATED PARTIES | |||||||
Ownership interest sold (as a percent) | 40.26% | ||||||
Proceeds from sale of ownership interest | ₽ 450,000,000 | ||||||
Share in joint venture | ₽ 690,000,000 | ||||||
Sistema Capital | |||||||
RELATED PARTIES | |||||||
Short-term investments | 11,644,000,000 | 11,644,000,000 | 9,600,000,000 | ||||
Balance of assets under trust management | ₽ 11,614,000,000 | ₽ 11,614,000,000 | ₽ 9,600,000,000 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) | 12 Months Ended | ||||
Dec. 31, 2018RUB (₽)₽ / sharesshares | Dec. 31, 2017RUB (₽)₽ / sharesshares | Dec. 31, 2016RUB (₽)shares | Dec. 31, 2015shares | Jul. 31, 2018RUB (₽) | |
Shareholders' equity | |||||
Number of shares outstanding | 1,830,742,676 | 1,912,042,419 | |||
Purchase of treasury shares | ₽ | ₽ 22,571,000,000 | ₽ 21,896,000,000 | ₽ 748,000,000 | ||
Common stock | |||||
Shareholders' equity | |||||
Ordinary shares authorized | 1,998,381,575 | 1,998,381,575 | |||
Par value (in RUB per share) | ₽ / shares | ₽ 0.1 | ₽ 0.1 | |||
Number of shares outstanding | 1,998,381,575 | 1,998,381,575 | 1,998,381,575 | 2,066,413,562 | |
Treasury stock | |||||
Shareholders' equity | |||||
Number of shares outstanding | (167,638,899) | (86,339,156) | (11,482,047) | (77,521,163) | |
Purchase of treasury shares | ₽ | ₽ 22,567,000,000 | ₽ 21,896,000,000 | ₽ 748,000,000 | ||
ADS | |||||
Shareholders' equity | |||||
Ratio of ordinary shares per each ADS | 2 | ||||
Number of ADSs repurchased (in shares) | 33,997,667 | ||||
Common stock and ADSs included in Tender Offer | |||||
Shareholders' equity | |||||
Maximum stock repurchase amount | ₽ | ₽ 4,647,000,000 | ₽ 4,935,000,000 | |||
Number of shares repurchased | 16,022,364 | 3,060,409 | |||
Price per share | ₽ / shares | ₽ 290 | ||||
Purchase of treasury shares | ₽ | ₽ 4,646,000,000 | ₽ 747,000,000 | |||
Common stock and ADSs included in Tender Offer | Sistema | |||||
Shareholders' equity | |||||
Number of shares repurchased | 1,550,495 | ||||
Purchase of treasury shares | ₽ | ₽ 335,000,000 | ||||
Common stock and ADSs included in Tender Offer | Sistema Finance | |||||
Shareholders' equity | |||||
Number of shares repurchased | 16,038,892 | ||||
Purchase of treasury shares | ₽ | ₽ 4,651,000,000 | ||||
Common stock and ADSs included in Tender Offer | Sistema Finance | Repurchase Plan - approved in 2018 | |||||
Shareholders' equity | |||||
Number of shares repurchased | 27,929,870 | ||||
Purchase of treasury shares | ₽ | ₽ 7,412,000,000 | ||||
Common stock and ADSs included in the Repurchase Plan | |||||
Shareholders' equity | |||||
Number of shares repurchased | 43,647,128 | ||||
Common stock and ADSs included in the Repurchase Plan | Repurchase Plan - approved in 2017 | |||||
Shareholders' equity | |||||
Maximum stock repurchase amount | ₽ | ₽ 20,000,000,000 | ||||
Number of shares repurchased | 8,057,356 | ||||
Purchase of treasury shares | ₽ | ₽ 2,837,000,000 | ₽ 12,475,000,000 | |||
Common stock and ADSs included in the Repurchase Plan | Repurchase Plan - approved in 2018 | |||||
Shareholders' equity | |||||
Maximum stock repurchase amount | ₽ | ₽ 30,000,000,000 | ||||
Number of shares repurchased | 55,854,178 | ||||
Purchase of treasury shares | ₽ | ₽ 14,903,000,000 | ||||
Common stock and ADSs included in the Repurchase Plan | Minimum | Repurchase Plan - approved in 2017 | |||||
Shareholders' equity | |||||
Price per share | ₽ / shares | ₽ 257 | ||||
Common stock and ADSs included in the Repurchase Plan | Minimum | Repurchase Plan - approved in 2018 | |||||
Shareholders' equity | |||||
Price per share | ₽ / shares | ₽ 191 | ||||
Common stock and ADSs included in the Repurchase Plan | Maximum | Repurchase Plan - approved in 2017 | |||||
Shareholders' equity | |||||
Price per share | ₽ / shares | ₽ 305 | ||||
Common stock and ADSs included in the Repurchase Plan | Maximum | Repurchase Plan - approved in 2018 | |||||
Shareholders' equity | |||||
Price per share | ₽ / shares | ₽ 338 | ||||
Common stock and ADSs included in the Repurchase Plan | Sistema Finance | Repurchase Plan - approved in 2017 | |||||
Shareholders' equity | |||||
Number of shares repurchased | 17,339,848 | ||||
Purchase of treasury shares | ₽ | ₽ 4,882,000,000 |
SHAREHOLDERS' EQUITY - Nature a
SHAREHOLDERS' EQUITY - Nature and purpose of reserves (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reserves balances | |||
Balance at beginning of the year | ₽ 124,205 | ₽ 143,948 | ₽ 168,371 |
Other comprehensive income / (loss) for the year, net of income tax | 7,799 | (2,824) | (17,807) |
Balance at end of the year | 77,565 | 124,205 | 143,948 |
Foreign currency translation reserve | |||
Reserves balances | |||
Balance at beginning of the year | (9,697) | (6,418) | 9,638 |
Other comprehensive (loss) / income for the year | 7,726 | (2,620) | (13,970) |
Amounts reclassified to profit for the year | (2,086) | ||
Amounts reclassified to additional paid in capital | (659) | ||
Other comprehensive income / (loss) for the year, net of income tax | 7,726 | (3,279) | (16,056) |
Balance at end of the year | (1,971) | (9,697) | (6,418) |
Cash flow hedging reserve | |||
Reserves balances | |||
Balance at beginning of the year | 340 | (155) | 1,045 |
Other comprehensive (loss) / income for the year | 4,202 | (3,140) | (11,324) |
Less: tax benefit | (840) | 628 | 2,219 |
Amounts reclassified to profit for the year | (4,331) | 3,748 | 9,897 |
Less: tax (expense) benefit | 866 | (741) | (1,992) |
Other comprehensive income / (loss) for the year, net of income tax | (103) | 495 | (1,200) |
Balance at end of the year | 237 | 340 | (155) |
Remeasurements of the net defined benefit liability | |||
Reserves balances | |||
Balance at beginning of the year | 503 | 543 | 493 |
Other comprehensive (loss) / income for the year | 167 | (40) | 50 |
Other comprehensive income / (loss) for the year, net of income tax | 167 | (40) | 50 |
Balance at end of the year | ₽ 670 | ₽ 503 | ₽ 543 |
SHAREHOLDERS' EQUITY - Non-cont
SHAREHOLDERS' EQUITY - Non-controlling interest (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Non-controlling interest | |||
Non-controlling interest opening balance | ₽ (4,079) | ||
Dividends to non-controlling interest | 1,165 | ₽ 1,175 | ₽ 1,120 |
Acquisitions under common control | 5,849 | ||
Non-controlling interest closing balance | (12,291) | (4,079) | |
Statement of financial position | |||
Current assets | 268,934 | 146,032 | |
Non-current assets | 647,059 | 405,038 | |
Current liabilities | (295,471) | (156,671) | |
Non-current liabilities | (542,957) | (270,194) | |
Income statement | |||
Revenue, gross of intercompany | (480,293) | (442,911) | (435,692) |
Profit for the year, gross of intercompany | (7,832) | (56,590) | (48,450) |
Non-controlling interests | |||
Non-controlling interest | |||
Dividends to non-controlling interest | 1,165 | 1,175 | 1,120 |
Acquisitions under common control | 8,320 | ||
Income statement | |||
Profit for the year, gross of intercompany | (984) | (548) | 24 |
MGTS Group | |||
Non-controlling interest | |||
Non-controlling interest opening balance | (4,180) | (4,787) | (5,191) |
Profit for the year attributable to non-controlling interest | (619) | (554) | (727) |
Dividends to non-controlling interest | 1,165 | 1,175 | 1,120 |
Other | (15) | (14) | 11 |
Non-controlling interest closing balance | (3,649) | (4,180) | (4,787) |
MGTS Group | Non-controlling interests | |||
Statement of financial position | |||
Current assets | 123,879 | 22,595 | |
Non-current assets | 84,093 | 42,204 | |
Current liabilities | (141,359) | (8,959) | |
Non-current liabilities | (18,269) | (7,250) | |
Income statement | |||
Revenue, gross of intercompany | (51,246) | (39,565) | (40,210) |
Profit for the year, gross of intercompany | (11,314) | (9,719) | ₽ (12,167) |
MTS Bank | |||
Non-controlling interest | |||
Non-controlling interest opening balance | (378) | ||
Profit for the year attributable to non-controlling interest | (8,320) | ||
Acquisitions under common control | ₽ 8,698 | ||
Non-controlling interest closing balance | ₽ (378) |
SHAREHOLDERS' EQUITY - Dividend
SHAREHOLDERS' EQUITY - Dividends (Details) ₽ / shares in Units, ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018RUB (₽)payment₽ / shares | Dec. 31, 2017RUB (₽)payment₽ / shares | Dec. 31, 2016RUB (₽)payment₽ / shares | |
Dividends | |||
Minimum cumulative dividend payout for ordinary share | ₽ 20 | ₽ 20 | ₽ 20 |
Number of semi-annual payments | payment | 2 | 2 | 2 |
Declared cash dividends | |||
Dividends declared (including dividends on treasury shares of 3,037, 1,337 and 220 respectively) | ₽ | ₽ 51,958 | ₽ 51,958 | ₽ 51,958 |
Dividends declared on treasury shares | ₽ | ₽ 3,037 | ₽ 1,337 | ₽ 220 |
Dividends, RUB per ADS | ₽ 52 | ₽ 52 | ₽ 52 |
Dividends, RUB per share | ₽ 26 | ₽ 26 | 26 |
Dividends payable | ₽ | ₽ 146.2 | ₽ 125.4 | |
Minimum | |||
Dividends | |||
Target annual payout per ordinary share | ₽ 25 | ₽ 25 | 25 |
Maximum | |||
Dividends | |||
Target annual payout per ordinary share | ₽ 26 | ₽ 26 | ₽ 26 |
LIABILITY UNDER PUT OPTION AG_2
LIABILITY UNDER PUT OPTION AGREEMENT (Details) - RUB (₽) ₽ in Millions | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2007 | Dec. 31, 2018 | Dec. 31, 2017 | |
Aramayo | |||
Liability under put option agreement | |||
Stake acquired | 80.00% | ||
Liabilities under put option agreements | MTS Armenia | |||
Liability under put option agreement | |||
Liabilities | ₽ 3,629 | ₽ 2,012 | |
Call and put option agreement | Aramayo | |||
Liability under put option agreement | |||
Remaining stake to be acquired | 20.00% | ||
ICH | |||
Liability under put option agreement | |||
Stake acquired | 80.00% | ||
ICH | MTS Armenia | |||
Liability under put option agreement | |||
Stake acquired | 100.00% | ||
ICH | Call and put option agreement | |||
Liability under put option agreement | |||
Remaining stake to be acquired | 20.00% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) item in Thousands, ₽ in Millions | 1 Months Ended | |
Apr. 30, 2017item | Dec. 31, 2018RUB (₽) | |
Capital commitments | ||
Capital commitment to acquire property, plant and equipment, intangible assets and related costs | ₽ | ₽ 36,875 | |
Apple Rus LLC [Member] | ||
Capital commitments | ||
Number of iPhone handsets included in the purchase agreement | item | 615 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Taxation (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Taxation | ||
Additional taxes, fines and penalties resulting from tax audit | ₽ 591 | |
Additional taxes other than income tax contingent liability | ||
Taxation | ||
Estimated financial effect of contingent liabilities | 730 | ₽ 732 |
Additional income tax contingent liability | ||
Taxation | ||
Estimated financial effect of contingent liabilities | ₽ 2,051 | ₽ 2,591 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Licenses (Details) ₽ in Millions, ₴ in Millions | Jan. 01, 2013 | Jul. 12, 2012RUB (₽)item | Mar. 31, 2015UAH (₴) | Mar. 31, 2015RUB (₽) | Mar. 31, 2018item | Dec. 31, 2018UAH (₴) | Dec. 31, 2018RUB (₽) | Dec. 31, 2017UAH (₴) | Dec. 31, 2017RUB (₽) | Dec. 31, 2015UAH (₴) | Dec. 31, 2015RUB (₽) |
LTE license | |||||||||||
Commitments and Contingencies related to Licenses | |||||||||||
Number of years to deploy service | 7 years | ||||||||||
Minimum number of inhabitants for providing LTE services | 50,000 | ||||||||||
Minimum annual investment | ₽ | ₽ 15,000 | ||||||||||
LTE license | Vodafone Ukraine (VF Ukraine) | |||||||||||
Commitments and Contingencies related to Licenses | |||||||||||
Number of years to deploy service | 42 months | ||||||||||
Minimum number of inhabitants for providing LTE services | 10,000 | ||||||||||
Minimum percentage of population in each regional center | 90.00% | ||||||||||
Maximum period obligated to deliver LTE services in regional center | 12 months | ||||||||||
Minimum percentage of population in each population center | 90.00% | ||||||||||
Amount paid for conversion of frequencies | ₴ 130 | ₽ 271 | |||||||||
UMTS Licenses | MTS Ukraine | |||||||||||
Commitments and Contingencies related to Licenses | |||||||||||
License cost | ₴ 2,715 | ₽ 6,015 | |||||||||
Grant period (in years) | 15 years | 15 years | |||||||||
Amount paid for conversion of frequencies | ₴ 230 | ₽ 535 | ₴ 299 | ₽ 645 | ₴ 358 | ₽ 865 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Others (Details) ₽ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018RUB (₽) | Dec. 31, 2018USD ($) | Dec. 31, 2018RUB (₽) | Dec. 31, 2014 | |
Potential adverse effects of economic instability and sanctions | ||||
Administrative fines imposed on MTS in each antimonopoly proceeding | ₽ 1 | |||
UMS | ||||
Potential adverse effects of economic instability and sanctions | ||||
Accrued penalty | $ 850 | ₽ 59,100 | ||
Provision for penalty | $ 850 | ₽ 55,800 | ||
Central Bank of Russia | ||||
Potential adverse effects of economic instability and sanctions | ||||
Key rate | 7.75% | 7.75% | 17.00% | |
Ukranian Bank | ||||
Potential adverse effects of economic instability and sanctions | ||||
Current accounts and deposits | ₽ 6,596 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - RUB (₽) ₽ in Billions | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Jul. 31, 2018 | Apr. 23, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | |
Minimum | |||||||
Subsequent events | |||||||
Maturity of bonds | 1 year | ||||||
Maximum | |||||||
Subsequent events | |||||||
Maturity of bonds | 7 years | ||||||
Acquisition of shares under Share Repurchase Plan | Common stock | |||||||
Subsequent events | |||||||
Number of shares repurchased | 35,679,838 | ||||||
Acquisition of shares under Share Repurchase Plan (as percent) | 1.79% | ||||||
Exchange-traded bonds | Ruble bonds placement | |||||||
Subsequent events | |||||||
Bonds issued | ₽ 10 | ||||||
Annual coupon rate | 8.70% | ||||||
Maturity of bonds | 5 years | ||||||
MTS Bank | |||||||
Subsequent events | |||||||
Ownership interest acquired (in percentage) | 26.60% | ||||||
Ownership interest in subsidiary (as a percentage) | 55.40% | ||||||
MTS Bank | Purchase of additional stake in MTS-Bank | |||||||
Subsequent events | |||||||
Ownership interest in subsidiary (as a percentage) | 94.92% | ||||||
MTS Bank | Purchase of additional stake in MTS-Bank | Sistema | |||||||
Subsequent events | |||||||
Ownership interest acquired (in percentage) | 39.48% | ||||||
Consideration paid | ₽ 11.4 | ||||||
OZON Holdings Ltd | Sale of investment in Ozon Holdings Limited | |||||||
Subsequent events | |||||||
Proportion of ownership interest sold in associate | 18.69% | ||||||
Proceeds from disposal of ownership interest in associate | ₽ 7.9 |