Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document Information | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Trading Symbol | QIWI |
Entity Registrant Name | QIWI plc |
Entity Central Index Key | 0001561566 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Class A ordinary shares | |
Document Information | |
Entity Common Stock, Shares Outstanding | 13,833,419 |
Class B ordinary shares | |
Document Information | |
Entity Common Stock, Shares Outstanding | 48,879,556 |
Consolidated statement of finan
Consolidated statement of financial position - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Non-current assets | ||
Property and equipment | ₽ 1,074 | ₽ 724 |
Goodwill and other intangible assets | 10,846 | 10,807 |
Investments in associates | 812 | |
Investments in joint ventures | 836 | 832 |
Long-term debt instruments | 497 | 1,100 |
Long-term loans | 230 | 164 |
Other non-current assets | 110 | 64 |
Deferred tax assets | 157 | 245 |
Total non-current assets | 14,562 | 13,936 |
Current assets | ||
Trade and other receivables | 8,042 | 9,648 |
Short-term loans | 6,890 | 1,691 |
Short-term debt instruments | 1,432 | 704 |
Prepaid income tax | 112 | 187 |
Other current assets | 929 | 458 |
Cash and cash equivalents | 40,966 | 18,406 |
Total current assets | 58,371 | 31,094 |
Assets of disposal group classified as held for sale | 90 | 29 |
Total assets | 73,023 | 45,059 |
Equity attributable to equity holders of the parent | ||
Share capital | 1 | 1 |
Additional paid-in capital | 1,876 | 1,876 |
Share premium | 12,068 | 12,068 |
Other reserve | 2,097 | 1,462 |
Retained earnings | 9,091 | 5,715 |
Translation reserve | 513 | (2) |
Total equity attributable to equity holders of the parent | 25,646 | 21,120 |
Non-controlling interests | 60 | 37 |
Total equity | 25,706 | 21,157 |
Non-current liabilities | ||
Long-term Customer accounts | 237 | |
Other non-current liabilities | 1 | 10 |
Deferred tax liabilities | 743 | 826 |
Total non-current liabilities | 981 | 836 |
Current liabilities | ||
Trade and other payables | 27,499 | 19,599 |
Customer accounts and amounts due to banks | 17,868 | 3,182 |
VAT and other taxes payable | 428 | 198 |
Income tax payable | 10 | 32 |
Other current liabilities | 531 | 51 |
Total current liabilities | 46,336 | 23,062 |
Liabilities directly associated with the assets of a disposal group classified as held for sale | 4 | |
Total equity and liabilities | ₽ 73,023 | ₽ 45,059 |
Consolidated statement of compr
Consolidated statement of comprehensive income - RUB (₽) ₽ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Consolidated statement of comprehensive income | ||||
Revenue | ₽ 30,610 | ₽ 20,897 | ₽ 17,880 | |
Payment processing fees | 23,694 | 17,265 | 14,999 | |
Interest revenue calculated using the effective interest rate | 1,854 | 1,052 | 899 | |
Fees from inactive accounts and unclaimed payments | 1,419 | 1,310 | 1,290 | |
Other revenue | 3,643 | 1,270 | 692 | |
Operating costs and expenses | (26,161) | (16,906) | (13,743) | |
Cost of revenue (exclusive of depreciation and amortization) | (15,129) | (9,763) | (8,646) | |
Selling, general and administrative expenses | (9,671) | (6,023) | (3,208) | |
Depreciation and amortization | (864) | (796) | (796) | |
Credit loss expense | [1] | (474) | (220) | (215) |
Impairment of intangible assets | (23) | (104) | (878) | |
Profit from operations | 4,449 | 3,991 | 4,137 | |
Other income and expenses, net | (227) | (41) | (79) | |
Foreign exchange gain | 1,311 | 257 | 1,040 | |
Foreign exchange loss | (1,049) | (373) | (1,963) | |
Interest income and expenses, net | 17 | 6 | (28) | |
Profit before tax | 4,501 | 3,840 | 3,107 | |
Income tax expense | (875) | (698) | (618) | |
Net profit | 3,626 | 3,142 | 2,489 | |
Attributable to: | ||||
Equity holders of the parent | 3,584 | 3,114 | 2,474 | |
Non-controlling interests | 42 | 28 | 15 | |
Other comprehensive income to be reclassified to profit or loss in subsequent periods: | ||||
Exchange differences on translation of foreign operations | 525 | (133) | (330) | |
Total comprehensive income, net of tax effect of nil | 4,151 | 3,009 | 2,159 | |
Attributable to: | ||||
Equity holders of the parent | 4,099 | 2,981 | 2,144 | |
Non-controlling interests | ₽ 52 | ₽ 28 | ₽ 15 | |
Earnings per share: | ||||
Basic, profit attributable to ordinary equity holders of the parent | ₽ 58.56 | ₽ 51.25 | ₽ 40.91 | |
Diluted, profit attributable to ordinary equity holders of the parent | ₽ 58.06 | ₽ 50.92 | ₽ 40.79 | |
[1] | Credit loss expense for the years 2016 and 2017 were separated from of Selling, general and administrative expenses as a result of adoption of IFRS 9 for comparative purposes. |
Consolidated statement of cash
Consolidated statement of cash flows - RUB (₽) ₽ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Cash flows from operating activities | ||||
Profit before tax | ₽ 4,501 | ₽ 3,840 | ₽ 3,107 | |
Adjustments to reconcile profit before tax to net cash flows generated from operating activities | ||||
Depreciation and amortization | 864 | 796 | 796 | |
Foreign exchange loss/(gain), net | (262) | 116 | 923 | |
Interest income, net | (1,782) | (1,016) | (834) | |
Credit loss expense | 474 | 220 | 215 | |
Share-based payments | 635 | 398 | 224 | |
Impairment of intangible assets | 23 | 104 | 878 | |
Loss from initial recognition | 143 | |||
Other | 417 | 46 | 80 | |
Operating profit before changes in working capital | 5,013 | 4,504 | 5,389 | |
(Increase)/decrease in trade and other receivables | 1,127 | (3,683) | (709) | |
(Increase)/decrease in other assets | (529) | 150 | (127) | |
Increase in customer accounts and amounts due to banks | 14,601 | 898 | 90 | |
Increase in trade and other payables | 7,347 | 3,414 | 1,020 | |
Loans issued from banking operations | (5,827) | (1,888) | ||
Cash flows generated from operations | 21,732 | 3,395 | 5,663 | |
Interest received | 1,795 | 1,048 | 858 | |
Interest paid | (113) | (70) | (101) | |
Income tax paid | (769) | (813) | (877) | |
Net cash flow generated from operating activities | 22,645 | 3,560 | 5,543 | |
Cash flows (used in)/generated from investing activities | ||||
Acquisition of joint control company | (21) | (813) | ||
Cash received upon /(used in) business combination | 138 | (321) | (10) | |
Purchase of property and equipment | (736) | (292) | (388) | |
Purchase of intangible assets | (385) | (566) | (298) | |
Loans issued | (187) | (376) | (675) | |
Repayment of loans issued | 4 | 316 | 774 | |
Purchase of debt instruments | (810) | (1,376) | (549) | |
Proceeds from settlement of debt instruments | 672 | 1,775 | 1,326 | |
Net cash (used in)/generated from investing activities | (1,325) | (1,653) | 180 | |
Cash flows (used in)/generated from financing activities | ||||
Proceeds from borrowings | 2 | |||
Repayment of borrowings | (4) | |||
Dividends paid to owners of the Group | (2,148) | (4,628) | ||
Dividends paid to non-controlling shareholders | (29) | (12) | (7) | |
Net cash used in financing activities | (29) | (2,160) | (4,637) | |
Effect of exchange rate changes on cash and cash equivalents | 1,240 | (333) | (1,428) | |
Net increase/(decrease) in cash and cash equivalents | 22,531 | (586) | (342) | |
Cash and cash equivalents at the beginning of year | [1] | 18,435 | 19,021 | 19,363 |
Cash and cash equivalents at the end of year | [1] | ₽ 40,966 | ₽ 18,435 | ₽ 19,021 |
[1] | Cash and cash equivalents at the end of year 2016 and 2017 do not reconcile to Note 14 by 24 and 29 respectively, due to the amount of cash classified as part of assets held for sale as of December 31, 2016 and 2017. |
Consolidated statement of cas_2
Consolidated statement of cash flows (Parenthetical) - RUB (₽) ₽ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated statement of cash flows | ||
Cash and cash equivalents classified as part of assets held for sale | ₽ 29 | ₽ 24 |
Consolidated statement of chang
Consolidated statement of changes in equity - RUB (₽) ₽ in Millions | Share capital | Additional paid-in capital | Share premium | Other reserves | Retained earnings | Translation reserve | Total | Non-controlling interests | Total |
Beginning balance, equity at Dec. 31, 2015 | ₽ 1 | ₽ 1,876 | ₽ 12,068 | ₽ 840 | ₽ 7,177 | ₽ 461 | ₽ 22,423 | ₽ 13 | ₽ 22,436 |
Beginning balance, shares outstanding at Dec. 31, 2015 | 60,418,601 | ||||||||
Profit for the year | 2,474 | 2,474 | 15 | 2,489 | |||||
Exchange differences on translation of foreign operations | (330) | (330) | (330) | ||||||
Total comprehensive income, net of tax effect of nil | 2,474 | (330) | 2,144 | 15 | 2,159 | ||||
Share-based payments | 224 | 224 | 224 | ||||||
Exercise of options | 178,433 | ||||||||
Dividends (in RUR per share) | (4,843) | (4,843) | (4,843) | ||||||
Dividends to non-controlling interests | (7) | (7) | |||||||
Ending balance, equity at Dec. 31, 2016 | ₽ 1 | 1,876 | 12,068 | 1,064 | 4,808 | 131 | 19,948 | 21 | ₽ 19,969 |
Ending balance, shares outstanding at Dec. 31, 2016 | 60,597,034 | 60,597,000 | |||||||
Profit for the year | 3,114 | 3,114 | 28 | ₽ 3,142 | |||||
Exchange differences on translation of foreign operations | (133) | (133) | (133) | ||||||
Total comprehensive income, net of tax effect of nil | 3,114 | (133) | 2,981 | 28 | 3,009 | ||||
Share-based payments | 398 | 398 | ₽ 398 | ||||||
Exercise of options | 335,620 | 336,000 | |||||||
Dividends (in RUR per share) | (2,207) | (2,207) | ₽ (2,207) | ||||||
Dividends to non-controlling interests | (12) | (12) | |||||||
Ending balance, equity at Dec. 31, 2017 | ₽ 1 | 1,876 | 12,068 | 1,462 | 5,715 | (2) | 21,120 | 37 | ₽ 21,157 |
Ending balance, shares outstanding at Dec. 31, 2017 | 60,932,654 | 60,933,000 | |||||||
Impact of adopting IFRS 9 | (208) | (208) | ₽ (208) | ||||||
Beginning balance adjusted for impact of IFRS 9 | ₽ 1 | 1,876 | 12,068 | 1,462 | 5,507 | (2) | 20,912 | 37 | 20,949 |
Profit for the year | 3,584 | 3,584 | 42 | 3,626 | |||||
Exchange differences on translation of foreign operations | 515 | 515 | 10 | 525 | |||||
Total comprehensive income, net of tax effect of nil | 3,584 | 515 | 4,099 | 52 | 4,151 | ||||
Share-based payments | 635 | 635 | ₽ 635 | ||||||
Exercise of options | 518,859 | 519,000 | |||||||
Dividends to non-controlling interests | (29) | ₽ (29) | |||||||
Ending balance, equity at Dec. 31, 2018 | ₽ 1 | ₽ 1,876 | ₽ 12,068 | ₽ 2,097 | ₽ 9,091 | ₽ 513 | ₽ 25,646 | ₽ 60 | ₽ 25,706 |
Ending balance, shares outstanding at Dec. 31, 2018 | 61,451,513 | 61,452,000 |
Consolidated statement of cha_2
Consolidated statement of changes in equity (Parenthetical) - ₽ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated statement of changes in equity | ||
Dividends recognised as distributions to owners per share | ₽ 36 | ₽ 80 |
Corporate information and descr
Corporate information and description of business | 12 Months Ended |
Dec. 31, 2018 | |
Corporate information and description of business | |
Corporate information and description of business | 1. QIWI plc (hereinafter “the Company”) was registered on February 26, 2007 as a limited liability Company OE Investment in Cyprus under the Cyprus Companies Law, Cap. 113. The registered office of the Company is Kennedy 12, Kennedy Business Centre, 2nd Floor, P.C.1087, Nicosia, Cyprus. On September 13, 2010 the directors of the Company resolved to change the name of the Company from OE Investments Limited to QIWI Limited. On February 25, 2013 the directors of the Company resolved to change the legal form of the Company from QIWI Limited to QIWI plc. The consolidated financial statements of QIWI plc and its subsidiaries for the year ended December 31, 2018 were authorized for issue by Board of Directors on March 14, 2019. QIWI plc and its subsidiaries (collectively the “Group”) operate electronic online payment systems primarily in Russia, Kazakhstan, Moldova, Belarus, Romania, United Arab Emirates (UAE) and other countries and provide consumer and small and medium enterprises (SME) financial services. The Company was founded as a holding company as a part of the business combination transaction in which ZAO Ob’edinennya Sistema Momentalnykh Platezhey and ZAO e-port Group of entities were brought together by way of contribution to the Company. The transaction was accounted for as a business combination in which ZAO Ob’edinennya Sistema Momentalnykh Platezhey was identified as the acquirer. The Company’ American Depositary Securities (ADS) have been listed on Nasdaq since May 3, 2013 and have been admitted to trading on MOEX since May 20, 2013. Prior to that time, there was no public market for the Company’ ADSs or ordinary shares. Subsequently, the Company closed two follow-on offerings of its ADSs on October 3, 2013 and on June 20, 2014. Sergey Solonin is the ultimate controlling shareholder of the Group as of December 31, 2018. Information on the Company’s principal subsidiaries is disclosed in Note 5. |
Principles underlying preparati
Principles underlying preparation of consolidated financial statements | 12 Months Ended |
Dec. 31, 2018 | |
Principles underlying preparation of consolidated financial statements | |
Principles underlying preparation of consolidated financial statements | 2. 2.1 The consolidated financial statements are prepared on a historical cost basis. The consolidated financial statements are presented in Russian rubles (“RUB”) and all values are rounded to the nearest million (RUB (000,000)) except when otherwise indicated. The Group’s subsidiaries maintain and prepare their accounting records and prepare their statutory accounting reports in accordance with domestic accounting legislation. Standalone financial statements of subsidiaries are prepared in their respective functional currencies (see Note 3.3 below). The Group accounts are prepared in accordance with the IFRS standards and interpretations, as published by the IASB. These consolidated financial statements are based on the underlying accounting records appropriately adjusted and reclassified for fair presentation in accordance with IFRS. IFRS adjustments include and affect but not limited to such major areas as consolidation, revenue recognition, accruals, deferred taxation, fair value adjustments, business combinations and impairment. 2.2 The consolidated financial statements comprise the financial statements of QIWI plc and its subsidiaries as of December 31 each year. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: · Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee), · Exposure, or rights, to variable returns from its involvement with the investee, and · The ability to use its power over the investee to affect its returns. When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: · The contractual arrangement with the other vote holders of the investee, · Rights arising from other contractual arrangements, · The Group’s voting rights and potential voting rights. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group losses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, income, expenses and unrealized gains and losses resulting from intra-group transactions are eliminated in full, except for the foreign exchange gains and losses arising on intra-group loans. Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: · Derecognises the assets (including goodwill) and liabilities of the subsidiary. · Derecognises the carrying amount of any non-controlling interests, including any components of other comprehensive income attributable to them. · Recognises the fair value of the consideration received. · Recognises the fair value of any investment retained. · Recognises any surplus or deficit in profit or loss. · Reclassifies to profit or loss or retained earnings, as appropriate, the amounts previously recognized in OCI as would be required if the Group had directly disposed of the related assets or liabilities. 2.3 The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended December 31, 2017, except for the adoption of the new and amended IFRS and IFRIC interpretations as of January 1, 2018. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. The Group applies IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers for the first time in 2018. The nature and effect of changes to the Group’s financial statements as a result of adopting these standards are disclosed below. Several other amendments and interpretations are applied for the first time in 2018, but do not have an impact on the consolidated financial statements of the Group. IFRS 9 Financial Instruments IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after January 1, 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting . The Group applied IFRS 9 prospectively, with the initial application date of January 1, 2018 without adjusting the comparative information for the prior periods. (a) Classification and measurement Under IFRS 9, all debt financial assets that do not meet a “solely payment of principal and interest” (SPPI) criterion, are classified as accounted at fair value through profit or loss (FVPL). Under this criterion, debt instruments that do not correspond to a “basic lending arrangement”, such as instruments containing embedded conversion options or “non-recourse” loans, are measured at FVPL. For debt financial assets that meet the SPPI criterion, classification at initial recognition is determined based on the business model, under which these instruments are managed: - Instruments that are managed on a “hold to collect” basis are measured at amortised cost; - Instruments that are managed on a “hold to collect and for sale” basis are measured at fair value through other comprehensive income (FVOCI); - Instruments that are managed on other basis, including trading financial assets, will be measured at FVPL. Equity financial assets are required to be classified at initial recognition as FVPL unless an irrevocable designation is made to classify the instrument as FVOCI. For equity investments classified as FVOCI, all realised and unrealised gains and losses, except for dividend income, are recognised in other comprehensive income with no subsequent reclassification to profit and loss. The classification of financial liabilities remains largely unchanged from the current IAS 39 requirements. Derivatives will continue to be measured at FVPL. Embedded derivatives are no longer separated from a host financial asset. The IFRS 9 had no impact on the Group’s balance sheet or equity on applying the classification requirements. The accounting for the Group’s financial assets and liabilities remains largely the same as it was under IAS 39. The Group continues measuring at fair value all financial assets currently held at fair value (FVPL). The Group analysed the contractual cash flow characteristics of cash at banks, debt securities, loans and trade receivables and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Therefore, reclassification for these instruments was not required. (b) Impairment The adoption of IFRS 9 has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing IAS 39’s incurred loss approach with a forward-looking expected credit loss (ECL) approach. IFRS 9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not held at FVPL. The ECL allowance is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit loss or LTECL), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based on the 12 months’ expected credit loss (12mECL). The 12mECL is the portion of LTECL that represent the ECLs that result from default events on a financial instrument that are possible within the 12 months after the reporting date. Both LTECL and 12mECL are calculated on either an individual basis or a collective basis, depending on the nature of the underlying portfolio of financial instruments. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate. The mechanics of the ECL calculations are outlined below and the key elements are as follows: - PD The Probability of Default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio. - EAD The Exposure at Default is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments. - LGD The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realisation of any collateral. It is usually expressed as a percentage of the EAD. For other financial assets (i.e., cash in banks, loans and debt instruments) and financial liabilities (i.e., financial guaranties and credit related commitments) the Group has established a policy to perform an assessment, at the end of each reporting period, of whether a financial instrument’s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. In all cases, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. The Group considers a financial asset in default when contractual payment are 90 days past due (except for particular sort of Trade and other receivables of 60 days). However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. For Trade and other receivables, the Group has applied the standard’s simplified approach and has calculated ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For instalment card loans and its undrawn credit commitments ELC calculation the Group uses internal historical instalment card loans loss rates statistics for assessment of probabilities of default. The loss given default is an estimate of the loss arising in the case where a default occurs at a given time and is based on internal statistics. The adoption of the ECL requirements of IFRS 9 resulted in increases in impairment allowances of the Group’s financial assets. The increase in allowance resulted in adjustment to Retained earnings. The statement of financial position as at December 31, 2017 was restated for the amount presented in the table below (see clause (e) ). (c) Hedge accounting The Group does not use hedge accounting in its financial statements. (d) Other adjustments In addition to the adjustments described above, on adoption of IFRS 9, other items of the primary financial statements such as deferred taxes and retained earnings were also adjusted. (e) Effect of transition to IFRS 9 Impact of adopting IFRS 9 on the statement of financial position (increase/(decrease)) as at December 31, 2017: Adjustments Amount Assets Trade and other receivables (b) (33) Loans issued (b) (108) Debt instruments (b) (5) Deferred tax assets (d) 49 Total assets (97) Liabilities Other current liabilities (b) 111 Total Liabilities 111 Net impact on equity, Including (208) Retained earnings (b), (d) (208) The reconciliations for the opening loss provision allowances under IAS 39 and provisions for loan commitments and financial guarantee contracts in accordance with IAS 37 Provisions Contingent Liabilities and Contingent Assets to the Expected Credit Losses (ECL) allowances under IFRS 9 are disclosed in the table below: Loan loss provision ECLs under under IAS 39/IAS 37 IFRS 9 as of Impairment allowance for: as of December 31, 2017 Remeasurement January 1, 2018 Debt instruments — (5) (5) Trade and other receivables (545) (33) (578) Loans issued (321) (108) (429) Undrawn credit commitments — (111) (111) (866) (257) (1,123) IFRS 15 Revenue from Contracts with Customers IFRS 15 supersedes IAS 11 Construction Contracts , IAS 18 Revenue and related Interpretations and applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. The Group analysed all aspects and requirements of IFRS 15 and noted no impact on its operations accounting or financial statements. The Group adopted IFRS 15 using the full retrospective method of adoption. IFRIC 22 Foreign Currency Transactions and Advance Consideration The Interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. This Interpretation had no impact on the Group’s consolidated financial statements. Amendments to IAS 28 Investments in Associates and Joint Ventures The amendments clarify that an entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. These amendments had no impact on the Group’s consolidated financial statements. 2.4 IFRS 16 - Leases IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases , IFRIC 4 Determining whether an Arrangement contains a Lease , SIC‑15 Operating Leases-Incentives and SIC‑27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use assets). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use assets. Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use assets. Lessor accounting under IFRS 16 is substantially unchanged from legacy accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after January 1, 2019. Early application is permitted, but not before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. The Group will apply IFRS 16 for the periods beginning on January 1, 2019 using modified retrospective approach. Most contracts where the Group acts as a lessee (except for long-term contract for offise premises lease), fall under the recognition exemption for being short-term leases. The Group will not recognize either assets or liabilities for them and will continue recognize expenditure arising from them as expenses on rent of premises and related utility expenses (within selling, general, and administrative expenses) as they are incurred. Accounting of several long-term contracts of lease of office premises where the Group acts as a lessee, will have a material effect on the consolidated financial statements of the Group. This effect will result from recognition of lease liabilities and right-of-use assets and from derecognition of accounts payable related to these contracts. Lease liabilities will be recognized at the date of initial application at the present value of the remaining lease payments discounted using the Group’s incremental borrowing rate at the date of initial application. Right-of use assets will be recognized at an amount equal to the lease liability adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the statement of financial position immediately before the date of initial application. No impairment will be accrued on right-of-use assets as at the date of initial application. The accumulated balance of accounts payable representing rent expenses recognized but not paid under some contracts as at the transition date will be written off to retained earnings of prior periods at the date of initial application. The provisional Impact of adopting IFRS 16 on the statement of financial position (increase/ (decrease)) as at January 1, 2019: Amount Assets Property and equipment (Right-of-use assets) 1,088 Other non-current assets (Advances issued (long-term)) (9) Trade and other receivables (Advances issued (short-term)) (3) Deferred tax assets (29) Total assets 1,047 Liabilities Long-term portion of lease liabilities 702 Short-term portion of lease liabilities 360 Trade and other payables (Other payables) (132) Total Liabilities 930 Net impact on equity, Including 117 Retained earnings 117 The following other new pronouncements are not expected to have any material impact on the Group when adopted: - Long-term Interests in Associates and Joint Ventures – Amendments to IAS 28 (issued on October 12, 2017 and effective for annual periods beginning on or after January 1, 2019). - Annual Improvements to IFRSs 2015‑2017 cycle - Amendments to IFRS 3, IFRS 11, IAS 12, IAS 23 (issued on December 12, 2017 and effective for annual periods beginning on or after January 1, 2019). - Prepayment Features with Negative Compensation – Amendments to IFRS 9 (issued on October 12, 2017 and effective for annual periods beginning on or after January 1, 2019). - Amendments to References to the Conceptual Framework in IFRS Standards (issued on March 29, 2018 and effective for annual periods beginning on or after January 1, 2020). - Amendments to IAS 1 and IAS 8: Definition of Material (issued on October 31, 2018 and effective for annual periods beginning on or after January 1, 2020). - Amendment to IFRS 3 Business Combinations (issued on October 22, 2018 and effective for annual periods beginning on or after January 1, 2020). - IFRIC Interpretation 23 Uncertainty over Income Tax Treatment (issued on June, 2017 and effective for annual periods beginning on or after January 1, 2019). |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 3. Set out below are the principal accounting policies used to prepare these consolidated financial statements: 3.1 Business combinations are accounted for using the acquisition method. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the Group identifies any amounts that are not part of what the Group and the acquiree exchanged in the business combination. The Group recognizes as part of applying the acquisition method, only the consideration transferred for the acquiree and the assets acquired and liabilities assumed in the exchange for the acquiree. If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss. It is then considered in the determination of goodwill. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequently, contingent consideration classified as an asset or liability, is measured at fair value with changes in fair value recognized in profit or loss. Contingent consideration that is classified as equity is not re-measured and subsequent settlement is accounted for within equity. The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated of the Group’s cash generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquired entity are assigned to those units. Where goodwill has been allocated to a cash-generating unit and certain operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed in this circumstance is measured based on the relative values of the operation disposed and the portion of the cash-generating unit retained. 3.2 The Group’s investment in its associate and joint ventures are accounted for using the equity method. An associate is an entity in which the Group has significant influence. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. unanimous consent of the parties) have rights to the net assets of the arrangement. Under the equity method, the investment in the associate or joint venture is carried on the statement of financial position at cost plus post acquisition changes in the Group’s share of net assets of the associate/joint venture. Goodwill relating to the associate/joint venture is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment. The statement of comprehensive income reflects the Group’s share of the results of operations of the associate/joint venture. When there has been a change recognized directly in the equity of the investment, the Group recognizes its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associate/joint venture are eliminated to the extent of the interest in it. The Group’s share of profit of an associate/joint venture is shown on the face of the statement of comprehensive income or in the notes. This is the profit attributable to equity holders of the associate/joint venture and, therefore, is profit after tax and non-controlling interests in the subsidiaries of the associate/joint venture. The financial statements of the associates/joint ventures are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. After application of the equity method, the Group determines whether it is necessary to recognize an additional impairment loss on its investment in its associates/joint ventures. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate/joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of an investment in associate/joint venture and its carrying value and recognizes any respective loss in the statement of comprehensive income. Upon loss of significant influence over the associate/joint venture, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate/joint venture upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss. 3.3 The consolidated financial statements are presented in Russian rubles (RUB), which is the Company’s functional and the Group’s presentation currency. Each entity in the Group determines its own functional currency, depending on what the underlying economic environment is, and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency at the functional currency rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are re-measured in to the functional currency at the functional currency rate of exchange at the reporting date. All differences are taken to profit or loss. They are shown separately for each Group company but netted by major types of monetary assets and liabilities. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as of the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on retranslation of non-monetary items is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in other comprehensive income or profit or loss is also recognized in other comprehensive income or profit or loss, respectively). The functional currency of the foreign operations is generally the respective local currency – US Dollar (U.S.$), Euro (€), Kazakhstan tenge (KZT), Belarussian ruble (BYR), Moldovan leu (MDL) and New Romanian leu (RON). As of the reporting date, the assets and liabilities of these operations are translated into the presentation currency of the Group (the Russian Ruble) at the rate of exchange at the reporting date and their statements of comprehensive income are translated at the average exchange rates for the year or exchange rates prevailing on the date of specific transactions. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign entity, the deferred cumulative amount recognized in equity relating to that particular foreign operation is reclassified to the profit or loss. The exchange rates of the Russian ruble to each respective currency as of December 31, 2018 and 2017 were as follows: Average exchange rates for Exchange rates at the year ended December 31, December 31, 2017 2018 2017 2018 US Dollar 58.3529 62.7078 57.6002 69.4706 Euro 65.9014 73.9384 68.8668 79.4605 Kazakhstan Tenge (100) 17.8959 18.1717 17.3184 18.0570 Belarussian Ruble 30.2125 30.7630 29.1013 32.0732 Moldovan Leu (10) 31.6871 37.3239 33.6548 40.9084 New Romanian Leu 14.4216 15.8887 14.7822 17.0501 The currencies listed above are not a fully convertible outside the territories of countries of their operations. Related official exchange rates are determined daily by the Central Bank of the Russian Federation (further CBR). Market rates may differ from the official rates but the differences are, generally, within narrow parameters monitored by the respective Central Banks. The translation of assets and liabilities denominated in the currencies listed above into RUB for the purposes of these financial statements does not indicate that the Group could realize or settle, in RUB, the reported values of these assets and liabilities. Likewise, it does not indicate that the Group could return or distribute the reported RUB value of capital and retained earnings to its shareholders. 3.4 3.4.1 Cost of property and equipment Property and equipment are stated at cost less accumulated depreciation and any accumulated impairment loss. Expenditures for continuing repairs and maintenance are charged to the profit or loss as incurred. 3.4.2 Depreciation and useful lives Depreciation is calculated on property and equipment on a straight-line basis from the time the assets are available for use, over their estimated useful lives as follows: Processing servers and engineering equipment 3 - 10 years Computers and office equipment 3 - 5 years Other equipment 2 - 20 years Useful lives of leasehold improvements of leased office premises included in engineering equipment and other equipment are determined at the lower between the useful live of the asset or the lease term. The asset’s residual values, useful lives and depreciation methods are reviewed, and adjusted as appropriate, at each financial year-end. 3.5 3.5.1 Software and other intangible assets Software and other intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected generation of future benefits, generally 3‑5 years. During the period of development, the asset is tested for impairment annually. 3.5.2 Software development costs Development expenditure on an individual project is recognized as an intangible asset when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure during development. 3.5.3 Useful life and amortization of intangible assets The Group assesses whether the useful life of an intangible asset is finite or indefinite and, if finite, the length of that useful life. An intangible asset is regarded by the entity as having an indefinite useful life when, based on an analysis of all of the relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. Intangible assets with finite lives are amortized on a straight-line basis over the useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Below is the summary of useful lives of intangible assets: Customer relationships and contract rights 4 - 15 years Computer Software 3 - 10 years Bank license indefinite Trademarks and other intangible assets 3 - 11 years Amortization periods and methods for intangible assets with finite useful lives are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. Indefinite-lived intangible assets include the acquired licenses for banking operations. It is considered indefinite-lived as the related license is expected to be renewed indefinitely. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of comprehensive income when the asset is derecognized. 3.6 The Group assesses at each reporting date whether there is an indication that an asset, other than goodwill and intangible assets with indefinite useful life, may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their 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 asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded analogues, if applicable, or other available fair value indicators. The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s cash generating units (CGU), to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years or longer, when management considers appropriate. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the last year. Impairment losses of continuing operations are recognized in profit or loss in those expense categories consistent with the function of the impaired asset. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss. The following criteria are also applied in assessing impairment of specific assets: Goodwill Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating units, to which the goodwill relates. Where the recoverable amount of the cash-generating units is less than their carrying amount an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. The Group performs its annual impairment test of goodwill as of December 31 and whenever certain events and circumstances indicate that its carrying value may be impaired. Intangible assets with indefinite useful life Intangible assets with indefinite useful life are tested for impairment annually as of December 31, either individually or at the cash generating unit level, as appropriate and whenever events and circumstances indicate that an asset may be impaired. 3.7 3.7.1 Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. 3.7.2 Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: - Financial assets at amortised cost - Financial assets at fair value through OCI with recycling of cumulative gains and losses - Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition - Financial assets at fair value through profit or loss Financial assets at amortised cost This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met: - The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows, And - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost includes debt instruments, trade and other receivables and loans issued. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the profit or loss section of statement of comprehensive income. The Group’s financial assets at fair value through profit or loss includes few loans issued that did not pass SPPI test. Financial assets at fair value through OCI The Group’s has no financial assets at fair value through OCI with recycling or with no recycling of cumulative gains and losses upon derecognition. 3.7.3 Impairment - credit loss allowance for ECL The Group assesses and recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. The measurement of ECL reflects: - an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes; - the time value of money; and - all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future economic conditions. Debt instruments measured at AC are presented in the consolidated statement of financial position net of the allowance for ECL. For loan commitments (where those components can be separated from the loan), a separate provision for ECL is recognised as other financial liabilities as part of accounts payable in the consolidated statement of financial position. For debt instruments at FVOCI, an allowance for ECL is recognised in profit or loss and it affects fair value gains or losses recognised in OCI rather than the carrying amount of those instruments. The Group applies a “three stage” model for impairment in accordance with IFRS 9, based on changes in credit quality since initial recognition: 1. A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12 months (12 month ECL). 2. If the Group identifies a significant increase in credit risk (“SICR”) since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis (lifetime ECL). 3. If the Group determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a lifetime ECL. For financial assets that are credit-impaired on purchase or at origination, the ECL is always measured at a lifetime ECL. Note 31 provides information about inputs, assumptions and estimation techniques used in measuring ECL, including an explanation of how the Group incorporates forward-looking information in the ECL models. 3.7.4 A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when: - The rights to receive cash flows from the asset have expired - The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. 3.8 3.8.1 Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, bank overdraft, financial guarantees, undrawn loan commitments, customer accounts and amounts due to banks. 3.8.2 Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. The Group has no such instruments. Loans and deposits This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the profit or loss section of statement of comprehensive income. Financial guarantees Subsequent to initial recognition, the Group’s liability under each guarantee is measured at the higher of the amount initially recognised less cumulative amortisation recognised in the income statement, and an ECL allowance . The premium received is recognised in the income statement in Commissions and other revenue on a straight line basis over the life of the guarantee. Undrawn loan commitments Undrawn loan commitments are commitments under which, over the duration of the commitment, the Group is required to provide a loan with pre-specified terms to the customer. Similar to financial guarantee contracts, under IAS 39, a provision was made if they were an onerous contract but, from January 1, 2018, these contracts are in the scope of the ECL requirements. 3.8.3 Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss. In accordance with terms and conditions of use of e-wallet accounts and system rules, the Group charges a fee on its consumers on the balance of unused accounts after certain period of inactivity and unclaimed payments. Such fees are recorded as revenues in the period a fee is charged. 3.8.4 Offsetting financial assets and liabilities Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if: - There is a currently enforceable legal right to offset the recognized amounts; and - There is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. The right of set-off: - Must not be contingent on a future event; and - Must be legally enforceable in all of the following circumstances: (i) the normal course of business; (ii) the event of default; and (iii) the event of insolvency or bankruptcy of the entity and all of the counterparties 3.9 Cash comprises cash at banks and in hand and short-term deposits with an original maturity of three months or less. All these items are included as a component of cash and cash equivalents for the purpose of the statement of financial position and statement of cash flows. 3.10 3.10.1 Short-term employee benefits Wages and salaries paid to employees are recognized as expenses in the current period. The Group also accrues expenses for future vacation payments and short-term employee bonuses. 3.10.2 Social contributions and define contributions to pension fund Under provisions of the Russian legislation, social contributions include defined contributions to pension and other social funds of Russia and are calculated by the Group by the application of a regressive rate (from 30% to 15% in 2018, 2017 and 2016) to the annual gross remuneration of each employee. For the year ended December 31, 2018 defined contributions to pension fund of Russia of the Group amounted to 886 (2017 – 473; 2016 – 315). 3.11 Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of discounting is material, provisions are determined by discounting the expected value of future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. Performance guarantees Performance guarantees are contracts that provide compensation if another party fails to perform a contractual obligation. Performance guarantees are initially recognized at their fair value, which is usually equal to the amount of fees received. This amount is amortised on a straight line basis over the life of the contract. Performance guarantees do not transfer credit risk. The risk under performance guarantee contracts is the possibility that the failure to perform the contractual obligation by another party occurs. 3.12 Dividend Distribution Cyprus entities that do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, are deemed to have distributed as dividends 70% of these profits. A special contribution for the defence fund of the Republic of Cyprus is levied at the 17% rate for 2016, 2017, 2018 and thereafter will be payable on such deemed dividends distribution. Profits that are attributable to shareholders who are not tax resident of Cyp |
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. The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the reporting dates and the reported amounts of revenues and expenses during the reporting periods. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. Significant judgments Revenue recognition Revenue from SOVEST project – applicable standards SOVEST project implies offering interest free loans to individuals for the purchases made with installment cards plus various options connected to the use of these cards. It brings revenues in the form of commissions from merchants and card-holders as well as interchange fee from the payment system. The Group exercises significant judgment in determining which of these commissions fall within the scope of IFRS 9 or IFRS 15. The resulting conclusion depends mainly on whether a commission can be linked to a specific lending arrangement or not. Revenue from inactive accounts and unclaimed payments The Group stipulates in its public offers the term during which a customer who failed to identify correctly the recipient of his transfer can return to correct the identification details or claim money back. If the customer does not return, the whole amount of transfer is appropriated by the Group in the period of specified time in public offer. Similarly, the Group charges a daily commission on the balance of wallets that remained inactive during the period indicated in the public offer. The Group believes that including these rules into its public offers gives it appropriate legal rights to recognize the distinguishment of customer liabilities and, therefore, record related gain as revenue. Functional currency Each entity in the Group determines its own functional currency, depending on the economic environment it operates in, and items included in the financial statements of each entity are measured using that functional currency. Recognition of control, joint control, or significant influence over entities In assessing business combination we analyse all the relevant terms and conditions of management of the acquired or newly established entities and exercise judgment in deciding whether the Group has control, joint control, or significant influence over them. As a result certain acquisitions where the Group’s share is over 50% may not be recognized as consolidated subsidiaries and vice versa. See Note 6 for details. Acquisition of business in the form of separate assets In 2018 the Group completed acquisition of Rocketbank business that does not represent a separate legal entity. The acquisition was made through a combination of contracts on purchase of major non-current assets, transfer of employees etc. Since the assets and other resources have been acquired in order to operate them as a business, these transactions were accounted for using the acquisition method as a single transaction. The acquisition date was the date when the Group obtained control over the last key element of the business. All the cash amounts paid by the Group under any of the contracts related to the acquisition were treated as consideration. See Note 6 for details. Significant estimates and assumptions Significant estimates reflected in the Company’s financial statements include, but are not limited to: - Fair values of assets and liabilities acquired in business combinations; - Fair value of assets transferred in non-monetary transactions; - Useful life of property, equipment and Intangible assets - Impairment of intangible assets, goodwill, investments in associates and joint ventures; - Recoverability of deferred tax assets; - Fair value of loans issued; - Impairment of loans and receivables; - Measurement of cost associated with share-based payments; - Uncertain position over risk assessment; Actual results could materially differ from those estimates. The key assumptions concerning the future events and other key sources of estimation uncertainty at the reporting date that have a significant risk of a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Fair values of assets and liabilities acquired in business combinations The Group recognizes separately, at the acquisition date, the identifiable assets, liabilities and contingent liabilities acquired or assumed in the business combination at their fair values, which involves estimates. Such estimates are based on valuation techniques, which require considerable judgment in forecasting future cash flows and developing other assumptions. Fair value of assets transferred in non-monetary transactions The Group was engaged in a transaction of establishment of JSC Tochka during the reporting period. In this process, the Group invested a number of assets into the newly established entity (fixed assets, intangible assets, promissory notes). Fair value of promissory notes is deemed equal to their nominal value because they can be instantly exchanged for cash. Fair value of fixed assets and intangible assets is deemed equal to their carrying amount because these assets had been purchased not long ago from a unrelated party. Impairment of goodwill and intangible assets The Group determines the following material CGUs: SOVEST, Payment services, Postomatnye Tekhnologii, Tochka, Rocketbank and Flocktory. For the purpose of goodwill impairment test, the Group estimates the recoverable amounts of Payment services CGU as fair value less costs of disposal on the basis of quoted prices of Company’s ordinary shares. See also Note 11 below for details. For the purpose of intangible assets with indefinite useful life impairment test, the Group estimates the recoverable amounts of each asset as fair value less costs of disposal on the basis of comparative method and cost approach. For the purpose of intangible assets with definite useful life impairment, when indicators of impairment are noted, the Group estimates the recoverable amounts as higher of value in use or fair value less costs to sell of an individual asset or the CGU to which this asset relates. Impairment of investments in associates and joint ventures Group’s investments in significant associates and joint ventures are generally designated as separate CGUs. The recoverable amount of these CGUs is determined based on a value in use calculation using appropriate financial models. See Note 11 for details. Recoverability of deferred tax assets The utilization of deferred tax assets will depend on whether it is possible to generate sufficient taxable income against which the deductible temporary differences can be utilized. Various factors are used to assess the probability of the future utilization of deferred tax assets, including past operating results, operational plans, expiration of tax losses carried forward, and tax planning strategies. Certain portion of deferred tax assets was not recorded because the Group does not expect to realize certain of its tax loss carry forwards in the foreseeable future due to history of losses. Further details on deferred taxes are disclosed in Note 27. Fair value of loans issued The Group measures loans issued at amortized cost using effective interest rate (EIR) method. EIR is assumed to be equal to loan market rates which are defined on market participants statistic available to the Group. ECL measurement The Group applied statements for impairment of IFRS 9 starting the year 2018 as change in accounting policy and disclosed it in the Note 2.3. Further details on provision for impairment of loans and receivables are disclosed in Notes 12, 13. Measurement of cost associated with share-based payments Share-based payments included expenses incurred under employee stock option plan (ESOP) and restricted stock unit plan (RSU). See also Note 32 below for more details. Management estimates the fair value of stock options at the date of grant using the Black-Scholes-Merton pricing model and its restricted stock units using the Binominal model. The option pricing models were originally developed for use in estimating the fair value of traded options, which have different characteristics than the stock options granted by the Company and its subsidiaries, associates and joint ventures. The models are also sensitive to changes in the subjective assumptions, which can materially affect the fair value estimate. These subjective assumptions include the expected life of the options, expected volatility, risk-free interest rates, expected dividend yield, the fair value of the underlying shares. The amount of expense is also sensitive to the number of awards, which are expected to vest, taking into account estimated forfeitures. Below is the discussion of each of these estimates: Assumptions used for ESOP valuation Expected life The Company did not have any option grants in the past, and does not have sufficient history to determine the time the option holders will hold the shares. Therefore, the Company used the expected term as the average between the vesting and contractual term of each option tranche for stock option plan. Expected volatility Due to a relatively short period of historical market data, QIWI’s share price volatility for options valuation was defined based on the historical volatility of peer group companies over a period, which approximates the expected life of option tranches. Risk-free interest rates Risk-free interest rates are based on the implied yield currently available in the US treasury bonds , adjusted for a country risk premium, with a remaining term approximating the expected life of the option award being valued. Expected dividend yield The Group set an dividend yield based on historical payout and best management’s expectation for dividends distribution. Fair value of the underlying shares Prior to May 2013 the Company’s ordinary shares were not publicly traded. Therefore, it estimated the fair value of the underlying shares on the basis of valuations arrived at by employing the “income approach” valuation methodology. Since May 2013 QIWI plc is a public company and the fair value of its shares defined by reference to closing market price of its traded shares. Estimated forfeitures As of the dates of stock options grants had no data of attrition rate among key personnel and management resulted in an estimated forfeiture rate of zero. Subsequently, the actual forfeiture rate is higher, the actual amount of related expense will become lower. Assumptions used for RSU valuation Expected life The Company used the expected term as the vesting term for RSU plan. Expected volatility The expected volatility reflects the assumption that the historical QIWI’s share price volatility over a period similar to the life of the RSUs is indicative of future trends, which may not necessarily be the actual outcome. Risk-free interest rates Risk-free interest rates are based on the implied yield currently available in the US treasury bonds , adjusted for a country risk premium, with a remaining term approximating the expected life of the option award being valued. Expected dividend yield The Group set an dividend yield based on historical payout and best management’s expectation for dividends distribution. Fair value of the underlying shares The fair value of shares defined by reference to closing market price of the Group’s traded shares. Estimated forfeitures The forfeiture rate for RSUs granted during the period is 11‑16%. It is based on historical data and current expectations and is not necessarily indicative of forfeiture patterns that may occur. Uncertain position over risk assessment The Group disclosed possible and accrued probable risks in respect on currency, customs, tax and other regulatory positions. Management estimates the amount of risk based on its interpretation of the relevant legislation, in accordance with the current industry practice and in conformity with its estimation of probability, which require considerable judgment. |
Consolidated subsidiaries
Consolidated subsidiaries | 12 Months Ended |
Dec. 31, 2018 | |
Consolidated subsidiaries | |
Consolidated subsidiaries | 5. The consolidated IFRS financial statements include the assets, liabilities and financial results of the Company and its subsidiaries. The subsidiaries are listed below: Ownership interest As of As of December 31, December 31, Subsidiary Main activity 2017 2018 JSC QIWI (Russia) Operation of electronic payment kiosks 100 % 100 % QIWI Bank JSC (Russia) Maintenance of electronic payment systems, money transfer, consumer and SME financial services 100 % 100 % QIWI Payments Services Provider Ltd (UAE) Operation of on-line payments 100 % 100 % QIWI International Payment System LLC (USA) Operation of electronic payment kiosks 100 % 100 % Qiwi Kazakhstan LP (Kazakhstan) Operation of electronic payment kiosks 100 % 100 % JLLC OSMP BEL (Belarus) Operation of electronic payment kiosks 51 % 51 % QIWI-M S.R.L. (Moldova) Operation of electronic payment kiosks 51 % 51 % QIWI ROMANIA SRL (Romania) Operation of electronic payment kiosks 100 % 100 % QIWI WALLET EUROPE SIA (Latvia) Operation of on-line payments 100 % 100 % QIWI Retail LLC (Russia) * Sublease of space for electronic payment kiosks 100 % — QIWI Management Services FZ‑LLC (UAE) Management services 100 % 100 % Attenium LLC (Russia) Management services 100 % 100 % Postomatnye Tekhnologii LLC (Russia) Logistic 100 % 100 % Future Pay LLC (Russia) Operation of on-line payments 100 % 100 % Qiwi Blockchain Technologies LLC (Russia) Software development 100 % 100 % QIWI Shtrikh LLC (Russia) On-line cashbox production 51 % 51 % QIWI Platform LLC (Russia) Software development 100 % 100 % QIWI Processing LLC (Russia) Software development 100 % 100 % Joint ventures (Note 6, Note 21) Flocktory Ltd (Cyprus) Holding company 82 % 82 % Flocktory Spain S.L. (Spain) SaaS platform for customer lifecycle management and personalization 82 % 82 % FreeAtLast LLC (Russia) SaaS platform for customer lifecycle management and personalization 82 % 82 % Associate (Note 6, Note 20) JSC Tochka (Russia) Digital services for banks — 40 % * QIWI Retail LLC was liquidated during the year 2018. |
Acquisitions and business combi
Acquisitions and business combinations | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions and business combinations | |
Acquisitions and business combinations | 6. 2018 Rocketbank In July 2018, the Group obtained control over Rocketbank business, which does not represent a separate legal entity and will operate under the banking license of QIWI bank . Rocketbank is primarily focused on consumer financial services. The transaction was structured as an acquisition of assets combined with hiring of Rocketbank employees by the Group. The acquisition has been accounted for using the acquisition method. Pre-existing relationships between the Group and Rocketbank were not significant. Consideration paid for Rocketbank business comprises only of cash in the amount of 183. The fair value of the identifiable assets and liabilities as of the date of acquisition was: Fair value Net assets acquired: Property and equipment 113 Intangible assets 393 Deferred tax asset 3 Other liabilities (419) Total identifiable net assets at fair value 90 Consideration paid 183 Goodwill arising on acquisition 93 Goodwill in the amount of 93 relates to qualified workforce and is equal to the difference between fair value of net assets acquired in the business acquisition and the consideration paid. Goodwill was allocated to CGU Rocketbank. The Group determined the fair value of Rocketbank software, trademarks, client base and recognized as intangible assets as 393. The Group also obtained a liability regarding loyalty program of the acquired client base in the amount of 419. The Group received a compensation in the amount of 321 from seller for loyalty program liability transferred which was included as decrease of consideration paid. None of the goodwill recognised is expected to be deductible for income tax purposes. Revenue of Rocketbank business from the acquisition date to the reporting date amounted to 180 and the net loss was 818. If Rocketbank business had been part of the Group from the beginning of the year, the Group’s revenue through to the reporting date would have amounted to 31,016 and net profit to 2,266. Analysis of cash flows on acquisition for 2018: Amount Cash paid to the seller for non-current assets (83) Cash paid to the top-management of Rocketbank (100) Cash received from the seller 321 Total cash received upon business combination in the year 2018 138 Cash paid to the seller purchases of non-current assets of Rocketbank in the year 2017 was 321. JSC Tochka In June 2018, the Group, Bank Financial Corporation Otkritie and Tochka management signed a cooperation agreement to establish a new entity to develop the Tochka project together as a multi-banking platform. In July 2018 new entity JSC Tochka was created. Tochka is a digital banking service focused on offering a broad range of services to small and medium businesses. The capital structure of the new entity is as follows: Otkritie Bank has 50% + 1 share, QIWI - 40% and Tochka management has 10% - 1 share, while dividends and potential capital gains are distributed as follows: QIWI and Otkritie Bank to receive 45% each and 10% will be attributed to Tochka management. QIWI Group assesses its share in the new entity at 45% (according to its share in dividends and potential capital gains). Otkritie can impose its decisions by forcefully acquiring the shares of other partners in case of deadlocks, so the Group believes it only has significant influence over JSC Tochka. The Group recognizes this investment as an associate and has been accounted for it under the equity method. As part of the transaction Bank Financial Corporation Otkritie, Tochka management and the Group agreed to each contribute their assets to the new entity, including software, hardware and cash financing. The structure of the Group contribution was the following: Non-monetary assets 125 Monetary assets* 992 Total contribution 1,117 * No significant additional contributions are expected to be made in the next periods. The fair value of assets contributed to JSC Tochka was: Fair value Property and equipment 47 Intangible assets 88 Cash, accounts receivable and promissory notes 1,753 Total contributions 1,888 Group’s share (45%) 850 Contribution of the Group 1,117 Loss on set up of associate (267) The loss in the amount of 267 relates to disproportional contribution of assets by the Group as compared to other shareholders and is equal to the difference between the fair value of the obtained share in the JSC Tochka’s assets and Group contribution made. 2017 FLOCKTORY On March 22, 2017, the Group acquired 82% stake in Flocktory Ltd, non-public company, operating in Russia and Spain. Flocktory Ltd operates through its subsidiaries Flocktory Spain S.L. and FreeAtLast LLC (Russia). The Flocktory’s business is primarily focused on the development of automated marketing solutions for the e-commerce, financial, media and travel industries, which are based on data collection and analysis and substantively represents SaaS platform for customer lifecycle management and personalization. According to the shareholders’ agreement and Flocktory articles of association, decisions on relevant activities require unanimous consent of all shareholders. Thus, since the date of acquisition the Group has exercised a joint control over Flocktory Ltd and recognized it as a joint venture accounted for under equity method. Pre-existing relationships between the Group and Flocktory group were not significant. QIWI entered into call and put option agreements with respect to the remaining 18% stake in Flocktory Ltd. Put option provides right to minority shareholders to sell their remaining shares in Flocktory to QIWI after the acquisition date. Put option becomes exercisable after one year from the acquisition date for 50% of minority shares, after year and a half from acquisition for 25% of minority shares and after two years form acquisition - remaining 25%. The consideration was made by the following: Cash consideration paid 794 Cash payable for Flocktory’s stock option plan cancelation* 37 Total purchase consideration transferred 831 * The fair value of the identifiable assets and liabilities as of the date of acquisition was: Fair value Net assets acquired: Property and equipment 1 Intangible assets 720 Accounts receivable 26 Cash and cash equivalents 55 Trade and other payables (21) Other liabilities (1) Total identifiable net assets at fair value 780 Group’s share of net assets (82%) 639 Goodwill arising on acquisition 192 Goodwill related to the joint venture amounted to 192 and is included in the carrying amount of the investment in joint venture . |
Operating segments
Operating segments | 12 Months Ended |
Dec. 31, 2018 | |
Operating segments. | |
Operating segments | 7. In reviewing the operational performance of the Group and allocating resources, the chief operating decision maker of the Group (CODM), who is the Croup’s CEO and its ultimate controlling shareholder, reviews selected items of segment’s statement of comprehensive income. In determining that the CODM was the CEO, the Group considered the aforementioned roles of CEO responsibilities as well as the following factors: - The CEO determines compensation of our other executive officers while board of directors approves corporate key performance indicators (KPIs) and total bonus pool for those executive officers. In case of underperformance of corporate KPIs a right to make a final decision on bonus pool distribution is left with the BOD ; - The CEO is actively involved in the operations of the Group and regularly chairs meetings on key projects of the Group; and - The CEO regularly reviews the financial and operational reports of the Group. These reports primarily include segment net revenue, segment profit before tax and segment net profit for the Group as well as certain operational data. The financial data is presented on a combined basis for all key subsidiaries, joint ventures and associates representing the segment net revenue, segment profit before tax and segment net profit. The Group measures the performance of its operating segments by monitoring: segment net revenue, segment profit before tax and segment net profit. Segment net revenue is a measure of profitability defined as the segment revenues less segment direct costs, which include the same items as the “Cost of revenue (exclusive of depreciation and amortization)” as reported in the Group’s consolidated statement of comprehensive income, except for payroll costs. Payroll costs are excluded because, although required to maintain the Group’s operations, they are not linked to volume. The Group does not monitor balances of assets and liabilities by segments as CODM considers they have no impact on decision-making. The Group has identified its operating segments based on the types of products and services the Group offers. Before January 1, 2018, the Group reported two segments: Payment Services (PS) and Consumer Financial Services (CFS). Since 2018, the Group additionally discloses: Small and Medium Enterprises (SME) segment and Rocketbank segment. In 2018, the Group completed the deal related to acquisition of Rocketbank and started to invest in new business activities which resulted in Rocketbank segment becoming significant. As a result, starting 2018, CODM reviews segment net revenue, segment profit before tax and segment net profit separately for each of the following reportable segments: Payment Services, Consumer Financial Services, Small and Medium Enterprises and Rocketbank: - Payment Services (PS), operating segment that generates revenue through operations of our payment processing system offered to our customers through a diverse range of channels and interfaces; - Consumer Financial Services (CFS), operating segment that generates revenue through financial services rendered to individuals, currently presented by Sovest installment card project; - Small and Medium Enterprises (SME), operating segment that generates revenue through offering a broad range of services to small and medium businesses. - Rocketbank (RB), operating segment that generates revenue through digital banking service offering debit cards and deposits to retail customers. For the purpose of management reporting, expenses related to corporate back-office operations were not allocated to any operating segment and are presented separately to CODM. Results of other operating segments and corporate expenses are included in Corporate and Other (CO) category for the purpose of segment reporting. Management reporting is different from IFRS, because it does not include certain IFRS adjustments, which are not analyzed by the CODM in assessing the operating performance of the business. The adjustments affect such major areas as deferred taxation, share-based payments, foreign exchange gain/(loss) from revaluation of cash proceeds received from secondary public offering, effect from disposal of subsidiaries and fair value adjustments, such as amortization and impairment. The segments’ statement of comprehensive income for the year ended December 31, 2018, as presented to the CODM are presented below: 2018 PS CFS SME RB CO Total Revenue 26,649 558 3,045 180 178 30,610 Segment net revenue 16,497 385 2,916 (263) 122 19,657 Segment profit/(loss) before tax 11,552 (3,281) (898) (1,327) (974) 5,072 Segment net profit/(loss) 9,529 (2,618) (776) (1,061) (937) 4,137 The segments’ statement of comprehensive income for the year ended December 31, 2017, as presented to the CODM are presented below: 2017* PS CFS SME RB CO Total Revenue 20,133 105 611 — 48 20,897 Segment net revenue 12,580 9 578 (5) 31 13,193 Segment profit/(loss) before tax 8,795 (2,704) (190) (323) (760) 4,818 Segment net profit/(loss) 7,543 (2,164) (171) (311) (843) 4,054 The segments’ statement of comprehensive income for the year ended December 31, 2016, as presented to the CODM are presented below: 2016* PS CFS CO Total Revenue 17,846 1 33 17,880 Segment net revenue 10,583 (3) 31 10,611 Segment profit/(loss) before tax 6,454 (259) (605) 5,590 Segment net profit/(loss) 5,612 (219) (679) 4,714 *For comparative purposes 2016 and 2017 segment information is presented in 2018 format. Segment net revenue, as presented to the CODM, for the years ended December 31, 2016, 2017 and 2018 is calculated by subtracting cost of revenue (exclusive of depreciation and amortization) from revenue and adding back payroll and related taxes as presented in the table below: 2016 2017 2018 Revenue under IFRS 17,880 20,897 30,610 Cost of revenue (exclusive of depreciation and amortization) (8,646) (9,763) (15,129) Payroll and related taxes 1,377 2,059 4,176 Total segment net revenue, as presented to CODM 10,611 13,193 19,657 A reconciliation of segment profit before tax as presented to the CODM to IFRS consolidated profit before tax of the Group, for the years ended December 31, 2016, 2017 and 2018 is presented below: 2016 2017 2018 Consolidated profit before tax under IFRS 3,107 3,840 4,501 Amortization of fair value adjustments recorded on business combinations 396 344 369 Share-based payments 224 398 635 Foreign exchange loss/(gain) from revaluation of cash proceeds received from secondary public offering (Note 30) 975 236 (433) Impairment of intangible assets recorded on acquisitions 878 — — Loss on disposal of subsidiaries, net 10 — — Total segment profit before tax, as presented to CODM 5,590 4,818 5,072 A reconciliation of segment net profit as presented to the CODM to IFRS consolidated net profit of the Group, for the years ended December 31, 2016, 2017 and 2018 is presented below: 2016 2017 2018 Consolidated net profit under IFRS 2,489 3,142 3,626 Amortization of fair value adjustments recorded on business combinations 396 344 369 Share-based payments 224 398 635 Foreign exchange loss/(gain) from revaluation of cash proceeds received from secondary public offering (Note 30) 975 236 (433) Impairment of intangible assets recorded on acquisitions 878 — — Loss on disposal of subsidiaries, net 10 — — Effect from taxation of the above items (258) (66) (60) Total segment net profit, as presented to CODM 4,714 4,054 4,137 Geographic information Revenues from external customers are presented below: 2016 2017 2018 Russia 13,274 15,556 22,693 Other CIS 1,099 1,098 1,393 EU 807 989 2,353 Other 2,700 3,254 4,171 Total revenue per consolidated statement of comprehensive income 17,880 20,897 30,610 Revenue is recognized according to merchants’ geographic place. The majority of the Group’s non-current assets is located in Russia. The Group does not have any single external customer amounting to 10% or greater of the Group’s revenue for the years ended December 31, 2018, 2017 and 2016. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings per share | |
Earnings per share | 8. Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent adjusted for the effect of any potential share exercise by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. The following reflects the income and share data used in basic and diluted earnings per share computations for the years ended December 31: 2016 2017 2018 Net profit attributable to ordinary equity holders of the parent for basic earnings 2,474 3,114 3,584 Weighted average number of ordinary shares for basic earnings per share 60,477,840 60,755,706 61,202,710 Effect of share-based payments 167,197 404,357 522,116 Weighted average number of ordinary shares for diluted earnings per share 60,645,037 61,160,063 61,724,826 Earnings per share: Basic, profit attributable to ordinary equity holders of the parent 40.91 51.25 58.56 Diluted, profit attributable to ordinary equity holders of the parent 40.79 50.92 58.06 There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements. |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property and equipment | |
Property and equipment | 9. Construction Processing in progress servers and Computers (CIP) and engineering and office Other Advances for equipment equipment equipment equipment Total Cost Balance as of December 31, 2016 695 91 162 81 1,029 Transfer between groups 77 1 — (78) — Additions 196 45 16 108 365 Disposals (146) (7) (4) — (157) Balance as of December 31, 2017 822 130 174 111 1,237 Transfer between groups 22 5 12 (39) — Additions 478 134 109 15 736 Additions from business combinations (Note 6) 82 22 9 (68) 45 Disposals* (65) (13) (109) — (187) Balance as of December 31, 2018 1,339 278 195 19 1,831 Accumulated depreciation and impairment: Balance as of December 31, 2016 (328) (61) (47) — (436) Depreciation charge (150) (21) (35) — (206) Disposals 122 6 1 — 129 Balance as of December 31, 2017 (356) (76) (81) — (513) Depreciation charge (192) (40) (52) — (284) Disposals 16 10 14 — 40 Balance as of December 31, 2018 (532) (106) (119) — (757) Net book value As of December 31, 2016 367 30 115 81 593 As of December 31, 2017 466 54 93 111 724 As of December 31, 2018 807 172 76 19 1,074 *Disposal in the year 2018 includes property and equipment that were classified as held for sale as of December 31, 2018 in the net book value of 90. As of December 31, 2018, the gross book value of fully depreciated assets is equal to 249 (2017 – 184). |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets. | |
Intangible assets | 10. Advances for Computer Customer intangibles, CIP Cost: Goodwill Licenses Software relationships Trade marks Contract rights and others Total Balance as of December 31, 2016 6,285 284 910 5,338 216 295 112 13,440 Additions — — 244 — — — 240 484 Transfer between groups — — 54 — — — (54) — Disposals — (101) (125) (12) — (295) (99) (632) Balance as of December 31, 2017 6,285 183 1,083 5,326 216 — 199 13,292 Additions — — 279 — — — 106 385 Additions from business combinations (Note 6) 93 — 166 88 139 — (149) 337 Transfer between groups — — 31 — — — (31) — Disposals — — (205) — — — (19) (224) Balance as of December 31, 2018 6,378 183 1,354 5,414 355 — 106 13,790 Accumulated Amortization: Balance as of December 31, 2016 — (59) (436) (1,536) (90) (295) (2) (2,418) Amortization charge — (42) (220) (286) (36) — (6) (590) Impairment — — — (8) — — (96) (104) Disposals — 101 120 12 2 295 97 627 Balance as of December 31, 2017 — — (536) (1,818) (124) — (7) (2,485) Amortization charge — — (245) (289) (43) — (3) (580) Impairment — — (4) — — — (19) (23) Disposals — — 125 — — — 19 144 Balance as of December 31, 2018 — — (660) (2,107) (167) — (10) (2,944) Net book value As of December 31, 2016 6,285 225 474 3,802 126 — 110 11,022 As of December 31, 2017 6,285 183 547 3,508 92 — 192 10,807 As of December 31, 2018 6,378 183 694 3,307 188 — 96 10,846 As of December 31, 2018, the gross book value of fully amortized intangible assets is equal to 190 (2017 – 169). |
Impairment testing of goodwill
Impairment testing of goodwill and intangible assets | 12 Months Ended |
Dec. 31, 2018 | |
Impairment testing of goodwill and intangible assets | |
Impairment testing of goodwill and intangible assets | 11. The Group identified the following significant CGU’s: Payment Services, SOVEST, Tochka, Rocketbank , Postomatnye Tekhnologii and Flocktory. As of December 31, 2018 the Goodwill is allocated to two of CGUs: Payment Services and Rocketbank and intangible assets with indefinite useful life relates to four CGUs: Payment Services, SOVEST, Tochka, Rocketbank. An analysis and movement of net book value of goodwill and indefinite life licenses acquired through business combinations, as included in the intangible assets (Note 10), is as follows: Goodwill Indefinite Payment services Rocketbank life license Total As of December 31, 2016 6,285 – 183 6,468 As of December 31, 2017 6,285 – 183 6,468 Addition (Note 6) — 93 — 93 As of December 31, 2018 6,285 93 183 6,561 The Group tests its goodwill and the intangible assets with indefinite useful life annually. Goodwill For the purpose of goodwill impairment test of the Payment services CGU the Company estimated the recoverable amount as fair value less costs of disposal on the basis of quoted prices of the Company’s ordinary shares (Level 1). As a result of annual impairment test the Group did not identify impairment of Goodwill allocated to Payment services CGU as of December 31, 2017 and 2018. The recoverable amount of Rocketbank CGU has been determined based on a value in use calculation (Level 3) using cash flow projections from financial budgets approved by senior management covering an five-year period (2019‑2023). The pre-tax discount rate adjusted to risk specific applied to cash flow projections of Rocketbank CGU is 21%. The growth rates applied to discounted terminal value projection in beyond the forecast period is 4%. The calculation of value in use for this cash generating unit is sensitive to: - Number of new clients acquired, and its attrition rate; - Commission revenue per client; - Terminal growth rates used to extrapolate cash flows beyond the budget period; - Discount rates. With regard to the assessment of value in use of Rocketbank CGU, a rise in the discount rate to by 1.2% or a decrease in commission revenue per client by 7.5% would result in impairment. Management believes that no reasonably possible change in any other key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount. As a result of annual impairment test the Group did not identify any impairment of Goodwill allocated to Rocketbank CGU as of December 31, 2018. Intangible assets with indefinite useful life As of December 31, 2018, the carrying amount of intangible assets with an indefinite useful life (licenses for banking operations, which are expected to be renewed indefinitely) is recognized with a value of 183 (2017 - 183). Intangible assets with an indefinite useful life were recorded by the Group at the date of acquisition of QIWI Bank JSC. For the purpose of the impairment test of the intangible assets with indefinite useful life, the Company estimated the recoverable amounts of each asset as fair value less costs of disposal on the basis of comparative method and cost approach (Level 3). Under the valuation using the comparative method the Group considered similar third-party’s transactions for acquisition of banks or bank organization that holds licenses identical to the Group’s ones. Under the valuation using the cost approach the Group considered outflows required to meet the requirements for a minimum amount of equity to be held by the bank or bank organization with licenses similar to the Group ones according to current legislation. The key assumption used in fair value less cost of disposal calculations is expected outflows to acquire license on the open market. All assumptions are determined using observable market data and publicly available information of the cash transactions of the third-parties. The Group performed an annual impairment test of Qiwi Bank’s license as of December 31, 2018 and as of December 31, 2017, no impairment was identified. Reasonably possible changes in any valuation parameters would not result in impairment of intangible assets with indefinite useful life. Intangible assets with definite useful life For the purpose of the impairment test on other intangible assets the Company estimated the recoverable amounts as the higher of value in use or fair value less costs to sell of an individual asset or CGU this asset relates. As of December 31, 2016 the Group identified the impairment indicators of intangible assets allocated to Rapida CGU (combined with Payment service CGU in 2017 after the completion of integration of Rapida business) and performed an impairment test of this CGU, which indicated an impairment as of the reporting date in the amount of 847. As of December 31, 2017 the Group identified the impairment indicators of New terminal CGU and impaired it fully by the amount of 89. As of December 31, 2018 the Group did not recognize any significant impairment of intangible assets. |
Long-term and short-term loans
Long-term and short-term loans issued | 12 Months Ended |
Dec. 31, 2018 | |
Long-term and short-term loans issued | |
Long-term and short-term loans issued | 12. As of December 31, 2018, long-term and short-term loans issued consisted of the following: Total as of Expected Net as of December 31, credit loss December 31, 2018 allowance 2018 Long-term loans Loans to legal entities 235 (5) 230 Total long-term loans 235 (5) 230 Short-term loans Loans to individuals 30 — 30 Loans to legal entities 1,612 (26) 1,586 Instalment Card Loans 6,096 (822) 5,274 Total short-term loans 7,738 (848) 6,890 As of December 31, 2017, long-term and short-term loans consisted of the following: Total as of Provision for Net as of December 31, impairment of December 31, 2017 loans 2017 Long-term loans Loans to individuals 1 — 1 Loans to legal entities 166 (3) 163 Total long-term loans 167 (3) 164 Short-term loans Loans to financial institutions 3 (3) — Loans to legal entities 94 (93) 1 Instalment Card Loans 1,912 (222) 1,690 Total short-term loans 2,009 (318) 1,691 The amounts in the tables show the maximum exposure to credit risk regarding loans issued. The Group has no internal grading system of loans issued for credit risk rating grades analysis. Loans issued are not collateralized. An analysis of the changes in the ECL allowances due to changes in corresponding gross carrying amounts for the year ended December 31, 2018, was the following: Stage 1 Stage 2 Stage 3 Total Collective Collective ECL allowance under IFRS 9 as of January 1, 2018 (Note 2.3(e)) (175) (60) (194) (429) Changes because of financial instruments (originated or acquired)/derecognized during the reporting period (146) (44) (309) (499) Transfers between stages 105 (16) (89) — Amounts written off — — 75 75 ECL allowance under IFRS 9 as of December 31, 2018 (216) (120) (517) (853) The movement of provision for impairment of loans for 2017 was the following: Provision for Provision for impairment impairment of loans as of (Charge)/ of loans as of December 31, reversal for December 31, 2016 the year Utilisation 2017 Instalment Card Loans — (222) — (222) Loans to legal entities (113) 3 14 (96) Loans to financial institutions (3) — — (3) Total (116) (219) 14 (321) The movement of provision for impairment of loans for 2016 was the following: Provision for Provision for impairment impairment of loans as of of loans as of December 31, Charge December 31, 2015 for the year Utilisation 2016 Loans to legal entities (199) (53) 139 (113) Loans to financial institutions (3) — — (3) Total (202) (53) 139 (116) |
Trade and other receivables
Trade and other receivables | 12 Months Ended |
Dec. 31, 2018 | |
Trade and other receivables | |
Trade and other receivables | 13. As of December 31, 2018, trade and other receivables consisted of the following: Total as of Expected credit loss Net as of December 31, allowance/ Provision for December 31, 2018 impairment 2018 Cash receivable from agents 4,207 (270) 3,937 Deposits issued to merchants 2,975 (16) 2,959 Commissions receivable 559 (21) 538 Advances issued 287 (12) 275 Other receivables 380 (47) 333 Total trade and other receivables 8,408 (366) 8,042 As of December 31, 2017, trade and other receivables consisted of the following: Total as of Provision for Net as of December 31, impairment of December 31, 2017 receivables 2017 Cash receivable from agents 4,666 (426) 4,240 Deposits issued to merchants 3,919 (13) 3,906 Commissions receivable 827 (18) 809 Advances issued 240 (1) 239 Other receivables 541 (87) 454 Total trade and other receivables 10,193 (545) 9,648 The amounts in the tables show the maximum exposure to credit risk regarding Trade and other receivables. The Group has no internal grading system of Trade and other receivables for credit risk rating grades analysis. An analysis of the changes in the ECL allowances due to changes in the corresponding gross carrying amounts for the year ended December 31, 2018, was the following: Total ECL allowance under IFRS 9 as of January 1, 2018 (Note 2.3(e)) (578) Changes because of financial instruments (originated or acquired)/ derecognized during the reporting period 5 Amounts written off 207 ECL allowance under IFRS 9 as of December 31, 2018 (366) For the year ended December 31, 2017, the provision for impairment of receivables movement was the following: Provision for Provision for impairment of impairment of receivables as (Charge)/ receivables as of December 31, reversal for of December 31, 2016 the year Utilisation 2017 Cash receivable from agents (659) 16 217 (426) Deposits issued to merchants (3) (11) 1 (13) Commissions receivable (7) (11) — (18) Advances issued (1) — — (1) Other receivables (109) 5 17 (87) Total trade and other receivables (779) (1) 235 (545) For the year ended December 31, 2016, the provision for impairment of receivables movement was the following: Provision for Provision for impairment of impairment of receivables as Charge receivables as of December 31, for of December 31, 2015 the year Utilisation 2016 Cash receivable from agents (660) (125) 126 (659) Deposits issued to merchants (1) (2) — (3) Commissions receivable (21) (1) 15 (7) Advances issued (1) — — (1) Other receivables (111) (14) 16 (109) Total trade and other receivables (794) (142) 157 (779) Receivables are non-interest bearing, except for agent receivables bearing, generally, interest rate of 14%‑36% per annum and credit terms generally do not exceed 30 days. There is no requirement for collateral for customer to receive credit. |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2018 | |
Cash and cash equivalents | |
Cash and cash equivalents | 14. As of December 31, 2018 and 2017, cash and cash equivalents consisted of the following: As of As of December 31, December 31, 2017 2018 Correspondent accounts with CBR 6,522 5,587 Сash with banks and on hand 4,063 13,119 Short-term CBR deposits 6,500 21,000 Other short-term bank deposits 1,322 1,267 Less: Allowance for ECL/impairment losses (1) (7) Total cash and cash equivalents 18,406 40,966 The amounts in the table show the maximum exposure to credit risk regarding cash and cash equivalents. The Group has no internal grading system of cash and cash equivalents for credit risk rating grades analysis. Since 2017 the Company has the bank guarantee and secured it by a cash deposit of U.S.$ 2.5 mln until July 31, 2019. |
Other current assets and other
Other current assets and other current liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other current assets and other current liabilities | |
Other current assets and other current liabilities | 15. 15.1 As of December 31, 2018 and 2017, other current assets consisted of the following: As of As of December 31, December 31, 2017 2018 Reserves at CBR* 229 684 Prepaid expenses 99 156 VAT and other taxes receivable 51 12 Other 79 77 Total other current assets 458 929 * 15.2 As of December 31, 2018 and 2017, other current liabilities consisted of the following: As of As of December 31, December 31, 2017 2018 Loyalty program liability — 473 Other 51 58 Total other current liabilities 51 531 |
Share capital, additional paid-
Share capital, additional paid-in capital, share premium and other reserves | 12 Months Ended |
Dec. 31, 2018 | |
Share capital, additional paid-in capital, share premium and other reserves | |
Share capital, additional paid-in capital, share premium and other reserves | 16. The Capital of the Company is divided by two classes. Each class A share has the right to ten votes at a meeting of shareholders and each class B share has the right to one vote at a meeting of shareholders. The class A shares and the class B shares have the right to an equal share in any dividend or other distribution the Company pays and have nominal of EUR 0.0005 each. As of As of As of Authorised shares December 31, December 31, December 31, 2016 2017 2018 Thousands Thousands Thousands Ordinary Class A shares 133,017 131,778 131,333 Ordinary Class B shares 97,833 99,072 99,517 Total authorised shares 230,850 230,850 230,850 As of As of As of December 31, December 31, December 31, Issued and fully paid shares 2016 2017 2018 Thousands Thousands Thousands Ordinary Class A shares 15,517 14,278 13,833 Ordinary Class B shares 45,080 46,655 48,880 Total issued and fully paid shares 60,597 60,933 62,713 As of December 31, 2018 the Company owned 1,261 thousand treasury class B shares (December 31,2017 - nil) that were issued and fully paid in 2018 and retained by QIWI Employee trust (see Note 32.1) in order to settle future obligations on share-based payments. For the year ended December 31, 2018 and 2017 the movement of number of shares outstanding was the following: Number Ordinary Ordinary of outstanding Class A shares Class B shares shares Thousands Thousands Thousands As of December 31, 2016 15,517 45,080 60,597 Transfer between classes (1,239) 1,239 — Increase of share capital due to exercise of options by employees during the year — 336 336 As of December 31, 2017 14,278 46,655 60,933 Transfer between classes (445) 445 — Increase of share capital due to exercise of options by employees during the year — 519 519 As of December 31, 2018 13,833 47,619 61,452 In case of liquidation, the Company’s assets remaining after settlement with creditors, payment of dividends and redemption of the par value of shares is distributed among the ordinary shareholders proportionately to the number of shares owned. The other reserves of the Group’s equity represent the financial effects from changes in equity settled share-based payments to employees, acquisitions and disposals, as well as other operations with non-controlling interests in the subsidiaries without loss of control. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Borrowings | |
Borrowings | 17. During the year ended December 31, 2018 the Group had available overdraft credit facilities with an overall credit limit of 1,460, with maturity up to June 2020, and interest rate of up to 30% per annum. The balance payable under these credit lines as of December 31, 2018 was nil. Some of these agreements stipulated the right of a lender to increase the interest rate in case the covenants are violated. |
Trade and other payables
Trade and other payables | 12 Months Ended |
Dec. 31, 2018 | |
Trade and other payables | |
Trade and other payables | 18. As of December 31, 2018 and 2017, the Group’s trade and other payables consisted of the following: As of As of December 31, December 31, 2017 2018 Payables to merchants 9,178 13,942 Money remittances and e-wallets accounts payable 5,312 6,571 Deposits received from agents 3,638 4,839 Commissions payable 469 601 Accrued personnel expenses and related taxes 353 562 Provision for undrawn credit commitments (Note 28) — 84 Other payables 573 848 Other advances received 76 52 Total trade and other payables 19,599 27,499 |
Customer accounts and amounts d
Customer accounts and amounts due to banks | 12 Months Ended |
Dec. 31, 2018 | |
Customer accounts and amounts due to banks | |
Customer accounts and amounts due to banks | 19. As of December 31, 2018 and 2017, customer accounts and amounts due to banks consisted of the following: As of As of December 31, December 31, 2017 2018 Due to banks 1,390 1,391 Due to individuals 110 10,844 Due to legal entities 1,571 3,767 Term deposits 111 2,103 Total customer accounts and amounts due to banks 3,182 18,105 Including long-term deposits — 237 Customer accounts and amounts due to banks bear interest of up to 6%. |
Investment in associates
Investment in associates | 12 Months Ended |
Dec. 31, 2018 | |
Investment in associates | |
Investment in associates | 20. The Group has a single associate: JSC Tochka (see Note 6). QIWI Group assesses its share in the new entity at 45% according to its share in dividends and potential capital gains. The Group’s interest in JSC Tochka is accounted for using the equity method in the consolidated financial statements. The following table illustrates summarized financial information of the Group’s investment in JSC Tochka associate: As of December 31, 2018 Associates’ statement of financial position: Non-current assets 149 Current assets 1,836 including cash and cash equivalents 1,326 Current liabilities (183) including financial liabilities (183) Net assets 1,802 Carrying amount of investment in associates (45%) of net assets 812 Associate’ revenue and net income for the year ended December 31 was as follows: 2018 Revenue 4 Cost of revenues (3) Other income and expenses, net (85) including depreciation and amortization (1) Total net loss (84) Group’s share (45%) of total net loss (38) |
Investment in joint ventures
Investment in joint ventures | 12 Months Ended |
Dec. 31, 2018 | |
Investment in joint venture | |
Investment in joint ventures | 21. The Group has a single joint venture: Flocktory Ltd with subsidiaries (see Note 6). Three parties exercising joint control over this entity make unanimous decisions on major issues, including distribution and payment of dividends. The Group’s interest in Flocktory joint venture is accounted for using the equity method in the consolidated financial statements. The following table illustrates summarized financial information of the Group’s investment in Flocktory joint venture: As of As of December 31, December 31, 2017 2018 Joint venture companies’ statement of financial position: Non-current assets 666 598 Current assets 125 191 including cash and cash equivalents 80 144 Current liabilities (11) (20) including financial liabilities (9) (18) Net assets 780 769 Group’s share (82%) of net assets 640 631 Goodwill 192 205 Carrying amount of investment in joint venture company 832 836 Joint venture’ revenue and net income for the years ended December 31 was as follows : 2017 2018 Revenue 187 332 Cost of revenues (79) (142) Other income and expenses, net (107) (200) including depreciation and amortization (59) (79) Total net loss 1 (10) Group’s share (82%) of total net loss 1 (8) The Group did not identify any impairment indicators regarding its investment in Flocktory joint venture as at December 31, 2018 and December 31, 2017. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Revenue | 22. Other revenue for the years ended December 31 was as follows: 2016 2017 2018 Cash and settlement service fees 130 670 3,017 Other revenue 562 600 626 Total other revenue 692 1,270 3,643 For the purposes of consolidated cash flow statement, “Interest income, net” consists of the following: 2016 2017 2018 Interest revenue calculated using the effective interest rate (899) (1,052) (1,854) Interest expense classified as part of cost of revenue 37 42 89 Interest income from non-banking loans classified separately in the consolidated statement of comprehensive income (36) (35) (41) Interest expense from non-banking loans classified separately in the consolidated statement of comprehensive income 64 29 24 Interest income, net, for the purposes of consolidated cash flow statement (834) (1,016) (1,782) |
Cost of revenue (exclusive of d
Cost of revenue (exclusive of depreciation and amortization) | 12 Months Ended |
Dec. 31, 2018 | |
Cost of revenue (exclusive of depreciation and amortization) | |
Cost of revenue (exclusive of depreciation and amortization) | 23. Cost of revenue (exclusive of depreciation and amortization) for the years ended December 31 was as follows: 2016 2017 2018 Transaction costs 6,490 6,756 9,324 Payroll and related taxes 1,377 2,059 4,176 Other expenses 779 948 1,629 Total cost of revenue (exclusive of depreciation and amortization) 8,646 9,763 15,129 |
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 | 24. Selling, general and administrative expenses for the years ended December 31 were as follows: 2016 2017 2018 Compensation to employees, related taxes and other personnel expenses 1,682 2,227 3,572 Advertising, client acquisition and related expenses 165 1,294 2,369 Tax expenses, except income and payroll related taxes 175 407 690 Advisory and audit services 297 433 661 Rent of premises and related utility expenses 346 391 643 IT related services 180 236 364 Loss/(gain) from initial recognition, net — — 143 Other expenses 363 1,035 1,229 Total selling, general and administrative expenses 3,208 6,023 9,671 |
Other income and expenses
Other income and expenses | 12 Months Ended |
Dec. 31, 2018 | |
Other income and expense | |
Other income and expenses | 25. Other income and expenses Other income and expenses for the years ended December 31 was as follows: 2016 2017 2018 Loss on set up of associate (Note 6) — — (267) Compensation of expenses from an associate — — 181 Change in fair value of financial instruments — — (86) Share in loss of associates and joint ventures — — (46) Loss on disposal of subsidiaries (10) — — Other expenses (76) (71) (27) Other Income 7 30 18 Total other income and expenses, net (79) (41) (227) |
Dividends paid and proposed
Dividends paid and proposed | 12 Months Ended |
Dec. 31, 2018 | |
Dividends paid and proposed | |
Dividends paid and proposed | 26. Dividends paid and proposed by the Group to the shareholders of the parent are presented below: 2016 2017 2018 Proposed, declared and approved during the year: 2018: nil — (2017: Final dividend for 2016: U.S.$ 11,520,798, Interim dividend for 2017: U.S.$ 26,113,788 2,207 2016: Final dividend for 2015: U.S.$ 30,210,153, Interim dividend for 2016: U.S.$ 39,943,003) 4,843 Paid during the period*: 2018: nil — (2017: Final dividend for 2016: U.S.$ 11,520,798, Interim dividend for 2017: U.S.$ 26,113,788 2,148 2016: Final dividend for 2015: U.S.$ 30,210,153, Interim dividend for 2016: U.S.$ 39,943,003) 4,628 Proposed for approval (not recognized as a liability as of December 31): 2018: nil — 2017: nil — 2016: Final dividend for 2016: U.S.$ 11,513,436 679 Dividends payable as of December 31 — — — * |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2018 | |
Income tax | |
Income tax | 27. The Company is incorporated in Cyprus under the Cyprus Companies Law, but the business activity of the Group and joint ventures is subject to taxation in multiple jurisdictions, the most significant of which include: Cyprus The Company is subject to 12.5% corporate income tax applied to its worldwide income. Gains from the sale of securities/titles (including shares of companies) either in Cyprus or abroad are exempt from corporate income tax in Cyprus. Capital gains tax is levied at a rate of 20% on profits from disposal of immovable property situated in Cyprus or of shares in companies which own immovable property situated in Cyprus (unless the shares are listed on a recognized stock exchange). Dividends received from a non-resident (foreign) company are exempt from the levy of defence contribution if either the dividend paying company derives at least 50% of its income directly or indirectly from activities which do not lead to investment income (“active versus passive investment income test” is met) or the foreign tax burden on the profit to be distributed as dividend has not been substantially lower than the Cypriot corporate income tax rate (i.e. lower than 6.25%) at the level of the dividend paying company (“effective minimum foreign tax test” is met). The Company has not been subject to defence tax on dividends received from abroad as the dividend paying entities are engaged in operating activities . The Russian Federation The Company’s subsidiaries incorporated in the Russian Federation are subject to corporate income tax at the standard rate of 15% applied to income received from Russia government bonds and 20% applied to their other taxable income. Withholding tax of 15% is applied to any dividends paid out of Russia, reduced to as low as 5% for some countries (including Cyprus), with which Russia has double-taxation treaties. Kazakhstan The Company’s subsidiary incorporated in Kazakhstan is subject to corporate income tax at the standard rate of 20% applied to their taxable income. Deferred income tax assets and liabilities as of December 31, 2018 and 2017, relate to the following: Consolidated statement of Consolidated statement of financial position as of comprehensive income for the December 31, year ended 2018 2017 2018 2017 Intangible assets (678) (719) 59 65 Trade and other payables 181 166 (7) 36 Trade and other receivables 31 101 (74) (37) Loans issued 69 48 (2) 21 Taxes on unremitted earnings (253) (184) (69) (109) Other 64 7 36 24 Net deferred income tax asset/(liability) (586) (581) (57) — including: Deferred tax asset 157 245 Deferred tax liability (743) (826) Deferred tax assets and liabilities are not offset because they do not relate to income taxes levied by the same tax authority on the same taxable entity. Reconciliation of deferred income tax asset/(liability), net: 2016 2017 2018 Deferred income tax asset/(liability), net as of January 1 (834) (581) (581) Impact of adopting IFRS 9 ( Note 2.3(e) ) — — 49 Effect of acquisitions of subsidiaries — — 3 Deferred tax benefit/(expense) 253 — (57) Deferred income tax asset/(liability), net as of December 31 (581) (581) (586) As of December 31, 2018 the Group does not intend to distribute a portion of its accumulated unremitted earnings in the amount of 3,212 (2017 – 2,473). The amount of tax that the Group would pay to distribute them would be 161 (2017 – 124). Unremitted earnings include all earning that were recognized by the Group’s subsidiaries and that are expected to be distributed to the holding company. For the year ended December 31 income tax expense included: 2016 2017 2018 Total tax expense Current income tax expense (871) (698) (818) Deferred tax benefit/(expense) 253 — (57) Income tax expense for the year (618) (698) (875) Theoretical and actual income tax expense is reconciled as follows: 2016 2017 2018 Profit before tax 3,107 3,840 4,501 Theoretical income tax expense at the domestic rate in each individual jurisdiction (278) (370) (479) (Increase)/decrease resulting from the tax effect of: Non-taxable income 39 12 70 Non-deductible expenses (269) (222) (388) Income tax associated with earnings of foreign subsidiaries (95) (109) (70) Unrecognized deferred tax assets (15) (9) (8) Total income tax expense (618) (698) (875) During the year ended December 31, 2018 the Group did not recognize deferred tax assets related to the tax loss carry forward in the amount of 8 (2017 – 9, 2016 - 15) because the Group did not believe that the realization of the related deferred tax assets is probable. |
Commitments, contingencies and
Commitments, contingencies and operating risks | 12 Months Ended |
Dec. 31, 2018 | |
Commitments, contingencies and operating risks | |
Commitments, contingencies and operating risks | 28. Operating environment Russia’s economy has been facing significant challenges for the past few years due to the combined effect of the ongoing crisis in Eastern Ukraine, the deterioration of Russia's relationships with many Western countries, the economic and financial sanctions imposed in connection with these events on certain Russian companies and individuals, as well as against entire sectors of Russian economy, by the U.S., EU, Canada and other countries, a steep decline in oil prices, a record weakening of the Russian ruble against the U.S. dollar, a lack of access to financing for Russian issuers, capital flight and a general climate of political and economic uncertainty, among other factors. The Russian economy contracted both in 2015 and in 2016, although it returned to modest growth in 2017 and 2018. During 2014-2016, the population’s purchasing power has decreased due to weakening of the ruble, basic necessities such as food products and utilities became more expensive. Against backdrop in inflation, household consumption decreased in 2015 versus 2014, although it subsequently rebound somewhat in absolute terms. Nevertheless, consumer spending generally remains cautious and consumer confidence is far from its peaks. A further decline in real disposable income and consumer purchasing power is expected in connection with the recent increase of VAT in Russia effective as of the beginning of 2019. A prolonged economic slowdown in Russia could have a significant negative effect on consumer spending in Russia and, accordingly, on the Group’s business. As a result of the challenging operating environment in Russia, the Group has experienced slower payment volume growth. Further adverse changes in economic conditions in Russia could adversely impact the Group’s future revenues and profits and cause a material adverse effect on its business, financial condition and results of operations. Some of Group’s agents, merchants or Tochka’s SME clients, although mostly not incorporated in Crimea, may have operations there. Further, before the introduction of the corresponding sanctions the Group has had direct contacts with several Crimea banks that are registered as financial legal entities in Crimea, currently such banks may continue to operate as the Group’ agents or merchants. On December 19, 2014, U.S. President Obama signed an executive order imposing comprehensive sanctions on the Crimea region. The EU has similarly introduced a broad set of sanctions through the Council Regulation (EU) 692/2014 as amended by Regulation (EU) 1351/2014. To date, management does not believe that any of the current sanctions as in force limit the Group’ ability to work with entities that may have operations in Crimea or operate in Crimea. Nevertheless, if the the Group is deemed to be in violation of any sanctions currently in place or if any new or expanded sanctions are imposed on Russian businesses operating in Crimea by the U.S., EU, or other countries, the Group’s business and results of operations may be materially adversely affected. In the ordinary course of the Group’s business, it may accept payments from consumers to or otherwise indirectly interact with certain entities that are the targets of U.S. sanctions. The Group operates primarily within the Russian financial system and, accordingly, many of its customers have accounts at banks in Russia. The U.S., EU and other countries have adopted a package of economic restrictive measures imposing certain sanctions on the operations of various Russian banks, including VTB Bank and Gazprombank. Some of the Group’s subsidiaries hold bank accounts at the aforementioned banks as well as have overdrafts and bank guarantees with VTB Bank. A number of Russian banks, including Bank Rossiya, SMP Bank, Investcapitalbank and Sobinbank have been designated by OFAC and are subject to U.S. economic sanctions. In addition, Tempbank was designated due to its dealings with the Syrian government. U.S. sanctions may be extended to any person that U.S. authorities determine has materially assisted, or provided financial, material, or technological support for, or goods or services to or in support of, any sanctioned individuals or entities. For example, the Group may be associated with U.S.- designated banks due to accepting payments for them from consumers in the ordinary course of business, even though the Group may not have any direct contract relationships with them. There can be no assurance that the U.S. Government would not view such activities as meeting the criteria for U.S. economic sanctions. In addition, because of the nature of the Group’s business, management does not generally identify the Group’s customers where there is no express requirement to do so under Russian anti-money laundering legislation. Therefore, management is not always able to screen them against the Specially Designated Nationals and Blocked Persons List published by OFAC and other sanctions lists. While management believes that the Group’s indirect interaction with sanctioned Russian banks and potential interaction with designated individuals, as well as other interactions the Group may potentially have with entities and persons that may be subject to U.S. or EU economic and financial sanctions does not contravene any law, the Group’s business and reputation could be adversely affected if the U.S. government were to designate the Group as a blocked party and extend such sanctions to it. The executive orders authorizing the U.S. sanctions provide that persons may be designated if, inter alia, they materially assist, or provide financial, material, or technological support for goods or services to or in support of, blocked or designated parties. EU financial sanctions prohibit the direct and indirect making available of funds or economic resources to or for the benefit of sanctioned parties. Investors may also be adversely affected if the Group is so designated, resulting in their investment in the Group’s securities being prohibited or restricted. Furthermore, under those circumstances, some U.S. or EU investors may decide for legal or reputational reasons to divest their holdings in the Group or not to purchase its securities in the first place. Management is aware of initiatives by U.S. governmental entities and U.S. institutional investors, such as pension funds, to adopt or consider adopting laws, regulations, or policies prohibiting transactions with or investment in, or requiring divestment from, entities doing business with certain countries. There can be no assurance that the foregoing will not occur or that such occurrence will not have a material adverse effect on the Group’s share price. Even if the Group is not subjected to U.S. or other economic sanctions, its participation in the Russian financial system and indirect interaction with sanctioned banks and potential interaction with designated individuals may adversely impact the Group’s reputation among investors. There is also a risk that other entities with which the Group does engage in business, or individuals or entities associated with them, are, or at any time in the future may become, subject to sanctions. The Group contracts with some of international merchants in U.S. dollars and other currencies such as Euros. Recently it started to encounter difficulties in conducting such transactions, even with respect to largest and most well-known international merchants, due to the refusal of an increasing number of the Group’s U.S. relationship banks and the correspondent U.S. banks of the Group’s non-U.S. relationship banks to service U.S. dollar payments. A direct or correspondent relationship with a U.S. bank is necessary in order for any non-U.S. company to transact in U.S. dollars. Reasons the Group has been given to explain these changes in approach by the banks mainly referred to changes in internal know-your-customer procedures, limits on certain types of merchants and certain jurisdictions, and other internal policies, which the management believes might be a result of the increasing negative sentiment towards Russia on part of U.S. banks, among other factors, even with respect to transactions and relationships that do not present any potential violation of any applicable sanctions. Even though the Group still maintains a number of U.S. dollar accounts with various financial institutions, at the same time the Group is already conducting a portion of U.S. dollar transactions with international merchants in other currencies, bearing additional currency conversion costs. No assurance can be given that such institutions or their respective correspondent banks in the U.S. will not similarly refuse to process the Group’s transactions for similar reasons or otherwise, thereby further increasing the currency conversion costs that the Group has to bear or that international merchants will agree to accept payments in any currency, but the U.S. dollar in the future. If the Group is not able to conduct transactions in U.S. dollars, it may bear significant currency conversion costs or lose some merchants who will not be willing to conduct transactions in currencies other than the U.S. dollars, and the Group’s business, financial condition and results of operations may be materially adversely affected. Management can give no assurance that similar issues would not arise with respect to the Group’s transactions in other currencies, such as the Euro, which could have similarly adverse consequences. In recent years, the CBR has considerably increased the intensity of its supervision and regulation of the Russian banking sector. Historically, the revocation of banking licenses by the CBR has been a relatively rare event mostly occurring to local banks with little assets and little or no significance for the banking sector as a whole. Starting October 2013, however, the CBR has launched a campaign aimed at cleansing the Russian banking industry, revoking the licenses from an unusually high number of banks (including significant banks such as Ugra, Master-Bank, Investbank, ProBusinessBank, Svyaznoy Bank, Vneshprombank, Tatfondbank and others) on allegations of money laundering, financial statements manipulation and other illegal activities, as well as inability of certain banks to discharge their financial obligations, which resulted in turmoil in the industry, instigated bank runs on a number of Russian credit institutions, and severely undermined the trust that the Russian population had with private banks. In addition, in the course of 2017 three of Russia's largest private banks, Otkritie Bank, Binbank and Promsvyazbank, were all bailed out and taken over by the CBR through the newly established Banking Industry Consolidation Fund, since all of them were allegedly unable to perform their obligations as they fell due for various reasons. License revocations have continued throughout 2018 and early 2019, again with some major players impacted. The private banking sector in Russia, always relatively minor compared to state players like Sberbank and VTB to begin with, has contracted severely as a result. This can be expected to result in reduced competition in the banking sector (while at the same time putting alternative payment solution providers such as itself in the position of having to predominantly compete with the government itself), increased inflation and a general deterioration of the quality of the Russian banking industry. It could be expected that the difficulties currently faced by the Russian economy could result in further collapses of Russian banks. With few exceptions (notably the state-owned banks), the Russian banking system suffers from weak depositor confidence, high concentration of exposure to certain borrowers and their affiliates, poor credit quality of borrowers and related party transactions. Current economic circumstances in Russia are putting stress on the Russian banking system. Combined with heightened interest rates – with the key interest rate of the CBR currently at 7.75% per annum (but rising as high as 17% over the course of 2014-2015) – these circumstances decrease the affordability of consumer credit, putting further pressure on overall consumer purchasing power. In addition, these factors could further tighten liquidity on the Russian market and add pressure onto the ruble. The Group provides payment processing services to a number of merchants in the betting industry. Processing payments to such merchants represents a relatively significant portion of the Group’s revenues. Processing such payments generally carries higher margins than processing payments to merchants. Moreover, the repayment of winnings by such merchants to customers also serves as an important and economically beneficial Qiwi Wallet reload channel and new customer acquisition tool, contributing to the sustainability and attractiveness of the Group’s ecosystem. The Group’s operating results will continue to depend on merchants in the betting industry and their use of the Group’s services for the foreseeable future. The betting industry is subject to extensive and actively developing regulation in Russia, as well as increasing government scrutiny. Under amendments to the Russian betting laws introduced in 2014 (see “Regulation”), in order to engage in the betting industry, a bookmaker has to become a member of a self-regulated organization of bookmakers and abide by its rules, and any and all interactive bets may be only accepted through an Interactive Bets Accounting Center (TSUPIS) set up by a credit organization together with a self-regulated association of bookmakers. In 2016 QIWI Bank established a TSUPIS together with one of the self -regulated associations of bookmakers in order to be able to accept such payments. If any merchants engaged in the betting industry are not able or willing to comply with the Russian betting legislation or if they decide to cease their operations in Russia for regulatory reasons or otherwise or shift to another payment processor (TSUPIS), the Group would have to discontinue servicing them and would lose associated volumes and income. Moreover, if the Group is found to be in non-compliance with any of the requirements of the applicable legislation, it could not only become subject to fines and other sanctions, but could also have to discontinue to process transactions that are deemed to be in breach of the applicable rules and as a result lose associated revenue streams. Effective January 1, 2018, relevant legislation has been supplemented with the concept of government blacklisting of betting merchants that have been found to be in violation or allegedly are not in compliance with applicable Russian laws, and the requirement for credit institutions to block any payments to such blacklisted merchants. The Group has already experienced a number of instances where certain providers have been blacklisted and management observes that this trend is gaining momentum and further blacklistings are likely. Any of these developments may result in the contraction of the betting sector or the Group’s share in this market and therefore adversely affect the revenues, margins and payment net revenue yield of our E-commerce market vertical and overall Payment Services segment as well as decrease the attractiveness of the Group’s ecosystem to some of the consumers and consequently overall negatively affect consumer engagement with the Group’s services. Furthermore, if any of the merchants engaged in the betting industry are blacklisted, the Group’s subsidiaries, which process the payments for betting merchants may be found to be in violation of the relevant laws, whether due to misinterpretation of applicable requirements, failure to take timely action, or for any other reason, and could become so blacklisted as well, which could substantially hinder the Group’s operations. Taxation Russian and the CIS’s tax, currency and customs legislation is subject to varying interpretations, and changes, which can occur frequently. Management’s interpretation of such legislation as applied to the transactions and activity of the Group may be challenged by the relevant regional and federal authorities. Recent events within Russia and the CIS which are discussed below suggest that the tax authorities are taking a more assertive position in their interpretation of the legislation and assessments and as a result, it is possible that transactions and activities that have not been challenged in the past may be challenged in the future. The Company may encounter difficulties in obtaining lower rates of Russian withholding income tax envisaged by the Russia-Cyprus double tax treaty for dividends distributed from Russia. Dividends paid by a Russian legal entity to a foreign legal entity are generally subject to Russian withholding income tax at a rate of 15%, although this tax rate may be reduced under an applicable double tax treaty. The Company intends to rely on the Russia-Cyprus double tax treaty. The tax treaty allows reduction of withholding income tax on dividends paid by a Russian company to a Cypriot company to 10% provided that the following conditions are met: (i) the Cypriot company is a tax resident of Cyprus within the meaning of the tax treaty; (ii) the Cypriot company is the beneficial owner of the dividends; (iii) the dividends are not attributable to a permanent establishment of the Cypriot company in Russia; and (iv) the treaty clearance procedures are duly performed. This rate may be further reduced to 5% if the direct investment of the Cypriot company in a Russian subsidiary paying the dividends is at least EUR 100,000. Although the Group will seek to claim treaty protection, there is a risk that the applicability of the reduced rate of 5% or 10% may be challenged by Russian tax authorities. As a result, there can be no assurance that the Company would be able to avail itself of the reduced withholding income tax rate in practice. Specifically, Cypriot holding company may incur a 15% withholding income tax at source on dividend payments from Russian subsidiaries if the treaty clearance procedures are not duly performed at the date when the dividend payment is made. In this case the Company may seek to claim as a refund the difference between the 15% tax withheld and the reduced rate of 10% or 5% as appropriate. However, there can be no assurance that such taxes would be refunded in practice. Similar approach is applied to dividends received from Russian subsidiaries by the Company’s non-Russian subsidiaries. Furthermore, a number of amendments had been made to the Russian tax legislation introducing, amongst others, the concept of beneficial ownership. Under this concept, double tax treaty benefits are only available to the recipient of income from Russian sources, if such recipient is the beneficial owner of the relevant income. Foreign entities that do not qualify as beneficial owners may not claim double tax treaty relief even if they are residents in a double tax treaty country. For these purposes, the beneficial owner is defined as a person holding directly, through its direct and/or indirect participation in other organizations or otherwise, the right to own, use or dispose of income, or the person on whose behalf another person is authorized to use and/or dispose of such income. In order to determine whether a foreign entity is a beneficial owner of income, it is necessary to take into account the functions performed by such foreign entity, as well as the risks borne by it. Entities are not recognized as beneficial owners of income if they have limited authorities to use or dispose income received from Russian sources, perform agency or other similar functions in favour of third parties, not taking any risks or transfer such income (either partially or in full) to third parties that are not eligible to double tax treaty benefits. Introduction of the concept of beneficial ownership may result in the inability of the foreign companies within the Group to claim benefits under a double taxation treaty through structures which historically have benefited from double taxation treaty protection in Russia. This may be the case if the recipient of the income is not recognized as its beneficial owner, look-through approach cannot be applied or is challenged by the tax authorities. Recent court cases demonstrate that the Russian tax authorities actively challenge application of double tax treaty benefits retroactively (i.e. prior to concept of beneficial ownership was introduced in the Russian Tax Code) on the grounds that double tax treaties already include beneficial ownership requirement to allow application of reduced tax rates or exemptions. In these cases the Russian tax authorities obtained relevant information by means of information exchange with the foreign tax authorities. The imposition of additional tax liabilities as a result of the application of this rule to transactions carried out by the Group may have a material adverse effect on its business, financial condition and results of operations. In addition, on November 27, 2017 the Federal Law No. 340-FZ introducing country-by-country reporting (“CbCR”) requirements was published. The mandatory filing of CbCR is, in general, in line with the Organization for Economic Co-operation and Development (“OECD”) recommendations within the Base Erosion and Profit Shifting (“BEPS”) initiative. The law has taken effect on the date of its official publication, and its provisions apply to financial years starting in 2017 (except for the provisions regarding the national documentation). These amendments would require multinational corporate enterprise groups with consolidated revenues of over certain threshold to submit annual CbCR, as well as certain other reporting forms detailing multinational corporate enterprises groups operations (locally and globally, respectively), as well as transfer pricing methodologies applied to intra-group transactions. Thus, if the Group reaches the reporting threshold in Russia (over RUB 50 billion), or alternatively in any other jurisdiction of presence (e.g. in Cyprus, where the Decree issued by the Cyprus Minister of Finance on December 30, 2016 introduced a mandatory CbCR for multinational enterprise groups generating consolidated annual turnover exceeding EUR 750 million) the Group may be liable to submit relevant CbCR. It is unclear at the moment how the above measures will be applied in practice by the Russian tax authorities and courts. Management does not consider the Company to be subject to CbCR requirements. However, taking into consideration the possibility of further developments in Russia as well as international legislation, the Group may become subject to the above requirements. It is important to note that the above changes and amendments to the Russian Tax Code introduced by the law do not replace already existing transfer pricing documentation requirements. On November 24, 2016, the OECD published the multilateral instrument (“MLI”) which introduces new provisions to existing double tax treaties limiting the use of tax benefits provided thereof. For example, the reduced rate on dividends provided under a double tax treaty shall be denied if the conditions for holding equity interest or shares by the time of the dividend payout are met over less than a 365-day period. Thus, when determining tax consequences several sources of legislation will now need to be considered, namely the domestic tax law, double tax treaties and MLI provisions, which have been adopted by states-parties to the relevant double tax treaty. To date the MLI has not been ratified by Russia. The draft law on ratification of the MLI has been submitted to the Russian State Duma (the low chamber of the parliament). However, it is likely that the application of the double tax treaties, which Russia is a party to, i.a. the double tax treaty between Russia and Cyprus, will be significantly limited by the MLI. Russian transfer pricing legislation may require pricing adjustments and impose additional tax liabilities with respect to all controlled transactions. The existing transfer pricing rules became effective from January 1, 2012. Under these rules the Russian tax authorities are allowed to make transfer-pricing adjustments and impose additional tax liabilities in respect of certain types of transactions (“controlled” transactions). The list of the “controlled” transactions includes transactions with related parties (with several exceptions such as guarantees between Russian non-banking organizations and interest-free loans between Russian related parties) and certain types of cross border transactions. Starting from 2019 transactions between Russian tax residents will be controlled only if the amount of income from the transactions between these parties within one year exceeds RUB 1 billion and one of the conditions stipulated in Article 105.14 of Russian Tax Code (e.g., the parties to the transaction apply different corporate income tax rates) is met. Certain other transactions, such as foreign trade transactions in commodities traded on global exchanges, transactions with parties from blacklisted countries, transactions between related parties under participation of the independent intermediary, as well as transactions between the Russian tax resident and foreign tax resident (related parties) remain under control in case the amount of income from transactions between these parties within one year exceeds RUB 60 million threshold;. The new rules apply to transactions, under which income (expenses) from such controlled transactions are recognised after January 1, 2019. As a side effect, the Russian tax authorities who are entitled to perform tax audits of Russian taxpayers with focus on compliance with existing transfer pricing legislation will no longer be involved in tax audit of transactions between Russian parties due to increased limits on transactions between Russian tax residents but they will be able to pay more attention to cross-border transactions. It is therefore possible that the Group entities may become subject to transfer pricing tax audits by tax authorities in the foreseeable future. Due to the uncertainty and lack of established practice of application of the Russian transfer pricing legislation the Russian tax authorities may challenge the level of prices applied by the Group under the “controlled” transactions (including certain intercompany transactions) or challenge the methods used to prove prices applied by the Group, and as a result accrue additional tax liabilities. If additional taxes are assessed with respect to these matters, they could have a material adverse effect on our business, financial condition and results of operations. Risk of cybersecurity breach The Group stores and/or transmits sensitive data, such as credit or debit card numbers, mobile phone numbers and other identification data, and the Company has ultimate liability to its customers for the failure to protect this data. The Company has experienced breaches of its security by hackers in the past, and breaches could occur in the future. In such circumstances, the encryption of data and other protective measures have not prevented unauthorized access and may not be sufficient to prevent future unauthorized access. For example, in January 2014 the Group has discovered certain unauthorized activity in a number of wallet accounts. Although management does not believe that any confidential customer account data was compromised as a result of the activity, the Company incurred a loss of RUB 88 million. Rapida LTD (prior to its merger with and into QIWI Bank) also experienced several security breaches prior to acquisition of the company. Any future breach of the system, including through employee fraud, may subject the Company to material losses or liability, including fines and claims for unauthorized purchases with misappropriated credit or debit card information, identity theft, impersonation or other similar fraud claims. A misuse of such sensitive data or a cybersecurity breach could harm the Group’s reputation and deter clients from using electronic payments as well as kiosks and terminals generally and any of the Group’s services specifically, increase operating expenses in order to correct the breaches or failures, expose the Group to uninsured liability, increase risk of regulatory scrutiny, subject the Group to lawsuits, result in the imposition of material penalties and fines by state authorities and otherwise materially adversely affect the Group’s business, financial condition and results of operations. Risk assessment The Group’s management believes that its interpretation of the relevant legislation is appropriate and is in accordance with the current industry practice and that the Group’s currency, customs, tax and other regulatory positions will be sustained. However, the interpretations of the relevant authorities could differ and the maximum effect of additional losses, if the authorities were successful in enforcing their different interpretations, could be significant, and amount up to RUB 2.7 billion that was assessed by the Group as of December 31, 2018 (RUB 2.5 billion as of December 31, 2017). Insurance policies The Group holds no insurance policies in relation to its assets, operations, or in respect of public liability or other insurable risks. There are no significant physical assets to insure. Management has considered the possibility of insurance of business interruption in Russia, but the cost of it outweighs the benefits in management’s view. Legal proceedings In the ordinary course of business, the Group is subject to legal actions and complaints. Management believes that the ultimate liability, if any, arising from such actions or complaints will not have a material adverse effect on the financial condition or the results of future operations of the Group. Know-your-client requirements in Russia The Group’s business is currently subject to know-your-client requirements established by Federal Law of the Russian Federation No. 115‑FZ “On Combating the Legalization (Laundering) of Criminally Obtained Income and Funding of Terrorism”, dated August 7, 2001, as amended, or the Anti-Money Laundering Law. Based on the Anti-Money Laundering Law management distinguishes three types of consumers based on their level of identification, being anonymous, identified through a simplified procedure and fully identified. All these types of consumers face varying monetary and non-monetary restrictions in terms of the transactions they may perform and electronic money account balances they may hold, with fully identified consumers enjoying the most privileges. The key difference between the simplified and the full identification procedures is that the simplified identification can be performed remotely. The remote identification requires the verification of certain data provided by consumers against public databases. Albeit the Group performs all necessary steps to collect data and performs the relevant identification procedures either personally or through such or additional public databases, the Group can not guarantee that it will be able to collect all necessary data to perform the identification procedure in full or that the data the users provide it for the purposes of identification will not contain any mistakes or misstatements and will be correctly matched with the information available in the governmental databases. At the end of 2017, a new law was enacted enabling "full" identification performed remotely as well, to the extent the relevant individual has previously undergone identification by an eligible credit institution and has consented for his data to be included in a database; however, as of the date of this annual report such identification method has not been fully developed either. Thus, current situation could cause the Group to be in violation of the identification requirements. In case management is forced not to use the simplified identification procedure until the databases are fully running or in case the identification requirements are further tightened, it could negatively affect the number of consumers and, consequently, volumes and revenues . Additionally, Russian anti-money laundering legislation is in a constant state of development and is subject to varying interpretations. If the Group is found to be in non-compliance with any of its requirements, it could not only become subject to fines and other sanctions, but could also have to discontinue to p |
Balances and transactions with
Balances and transactions with related parties | 12 Months Ended |
Dec. 31, 2018 | |
Balances and transactions with related parties | |
Balances and transactions with related parties | 29. Customers accounts payable in the amount of 51 as of December 31, 2018 (December 31, 2017 – 97) comprise of cash held at bank account by related parties, including key management personnel and the companies under their control or control of their close family members. Amounts owed (accounts payable) to related parties comprising of 207 as of December 31, 2018 (December 31, 2017 - 18) mainly consist of the contribution payable to the Group’s associate. Amounts owed (accounts receivable) by related parties comprising of 180 as of December 31, 2018 mainly consist of the compensation receivable from the Group’s associate. Benefits of key management and Board of Directors generally comprise of short-term benefits amounted to 120 during the year ended December 31, 2018 (115- for the year 2017, 122 - for the year 2016) and share-based payments amounted to 36 during the year ended December 31, 2018 (22 - for the year 2017, 14 - for the year 2016). As of December 31, 2016 some of the overdraft facilities were guaranteed by the Group’s CEO. There are no such overdraft facilities as of December 31, 2018 and December 31, 2017. |
Risk management
Risk management | 12 Months Ended |
Dec. 31, 2018 | |
Risk management | |
Risk management | 30. The main risks that could adversely affect the Group’s financial assets, liabilities or future cash flows are foreign exchange risk, liquidity and credit risk. Management reviews and approves policies for managing each of the risks which are summarized below. Foreign exchange risk Foreign exchange risk is the risk that fluctuations in exchange rates will adversely affect items in the Group’s statement of comprehensive income, statement of financial position and/or cash flows. Foreign currency denominated assets and liabilities give rise to foreign exchange exposure. During the last public offering, the Company increased its issued share capital and received approximately U.S. $89 mln, of which U.S. $30 mln remained at the account of the Company as of December 31, 2018 after part of these funds was spent for merges and acquisitions (M&A) and certain operational needs in the normal course of the business. The major part of these proceeds is accounted as other short-term bank deposits in cash and cash equivalents as of December 31, 2018 and as of December 31, 2017. Due to appreciation of U.S. $ rate against RUB for the year ended December 31, 2018 and depreciation for the year ended December 31, 2017 the Group recorded foreign exchange gain in the amount of 433 and loss in the amount of 236 respectively. The Group intends to use these funds for settlement of its U.S. $ denominated obligations that will arise from its M&A activity or for capital expenditures in the normal course of business in the future. Foreign currency sensitivity The following tables demonstrate the sensitivity to a reasonably possible change in US Dollar and Euro exchange rates against Ruble, with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the carrying amount of monetary assets and liabilities denominated in US Dollar and Euro when these currencies are not functional currencies of the respective Group subsidiary. The Group’s exposure to foreign currency changes for all other currencies is not material. Effect on profit before tax change in US Dollar Gain/(loss) 2018 +14% 329 -14% (329) 2017 +11% 83 -11% (83) Effect on profit before tax change in Euro Gain/(loss) 2018 +14% 196 - 14% (196) 2017 +12.5% 36 - 12.5% (36) Liquidity risk and capital management The Group uses cash from shareholders’ contributions, has sufficient cash and does not have any significant outstanding debt other than interbank debt with short maturities (classified as due to banks). Deposits received from agents are also due on demand, but are usually offset against future payments processed through agents. The Group expects that agent’s deposits will continue to be offset against future payments and not be called by the agents. Сustomer accounts and amounts due to banks, trade and other payables are due on demand. Since 2014 Russian economy has been going through a period of macroeconomic slowdown and liquidity shortage in a number of markets (including those in which the Group operates), caused among other things by falling oil prices, ruble devaluation and the economic sanctions regime. Banks and other entities in Russia decreased credit limits in their everyday operations and it was noted that the Group’s merchants and partners also started and in certain cases continued to request from the Group larger collaterals to hedge their risks. The Group was able to manage these conditions and requirements to date, though the liquidity shortage in the market if exacerbated may have further negative effects on the Group’s operations, which cannot be now reliably estimated. According to CBR requirements, a bank’s capital calculated based on CBR instruction should be not less than certain portion of its risk-adjusted assets. As of December 31, 2018, QIWI Bank JSC’s capital ratio is above the minimal level required of 8%. The Group monitor the fulfillment of requirements on a daily basis and send the reports to CBR on a monthly basis. During the years ended December 31, 2018 and 2017 QIWI Bank JSC met the capital adequacy requirements. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. Capital includes share capital, share premium, additional paid-in capital, other reserves and translation reserve. To maintain or adjust the capital structure, the Group may make dividend payments to shareholders, return capital to shareholders or issue new shares. Currently, the Group requires capital to finance its growth, but it generates sufficient cash from its operations. The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments. Due: More than a Total On demand Within a year year Trade and other payables (Note 18) 27,499 27,499 — — Customer accounts and amounts due to banks (Note 19) 18,105 16,002 1,866 237 Total as of December 31, 2018 45,604 43,501 1,866 237 Due: More than a Total On demand Within a year year Trade and other payables (Note 18) 19,599 19,599 — — Customer accounts and amounts due to banks (Note 19) 3,182 3,071 111 — Total as of December 31, 2017 22,781 22,670 111 — Credit risk Financial assets of the Group, which potentially subject us and our subsidiaries, joint ventures and associates to credit risk, consist principally of trade receivables, loans issued, cash and short-term investments. The Group sells services on a prepayment basis or ensures that its receivables are from customers with an appropriate credit history – large merchants and agents with sufficient and appropriate credit history. The Group’s receivables from merchants and others, except for agents, are generally non-interest-bearing and do not require collateral. Receivables from agents are interest-bearing and unsecured. The Group holds cash primarily with reputable Russian and international banks, including CBR, which management considers having minimal risk of default, although credit ratings of Russian and Kazakh banks are generally lower than those banks in more developed markets. Short-term investments include fixed-rate debt instruments issued by Russian Government. An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The carrying amount of accounts receivable, net of allowance for impairment of receivables, represents the maximum amount exposed to the credit risk for this type of receivables (Note 13). Set out below is the information about the credit risk exposure on the Group’s trade and other receivables (exept for advances issued) using a provision matrix: December 31, 2018 Days past due Current and <30 days 30-60 days 61-90 days >91 days Total Expected credit loss rate % % % % Exposure at default 7,672 96 22 331 8,121 Expected credit loss (20) (3) (8) (323) (354) The Group evaluates the concentration of risk with respect to trade and other receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The table below demonstrates the largest counterparties’ balances, as a percentage of respective totals: Trade and other receivables As of December 31, As of December 31, 2017 2018 Concentration of credit risks by main counterparties, % from total amount Top 5 counterparties 47 % 40 % Others 53 % 60 % The Group is also exposed to substantial credit risk through our payment-by-installment card project SOVEST, where Qiwi Bank JSC serves as a lender and bears all credit risk on outstanding loans. When granting loans on SOVEST cards, the Group uses automated scoring solvency models and evaluate individually each application for the probability of fraud and social default. It uses the information from the major credit bureaus as well as certain other data including the evaluation of the potential effects of changes in macroeconomic conditions and regional affiliation of the applicant in order to approve or reject the application. Qiwi Bank can then use manual verification for determining the credit limit for the approved applicants. Qiwi Bank runs advanced forward-looking models that are based on the analysis of the transactional behavior of individual customers in order to predict and stimulate usage as well as prevent fraud, and Qiwi Bank uses a migration matrix approach for calculation of the loan loss provisions. Qiwi Bank distributes its installment cards to customers on a federal scale, across all regions of Russia. Our target audience includes Russian citizens with the permanent registration and aged 18 to 70 years. Qiwi Bank also uses a variety of distribution channels and strategies to obtain clients and therefore believe that its credit risk is broadly diversified. The management established a credit committee that develops and approves general principles for lending and takes special measures to mitigate credit risk such as a reduction of the credit limits for unreliable clients and more advanced scoring models for the new borrowers. See Note 12 for the carrying amount of loans issued and the maximum amount exposed to the credit risk for these type of assets. |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2018 | |
Financial instruments | |
Financial instruments | 31. The Group’s principal financial instruments consisted of loans receivable, trade and other receivables, customer accounts and amounts due to banks, trade and other payables, cash and cash equivalents, long and short-term debt instruments and reserves at CBR. The Group has various financial assets and liabilities which arise directly from its operations. During the year, the Group did not undertake trading in financial instruments. The fair value of the Group’s financial instruments as of December 31, 2018 and 2017 is presented by type of the financial instrument in the table below: As of December 31, 2017* As of December 31, 2018 Carrying Fair Carrying Fair amount value amount value Financial assets Debt instruments AC 1,804 1,827 1,929 1,931 Long-term loans AC 164 164 159 159 Long-term loans FVPL — — 71 71 Total financial assets 1,968 1,991 2,159 2,161 * The balances of financial instruments as of December 31,2017 are classified under IFRS 9. Financial instruments used by the Group are included in one of the following categories: - AC – accounted at amortized cost; - FVPL – accounted at fair value through profit or loss. Carrying amounts of cash and cash equivalents, short-term loans issued, accounts receivable and payable, reserves at CBR and customer accounts and amounts due to banks approximate their fair values largely due to short-term maturities of these instruments. Debt instruments of the Group consist of RUB nominated government bonds with interest rate 6.4% - 7.5% and maturity up to May 2020. All debt instruments are pledged (Note 28). Long-term loans generally represent RUB nominated loans to Russian legal entities and have a maturity up to nine years. For the purpose of fair value measurement of these loans the Group uses comparable marketable interest rate which is in range of 9‑35%. The following table provides the fair value measurement hierarchy of the Group’s financial instruments to be accounted or disclosed at fair value: Fair value measurement using Quoted prices Significant Significant in active observable unobservable markets inputs inputs Date of valuation Total (Level 1) (Level 2) (Level 3) Assets accounted at fair value through profit or loss Long-term loans December 31, 2018 71 — — 71 Assets for which fair values are disclosed Debt instruments December 31, 2018 1,931 1,931 — — Long-term loans December 31, 2018 159 — — 159 Assets for which fair values are disclosed Debt instruments December 31, 2017 1,827 1,827 — — Long-term loans December 31, 2017 164 — — 164 There were no transfers between Level 1 and Level 2 fair value measurements and no transfers into or out of Level 3 fair value measurements during the year ended December 31, 2018. The Group uses the following IFRS hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: · Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities; · Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly; · Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. Valuation methods and assumptions The fair value of the financial assets and liabilities are evaluated at the amount the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Long-term fixed-rate loans issued and debt instruments are evaluated by the Group based on parameters such as interest rates, terms of maturity, specific country and industry risk factors and individual creditworthiness of the customer. |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2018 | |
Share-based payments | |
Share-based payments | 32. 32.1. As of December 31, 2018, the Group has the following outstanding option plans: 2012 Employee Stock Option Plan 2015 Restricted Stock Unit Plan (ESOP) (RSU Plan) Adoption date October, 2012 July, 2015 Type of shares class B shares class B shares Number of options or RSUs reserved Up to 7 % of total amount of shares Up to 7 % of total amount of shares Exercise price Granted during: Granted during: Year 2012: U.S. $ 13.65 Year 2016: n/a Year 2013: U.S. $ 41.24 - 46.57 Year 2017: n/a Year 2014: U.S. $ 34.09 - 37.89 Year 2018: n/a Year 2017: U.S. $ 23.94 Exercise basis Shares Shares Expiration date December 2020 December 2022 Vesting period Up to 4 years Three vesting during up to 2 years Other major terms The options are not transferrable - The units are not transferrable - All other terms of the units under 2015 RSU Plan are to be determined by the Company's BOD or the CEO, if so resolved by the BOD, acting as administrator of the Plan In April 2018, QIWI plc established QIWI Employees Trust, which owns shares reserved for ESOP and RSU plans and transfers them to employees who exercise their options. The Trust is not a legal entity and major decisions relating to its activities are determined by QIWI plc. In these financial statements it is regarded as an extension of QIWI plc. 32.2. The following table illustrates the movements in share options during the year ended December 31, 2018: As of Forfeited Exercised As of December 31, Granted during during the during the December 31, 2017 the period period period 2018 2012 ESOP 1,528,140 — (11,159) — 1,516,981 2015 RSU Plan 545,378 807,300 (20,800) (518,859) 813,019 Total 2,073,518 807,300 (31,959) (518,859) 2,330,000 As of December 31, 2018 the Company has 1,516,981 options outstanding, all of which are vested, and 813,019 RSUs outstanding, of which 126,067 are vested and 686,952 are unvested. The weighted average price for share options exercised under RSU plan was nil. 32.3. The valuation of all equity-settled options granted are summarized in the table below: Weighted average Number Weighted fair value of Risk-free Expec- average per option/ Option plan/ options/ Dividend Volatility, interest ted term, share price RSU (U.S. Valuation Grant date RSUs yield,% % rate, % years (U.S. $) $) method 2012 ESOP 4,128,521 0-5.03% 28%-49.85% 0.29%-3.85% 2 - 4 28.10 7.14 Black-Scholes-Merton 2015 RSU Plan 1,903,008 0-5.70% 44.43%-64.02% 2.89%-4.34% 0 - 2 15.15 14.47 Binominal The forfeiture rate used in valuation models granted during the period is from 11.35 to 16%. It is based on historical data and current expectations and is not necessarily indicative of forfeiture patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. 32.4. The amount of expense arising from equity-settled share-based payment transactions for the year ended December 31, 2018 was 635 (2017 – 398, 2016 – 224). |
Principles underlying prepara_2
Principles underlying preparation of consolidated financial statements and Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Principles underlying preparation of consolidated financial statements | |
Basis of preparation | 2.1 The consolidated financial statements are prepared on a historical cost basis. The consolidated financial statements are presented in Russian rubles (“RUB”) and all values are rounded to the nearest million (RUB (000,000)) except when otherwise indicated. The Group’s subsidiaries maintain and prepare their accounting records and prepare their statutory accounting reports in accordance with domestic accounting legislation. Standalone financial statements of subsidiaries are prepared in their respective functional currencies (see Note 3.3 below). The Group accounts are prepared in accordance with the IFRS standards and interpretations, as published by the IASB. These consolidated financial statements are based on the underlying accounting records appropriately adjusted and reclassified for fair presentation in accordance with IFRS. IFRS adjustments include and affect but not limited to such major areas as consolidation, revenue recognition, accruals, deferred taxation, fair value adjustments, business combinations and impairment. |
Basis of consolidation | 2.2 The consolidated financial statements comprise the financial statements of QIWI plc and its subsidiaries as of December 31 each year. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: · Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee), · Exposure, or rights, to variable returns from its involvement with the investee, and · The ability to use its power over the investee to affect its returns. When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: · The contractual arrangement with the other vote holders of the investee, · Rights arising from other contractual arrangements, · The Group’s voting rights and potential voting rights. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group losses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, income, expenses and unrealized gains and losses resulting from intra-group transactions are eliminated in full, except for the foreign exchange gains and losses arising on intra-group loans. Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: · Derecognises the assets (including goodwill) and liabilities of the subsidiary. · Derecognises the carrying amount of any non-controlling interests, including any components of other comprehensive income attributable to them. · Recognises the fair value of the consideration received. · Recognises the fair value of any investment retained. · Recognises any surplus or deficit in profit or loss. · Reclassifies to profit or loss or retained earnings, as appropriate, the amounts previously recognized in OCI as would be required if the Group had directly disposed of the related assets or liabilities. |
Changes in accounting policies | 2.3 The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended December 31, 2017, except for the adoption of the new and amended IFRS and IFRIC interpretations as of January 1, 2018. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. The Group applies IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers for the first time in 2018. The nature and effect of changes to the Group’s financial statements as a result of adopting these standards are disclosed below. Several other amendments and interpretations are applied for the first time in 2018, but do not have an impact on the consolidated financial statements of the Group. IFRS 9 Financial Instruments IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after January 1, 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting . The Group applied IFRS 9 prospectively, with the initial application date of January 1, 2018 without adjusting the comparative information for the prior periods. (a) Classification and measurement Under IFRS 9, all debt financial assets that do not meet a “solely payment of principal and interest” (SPPI) criterion, are classified as accounted at fair value through profit or loss (FVPL). Under this criterion, debt instruments that do not correspond to a “basic lending arrangement”, such as instruments containing embedded conversion options or “non-recourse” loans, are measured at FVPL. For debt financial assets that meet the SPPI criterion, classification at initial recognition is determined based on the business model, under which these instruments are managed: - Instruments that are managed on a “hold to collect” basis are measured at amortised cost; - Instruments that are managed on a “hold to collect and for sale” basis are measured at fair value through other comprehensive income (FVOCI); - Instruments that are managed on other basis, including trading financial assets, will be measured at FVPL. Equity financial assets are required to be classified at initial recognition as FVPL unless an irrevocable designation is made to classify the instrument as FVOCI. For equity investments classified as FVOCI, all realised and unrealised gains and losses, except for dividend income, are recognised in other comprehensive income with no subsequent reclassification to profit and loss. The classification of financial liabilities remains largely unchanged from the current IAS 39 requirements. Derivatives will continue to be measured at FVPL. Embedded derivatives are no longer separated from a host financial asset. The IFRS 9 had no impact on the Group’s balance sheet or equity on applying the classification requirements. The accounting for the Group’s financial assets and liabilities remains largely the same as it was under IAS 39. The Group continues measuring at fair value all financial assets currently held at fair value (FVPL). The Group analysed the contractual cash flow characteristics of cash at banks, debt securities, loans and trade receivables and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Therefore, reclassification for these instruments was not required. (b) Impairment The adoption of IFRS 9 has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing IAS 39’s incurred loss approach with a forward-looking expected credit loss (ECL) approach. IFRS 9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not held at FVPL. The ECL allowance is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit loss or LTECL), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based on the 12 months’ expected credit loss (12mECL). The 12mECL is the portion of LTECL that represent the ECLs that result from default events on a financial instrument that are possible within the 12 months after the reporting date. Both LTECL and 12mECL are calculated on either an individual basis or a collective basis, depending on the nature of the underlying portfolio of financial instruments. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate. The mechanics of the ECL calculations are outlined below and the key elements are as follows: - PD The Probability of Default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio. - EAD The Exposure at Default is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments. - LGD The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realisation of any collateral. It is usually expressed as a percentage of the EAD. For other financial assets (i.e., cash in banks, loans and debt instruments) and financial liabilities (i.e., financial guaranties and credit related commitments) the Group has established a policy to perform an assessment, at the end of each reporting period, of whether a financial instrument’s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. In all cases, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. The Group considers a financial asset in default when contractual payment are 90 days past due (except for particular sort of Trade and other receivables of 60 days). However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. For Trade and other receivables, the Group has applied the standard’s simplified approach and has calculated ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For instalment card loans and its undrawn credit commitments ELC calculation the Group uses internal historical instalment card loans loss rates statistics for assessment of probabilities of default. The loss given default is an estimate of the loss arising in the case where a default occurs at a given time and is based on internal statistics. The adoption of the ECL requirements of IFRS 9 resulted in increases in impairment allowances of the Group’s financial assets. The increase in allowance resulted in adjustment to Retained earnings. The statement of financial position as at December 31, 2017 was restated for the amount presented in the table below (see clause (e) ). (c) Hedge accounting The Group does not use hedge accounting in its financial statements. (d) Other adjustments In addition to the adjustments described above, on adoption of IFRS 9, other items of the primary financial statements such as deferred taxes and retained earnings were also adjusted. (e) Effect of transition to IFRS 9 Impact of adopting IFRS 9 on the statement of financial position (increase/(decrease)) as at December 31, 2017: Adjustments Amount Assets Trade and other receivables (b) (33) Loans issued (b) (108) Debt instruments (b) (5) Deferred tax assets (d) 49 Total assets (97) Liabilities Other current liabilities (b) 111 Total Liabilities 111 Net impact on equity, Including (208) Retained earnings (b), (d) (208) The reconciliations for the opening loss provision allowances under IAS 39 and provisions for loan commitments and financial guarantee contracts in accordance with IAS 37 Provisions Contingent Liabilities and Contingent Assets to the Expected Credit Losses (ECL) allowances under IFRS 9 are disclosed in the table below: Loan loss provision ECLs under under IAS 39/IAS 37 IFRS 9 as of Impairment allowance for: as of December 31, 2017 Remeasurement January 1, 2018 Debt instruments — (5) (5) Trade and other receivables (545) (33) (578) Loans issued (321) (108) (429) Undrawn credit commitments — (111) (111) (866) (257) (1,123) IFRS 15 Revenue from Contracts with Customers IFRS 15 supersedes IAS 11 Construction Contracts , IAS 18 Revenue and related Interpretations and applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. The Group analysed all aspects and requirements of IFRS 15 and noted no impact on its operations accounting or financial statements. The Group adopted IFRS 15 using the full retrospective method of adoption. IFRIC 22 Foreign Currency Transactions and Advance Consideration The Interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. This Interpretation had no impact on the Group’s consolidated financial statements. Amendments to IAS 28 Investments in Associates and Joint Ventures The amendments clarify that an entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. These amendments had no impact on the Group’s consolidated financial statements. |
Standards issued but not yet effective | 2.4 IFRS 16 - Leases IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases , IFRIC 4 Determining whether an Arrangement contains a Lease , SIC‑15 Operating Leases-Incentives and SIC‑27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use assets). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use assets. Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use assets. Lessor accounting under IFRS 16 is substantially unchanged from legacy accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after January 1, 2019. Early application is permitted, but not before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. The Group will apply IFRS 16 for the periods beginning on January 1, 2019 using modified retrospective approach. Most contracts where the Group acts as a lessee (except for long-term contract for offise premises lease), fall under the recognition exemption for being short-term leases. The Group will not recognize either assets or liabilities for them and will continue recognize expenditure arising from them as expenses on rent of premises and related utility expenses (within selling, general, and administrative expenses) as they are incurred. Accounting of several long-term contracts of lease of office premises where the Group acts as a lessee, will have a material effect on the consolidated financial statements of the Group. This effect will result from recognition of lease liabilities and right-of-use assets and from derecognition of accounts payable related to these contracts. Lease liabilities will be recognized at the date of initial application at the present value of the remaining lease payments discounted using the Group’s incremental borrowing rate at the date of initial application. Right-of use assets will be recognized at an amount equal to the lease liability adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the statement of financial position immediately before the date of initial application. No impairment will be accrued on right-of-use assets as at the date of initial application. The accumulated balance of accounts payable representing rent expenses recognized but not paid under some contracts as at the transition date will be written off to retained earnings of prior periods at the date of initial application. The provisional Impact of adopting IFRS 16 on the statement of financial position (increase/ (decrease)) as at January 1, 2019: Amount Assets Property and equipment (Right-of-use assets) 1,088 Other non-current assets (Advances issued (long-term)) (9) Trade and other receivables (Advances issued (short-term)) (3) Deferred tax assets (29) Total assets 1,047 Liabilities Long-term portion of lease liabilities 702 Short-term portion of lease liabilities 360 Trade and other payables (Other payables) (132) Total Liabilities 930 Net impact on equity, Including 117 Retained earnings 117 The following other new pronouncements are not expected to have any material impact on the Group when adopted: - Long-term Interests in Associates and Joint Ventures – Amendments to IAS 28 (issued on October 12, 2017 and effective for annual periods beginning on or after January 1, 2019). - Annual Improvements to IFRSs 2015‑2017 cycle - Amendments to IFRS 3, IFRS 11, IAS 12, IAS 23 (issued on December 12, 2017 and effective for annual periods beginning on or after January 1, 2019). - Prepayment Features with Negative Compensation – Amendments to IFRS 9 (issued on October 12, 2017 and effective for annual periods beginning on or after January 1, 2019). - Amendments to References to the Conceptual Framework in IFRS Standards (issued on March 29, 2018 and effective for annual periods beginning on or after January 1, 2020). - Amendments to IAS 1 and IAS 8: Definition of Material (issued on October 31, 2018 and effective for annual periods beginning on or after January 1, 2020). - Amendment to IFRS 3 Business Combinations (issued on October 22, 2018 and effective for annual periods beginning on or after January 1, 2020). - IFRIC Interpretation 23 Uncertainty over Income Tax Treatment (issued on June, 2017 and effective for annual periods beginning on or after January 1, 2019). |
Business combinations and goodwill | 3.1 Business combinations are accounted for using the acquisition method. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the Group identifies any amounts that are not part of what the Group and the acquiree exchanged in the business combination. The Group recognizes as part of applying the acquisition method, only the consideration transferred for the acquiree and the assets acquired and liabilities assumed in the exchange for the acquiree. If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss. It is then considered in the determination of goodwill. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequently, contingent consideration classified as an asset or liability, is measured at fair value with changes in fair value recognized in profit or loss. Contingent consideration that is classified as equity is not re-measured and subsequent settlement is accounted for within equity. The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated of the Group’s cash generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquired entity are assigned to those units. Where goodwill has been allocated to a cash-generating unit and certain operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed in this circumstance is measured based on the relative values of the operation disposed and the portion of the cash-generating unit retained. |
Investments in associates and joint ventures | 3.2 The Group’s investment in its associate and joint ventures are accounted for using the equity method. An associate is an entity in which the Group has significant influence. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. unanimous consent of the parties) have rights to the net assets of the arrangement. Under the equity method, the investment in the associate or joint venture is carried on the statement of financial position at cost plus post acquisition changes in the Group’s share of net assets of the associate/joint venture. Goodwill relating to the associate/joint venture is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment. The statement of comprehensive income reflects the Group’s share of the results of operations of the associate/joint venture. When there has been a change recognized directly in the equity of the investment, the Group recognizes its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associate/joint venture are eliminated to the extent of the interest in it. The Group’s share of profit of an associate/joint venture is shown on the face of the statement of comprehensive income or in the notes. This is the profit attributable to equity holders of the associate/joint venture and, therefore, is profit after tax and non-controlling interests in the subsidiaries of the associate/joint venture. The financial statements of the associates/joint ventures are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. After application of the equity method, the Group determines whether it is necessary to recognize an additional impairment loss on its investment in its associates/joint ventures. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate/joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of an investment in associate/joint venture and its carrying value and recognizes any respective loss in the statement of comprehensive income. Upon loss of significant influence over the associate/joint venture, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate/joint venture upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss. |
Foreign currency translation | 3.3 The consolidated financial statements are presented in Russian rubles (RUB), which is the Company’s functional and the Group’s presentation currency. Each entity in the Group determines its own functional currency, depending on what the underlying economic environment is, and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency at the functional currency rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are re-measured in to the functional currency at the functional currency rate of exchange at the reporting date. All differences are taken to profit or loss. They are shown separately for each Group company but netted by major types of monetary assets and liabilities. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as of the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on retranslation of non-monetary items is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in other comprehensive income or profit or loss is also recognized in other comprehensive income or profit or loss, respectively). The functional currency of the foreign operations is generally the respective local currency – US Dollar (U.S.$), Euro (€), Kazakhstan tenge (KZT), Belarussian ruble (BYR), Moldovan leu (MDL) and New Romanian leu (RON). As of the reporting date, the assets and liabilities of these operations are translated into the presentation currency of the Group (the Russian Ruble) at the rate of exchange at the reporting date and their statements of comprehensive income are translated at the average exchange rates for the year or exchange rates prevailing on the date of specific transactions. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign entity, the deferred cumulative amount recognized in equity relating to that particular foreign operation is reclassified to the profit or loss. The exchange rates of the Russian ruble to each respective currency as of December 31, 2018 and 2017 were as follows: Average exchange rates for Exchange rates at the year ended December 31, December 31, 2017 2018 2017 2018 US Dollar 58.3529 62.7078 57.6002 69.4706 Euro 65.9014 73.9384 68.8668 79.4605 Kazakhstan Tenge (100) 17.8959 18.1717 17.3184 18.0570 Belarussian Ruble 30.2125 30.7630 29.1013 32.0732 Moldovan Leu (10) 31.6871 37.3239 33.6548 40.9084 New Romanian Leu 14.4216 15.8887 14.7822 17.0501 The currencies listed above are not a fully convertible outside the territories of countries of their operations. Related official exchange rates are determined daily by the Central Bank of the Russian Federation (further CBR). Market rates may differ from the official rates but the differences are, generally, within narrow parameters monitored by the respective Central Banks. The translation of assets and liabilities denominated in the currencies listed above into RUB for the purposes of these financial statements does not indicate that the Group could realize or settle, in RUB, the reported values of these assets and liabilities. Likewise, it does not indicate that the Group could return or distribute the reported RUB value of capital and retained earnings to its shareholders. |
Property and equipment | 3.4 3.4.1 Cost of property and equipment Property and equipment are stated at cost less accumulated depreciation and any accumulated impairment loss. Expenditures for continuing repairs and maintenance are charged to the profit or loss as incurred. 3.4.2 Depreciation and useful lives Depreciation is calculated on property and equipment on a straight-line basis from the time the assets are available for use, over their estimated useful lives as follows: Processing servers and engineering equipment 3 - 10 years Computers and office equipment 3 - 5 years Other equipment 2 - 20 years Useful lives of leasehold improvements of leased office premises included in engineering equipment and other equipment are determined at the lower between the useful live of the asset or the lease term. The asset’s residual values, useful lives and depreciation methods are reviewed, and adjusted as appropriate, at each financial year-end. |
Intangible assets | 3.5 3.5.1 Software and other intangible assets Software and other intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected generation of future benefits, generally 3‑5 years. During the period of development, the asset is tested for impairment annually. 3.5.2 Software development costs Development expenditure on an individual project is recognized as an intangible asset when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure during development. 3.5.3 Useful life and amortization of intangible assets The Group assesses whether the useful life of an intangible asset is finite or indefinite and, if finite, the length of that useful life. An intangible asset is regarded by the entity as having an indefinite useful life when, based on an analysis of all of the relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. Intangible assets with finite lives are amortized on a straight-line basis over the useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Below is the summary of useful lives of intangible assets: Customer relationships and contract rights 4 - 15 years Computer Software 3 - 10 years Bank license indefinite Trademarks and other intangible assets 3 - 11 years Amortization periods and methods for intangible assets with finite useful lives are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. Indefinite-lived intangible assets include the acquired licenses for banking operations. It is considered indefinite-lived as the related license is expected to be renewed indefinitely. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of comprehensive income when the asset is derecognized. |
Impairment of non-financial assets | 3.6 The Group assesses at each reporting date whether there is an indication that an asset, other than goodwill and intangible assets with indefinite useful life, may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their 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 asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded analogues, if applicable, or other available fair value indicators. The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s cash generating units (CGU), to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years or longer, when management considers appropriate. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the last year. Impairment losses of continuing operations are recognized in profit or loss in those expense categories consistent with the function of the impaired asset. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss. The following criteria are also applied in assessing impairment of specific assets: Goodwill Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating units, to which the goodwill relates. Where the recoverable amount of the cash-generating units is less than their carrying amount an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. The Group performs its annual impairment test of goodwill as of December 31 and whenever certain events and circumstances indicate that its carrying value may be impaired. Intangible assets with indefinite useful life Intangible assets with indefinite useful life are tested for impairment annually as of December 31, either individually or at the cash generating unit level, as appropriate and whenever events and circumstances indicate that an asset may be impaired. |
Financial assets | 3.7 3.7.1 Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. 3.7.2 Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: - Financial assets at amortised cost - Financial assets at fair value through OCI with recycling of cumulative gains and losses - Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition - Financial assets at fair value through profit or loss Financial assets at amortised cost This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met: - The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows, And - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost includes debt instruments, trade and other receivables and loans issued. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the profit or loss section of statement of comprehensive income. The Group’s financial assets at fair value through profit or loss includes few loans issued that did not pass SPPI test. Financial assets at fair value through OCI The Group’s has no financial assets at fair value through OCI with recycling or with no recycling of cumulative gains and losses upon derecognition. 3.7.3 Impairment - credit loss allowance for ECL The Group assesses and recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. The measurement of ECL reflects: - an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes; - the time value of money; and - all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future economic conditions. Debt instruments measured at AC are presented in the consolidated statement of financial position net of the allowance for ECL. For loan commitments (where those components can be separated from the loan), a separate provision for ECL is recognised as other financial liabilities as part of accounts payable in the consolidated statement of financial position. For debt instruments at FVOCI, an allowance for ECL is recognised in profit or loss and it affects fair value gains or losses recognised in OCI rather than the carrying amount of those instruments. The Group applies a “three stage” model for impairment in accordance with IFRS 9, based on changes in credit quality since initial recognition: 1. A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12 months (12 month ECL). 2. If the Group identifies a significant increase in credit risk (“SICR”) since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis (lifetime ECL). 3. If the Group determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a lifetime ECL. For financial assets that are credit-impaired on purchase or at origination, the ECL is always measured at a lifetime ECL. Note 31 provides information about inputs, assumptions and estimation techniques used in measuring ECL, including an explanation of how the Group incorporates forward-looking information in the ECL models. 3.7.4 A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when: - The rights to receive cash flows from the asset have expired - The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. |
Financial liabilities | 3.8 3.8.1 Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, bank overdraft, financial guarantees, undrawn loan commitments, customer accounts and amounts due to banks. 3.8.2 Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. The Group has no such instruments. Loans and deposits This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the profit or loss section of statement of comprehensive income. Financial guarantees Subsequent to initial recognition, the Group’s liability under each guarantee is measured at the higher of the amount initially recognised less cumulative amortisation recognised in the income statement, and an ECL allowance . The premium received is recognised in the income statement in Commissions and other revenue on a straight line basis over the life of the guarantee. Undrawn loan commitments Undrawn loan commitments are commitments under which, over the duration of the commitment, the Group is required to provide a loan with pre-specified terms to the customer. Similar to financial guarantee contracts, under IAS 39, a provision was made if they were an onerous contract but, from January 1, 2018, these contracts are in the scope of the ECL requirements. 3.8.3 Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss. In accordance with terms and conditions of use of e-wallet accounts and system rules, the Group charges a fee on its consumers on the balance of unused accounts after certain period of inactivity and unclaimed payments. Such fees are recorded as revenues in the period a fee is charged. 3.8.4 Offsetting financial assets and liabilities Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if: - There is a currently enforceable legal right to offset the recognized amounts; and - There is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. The right of set-off: - Must not be contingent on a future event; and - Must be legally enforceable in all of the following circumstances: (i) the normal course of business; (ii) the event of default; and (iii) the event of insolvency or bankruptcy of the entity and all of the counterparties |
Cash and cash equivalents | 3.9 Cash comprises cash at banks and in hand and short-term deposits with an original maturity of three months or less. All these items are included as a component of cash and cash equivalents for the purpose of the statement of financial position and statement of cash flows. |
Employee benefits | 3.10 3.10.1 Short-term employee benefits Wages and salaries paid to employees are recognized as expenses in the current period. The Group also accrues expenses for future vacation payments and short-term employee bonuses. 3.10.2 Social contributions and define contributions to pension fund Under provisions of the Russian legislation, social contributions include defined contributions to pension and other social funds of Russia and are calculated by the Group by the application of a regressive rate (from 30% to 15% in 2018, 2017 and 2016) to the annual gross remuneration of each employee. For the year ended December 31, 2018 defined contributions to pension fund of Russia of the Group amounted to 886 (2017 – 473; 2016 – 315). |
Provisions | 3.11 Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of discounting is material, provisions are determined by discounting the expected value of future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. Performance guarantees Performance guarantees are contracts that provide compensation if another party fails to perform a contractual obligation. Performance guarantees are initially recognized at their fair value, which is usually equal to the amount of fees received. This amount is amortised on a straight line basis over the life of the contract. Performance guarantees do not transfer credit risk. The risk under performance guarantee contracts is the possibility that the failure to perform the contractual obligation by another party occurs. |
Special contribution for defence of the Republic of Cyprus | 3.12 Dividend Distribution Cyprus entities that do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, are deemed to have distributed as dividends 70% of these profits. A special contribution for the defence fund of the Republic of Cyprus is levied at the 17% rate for 2016, 2017, 2018 and thereafter will be payable on such deemed dividends distribution. Profits that are attributable to shareholders who are not tax resident of Cyprus and own shares in the Company either directly and/or indirectly at the end of two years from the end of the tax year to which the profits relate, are exempted. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defence is payable by the Company for the account of the shareholders. The Company’s ultimate shareholder as of December 31, 2018 is non-Cypriot tax resident and as such the Cypriot deemed dividend distribution rules are not applicable. Dividend income Dividends received from a non-resident (foreign) company are exempt from the levy of defence contribution if either the dividend paying company derives at least 50% of its income directly or indirectly from activities which do not lead to investment income (“active versus passive investment income test” is met) or the foreign tax burden on the profit to be distributed as dividend has not been substantially lower than the Cypriot corporate income tax rate (i.e. lower than 6.25%) at the level of the dividend paying company (“effective minimum foreign tax test” is met). The Company has not been subject to defence tax on dividends received from abroad as the dividend paying entities are engaged in other than investing activities. |
Income taxes | 3.13 Current income tax Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Current income tax relating to items recognized in other comprehensive income is recognized in other comprehensive income. Deferred income tax Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. |
Revenue from contracts with customers and transaction cost recognition | 3.14 Revenue from contracts with customers is recognized when control of the services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the services before transferring them to the customer. Revenues and related cost of revenue from services are recognized in the period when services are rendered, regardless of when payment is made. All performance obligations are either satisfied at a point of time or over time. In the former case they represent a separate instantaneous service, in the latter – a series of distinct services that are substantially the same and that have the same pattern of transfer to the customers. Such performance obligations are invoiced at least monthly. Progress of performance obligations satisfied over time is measured by output method. The Group recognizes most of the revenue at a point of time. Contract price is allocated separately to each performance obligation. There are generally no variable amounts affecting consideration by the moment such consideration is recognized as revenue. In the rare cases when the variability exists, the Group makes estimate of amount to be recognized basing on appropriate budgets and models. Consideration from customers does not have any non-cash component. Consideration payable to a customer is accounted as a reduction of the transaction price and,therefore, of revenue. Consideration from customers is normally received within a few months and never in more than a year. Consequently, the Group believes it contains no significant financing component. Within some components of its business, the Group pays remuneration to the employees and third parties for attracting customers. The costs which are incremental to acquisition of new customers are further analysed for recoverability. Generally, this expenditure is not expected to be reimbursed by future incomes and is not capitalized as costs to obtain a contract. Payment processing fee revenues and related transaction costs Payment processing fee revenues include the following types: - fees for processing of consumer payment (consumer fee and merchant fee), - conversion fees. The Group earns a fee for processing payments initiated by the individuals (“consumers”) to pay to merchants and service providers (“merchants”) or transfer money to other individuals. Payment processing fees are earned from consumers or merchants, or both. Consumers can make payments to various merchants through kiosks or network of agents and bank-participants of payment system or through the Group’s website or applications using a unique user login and password (e-payments). Payment kiosks are owned by third parties – cash collection agents (“agents”). When consumer payment is processed, the Group may incur transaction costs to acquire payments payable to agents, bank-participants, mobile operators, international payment systems and other parties. The payment processing fee revenue and related receivable, as well as the transaction cost and the related payable, are recognized at the point when merchants or individuals accept payments from consumers in the gross amount, including fees payable for payment acquisition. Payment processing fees and transaction costs are reported gross. Any fees from agents and other service providers are recorded as reduction of transactions costs unless the fee relates to distinct service rendered by the Group. The Group generates revenue from the foreign currency conversion when payments are made in currencies different from the country of the consumer, mainly Russia. The Group recognizes the related revenues at the time of conversion in the amount of conversion commission representing the difference between the current Russian or relevant country Central Bank foreign currency exchange rate and the foreign currency exchange rate charged by the Group’s processing system. Cash and settlement services The Group charges a fee for managing current bank accounts and deposits of individuals and legal entities, including guarantee deposits from agents placed with the bank to cover consumer payments they accept. Related revenue is recorded as services are rendered or as transactions are processed. Other revenues Other revenues include revenues from commissions charged for consumer financial services, advertising activities, guarantee commissions and some other minor activities. Loyalty programme The Group’s component engaged in banking services to retail customers has a loyalty programme, which allows customers to accumulate loyalty points that are accrued as percentage of purchases made using bank cards and can be used to reimburse future purchases. Revenue is therefore decreased by the nominal value of points awarded to customers during the period multiplied by the probability of their subsequent realization. |
Recognition of interest income and interest expense | 3.15. For all financial instruments measured at amortized cost, interest bearing financial assets classified as available for sale and financial instruments designated at fair value through profit or loss, interest income or expense is recorded using the EIR method. The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account any discount or premium on acquisition, fees and costs that are an integral part of the EIR of the financial instrument. The Group calculates interest income by applying the EIR to the gross carrying amount of financial assets other than credit-impaired assets. When a financial asset becomes credit-impaired and is, therefore, regarded as ‘Stage 3’, the Bank calculates interest income by applying the effective interest rate to the net amortised cost of the financial asset. If the financial assets restore and is no longer credit-impaired, the Bank reverts to calculating interest income on a gross basis. Interest income from bank loans and short-term and long-term investments performed as part of the Group’s treasury function is classified as part of revenues, Interest income derived from loans issued to various third and related parties as part of other arrangements is classified as interest income. Cash receipts of both types of interest are included into interest received in the statement of cash flows. Interest expense from bank borrowings intended to attract funds for reinvestment is classified as part of cost of revenue. Interest expense derived from borrowings attracted from various third parties as part of other arrangements and interest expense from bank guaranties is classified as interest expense not as part of cost of revenue. Cash disbursements of both types of interest are included into interest paid in the statement of cash flows. |
Share-based payments | 3.16 Employees of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is recognized, together with a corresponding increase in other reserves in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The statement of comprehensive income expense or credit for a period represents the movement in cumulative expense recognized as of the beginning and end of that period and is recognized in compensation to employees and other personnel expenses . No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions for which vesting is conditional upon a market or non-vesting condition. These are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognized is the expense that would have been incurred had the terms not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. When an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in previous paragraph. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. The option awards that are outstanding as of December 31, 2018, 2017 and 2016 can only be settled in shares, that is why they are accounted for as equity-settled transactions. |
Leases | 3.17 The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Group as a lessee Operating lease payments are recognized as an operating expense in the statement of comprehensive income on a straight-line basis over the lease term. Group as a lessor Leases in which the Group does not transfer substantially all the risks and benefits of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned. |
Non-current assets held for sale and discontinued operations | 3.18 Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. In the statement of comprehensive income, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income. Property and equipment and intangible assets once classified as held for sale are not depreciated or amortized. |
Principles underlying prepara_3
Principles underlying preparation of consolidated financial statements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Principles underlying preparation of consolidated financial statements | |
Summary of effect of transition to IFRS 9 | Impact of adopting IFRS 9 on the statement of financial position (increase/(decrease)) as at December 31, 2017: Adjustments Amount Assets Trade and other receivables (b) (33) Loans issued (b) (108) Debt instruments (b) (5) Deferred tax assets (d) 49 Total assets (97) Liabilities Other current liabilities (b) 111 Total Liabilities 111 Net impact on equity, Including (208) Retained earnings (b), (d) (208) The reconciliations for the opening loss provision allowances under IAS 39 and provisions for loan commitments and financial guarantee contracts in accordance with IAS 37 Provisions Contingent Liabilities and Contingent Assets to the Expected Credit Losses (ECL) allowances under IFRS 9 are disclosed in the table below: Loan loss provision ECLs under under IAS 39/IAS 37 IFRS 9 as of Impairment allowance for: as of December 31, 2017 Remeasurement January 1, 2018 Debt instruments — (5) (5) Trade and other receivables (545) (33) (578) Loans issued (321) (108) (429) Undrawn credit commitments — (111) (111) (866) (257) (1,123) |
Summary of provisional amounts due to adoption of IFRS 16 | The provisional Impact of adopting IFRS 16 on the statement of financial position (increase/ (decrease)) as at January 1, 2019: Amount Assets Property and equipment (Right-of-use assets) 1,088 Other non-current assets (Advances issued (long-term)) (9) Trade and other receivables (Advances issued (short-term)) (3) Deferred tax assets (29) Total assets 1,047 Liabilities Long-term portion of lease liabilities 702 Short-term portion of lease liabilities 360 Trade and other payables (Other payables) (132) Total Liabilities 930 Net impact on equity, Including 117 Retained earnings 117 |
Summary of significant accoun_2
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of significant accounting policies | |
Schedule of exchange rates of Russian ruble to other currencies | Average exchange rates for Exchange rates at the year ended December 31, December 31, 2017 2018 2017 2018 US Dollar 58.3529 62.7078 57.6002 69.4706 Euro 65.9014 73.9384 68.8668 79.4605 Kazakhstan Tenge (100) 17.8959 18.1717 17.3184 18.0570 Belarussian Ruble 30.2125 30.7630 29.1013 32.0732 Moldovan Leu (10) 31.6871 37.3239 33.6548 40.9084 New Romanian Leu 14.4216 15.8887 14.7822 17.0501 |
Summary of useful lives of property and equipment | Processing servers and engineering equipment 3 - 10 years Computers and office equipment 3 - 5 years Other equipment 2 - 20 years |
Summary of useful lives of intangible assets | Customer relationships and contract rights 4 - 15 years Computer Software 3 - 10 years Bank license indefinite Trademarks and other intangible assets 3 - 11 years |
Consolidated subsidiaries (Tabl
Consolidated subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Consolidated subsidiaries | |
Summary of subsidiaries and ownership interest | Ownership interest As of As of December 31, December 31, Subsidiary Main activity 2017 2018 JSC QIWI (Russia) Operation of electronic payment kiosks 100 % 100 % QIWI Bank JSC (Russia) Maintenance of electronic payment systems, money transfer, consumer and SME financial services 100 % 100 % QIWI Payments Services Provider Ltd (UAE) Operation of on-line payments 100 % 100 % QIWI International Payment System LLC (USA) Operation of electronic payment kiosks 100 % 100 % Qiwi Kazakhstan LP (Kazakhstan) Operation of electronic payment kiosks 100 % 100 % JLLC OSMP BEL (Belarus) Operation of electronic payment kiosks 51 % 51 % QIWI-M S.R.L. (Moldova) Operation of electronic payment kiosks 51 % 51 % QIWI ROMANIA SRL (Romania) Operation of electronic payment kiosks 100 % 100 % QIWI WALLET EUROPE SIA (Latvia) Operation of on-line payments 100 % 100 % QIWI Retail LLC (Russia) * Sublease of space for electronic payment kiosks 100 % — QIWI Management Services FZ‑LLC (UAE) Management services 100 % 100 % Attenium LLC (Russia) Management services 100 % 100 % Postomatnye Tekhnologii LLC (Russia) Logistic 100 % 100 % Future Pay LLC (Russia) Operation of on-line payments 100 % 100 % Qiwi Blockchain Technologies LLC (Russia) Software development 100 % 100 % QIWI Shtrikh LLC (Russia) On-line cashbox production 51 % 51 % QIWI Platform LLC (Russia) Software development 100 % 100 % QIWI Processing LLC (Russia) Software development 100 % 100 % Joint ventures (Note 6, Note 21) Flocktory Ltd (Cyprus) Holding company 82 % 82 % Flocktory Spain S.L. (Spain) SaaS platform for customer lifecycle management and personalization 82 % 82 % FreeAtLast LLC (Russia) SaaS platform for customer lifecycle management and personalization 82 % 82 % Associate (Note 6, Note 20) JSC Tochka (Russia) Digital services for banks — 40 % * QIWI Retail LLC was liquidated during the year 2018 |
Acquisitions and business com_2
Acquisitions and business combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RB (Rocketbank) | |
Disclosure of detailed information about business combinations | |
Summary of amounts recognised as of acquisition date | Fair value Net assets acquired: Property and equipment 113 Intangible assets 393 Deferred tax asset 3 Other liabilities (419) Total identifiable net assets at fair value 90 Consideration paid 183 Goodwill arising on acquisition 93 |
Summary of consideration transferred | Analysis of cash flows on acquisition for 2018: Amount Cash paid to the seller for non-current assets (83) Cash paid to the top-management of Rocketbank (100) Cash received from the seller 321 Total cash received upon business combination in the year 2018 138 |
JSC Tochka | |
Disclosure of detailed information about business combinations | |
Summary of amounts recognised as of acquisition date | Fair value Property and equipment 47 Intangible assets 88 Cash, accounts receivable and promissory notes 1,753 Total contributions 1,888 Group’s share (45%) 850 Contribution of the Group 1,117 Loss on set up of associate (267) |
Summary of consideration transferred | Non-monetary assets 125 Monetary assets* 992 Total contribution 1,117 * |
Flocktory Ltd (Cyprus) | |
Disclosure of detailed information about business combinations | |
Summary of amounts recognised as of acquisition date | Fair value Net assets acquired: Property and equipment 1 Intangible assets 720 Accounts receivable 26 Cash and cash equivalents 55 Trade and other payables (21) Other liabilities (1) Total identifiable net assets at fair value 780 Group’s share of net assets (82%) 639 Goodwill arising on acquisition 192 |
Summary of consideration transferred | Cash consideration paid 794 Cash payable for Flocktory’s stock option plan cancelation* 37 Total purchase consideration transferred 831 * |
Operating segments (Tables)
Operating segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Operating segments. | |
Schedule of segments' statement of comprehensive income | The segments’ statement of comprehensive income for the year ended December 31, 2018, as presented to the CODM are presented below: 2018 PS CFS SME RB CO Total Revenue 26,649 558 3,045 180 178 30,610 Segment net revenue 16,497 385 2,916 (263) 122 19,657 Segment profit/(loss) before tax 11,552 (3,281) (898) (1,327) (974) 5,072 Segment net profit/(loss) 9,529 (2,618) (776) (1,061) (937) 4,137 The segments’ statement of comprehensive income for the year ended December 31, 2017, as presented to the CODM are presented below: 2017* PS CFS SME RB CO Total Revenue 20,133 105 611 — 48 20,897 Segment net revenue 12,580 9 578 (5) 31 13,193 Segment profit/(loss) before tax 8,795 (2,704) (190) (323) (760) 4,818 Segment net profit/(loss) 7,543 (2,164) (171) (311) (843) 4,054 The segments’ statement of comprehensive income for the year ended December 31, 2016, as presented to the CODM are presented below: 2016* PS CFS CO Total Revenue 17,846 1 33 17,880 Segment net revenue 10,583 (3) 31 10,611 Segment profit/(loss) before tax 6,454 (259) (605) 5,590 Segment net profit/(loss) 5,612 (219) (679) 4,714 *For comparative purposes 2016 and 2017 segment information is presented in 2018 format. |
Schedule of segment net revenue | 2016 2017 2018 Revenue under IFRS 17,880 20,897 30,610 Cost of revenue (exclusive of depreciation and amortization) (8,646) (9,763) (15,129) Payroll and related taxes 1,377 2,059 4,176 Total segment net revenue, as presented to CODM 10,611 13,193 19,657 |
Schedule of reconciliation of segment profit before tax | 2016 2017 2018 Consolidated profit before tax under IFRS 3,107 3,840 4,501 Amortization of fair value adjustments recorded on business combinations 396 344 369 Share-based payments 224 398 635 Foreign exchange loss/(gain) from revaluation of cash proceeds received from secondary public offering (Note 30) 975 236 (433) Impairment of intangible assets recorded on acquisitions 878 — — Loss on disposal of subsidiaries, net 10 — — Total segment profit before tax, as presented to CODM 5,590 4,818 5,072 |
Schedule of reconciliation of segment net profit | 2016 2017 2018 Consolidated net profit under IFRS 2,489 3,142 3,626 Amortization of fair value adjustments recorded on business combinations 396 344 369 Share-based payments 224 398 635 Foreign exchange loss/(gain) from revaluation of cash proceeds received from secondary public offering (Note 30) 975 236 (433) Impairment of intangible assets recorded on acquisitions 878 — — Loss on disposal of subsidiaries, net 10 — — Effect from taxation of the above items (258) (66) (60) Total segment net profit, as presented to CODM 4,714 4,054 4,137 |
Schedule of revenue from external customers | 2016 2017 2018 Russia 13,274 15,556 22,693 Other CIS 1,099 1,098 1,393 EU 807 989 2,353 Other 2,700 3,254 4,171 Total revenue per consolidated statement of comprehensive income 17,880 20,897 30,610 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings per share | |
Calculation of basic and diluted earnings per share | 2016 2017 2018 Net profit attributable to ordinary equity holders of the parent for basic earnings 2,474 3,114 3,584 Weighted average number of ordinary shares for basic earnings per share 60,477,840 60,755,706 61,202,710 Effect of share-based payments 167,197 404,357 522,116 Weighted average number of ordinary shares for diluted earnings per share 60,645,037 61,160,063 61,724,826 Earnings per share: Basic, profit attributable to ordinary equity holders of the parent 40.91 51.25 58.56 Diluted, profit attributable to ordinary equity holders of the parent 40.79 50.92 58.06 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and equipment | |
Summary of property and equipment | Construction Processing in progress servers and Computers (CIP) and engineering and office Other Advances for equipment equipment equipment equipment Total Cost Balance as of December 31, 2016 695 91 162 81 1,029 Transfer between groups 77 1 — (78) — Additions 196 45 16 108 365 Disposals (146) (7) (4) — (157) Balance as of December 31, 2017 822 130 174 111 1,237 Transfer between groups 22 5 12 (39) — Additions 478 134 109 15 736 Additions from business combinations (Note 6) 82 22 9 (68) 45 Disposals* (65) (13) (109) — (187) Balance as of December 31, 2018 1,339 278 195 19 1,831 Accumulated depreciation and impairment: Balance as of December 31, 2016 (328) (61) (47) — (436) Depreciation charge (150) (21) (35) — (206) Disposals 122 6 1 — 129 Balance as of December 31, 2017 (356) (76) (81) — (513) Depreciation charge (192) (40) (52) — (284) Disposals 16 10 14 — 40 Balance as of December 31, 2018 (532) (106) (119) — (757) Net book value As of December 31, 2016 367 30 115 81 593 As of December 31, 2017 466 54 93 111 724 As of December 31, 2018 807 172 76 19 1,074 *Disposal in the year 2018 includes property and equipment that were classified as held for sale as of December 31, 2018 in the net book value of 90. |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets. | |
Summary of intangible assets | Advances for Computer Customer intangibles, CIP Cost: Goodwill Licenses Software relationships Trade marks Contract rights and others Total Balance as of December 31, 2016 6,285 284 910 5,338 216 295 112 13,440 Additions — — 244 — — — 240 484 Transfer between groups — — 54 — — — (54) — Disposals — (101) (125) (12) — (295) (99) (632) Balance as of December 31, 2017 6,285 183 1,083 5,326 216 — 199 13,292 Additions — — 279 — — — 106 385 Additions from business combinations (Note 6) 93 — 166 88 139 — (149) 337 Transfer between groups — — 31 — — — (31) — Disposals — — (205) — — — (19) (224) Balance as of December 31, 2018 6,378 183 1,354 5,414 355 — 106 13,790 Accumulated Amortization: Balance as of December 31, 2016 — (59) (436) (1,536) (90) (295) (2) (2,418) Amortization charge — (42) (220) (286) (36) — (6) (590) Impairment — — — (8) — — (96) (104) Disposals — 101 120 12 2 295 97 627 Balance as of December 31, 2017 — — (536) (1,818) (124) — (7) (2,485) Amortization charge — — (245) (289) (43) — (3) (580) Impairment — — (4) — — — (19) (23) Disposals — — 125 — — — 19 144 Balance as of December 31, 2018 — — (660) (2,107) (167) — (10) (2,944) Net book value As of December 31, 2016 6,285 225 474 3,802 126 — 110 11,022 As of December 31, 2017 6,285 183 547 3,508 92 — 192 10,807 As of December 31, 2018 6,378 183 694 3,307 188 — 96 10,846 |
Impairment testing of goodwil_2
Impairment testing of goodwill and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Impairment testing of goodwill and intangible assets | |
Summary of movements in goodwill and intangible assets with indefinite life | Goodwill Indefinite Payment services Rocketbank life license Total As of December 31, 2016 6,285 – 183 6,468 As of December 31, 2017 6,285 – 183 6,468 Addition (Note 6) — 93 — 93 As of December 31, 2018 6,285 93 183 6,561 |
Long-term and short-term loan_2
Long-term and short-term loans issued (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Long-term and short-term loans issued | |
Summary of long-term and short-term loans issued | As of December 31, 2018, long-term and short-term loans issued consisted of the following: Total as of Expected Net as of December 31, credit loss December 31, 2018 allowance 2018 Long-term loans Loans to legal entities 235 (5) 230 Total long-term loans 235 (5) 230 Short-term loans Loans to individuals 30 — 30 Loans to legal entities 1,612 (26) 1,586 Instalment Card Loans 6,096 (822) 5,274 Total short-term loans 7,738 (848) 6,890 As of December 31, 2017, long-term and short-term loans consisted of the following: Total as of Provision for Net as of December 31, impairment of December 31, 2017 loans 2017 Long-term loans Loans to individuals 1 — 1 Loans to legal entities 166 (3) 163 Total long-term loans 167 (3) 164 Short-term loans Loans to financial institutions 3 (3) — Loans to legal entities 94 (93) 1 Instalment Card Loans 1,912 (222) 1,690 Total short-term loans 2,009 (318) 1,691 |
Summary of analysis of changes in loss allowances for loans | An analysis of the changes in the ECL allowances due to changes in corresponding gross carrying amounts for the year ended December 31, 2018, was the following: Stage 1 Stage 2 Stage 3 Total Collective Collective ECL allowance under IFRS 9 as of January 1, 2018 (Note 2.3(e)) (175) (60) (194) (429) Changes because of financial instruments (originated or acquired)/derecognized during the reporting period (146) (44) (309) (499) Transfers between stages 105 (16) (89) — Amounts written off — — 75 75 ECL allowance under IFRS 9 as of December 31, 2018 (216) (120) (517) (853) The movement of provision for impairment of loans for 2017 was the following: Provision for Provision for impairment impairment of loans as of (Charge)/ of loans as of December 31, reversal for December 31, 2016 the year Utilisation 2017 Instalment Card Loans — (222) — (222) Loans to legal entities (113) 3 14 (96) Loans to financial institutions (3) — — (3) Total (116) (219) 14 (321) The movement of provision for impairment of loans for 2016 was the following: Provision for Provision for impairment impairment of loans as of of loans as of December 31, Charge December 31, 2015 for the year Utilisation 2016 Loans to legal entities (199) (53) 139 (113) Loans to financial institutions (3) — — (3) Total (202) (53) 139 (116) |
Trade and other receivables (Ta
Trade and other receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Trade and other receivables | |
Summary of trade and other receivables | As of December 31, 2018, trade and other receivables consisted of the following: Total as of Expected credit loss Net as of December 31, allowance/ Provision for December 31, 2018 impairment 2018 Cash receivable from agents 4,207 (270) 3,937 Deposits issued to merchants 2,975 (16) 2,959 Commissions receivable 559 (21) 538 Advances issued 287 (12) 275 Other receivables 380 (47) 333 Total trade and other receivables 8,408 (366) 8,042 As of December 31, 2017, trade and other receivables consisted of the following: Total as of Provision for Net as of December 31, impairment of December 31, 2017 receivables 2017 Cash receivable from agents 4,666 (426) 4,240 Deposits issued to merchants 3,919 (13) 3,906 Commissions receivable 827 (18) 809 Advances issued 240 (1) 239 Other receivables 541 (87) 454 Total trade and other receivables 10,193 (545) 9,648 |
Summary of analysis of changes in loss allowances for receivables | An analysis of the changes in the ECL allowances due to changes in the corresponding gross carrying amounts for the year ended December 31, 2018, was the following: Total ECL allowance under IFRS 9 as of January 1, 2018 (Note 2.3(e)) (578) Changes because of financial instruments (originated or acquired)/ derecognized during the reporting period 5 Amounts written off 207 ECL allowance under IFRS 9 as of December 31, 2018 (366) For the year ended December 31, 2017, the provision for impairment of receivables movement was the following: Provision for Provision for impairment of impairment of receivables as (Charge)/ receivables as of December 31, reversal for of December 31, 2016 the year Utilisation 2017 Cash receivable from agents (659) 16 217 (426) Deposits issued to merchants (3) (11) 1 (13) Commissions receivable (7) (11) — (18) Advances issued (1) — — (1) Other receivables (109) 5 17 (87) Total trade and other receivables (779) (1) 235 (545) For the year ended December 31, 2016, the provision for impairment of receivables movement was the following: Provision for Provision for impairment of impairment of receivables as Charge receivables as of December 31, for of December 31, 2015 the year Utilisation 2016 Cash receivable from agents (660) (125) 126 (659) Deposits issued to merchants (1) (2) — (3) Commissions receivable (21) (1) 15 (7) Advances issued (1) — — (1) Other receivables (111) (14) 16 (109) Total trade and other receivables (794) (142) 157 (779) |
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 | As of As of December 31, December 31, 2017 2018 Correspondent accounts with CBR 6,522 5,587 Сash with banks and on hand 4,063 13,119 Short-term CBR deposits 6,500 21,000 Other short-term bank deposits 1,322 1,267 Less: Allowance for ECL/impairment losses (1) (7) Total cash and cash equivalents 18,406 40,966 |
Other current assets and othe_2
Other current assets and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other current assets and other current liabilities | |
Summary of other current assets | As of As of December 31, December 31, 2017 2018 Reserves at CBR* 229 684 Prepaid expenses 99 156 VAT and other taxes receivable 51 12 Other 79 77 Total other current assets 458 929 * |
Summary of other current liabilities | As of As of December 31, December 31, 2017 2018 Loyalty program liability — 473 Other 51 58 Total other current liabilities 51 531 |
Share capital, additional pai_2
Share capital, additional paid-in capital, share premium and other reserves (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share capital, additional paid-in capital, share premium and other reserves | |
Summary of authorised, issued and fully paid shares | As of As of As of Authorised shares December 31, December 31, December 31, 2016 2017 2018 Thousands Thousands Thousands Ordinary Class A shares 133,017 131,778 131,333 Ordinary Class B shares 97,833 99,072 99,517 Total authorised shares 230,850 230,850 230,850 As of As of As of December 31, December 31, December 31, Issued and fully paid shares 2016 2017 2018 Thousands Thousands Thousands Ordinary Class A shares 15,517 14,278 13,833 Ordinary Class B shares 45,080 46,655 48,880 Total issued and fully paid shares 60,597 60,933 62,713 |
Summary of movement in shares outstanding | Number Ordinary Ordinary of outstanding Class A shares Class B shares shares Thousands Thousands Thousands As of December 31, 2016 15,517 45,080 60,597 Transfer between classes (1,239) 1,239 — Increase of share capital due to exercise of options by employees during the year — 336 336 As of December 31, 2017 14,278 46,655 60,933 Transfer between classes (445) 445 — Increase of share capital due to exercise of options by employees during the year — 519 519 As of December 31, 2018 13,833 47,619 61,452 |
Trade and other payables (Table
Trade and other payables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Trade and other payables | |
Summary of trade and other payables | As of As of December 31, December 31, 2017 2018 Payables to merchants 9,178 13,942 Money remittances and e-wallets accounts payable 5,312 6,571 Deposits received from agents 3,638 4,839 Commissions payable 469 601 Accrued personnel expenses and related taxes 353 562 Provision for undrawn credit commitments (Note 28) — 84 Other payables 573 848 Other advances received 76 52 Total trade and other payables 19,599 27,499 |
Customer accounts and amounts_2
Customer accounts and amounts due to banks (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Customer accounts and amounts due to banks | |
Summary of customer accounts and amounts due to banks | As of As of December 31, December 31, 2017 2018 Due to banks 1,390 1,391 Due to individuals 110 10,844 Due to legal entities 1,571 3,767 Term deposits 111 2,103 Total customer accounts and amounts due to banks 3,182 18,105 Including long-term deposits — 237 |
Investment in associates (Table
Investment in associates (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investment in associates | |
Schedule of associate financial information | The following table illustrates summarized financial information of the Group’s investment in JSC Tochka associate: As of December 31, 2018 Associates’ statement of financial position: Non-current assets 149 Current assets 1,836 including cash and cash equivalents 1,326 Current liabilities (183) including financial liabilities (183) Net assets 1,802 Carrying amount of investment in associates (45%) of net assets 812 Associate’ revenue and net income for the year ended December 31 was as follows: 2018 Revenue 4 Cost of revenues (3) Other income and expenses, net (85) including depreciation and amortization (1) Total net loss (84) Group’s share (45%) of total net loss (38) |
Investment in joint ventures (T
Investment in joint ventures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investment in joint venture | |
Schedule of joint venture financial information | The following table illustrates summarized financial information of the Group’s investment in Flocktory joint venture: As of As of December 31, December 31, 2017 2018 Joint venture companies’ statement of financial position: Non-current assets 666 598 Current assets 125 191 including cash and cash equivalents 80 144 Current liabilities (11) (20) including financial liabilities (9) (18) Net assets 780 769 Group’s share (82%) of net assets 640 631 Goodwill 192 205 Carrying amount of investment in joint venture company 832 836 Joint venture’ revenue and net income for the years ended December 31 was as follows : 2017 2018 Revenue 187 332 Cost of revenues (79) (142) Other income and expenses, net (107) (200) including depreciation and amortization (59) (79) Total net loss 1 (10) Group’s share (82%) of total net loss 1 (8) |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Schedule of other revenue | 2016 2017 2018 Cash and settlement service fees 130 670 3,017 Other revenue 562 600 626 Total other revenue 692 1,270 3,643 |
Schedule of interest income, net | 2016 2017 2018 Interest revenue calculated using the effective interest rate (899) (1,052) (1,854) Interest expense classified as part of cost of revenue 37 42 89 Interest income from non-banking loans classified separately in the consolidated statement of comprehensive income (36) (35) (41) Interest expense from non-banking loans classified separately in the consolidated statement of comprehensive income 64 29 24 Interest income, net, for the purposes of consolidated cash flow statement (834) (1,016) (1,782) |
Cost of revenue (exclusive of_2
Cost of revenue (exclusive of depreciation and amortization) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cost of revenue (exclusive of depreciation and amortization) | |
Schedule of cost of revenue (excluding depreciation and amortization) | 2016 2017 2018 Transaction costs 6,490 6,756 9,324 Payroll and related taxes 1,377 2,059 4,176 Other expenses 779 948 1,629 Total cost of revenue (exclusive of depreciation and amortization) 8,646 9,763 15,129 |
Selling, general and administ_2
Selling, general and administrative expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Selling, general and administrative expenses | |
Summary of selling, general and administrative expenses | 2016 2017 2018 Compensation to employees, related taxes and other personnel expenses 1,682 2,227 3,572 Advertising, client acquisition and related expenses 165 1,294 2,369 Tax expenses, except income and payroll related taxes 175 407 690 Advisory and audit services 297 433 661 Rent of premises and related utility expenses 346 391 643 IT related services 180 236 364 Loss/(gain) from initial recognition, net — — 143 Other expenses 363 1,035 1,229 Total selling, general and administrative expenses 3,208 6,023 9,671 |
Other income and expenses (Tabl
Other income and expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other income and expense | |
Summary of other income and expenses | 2016 2017 2018 Loss on set up of associate (Note 6) — — (267) Compensation of expenses from an associate — — 181 Change in fair value of financial instruments — — (86) Share in loss of associates and joint ventures — — (46) Loss on disposal of subsidiaries (10) — — Other expenses (76) (71) (27) Other Income 7 30 18 Total other income and expenses, net (79) (41) (227) |
Dividends paid and proposed (Ta
Dividends paid and proposed (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Dividends paid and proposed | |
Summary of dividends paid and proposed | 2016 2017 2018 Proposed, declared and approved during the year: 2018: nil — (2017: Final dividend for 2016: U.S.$ 11,520,798, Interim dividend for 2017: U.S.$ 26,113,788 2,207 2016: Final dividend for 2015: U.S.$ 30,210,153, Interim dividend for 2016: U.S.$ 39,943,003) 4,843 Paid during the period*: 2018: nil — (2017: Final dividend for 2016: U.S.$ 11,520,798, Interim dividend for 2017: U.S.$ 26,113,788 2,148 2016: Final dividend for 2015: U.S.$ 30,210,153, Interim dividend for 2016: U.S.$ 39,943,003) 4,628 Proposed for approval (not recognized as a liability as of December 31): 2018: nil — 2017: nil — 2016: Final dividend for 2016: U.S.$ 11,513,436 679 Dividends payable as of December 31 — — — * |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income tax | |
Summary of deferred income tax | Deferred income tax assets and liabilities as of December 31, 2018 and 2017, relate to the following: Consolidated statement of Consolidated statement of financial position as of comprehensive income for the December 31, year ended 2018 2017 2018 2017 Intangible assets (678) (719) 59 65 Trade and other payables 181 166 (7) 36 Trade and other receivables 31 101 (74) (37) Loans issued 69 48 (2) 21 Taxes on unremitted earnings (253) (184) (69) (109) Other 64 7 36 24 Net deferred income tax asset/(liability) (586) (581) (57) — including: Deferred tax asset 157 245 Deferred tax liability (743) (826) Deferred tax assets and liabilities are not offset because they do not relate to income taxes levied by the same tax authority on the same taxable entity. Reconciliation of deferred income tax asset/(liability), net: 2016 2017 2018 Deferred income tax asset/(liability), net as of January 1 (834) (581) (581) Impact of adopting IFRS 9 ( Note 2.3(e) ) — — 49 Effect of acquisitions of subsidiaries — — 3 Deferred tax benefit/(expense) 253 — (57) Deferred income tax asset/(liability), net as of December 31 (581) (581) (586) |
Summary of income tax expense | 2016 2017 2018 Total tax expense Current income tax expense (871) (698) (818) Deferred tax benefit/(expense) 253 — (57) Income tax expense for the year (618) (698) (875) |
Reconciliation of theoretical and actual income tax expense | 2016 2017 2018 Profit before tax 3,107 3,840 4,501 Theoretical income tax expense at the domestic rate in each individual jurisdiction (278) (370) (479) (Increase)/decrease resulting from the tax effect of: Non-taxable income 39 12 70 Non-deductible expenses (269) (222) (388) Income tax associated with earnings of foreign subsidiaries (95) (109) (70) Unrecognized deferred tax assets (15) (9) (8) Total income tax expense (618) (698) (875) |
Commitments, contingencies an_2
Commitments, contingencies and operating risks (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments, contingencies and operating risks | |
Summary of future minimum lease rentals under non-cancellable operating lease commitments for office premises | As of As of December 31, December 31, 2017 2018 Within one year 397 449 After one year but not more than five years 693 625 More than five years — 168 |
Schedule of outstanding credit limits | As of As of December 31, December 31, 2017 2018 Unused limits on instalment card loans 8,603 30,062 |
Summary of analysis of changes in loss allowances for commitments | Total ECL allowance under IFRS 9 as of January 1, 2018 (Note 2.3(e)) (111) Changes because of financial instruments (originated or acquired)/derecognized during the reporting period 27 Amounts written off — ECL allowance under IFRS 9 as of December 31, 2018 (84) |
Risk management (Tables)
Risk management (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risk management | |
Summary of sensitivity to reasonably possible changes in US Dollar and Euro exchange rates against Ruble | Effect on profit before tax change in US Dollar Gain/(loss) 2018 +14% 329 -14% (329) 2017 +11% 83 -11% (83) Effect on profit before tax change in Euro Gain/(loss) 2018 +14% 196 - 14% (196) 2017 +12.5% 36 - 12.5% (36) |
Summary of maturity profile of financial liabilities | Due: More than a Total On demand Within a year year Trade and other payables (Note 18) 27,499 27,499 — — Customer accounts and amounts due to banks (Note 19) 18,105 16,002 1,866 237 Total as of December 31, 2018 45,604 43,501 1,866 237 Due: More than a Total On demand Within a year year Trade and other payables (Note 18) 19,599 19,599 — — Customer accounts and amounts due to banks (Note 19) 3,182 3,071 111 — Total as of December 31, 2017 22,781 22,670 111 — |
Summary of credit risk exposure using provision matrix | December 31, 2018 Days past due Current and <30 days 30-60 days 61-90 days >91 days Total Expected credit loss rate % % % % Exposure at default 7,672 96 22 331 8,121 Expected credit loss (20) (3) (8) (323) (354) |
Summary of largest counterparties balances | Trade and other receivables As of December 31, As of December 31, 2017 2018 Concentration of credit risks by main counterparties, % from total amount Top 5 counterparties 47 % 40 % Others 53 % 60 % |
Financial instruments (Tables)
Financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial instruments | |
Summary of fair values of financial instruments | As of December 31, 2017* As of December 31, 2018 Carrying Fair Carrying Fair amount value amount value Financial assets Debt instruments AC 1,804 1,827 1,929 1,931 Long-term loans AC 164 164 159 159 Long-term loans FVPL — — 71 71 Total financial assets 1,968 1,991 2,159 2,161 * The balances of financial instruments as of December 31,2017 are classified under IFRS 9. |
Summary of fair value measurement hierarchy of financial instruments | Fair value measurement using Quoted prices Significant Significant in active observable unobservable markets inputs inputs Date of valuation Total (Level 1) (Level 2) (Level 3) Assets accounted at fair value through profit or loss Long-term loans December 31, 2018 71 — — 71 Assets for which fair values are disclosed Debt instruments December 31, 2018 1,931 1,931 — — Long-term loans December 31, 2018 159 — — 159 Assets for which fair values are disclosed Debt instruments December 31, 2017 1,827 1,827 — — Long-term loans December 31, 2017 164 — — 164 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based payments | |
Schedule of option plans | 2012 Employee Stock Option Plan 2015 Restricted Stock Unit Plan (ESOP) (RSU Plan) Adoption date October, 2012 July, 2015 Type of shares class B shares class B shares Number of options or RSUs reserved Up to 7 % of total amount of shares Up to 7 % of total amount of shares Exercise price Granted during: Granted during: Year 2012: U.S. $ 13.65 Year 2016: n/a Year 2013: U.S. $ 41.24 - 46.57 Year 2017: n/a Year 2014: U.S. $ 34.09 - 37.89 Year 2018: n/a Year 2017: U.S. $ 23.94 Exercise basis Shares Shares Expiration date December 2020 December 2022 Vesting period Up to 4 years Three vesting during up to 2 years Other major terms The options are not transferrable - The units are not transferrable - All other terms of the units under 2015 RSU Plan are to be determined by the Company's BOD or the CEO, if so resolved by the BOD, acting as administrator of the Plan |
Schedule of changes in outstanding options | As of Forfeited Exercised As of December 31, Granted during during the during the December 31, 2017 the period period period 2018 2012 ESOP 1,528,140 — (11,159) — 1,516,981 2015 RSU Plan 545,378 807,300 (20,800) (518,859) 813,019 Total 2,073,518 807,300 (31,959) (518,859) 2,330,000 |
Schedule of valuations of share-based payments | Weighted average Number Weighted fair value of Risk-free Expec- average per option/ Option plan/ options/ Dividend Volatility, interest ted term, share price RSU (U.S. Valuation Grant date RSUs yield,% % rate, % years (U.S. $) $) method 2012 ESOP 4,128,521 0-5.03% 28%-49.85% 0.29%-3.85% 2 - 4 28.10 7.14 Black-Scholes-Merton 2015 RSU Plan 1,903,008 0-5.70% 44.43%-64.02% 2.89%-4.34% 0 - 2 15.15 14.47 Binominal |
Principles underlying prepara_4
Principles underlying preparation of consolidated financial statements - Summary of impact of IFRS 9 adoption (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Trade and other receivables | ₽ 8,042 | ₽ 9,648 | ||
Deferred tax assets | 157 | 245 | ||
Total assets | 73,023 | 45,059 | ||
Liabilities | ||||
Other current liabilities | 531 | 51 | ||
Net impact on equity, Including | 25,706 | 21,157 | ₽ 19,969 | ₽ 22,436 |
Retained earnings | 9,091 | 5,715 | ||
Loss allowance / Impairment | ||||
Assets | ||||
Trade and other receivables | (366) | (545) | ||
Loans issued | (321) | |||
Liabilities | ||||
Undrawn credit commitments | ₽ (84) | |||
Financial assets and undrawn credit commitments | (866) | |||
Increase (decrease) due to application of IFRS 9 | ||||
Assets | ||||
Trade and other receivables | (33) | |||
Loans issued | (108) | |||
Debt instruments | (5) | |||
Deferred tax assets | 49 | |||
Total assets | (97) | |||
Liabilities | ||||
Other current liabilities | 111 | |||
Total liabilities | 111 | |||
Net impact on equity, Including | (208) | |||
Retained earnings | (208) | |||
Increase (decrease) due to application of IFRS 9 | Loss allowance / Impairment | ||||
Assets | ||||
Trade and other receivables | (33) | |||
Loans issued | (108) | |||
Debt instruments | (5) | |||
Liabilities | ||||
Undrawn credit commitments | (111) | |||
Financial assets and undrawn credit commitments | (257) | |||
Opening balance after application of IFRS 9 | Loss allowance / Impairment | ||||
Assets | ||||
Trade and other receivables | (578) | |||
Loans issued | (429) | |||
Debt instruments | (5) | |||
Liabilities | ||||
Undrawn credit commitments | (111) | |||
Financial assets and undrawn credit commitments | ₽ (1,123) |
Principles underlying prepara_5
Principles underlying preparation of consolidated financial statements - Provisional amounts for IFRS 16 adoption (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Property and equipment (Right-of-use assets) | ₽ 1,074 | ₽ 724 | ₽ 593 | |
Other non-current assets (Advances issued (long-term)) | 110 | 64 | ||
Trade and other receivables (Advances issued (short-term)) | 8,042 | 9,648 | ||
Deferred tax assets | 157 | 245 | ||
Total assets | 73,023 | 45,059 | ||
Liabilities | ||||
Trade and other payables (Other payables) | 27,499 | 19,599 | ||
Net impact on equity, Including | 25,706 | 21,157 | ₽ 19,969 | ₽ 22,436 |
Retained earnings | 9,091 | ₽ 5,715 | ||
Increase (decrease) due to application of IFRS 16 | ||||
Assets | ||||
Property and equipment (Right-of-use assets) | 1,088 | |||
Other non-current assets (Advances issued (long-term)) | (9) | |||
Trade and other receivables (Advances issued (short-term)) | (3) | |||
Deferred tax assets | (29) | |||
Total assets | 1,047 | |||
Liabilities | ||||
Long-term portion of lease liabilities | 702 | |||
Short-term portion of lease liabilities | 360 | |||
Trade and other payables (Other payables) | (132) | |||
Total liabilities | 930 | |||
Net impact on equity, Including | 117 | |||
Retained earnings | ₽ 117 |
Summary of significant accoun_3
Summary of significant accounting policies - Foreign currency translation (Details) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2018₽ / $ | Dec. 31, 2018₽ / $₽ / | Dec. 31, 2018₽ / $₽ / MDL | Dec. 31, 2018₽ / $₽ / ₸ | Dec. 31, 2018₽ / $₽ / € | Dec. 31, 2018₽ / $₽ / Br | Dec. 31, 2017₽ / $ | Dec. 31, 2017₽ / $₽ / | Dec. 31, 2017₽ / $₽ / MDL | Dec. 31, 2017₽ / $₽ / ₸ | Dec. 31, 2017₽ / $₽ / € | Dec. 31, 2017₽ / $₽ / Br | Dec. 31, 2018₽ / | Dec. 31, 2018₽ / MDL | Dec. 31, 2018₽ / ₸ | Dec. 31, 2018₽ / € | Dec. 31, 2018₽ / Br | Dec. 31, 2017₽ / | Dec. 31, 2017₽ / MDL | Dec. 31, 2017₽ / ₸ | Dec. 31, 2017₽ / € | Dec. 31, 2017₽ / Br | |
Summary of significant accounting policies | ||||||||||||||||||||||
Average exchange rate | 62.7078 | 15.8887 | 3.73239 | 0.181717 | 73.9384 | 30.7630 | 58.3529 | 14.4216 | 3.16871 | 0.178959 | 65.9014 | 30.2125 | ||||||||||
Exchange rates | 69.4706 | 69.4706 | 69.4706 | 69.4706 | 69.4706 | 69.4706 | 57.6002 | 57.6002 | 57.6002 | 57.6002 | 57.6002 | 57.6002 | 17.0501 | 4.09084 | 0.180570 | 79.4605 | 32.0732 | 14.7822 | 3.36548 | 0.173184 | 68.8668 | 29.1013 |
Summary of significant accoun_4
Summary of significant accounting policies - Property and equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | Processing servers and engineering equipment | |
Summary of significant accounting policies | |
Estimated useful lives | 3 years |
Minimum | Computers and office equipment | |
Summary of significant accounting policies | |
Estimated useful lives | 3 years |
Minimum | Other equipment | |
Summary of significant accounting policies | |
Estimated useful lives | 2 years |
Maximum | Processing servers and engineering equipment | |
Summary of significant accounting policies | |
Estimated useful lives | 10 years |
Maximum | Computers and office equipment | |
Summary of significant accounting policies | |
Estimated useful lives | 5 years |
Maximum | Other equipment | |
Summary of significant accounting policies | |
Estimated useful lives | 20 years |
Summary of significant accoun_5
Summary of significant accounting policies - Intangible assets (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Bank license (indefinite life license) | |
Summary of significant accounting policies | |
Amortization period of intangible assets | indefinite |
Minimum | Software and other intangible assets | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 3 years |
Minimum | Customer relationship and contract rights | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 4 years |
Minimum | Computer software | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 3 years |
Minimum | Trademarks and other intangible assets | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 3 years |
Maximum | Software and other intangible assets | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 5 years |
Maximum | Customer relationship and contract rights | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 15 years |
Maximum | Computer software | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 10 years |
Maximum | Trademarks and other intangible assets | |
Summary of significant accounting policies | |
Amortization period of intangible assets | 11 years |
Summary of significant accoun_6
Summary of significant accounting policies - Employee benefits (Details) - Russia - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of significant accounting policies | |||
Defined contributions to pension fund | ₽ 886 | ₽ 473 | ₽ 315 |
Maximum | |||
Summary of significant accounting policies | |||
Percentage of defined contributions to pension fund | 30.00% | 30.00% | 30.00% |
Minimum | |||
Summary of significant accounting policies | |||
Percentage of defined contributions to pension fund | 15.00% | 15.00% | 15.00% |
Significant accounting judgme_2
Significant accounting judgments, estimates and assumptions - Detailed information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Stock Option Plan (ESOP) | |
Significant accounting judgments, estimates and assumptions | |
Estimated forfeiture rate as of grant date | 0.00% |
Minimum | Restricted stock units (RSU) | |
Significant accounting judgments, estimates and assumptions | |
Estimated forfeiture rate | 11.00% |
Maximum | Restricted stock units (RSU) | |
Significant accounting judgments, estimates and assumptions | |
Estimated forfeiture rate | 16.00% |
Consolidated subsidiaries - Des
Consolidated subsidiaries - Description of subsidiaries and ownership interest (Details) | Dec. 31, 2018 | Dec. 31, 2017 |
JSC Tochka | ||
Consolidated subsidiaries | ||
Ownership interest in associate | 40.00% | |
Flocktory Ltd (Cyprus) | ||
Consolidated subsidiaries | ||
Ownership interest in joint ventures | 82.00% | 82.00% |
Flocktory Spain S.L. (Spain) | ||
Consolidated subsidiaries | ||
Ownership interest in joint ventures | 82.00% | 82.00% |
FreeAtLast LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in joint ventures | 82.00% | 82.00% |
JSC QIWI (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
QIWI Bank JSC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
QIWI Payments Services Provider Ltd (UAE) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
QIWI International Payment System LLC (USA) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
Qiwi Kazakhstan LP (Kazakhstan) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
JLLC OSMP BEL (Belarus) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 51.00% | 51.00% |
QIWI-M S.R.L. (Moldova) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 51.00% | 51.00% |
QIWI ROMANIA SRL | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
QIWI WALLET EUROPE SIA (Latvia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
QIWI Retail LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | |
QIWI Management Services FZ-LLC (UAE) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
Attenium LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
Postomatnye Tekhnologii LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
Future Pay LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
Qiwi Blockchain Technologies LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
QIWI Shtrikh LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 51.00% | 51.00% |
QIWI Platform LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
QIWI Processing LLC (Russia) | ||
Consolidated subsidiaries | ||
Ownership interest in subsidiaries | 100.00% | 100.00% |
Acquisitions and business com_3
Acquisitions and business combinations - Rocketbank (Details) - RUB (₽) ₽ in Millions | Jul. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash received | ||||
Total cash received upon business combination in the year 2018 | ₽ 138 | ₽ (321) | ₽ (10) | |
RB (Rocketbank) | ||||
Acquisitions and business combinations | ||||
Cash transferred | ₽ 183 | |||
Net assets acquired: | ||||
Property and equipment | 113 | |||
Intangible assets | 393 | |||
Deferred tax asset | 3 | |||
Other liabilities | (419) | |||
Total | 90 | |||
Consideration paid | 183 | |||
Goodwill arising on acquisition | 93 | |||
Goodwill expected to be deductible for tax purposes | 0 | |||
Revenue and net income | ||||
Revenue since acquisition date | 180 | |||
Net loss since acquisition date | (818) | |||
Revenue of combined entity | 31,016 | |||
Net profit of combined entity | ₽ 2,266 | |||
Cash received | ||||
Cash paid to the seller for non-current assets | (83) | ₽ (321) | ||
Cash paid to the top-management of Rocketbank | (100) | |||
Cash received from the seller | 321 | |||
Total cash received upon business combination in the year 2018 | 138 | |||
RB (Rocketbank) | Loyalty program contract liability | ||||
Net assets acquired: | ||||
Other liabilities | (419) | |||
RB (Rocketbank) | Software, trademarks and client base | ||||
Net assets acquired: | ||||
Intangible assets | ₽ 393 |
Acquisitions and business com_4
Acquisitions and business combinations - JSC Tochka (Details) - JSC Tochka - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Jun. 30, 2018 |
Acquisitions and business combinations | ||
Percentage of voting equity interests acquired | 40.00% | |
Share in entity according to share in dividends and potential capital gains | 45.00% | 45.00% |
Non-monetary assets contributed | ₽ 125 | |
Monetary assets contributed | 992 | |
Total contribution / consideration transferred | ₽ 1,117 | |
Cash paid | ₽ 0 | |
Bank Financial Corporation Otkritie | ||
Acquisitions and business combinations | ||
Percentage of ownership, excluding share adjustment | 50.00% | |
Share adjustment to percentage of ownership | 1 | |
Share in entity according to share in dividends and potential capital gains | 45.00% | |
Tochka management | ||
Acquisitions and business combinations | ||
Percentage of ownership, excluding share adjustment | 10.00% | |
Share adjustment to percentage of ownership | (1) | |
Share in entity according to share in dividends and potential capital gains | 10.00% |
Acquisitions and business com_5
Acquisitions and business combinations - Fair value of assets contributed (JSC Tochka) (Details) - RUB (₽) ₽ in Millions | Jun. 30, 2018 | Dec. 31, 2018 |
Acquisitions and business combinations | ||
Loss on set up of associate | ₽ (267) | |
JSC Tochka | ||
Acquisitions and business combinations | ||
Property and equipment | ₽ 47 | |
Intangible assets | 88 | |
Cash, accounts receivable and promissory notes | 1,753 | |
Total | 1,888 | |
Group's share (45%) | 850 | |
Contribution of the Group | 1,117 | |
Loss on set up of associate | ₽ (267) | |
Share in entity according to share in dividends and potential capital gains | 45.00% | 45.00% |
Acquisitions and business com_6
Acquisitions and business combinations - Flocktory (Details) - Flocktory Ltd (Cyprus) ₽ in Millions | Mar. 22, 2017RUB (₽)shares |
Acquisitions and business combinations | |
Percentage of voting equity interests acquired | 82.00% |
Percentage of remaining equity stake in entity | 18.00% |
Percentage of minority shareholders put option exercisable after one year from acquisition date | 50.00% |
Percentage of minority shareholders put option exercisable after one and half year from acquisition date | 25.00% |
Percentage of minority shareholders put option exercisable after two years from acquisition date | 25.00% |
Consideration Transferred | |
Cash consideration paid | ₽ 794 |
Cash payable for Flocktory's stock option plan cancelation | 37 |
Total contribution / consideration transferred | ₽ 831 |
ESOP rights for cancellation | shares | 504 |
ESOP rights cancelled at acquisition date | shares | 259 |
ESOP rights offered for cancellation at March 22, 2018 | shares | 120 |
ESOP rights offered for cancellation at March 22, 2019 | shares | 125 |
Net assets acquired: | |
Property and equipment | ₽ 1 |
Intangible assets | 720 |
Accounts receivable | 26 |
Cash and cash equivalents | 55 |
Trade and other payables | (21) |
Other liabilities | (1) |
Total | 780 |
Group's share of net assets (82%) | 639 |
Goodwill arising on acquisition | ₽ 192 |
Operating segments (Details)
Operating segments (Details) ₽ in Millions | 12 Months Ended | 130 Months Ended | ||
Dec. 31, 2018RUB (₽) | Dec. 31, 2017RUB (₽) | Dec. 31, 2016RUB (₽) | Dec. 31, 2017segment | |
Disclosure of operating segments | ||||
Number of reportable segments | segment | 2 | |||
Revenue | ₽ 30,610 | ₽ 20,897 | ₽ 17,880 | |
Profit/(loss) before tax | 4,501 | 3,840 | 3,107 | |
Net profit/(loss) | 3,626 | 3,142 | 2,489 | |
PS (Payment services) | ||||
Disclosure of operating segments | ||||
Revenue | 26,649 | 20,133 | 17,846 | |
CFS | ||||
Disclosure of operating segments | ||||
Revenue | 558 | 105 | 1 | |
SME | ||||
Disclosure of operating segments | ||||
Revenue | 3,045 | 611 | ||
RB (Rocketbank) | ||||
Disclosure of operating segments | ||||
Revenue | 180 | |||
CO | ||||
Disclosure of operating segments | ||||
Revenue | 178 | 48 | 33 | |
Operating segments | ||||
Disclosure of operating segments | ||||
Revenue | 19,657 | 13,193 | 10,611 | |
Profit/(loss) before tax | 5,072 | 4,818 | 5,590 | |
Net profit/(loss) | 4,137 | 4,054 | 4,714 | |
Operating segments | PS (Payment services) | ||||
Disclosure of operating segments | ||||
Revenue | 16,497 | 12,580 | 10,583 | |
Profit/(loss) before tax | 11,552 | 8,795 | 6,454 | |
Net profit/(loss) | 9,529 | 7,543 | 5,612 | |
Operating segments | CFS | ||||
Disclosure of operating segments | ||||
Revenue | 385 | 9 | (3) | |
Profit/(loss) before tax | (3,281) | (2,704) | (259) | |
Net profit/(loss) | (2,618) | (2,164) | (219) | |
Operating segments | SME | ||||
Disclosure of operating segments | ||||
Revenue | 2,916 | 578 | ||
Profit/(loss) before tax | (898) | (190) | ||
Net profit/(loss) | (776) | (171) | ||
Operating segments | RB (Rocketbank) | ||||
Disclosure of operating segments | ||||
Revenue | (263) | (5) | ||
Profit/(loss) before tax | (1,327) | (323) | ||
Net profit/(loss) | (1,061) | (311) | ||
Operating segments | CO | ||||
Disclosure of operating segments | ||||
Revenue | 122 | 31 | 31 | |
Profit/(loss) before tax | (974) | (760) | (605) | |
Net profit/(loss) | (937) | (843) | (679) | |
Material reconciling items, cost of revenue (exclusive of depreciation and amortization) | ||||
Disclosure of operating segments | ||||
Revenue | 15,129 | 9,763 | 8,646 | |
Material reconciling items, payroll and related taxes | ||||
Disclosure of operating segments | ||||
Revenue | (4,176) | (2,059) | (1,377) | |
Material reconciling items, amortization of fair value adjustments recorded on business combinations | ||||
Disclosure of operating segments | ||||
Profit/(loss) before tax | (369) | (344) | (396) | |
Net profit/(loss) | (369) | (344) | (396) | |
Material reconciling items, share-based payments | ||||
Disclosure of operating segments | ||||
Profit/(loss) before tax | (635) | (398) | (224) | |
Net profit/(loss) | (635) | (398) | (224) | |
Material reconciling items, foreign exchange loss/(gain) from revaluation of cash proceeds received from secondary public offering (Note 30) | ||||
Disclosure of operating segments | ||||
Profit/(loss) before tax | 433 | (236) | (975) | |
Net profit/(loss) | 433 | (236) | (975) | |
Material reconciling items, impairment of intangible assets recorded on acquisitions | ||||
Disclosure of operating segments | ||||
Profit/(loss) before tax | (878) | |||
Net profit/(loss) | (878) | |||
Material reconciling items, loss on disposal of subsidiaries, net | ||||
Disclosure of operating segments | ||||
Profit/(loss) before tax | (10) | |||
Net profit/(loss) | (10) | |||
Material reconciling items, effect from taxation | ||||
Disclosure of operating segments | ||||
Net profit/(loss) | ₽ 60 | ₽ 66 | ₽ 258 |
Operating segments - Geographic
Operating segments - Geographic information (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of geographical areas | |||
Revenue | ₽ 30,610 | ₽ 20,897 | ₽ 17,880 |
Russia | |||
Disclosure of geographical areas | |||
Revenue | 22,693 | 15,556 | 13,274 |
Other CIS | |||
Disclosure of geographical areas | |||
Revenue | 1,393 | 1,098 | 1,099 |
EU | |||
Disclosure of geographical areas | |||
Revenue | 2,353 | 989 | 807 |
Other countries | |||
Disclosure of geographical areas | |||
Revenue | ₽ 4,171 | ₽ 3,254 | ₽ 2,700 |
Operating segments - Major cust
Operating segments - Major customers (Details) - customer | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating segments. | |||
Number of customers exceeding ten percent of revenue | 0 | 0 | 0 |
Earnings per share (Details)
Earnings per share (Details) - RUB (₽) ₽ / shares in Units, ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings per share | |||
Net profit attributable to ordinary equity holders of the parent for basic earnings | ₽ 3,584 | ₽ 3,114 | ₽ 2,474 |
Weighted average number of ordinary shares for basic earnings per share | 61,202,710 | 60,755,706 | 60,477,840 |
Effect of share-based payments | 522,116 | 404,357 | 167,197 |
Weighted average number of ordinary shares for diluted earnings per share | 61,724,826 | 61,160,063 | 60,645,037 |
Basic, profit attributable to ordinary equity holders of the parent | ₽ 58.56 | ₽ 51.25 | ₽ 40.91 |
Diluted, profit attributable to ordinary equity holders of the parent | ₽ 58.06 | ₽ 50.92 | ₽ 40.79 |
Property and equipment (Details
Property and equipment (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and equipment | ||
Beginning balance | ₽ 724 | ₽ 593 |
Ending balance | 1,074 | 724 |
Decrease through classified as held for sale | (90) | |
Gross book value of fully depreciated assets | 249 | 184 |
Gross carrying amount | ||
Property and equipment | ||
Beginning balance | 1,237 | 1,029 |
Additions | 736 | 365 |
Additions from business combinations (Note 6) | 45 | |
Disposals | (187) | (157) |
Ending balance | 1,831 | 1,237 |
Accumulated depreciation, amortisation and impairment | ||
Property and equipment | ||
Beginning balance | (513) | (436) |
Depreciation charge | (284) | (206) |
Disposals | 40 | 129 |
Ending balance | (757) | (513) |
Processing servers and engineering equipment | ||
Property and equipment | ||
Beginning balance | 466 | 367 |
Ending balance | 807 | 466 |
Processing servers and engineering equipment | Gross carrying amount | ||
Property and equipment | ||
Beginning balance | 822 | 695 |
Transfer between groups | 22 | 77 |
Additions | 478 | 196 |
Additions from business combinations (Note 6) | 82 | |
Disposals | (65) | (146) |
Ending balance | 1,339 | 822 |
Processing servers and engineering equipment | Accumulated depreciation, amortisation and impairment | ||
Property and equipment | ||
Beginning balance | (356) | (328) |
Depreciation charge | (192) | (150) |
Disposals | 16 | 122 |
Ending balance | (532) | (356) |
Computers and office equipment | ||
Property and equipment | ||
Beginning balance | 54 | 30 |
Ending balance | 172 | 54 |
Computers and office equipment | Gross carrying amount | ||
Property and equipment | ||
Beginning balance | 130 | 91 |
Transfer between groups | 5 | 1 |
Additions | 134 | 45 |
Additions from business combinations (Note 6) | 22 | |
Disposals | (13) | (7) |
Ending balance | 278 | 130 |
Computers and office equipment | Accumulated depreciation, amortisation and impairment | ||
Property and equipment | ||
Beginning balance | (76) | (61) |
Depreciation charge | (40) | (21) |
Disposals | 10 | 6 |
Ending balance | (106) | (76) |
Other equipment | ||
Property and equipment | ||
Beginning balance | 93 | 115 |
Ending balance | 76 | 93 |
Other equipment | Gross carrying amount | ||
Property and equipment | ||
Beginning balance | 174 | 162 |
Transfer between groups | 12 | |
Additions | 109 | 16 |
Additions from business combinations (Note 6) | 9 | |
Disposals | (109) | (4) |
Ending balance | 195 | 174 |
Other equipment | Accumulated depreciation, amortisation and impairment | ||
Property and equipment | ||
Beginning balance | (81) | (47) |
Depreciation charge | (52) | (35) |
Disposals | 14 | 1 |
Ending balance | (119) | (81) |
Construction in progress (CIP) and Advances for equipment | ||
Property and equipment | ||
Beginning balance | 111 | 81 |
Ending balance | 19 | 111 |
Construction in progress (CIP) and Advances for equipment | Gross carrying amount | ||
Property and equipment | ||
Beginning balance | 111 | 81 |
Transfer between groups | (39) | (78) |
Additions | 15 | 108 |
Additions from business combinations (Note 6) | (68) | |
Ending balance | ₽ 19 | ₽ 111 |
Intangible assets (Details)
Intangible assets (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | ₽ 10,807 | ₽ 11,022 | |
Impairment | (23) | (104) | ₽ (878) |
Ending balance | 10,846 | 10,807 | 11,022 |
Gross amount of fully amortized intangible assets | 190 | 169 | |
Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 13,292 | 13,440 | |
Additions | 385 | 484 | |
Additions from business combinations (Note 6) | 337 | ||
Disposals | (224) | (632) | |
Ending balance | 13,790 | 13,292 | 13,440 |
Accumulated depreciation, amortisation and impairment | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | (2,485) | (2,418) | |
Amortization charge | (580) | (590) | |
Impairment | (23) | (104) | |
Disposals | 144 | 627 | |
Ending balance | (2,944) | (2,485) | (2,418) |
Goodwill | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 6,285 | 6,285 | |
Ending balance | 6,378 | 6,285 | 6,285 |
Goodwill | Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 6,285 | 6,285 | |
Additions from business combinations (Note 6) | 93 | ||
Ending balance | 6,378 | 6,285 | 6,285 |
Licenses | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 183 | 225 | |
Ending balance | 183 | 183 | 225 |
Licenses | Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 183 | 284 | |
Disposals | (101) | ||
Ending balance | 183 | 183 | 284 |
Licenses | Accumulated depreciation, amortisation and impairment | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | (59) | ||
Amortization charge | (42) | ||
Disposals | 101 | ||
Ending balance | (59) | ||
Computer software | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 547 | 474 | |
Ending balance | 694 | 547 | 474 |
Computer software | Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 1,083 | 910 | |
Additions | 279 | 244 | |
Additions from business combinations (Note 6) | 166 | ||
Transfer between groups | 31 | 54 | |
Disposals | (205) | (125) | |
Ending balance | 1,354 | 1,083 | 910 |
Computer software | Accumulated depreciation, amortisation and impairment | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | (536) | (436) | |
Amortization charge | (245) | (220) | |
Impairment | (4) | ||
Disposals | 125 | 120 | |
Ending balance | (660) | (536) | (436) |
Customer relationships | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 3,508 | 3,802 | |
Ending balance | 3,307 | 3,508 | 3,802 |
Customer relationships | Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 5,326 | 5,338 | |
Additions from business combinations (Note 6) | 88 | ||
Disposals | (12) | ||
Ending balance | 5,414 | 5,326 | 5,338 |
Customer relationships | Accumulated depreciation, amortisation and impairment | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | (1,818) | (1,536) | |
Amortization charge | (289) | (286) | |
Impairment | (8) | ||
Disposals | 12 | ||
Ending balance | (2,107) | (1,818) | (1,536) |
Trademarks | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 92 | 126 | |
Ending balance | 188 | 92 | 126 |
Trademarks | Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 216 | 216 | |
Additions from business combinations (Note 6) | 139 | ||
Ending balance | 355 | 216 | 216 |
Trademarks | Accumulated depreciation, amortisation and impairment | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | (124) | (90) | |
Amortization charge | (43) | (36) | |
Disposals | 2 | ||
Ending balance | (167) | (124) | (90) |
Contract rights | Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 295 | ||
Disposals | (295) | ||
Ending balance | 295 | ||
Contract rights | Accumulated depreciation, amortisation and impairment | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | (295) | ||
Disposals | 295 | ||
Ending balance | (295) | ||
Advances for intangibles, CIP and others | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 192 | 110 | |
Ending balance | 96 | 192 | 110 |
Advances for intangibles, CIP and others | Gross carrying amount | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | 199 | 112 | |
Additions | 106 | 240 | |
Additions from business combinations (Note 6) | (149) | ||
Transfer between groups | (31) | (54) | |
Disposals | (19) | (99) | |
Ending balance | 106 | 199 | 112 |
Advances for intangibles, CIP and others | Accumulated depreciation, amortisation and impairment | |||
Disclosure of reconciliation of changes in intangible assets and goodwill | |||
Beginning balance | (7) | (2) | |
Amortization charge | (3) | (6) | |
Impairment | (19) | (96) | |
Disposals | 19 | 97 | |
Ending balance | ₽ (10) | ₽ (7) | ₽ (2) |
Impairment testing of goodwil_3
Impairment testing of goodwill and intangible assets (Details) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018RUB (₽)item | Dec. 31, 2017RUB (₽) | Dec. 31, 2016RUB (₽) | |
Impairment testing of goodwill and intangible assets | |||
Number of CGUs to which goodwill is allocated | item | 2 | ||
Number of CGUs to which intangible assets with indefinite useful life relate | item | 4 | ||
Goodwill and other intangible assets | ₽ 10,846 | ₽ 10,807 | ₽ 11,022 |
Goodwill and indefinite life licences | |||
Impairment testing of goodwill and intangible assets | |||
Addition (Note 6) | 93 | ||
Goodwill and other intangible assets | 6,561 | 6,468 | 6,468 |
Goodwill | |||
Impairment testing of goodwill and intangible assets | |||
Goodwill and other intangible assets | 6,378 | 6,285 | 6,285 |
Goodwill | PS (Payment services) | |||
Impairment testing of goodwill and intangible assets | |||
Goodwill and other intangible assets | 6,285 | 6,285 | 6,285 |
Goodwill | RB (Rocketbank) | |||
Impairment testing of goodwill and intangible assets | |||
Addition (Note 6) | 93 | ||
Goodwill and other intangible assets | 93 | ||
Bank license (indefinite life license) | |||
Impairment testing of goodwill and intangible assets | |||
Goodwill and other intangible assets | ₽ 183 | ₽ 183 | ₽ 183 |
Impairment testing of goodwil_4
Impairment testing of goodwill and intangible assets - Goodwill and intangible assets with indefinite useful life (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | ₽ 10,846 | ₽ 10,807 | ₽ 11,022 |
RB (Rocketbank) | |||
Impairment testing of goodwill and intangible assets | |||
Period over which management has projected cash flows | 5 years | ||
Pre-tax discount rate adjusted to risk specific applied to cash flow projections | 21.00% | ||
Growth rate beyond forecast period | 4.00% | ||
Percentage of increase in discount rate that would result in impairment | 1.20% | ||
Percentage of decrease in commission revenue per client that would result in impairment | 7.50% | ||
Goodwill | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | ₽ 6,378 | 6,285 | 6,285 |
Goodwill | PS (Payment services) | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | 6,285 | 6,285 | 6,285 |
Goodwill | PS (Payment services) | Loss allowance / Impairment | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | 0 | 0 | |
Goodwill | RB (Rocketbank) | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | 93 | ||
Goodwill | RB (Rocketbank) | Loss allowance / Impairment | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | 0 | ||
Bank license (indefinite life license) | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | 183 | 183 | 183 |
Carrying amount of intangible assets with an indefinite useful life | 183 | 183 | |
Bank license (indefinite life license) | Loss allowance / Impairment | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | 0 | 0 | |
Intangible assets with definite useful life | Loss allowance / Impairment | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | ₽ 0 | ||
Intangible assets with definite useful life | Rapida | Loss allowance / Impairment | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | ₽ (847) | ||
Intangible assets with definite useful life | New terminal | Loss allowance / Impairment | |||
Impairment testing of goodwill and intangible assets | |||
Intangible assets and goodwill | ₽ (89) |
Long-term and short-term loan_3
Long-term and short-term loans issued (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about financial instruments | ||
Long-term loans | ₽ 230 | ₽ 164 |
Short-term loans | 6,890 | 1,691 |
Loans to individuals | ||
Disclosure of detailed information about financial instruments | ||
Long-term loans | 1 | |
Short-term loans | 30 | |
Loans to legal entities | ||
Disclosure of detailed information about financial instruments | ||
Long-term loans | 230 | 163 |
Short-term loans | 1,586 | 1 |
Installment card loans | ||
Disclosure of detailed information about financial instruments | ||
Short-term loans | 5,274 | 1,690 |
Gross carrying amount | ||
Disclosure of detailed information about financial instruments | ||
Long-term loans | 235 | 167 |
Short-term loans | 7,738 | 2,009 |
Gross carrying amount | Loans to individuals | ||
Disclosure of detailed information about financial instruments | ||
Long-term loans | 1 | |
Short-term loans | 30 | |
Gross carrying amount | Loans to legal entities | ||
Disclosure of detailed information about financial instruments | ||
Long-term loans | 235 | 166 |
Short-term loans | 1,612 | 94 |
Gross carrying amount | Loans to financial institutions | ||
Disclosure of detailed information about financial instruments | ||
Short-term loans | 3 | |
Gross carrying amount | Installment card loans | ||
Disclosure of detailed information about financial instruments | ||
Short-term loans | 6,096 | 1,912 |
Loss allowance / Impairment | ||
Disclosure of detailed information about financial instruments | ||
Long-term loans | (5) | (3) |
Short-term loans | (848) | (318) |
Loss allowance / Impairment | Loans to legal entities | ||
Disclosure of detailed information about financial instruments | ||
Long-term loans | (5) | (3) |
Short-term loans | (26) | (93) |
Loss allowance / Impairment | Loans to financial institutions | ||
Disclosure of detailed information about financial instruments | ||
Short-term loans | (3) | |
Loss allowance / Impairment | Installment card loans | ||
Disclosure of detailed information about financial instruments | ||
Short-term loans | ₽ (822) | ₽ (222) |
Long-term and short-term loan_4
Long-term and short-term loans issued - Changes in the ECL allowances (Details) - Loans issued - Loss allowance / Impairment ₽ in Millions | 12 Months Ended |
Dec. 31, 2018RUB (₽) | |
Changes in the ECL allowances | |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | ₽ (499) |
Amounts written off | 75 |
ECL allowance under IFRS 9 as end of the year | (853) |
Opening balance after application of IFRS 9 | |
Changes in the ECL allowances | |
ECL allowance under IFRS 9 as of beginning of the year | (429) |
12 month ECL | Collective | |
Changes in the ECL allowances | |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | (146) |
Transfers between stages | 105 |
ECL allowance under IFRS 9 as end of the year | (216) |
12 month ECL | Collective | Opening balance after application of IFRS 9 | |
Changes in the ECL allowances | |
ECL allowance under IFRS 9 as of beginning of the year | (175) |
Lifetime ECL | Financial instruments not credit-impaired | Collective | |
Changes in the ECL allowances | |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | (44) |
Transfers between stages | (16) |
ECL allowance under IFRS 9 as end of the year | (120) |
Lifetime ECL | Financial instruments not credit-impaired | Collective | Opening balance after application of IFRS 9 | |
Changes in the ECL allowances | |
ECL allowance under IFRS 9 as of beginning of the year | (60) |
Lifetime ECL | Financial instruments credit-impaired | |
Changes in the ECL allowances | |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | (309) |
Transfers between stages | (89) |
Amounts written off | 75 |
ECL allowance under IFRS 9 as end of the year | (517) |
Lifetime ECL | Financial instruments credit-impaired | Opening balance after application of IFRS 9 | |
Changes in the ECL allowances | |
ECL allowance under IFRS 9 as of beginning of the year | ₽ (194) |
Long-term and short-term loan_5
Long-term and short-term loans issued - Movement in provision for impairment (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loans issued | ||
Disclosure of detailed information about financial instruments | ||
Beginning balance | ₽ (116) | ₽ (202) |
(Charge)/reversal for the year | (219) | (53) |
Utilisation | 14 | 139 |
Ending balance | (321) | (116) |
Installment card loans | ||
Disclosure of detailed information about financial instruments | ||
(Charge)/reversal for the year | (222) | |
Ending balance | (222) | |
Loans to legal entities | ||
Disclosure of detailed information about financial instruments | ||
Beginning balance | (113) | (199) |
(Charge)/reversal for the year | 3 | (53) |
Utilisation | 14 | 139 |
Ending balance | (96) | (113) |
Loans to financial institutions | ||
Disclosure of detailed information about financial instruments | ||
Beginning balance | (3) | (3) |
Ending balance | ₽ (3) | ₽ (3) |
Trade and other receivables - S
Trade and other receivables - Summary of trade and other receivables (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Trade and other receivables | ||
Trade and other receivables | ₽ 8,042 | ₽ 9,648 |
Cash receivable from agents | ||
Trade and other receivables | ||
Trade and other receivables | 3,937 | 4,240 |
Deposits issued to merchants | ||
Trade and other receivables | ||
Trade and other receivables | 2,959 | 3,906 |
Commissions receivable | ||
Trade and other receivables | ||
Trade and other receivables | 538 | 809 |
Advances issued | ||
Trade and other receivables | ||
Trade and other receivables | 275 | 239 |
Other receivables | ||
Trade and other receivables | ||
Trade and other receivables | 333 | 454 |
Gross carrying amount | ||
Trade and other receivables | ||
Trade and other receivables | 8,408 | 10,193 |
Gross carrying amount | Cash receivable from agents | ||
Trade and other receivables | ||
Trade and other receivables | 4,207 | 4,666 |
Gross carrying amount | Deposits issued to merchants | ||
Trade and other receivables | ||
Trade and other receivables | 2,975 | 3,919 |
Gross carrying amount | Commissions receivable | ||
Trade and other receivables | ||
Trade and other receivables | 559 | 827 |
Gross carrying amount | Advances issued | ||
Trade and other receivables | ||
Trade and other receivables | 287 | 240 |
Gross carrying amount | Other receivables | ||
Trade and other receivables | ||
Trade and other receivables | 380 | 541 |
Loss allowance / Impairment | ||
Trade and other receivables | ||
Trade and other receivables | (366) | (545) |
Loss allowance / Impairment | Cash receivable from agents | ||
Trade and other receivables | ||
Trade and other receivables | (270) | (426) |
Loss allowance / Impairment | Deposits issued to merchants | ||
Trade and other receivables | ||
Trade and other receivables | (16) | (13) |
Loss allowance / Impairment | Commissions receivable | ||
Trade and other receivables | ||
Trade and other receivables | (21) | (18) |
Loss allowance / Impairment | Advances issued | ||
Trade and other receivables | ||
Trade and other receivables | (12) | (1) |
Loss allowance / Impairment | Other receivables | ||
Trade and other receivables | ||
Trade and other receivables | ₽ (47) | ₽ (87) |
Trade and other receivables - C
Trade and other receivables - Changes in the ECL allowances (Details) - Loss allowance / Impairment - Trade and other receivables ₽ in Millions | 12 Months Ended |
Dec. 31, 2018RUB (₽) | |
Changes in the ECL allowances | |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | ₽ 5 |
Amounts written off | 207 |
ECL allowance under IFRS 9 as end of the year | (366) |
Opening balance after application of IFRS 9 | |
Changes in the ECL allowances | |
ECL allowance under IFRS 9 as of beginning of the year | ₽ (578) |
Trade and other receivables - M
Trade and other receivables - Movement in provision for impairment (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Maximum | |||
Provision for impairment of receivables | |||
Credit terms for receivables | 30 days | ||
Trade and other receivables | |||
Provision for impairment of receivables | |||
Beginning balance | ₽ (545) | ₽ (779) | ₽ (794) |
(Charge)/reversal for the year | (1) | (142) | |
Utilisation | 235 | 157 | |
Ending balance | (545) | (779) | |
Cash receivable from agents | |||
Provision for impairment of receivables | |||
Beginning balance | ₽ (426) | (659) | (660) |
(Charge)/reversal for the year | 16 | (125) | |
Utilisation | 217 | 126 | |
Ending balance | (426) | (659) | |
Cash receivable from agents | Maximum | |||
Provision for impairment of receivables | |||
Receivables, interest rate | 36.00% | ||
Cash receivable from agents | Minimum | |||
Provision for impairment of receivables | |||
Receivables, interest rate | 14.00% | ||
Deposits issued to merchants | |||
Provision for impairment of receivables | |||
Beginning balance | ₽ (13) | (3) | (1) |
(Charge)/reversal for the year | (11) | (2) | |
Utilisation | 1 | ||
Ending balance | (13) | (3) | |
Commissions receivable | |||
Provision for impairment of receivables | |||
Beginning balance | (18) | (7) | (21) |
(Charge)/reversal for the year | (11) | (1) | |
Utilisation | 15 | ||
Ending balance | (18) | (7) | |
Advances issued | |||
Provision for impairment of receivables | |||
Beginning balance | (1) | (1) | (1) |
Ending balance | (1) | (1) | |
Other receivables | |||
Provision for impairment of receivables | |||
Beginning balance | ₽ (87) | (109) | (111) |
(Charge)/reversal for the year | 5 | (14) | |
Utilisation | 17 | 16 | |
Ending balance | ₽ (87) | ₽ (109) |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) ₽ in Millions, $ in Millions | Dec. 31, 2018USD ($) | Dec. 31, 2018RUB (₽) | Dec. 31, 2017RUB (₽) |
Cash and cash equivalents | |||
Total cash and cash equivalents | ₽ 40,966 | ₽ 18,406 | |
Cash deposit | $ | $ 2.5 | ||
Gross carrying amount | |||
Cash and cash equivalents | |||
Correspondent accounts with CBR | 5,587 | 6,522 | |
Cash with banks and on hand | 13,119 | 4,063 | |
Short-term CBR deposits | 21,000 | 6,500 | |
Other short-term bank deposits | 1,267 | 1,322 | |
Loss allowance / Impairment | |||
Cash and cash equivalents | |||
Total cash and cash equivalents | ₽ (7) | ₽ (1) |
Other current assets and othe_3
Other current assets and other current liabilities - Other current assets (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other current assets and other current liabilities | ||
Reserves at CBR | ₽ 684 | ₽ 229 |
Prepaid expenses | 156 | 99 |
VAT and other taxes receivable | 12 | 51 |
Other | 77 | 79 |
Total other current assets | ₽ 929 | ₽ 458 |
Other current assets and othe_4
Other current assets and other current liabilities - Other current assets additional information (Details) | 5 Months Ended |
Dec. 31, 2018 | |
RUR | |
Other current assets | |
Mandatory reserves at central bank, as percentage of liabilities | 5.00% |
Foreign currencies | Minimum | |
Other current assets | |
Mandatory reserves at central bank, as percentage of liabilities | 7.00% |
Foreign currencies | Maximum | |
Other current assets | |
Mandatory reserves at central bank, as percentage of liabilities | 8.00% |
Other current assets and othe_5
Other current assets and other current liabilities - Other current liabilities (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other current assets and other current liabilities | ||
Loyalty program liability | ₽ 473 | |
Other | 58 | ₽ 51 |
Total other current liabilities | ₽ 531 | ₽ 51 |
Share capital, additional pai_3
Share capital, additional paid-in capital, share premium and other reserves - Additional information (Details) | Dec. 31, 2018Vote / sharesitem€ / shares |
Share capital | |
Number of classes of shares | item | 2 |
Class A ordinary shares | |
Share capital | |
Number of votes per share | Vote / shares | 10 |
Nominal value per share | € / shares | € 0.0005 |
Class B ordinary shares | |
Share capital | |
Number of votes per share | Vote / shares | 1 |
Nominal value per share | € / shares | € 0.0005 |
Share capital, additional pai_4
Share capital, additional paid-in capital, share premium and other reserves - Summary of authorised, issued and fully paid shares (Details) - shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of classes of share capital | |||
Authorised shares | 230,850 | 230,850 | 230,850 |
Issued and fully paid shares | 62,713 | 60,933 | 60,597 |
Class A ordinary shares | |||
Disclosure of classes of share capital | |||
Authorised shares | 131,333 | 131,778 | 133,017 |
Issued and fully paid shares | 13,833 | 14,278 | 15,517 |
Class B ordinary shares | |||
Disclosure of classes of share capital | |||
Authorised shares | 99,517 | 99,072 | 97,833 |
Issued and fully paid shares | 48,880 | 46,655 | 45,080 |
Treasury shares | 1,261 | 0 |
Share capital, additional pai_5
Share capital, additional paid-in capital, share premium and other reserves - Movement in number of shares outstanding (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Beginning balance, shares outstanding | 60,933 | 60,597 |
Increase of share capital due to exercise of options by employees during the year, shares | 519 | 336 |
Ending balance, shares outstanding | 61,452 | 60,933 |
Class A ordinary shares | ||
Beginning balance, shares outstanding | 14,278 | 15,517 |
Transfer between classes | (445) | (1,239) |
Ending balance, shares outstanding | 13,833 | 14,278 |
Class B ordinary shares | ||
Beginning balance, shares outstanding | 46,655 | 45,080 |
Transfer between classes | 445 | 1,239 |
Increase of share capital due to exercise of options by employees during the year, shares | 519 | 336 |
Ending balance, shares outstanding | 47,619 | 46,655 |
Borrowings (Details)
Borrowings (Details) - Overdraft credit facilities ₽ in Millions | 12 Months Ended |
Dec. 31, 2018RUB (₽) | |
Borrowings | |
Credit facility balance payable | ₽ 0 |
Maximum | |
Borrowings | |
Credit facility limit | ₽ 1,460 |
Borrowings maturity | June 2020 |
Interest rate | 30.00% |
Trade and other payables (Detai
Trade and other payables (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Trade and other payables | ||
Payables to merchants | ₽ 13,942 | ₽ 9,178 |
Money remittances and e-wallets accounts payable | 6,571 | 5,312 |
Deposits received from agents | 4,839 | 3,638 |
Commissions payable | 601 | 469 |
Accrued personnel expenses and related taxes | 562 | 353 |
Provision for undrawn credit commitments (Note 28) | 84 | |
Other payables | 848 | 573 |
Other advances received | 52 | 76 |
Total trade and other payables | ₽ 27,499 | ₽ 19,599 |
Customer accounts and amounts_3
Customer accounts and amounts due to banks (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Customer accounts and amounts due to banks | ||
Due to banks | ₽ 1,391 | ₽ 1,390 |
Due to individuals | 10,844 | 110 |
Due to legal entities | 3,767 | 1,571 |
Term deposits | 2,103 | 111 |
Total customer accounts and amounts due to banks | 18,105 | ₽ 3,182 |
Including long-term deposits | ₽ 237 |
Customer accounts and amounts_4
Customer accounts and amounts due to banks - Additional information (Details) | Dec. 31, 2018 |
Maximum | |
Disclosure of amounts due to customers and amounts due to banks | |
Interest rate on customer accounts and amounts due to banks | 6.00% |
Investment in associates (Detai
Investment in associates (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | |
Statement of financial position: | ||||
Non-current assets | ₽ 14,562 | ₽ 13,936 | ||
including cash and cash equivalents | 40,966 | 18,406 | ||
Carrying amount of investment in associates (45%) of net assets | 812 | |||
Revenue and net income | ||||
Revenue | 30,610 | 20,897 | ₽ 17,880 | |
Cost of revenues | (15,129) | (9,763) | (8,646) | |
Other income and expenses, net | (227) | (41) | (79) | |
including depreciation and amortization | (864) | (796) | (796) | |
Net profit | ₽ 3,626 | ₽ 3,142 | ₽ 2,489 | |
JSC Tochka | ||||
Investment in associates | ||||
Share in entity according to share in dividends and potential capital gains | 45.00% | 45.00% | ||
Statement of financial position: | ||||
Non-current assets | ₽ 149 | |||
Current assets | 1,836 | |||
including cash and cash equivalents | 1,326 | |||
Current liabilities | (183) | |||
including financial liabilities | (183) | |||
Net assets | 1,802 | |||
Carrying amount of investment in associates (45%) of net assets | 812 | |||
Revenue and net income | ||||
Revenue | 4 | |||
Cost of revenues | (3) | |||
Other income and expenses, net | (85) | |||
including depreciation and amortization | (1) | |||
Net profit | (84) | |||
Group's share (45%) of total net loss | ₽ (38) |
Investment in joint ventures (D
Investment in joint ventures (Details) ₽ in Millions | Dec. 31, 2018RUB (₽)item | Dec. 31, 2017RUB (₽) | Dec. 31, 2018RUB (₽)item | Dec. 31, 2017RUB (₽) | Dec. 31, 2016RUB (₽) |
Disclosure of joint venture | |||||
Number of joint ventures | item | 1 | 1 | |||
Statement of financial position | |||||
Non-current assets | ₽ 14,562 | ₽ 13,936 | ₽ 14,562 | ₽ 13,936 | |
including cash and cash equivalents | 40,966 | 18,406 | 40,966 | 18,406 | |
Carrying amount of investment in joint venture company | ₽ 836 | 832 | 836 | 832 | |
Revenue and net income | |||||
Revenue | 30,610 | 20,897 | ₽ 17,880 | ||
Cost of revenues | (15,129) | (9,763) | (8,646) | ||
Other income and expenses, net | (227) | (41) | (79) | ||
including depreciation and amortization | (864) | (796) | (796) | ||
Net profit | ₽ 3,626 | 3,142 | ₽ 2,489 | ||
Flocktory Ltd (Cyprus) | |||||
Disclosure of joint venture | |||||
Number of parties exercising control | item | 3 | 3 | |||
Statement of financial position | |||||
Non-current assets | ₽ 598 | 666 | ₽ 598 | 666 | |
Current assets | 191 | 125 | 191 | 125 | |
including cash and cash equivalents | 144 | 80 | 144 | 80 | |
Current liabilities | (20) | (11) | (20) | (11) | |
including financial liabilities | (18) | (9) | (18) | (9) | |
Net assets | 769 | 780 | 769 | 780 | |
Group's share (82%) of net assets | 631 | 640 | 631 | 640 | |
Goodwill | 205 | 192 | 205 | 192 | |
Carrying amount of investment in joint venture company | ₽ 836 | ₽ 832 | 836 | 832 | |
Percentage of group's share in joint venture | 82.00% | 82.00% | |||
Revenue and net income | |||||
Revenue | 332 | 187 | |||
Cost of revenues | (142) | (79) | |||
Other income and expenses, net | (200) | (107) | |||
including depreciation and amortization | (79) | (59) | |||
Net profit | (10) | 1 | |||
Group's share (82%) of total net loss | ₽ (8) | ₽ 1 |
Revenue (Details)
Revenue (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | |||
Cash and settlement service fees | ₽ 3,017 | ₽ 670 | ₽ 130 |
Other revenue | 626 | 600 | 562 |
Total other revenue | ₽ 3,643 | ₽ 1,270 | ₽ 692 |
Revenue - Interest income net (
Revenue - Interest income net (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | |||
Interest revenue calculated using the effective interest rate | ₽ (1,854) | ₽ (1,052) | ₽ (899) |
Interest expense classified as part of cost of revenue | 89 | 42 | 37 |
Interest income from non-banking loans classified separately in the consolidated statement of comprehensive income | (41) | (35) | (36) |
Interest expense from non-banking loans classified separately in the consolidated statement of comprehensive income | 24 | 29 | 64 |
Interest income, net, for the purposes of consolidated cash flow statement | ₽ (1,782) | ₽ (1,016) | ₽ (834) |
Cost of revenue (exclusive of_3
Cost of revenue (exclusive of depreciation and amortization) (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cost of revenue (exclusive of depreciation and amortization) | |||
Transaction costs | ₽ 9,324 | ₽ 6,756 | ₽ 6,490 |
Payroll and related taxes | 4,176 | 2,059 | 1,377 |
Other expenses | 1,629 | 948 | 779 |
Total cost of revenue (exclusive of depreciation and amortization) | ₽ 15,129 | ₽ 9,763 | ₽ 8,646 |
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 | |||
Compensation to employees, related taxes and other personnel expenses | ₽ 3,572 | ₽ 2,227 | ₽ 1,682 |
Advertising, client acquisition and related expenses | 2,369 | 1,294 | 165 |
Tax expenses, except income and payroll related taxes | 690 | 407 | 175 |
Advisory and audit services | 661 | 433 | 297 |
Rent of premises and related utility expenses | 643 | 391 | 346 |
IT related services | 364 | 236 | 180 |
Loss/(gain) from initial recognition, net | 143 | ||
Other expenses | 1,229 | 1,035 | 363 |
Total selling, general and administrative expenses | ₽ 9,671 | ₽ 6,023 | ₽ 3,208 |
Other income and expenses (Deta
Other income and expenses (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other income and expense | |||
Loss on set up of associate (Note 6) | ₽ (267) | ||
Compensation of expenses from an associate | 181 | ||
Change in fair value of financial instruments | (86) | ||
Share in loss of associates and joint ventures | (46) | ||
Loss on disposal of subsidiaries | ₽ (10) | ||
Other expenses | (27) | ₽ (71) | (76) |
Other income | 18 | 30 | 7 |
Total other income and expenses, net | ₽ (227) | ₽ (41) | ₽ (79) |
Dividends paid and proposed (De
Dividends paid and proposed (Details) ₽ in Millions | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017RUB (₽) | Dec. 31, 2016USD ($) | Dec. 31, 2016RUB (₽) | |
Dividends paid and proposed | ||||
Dividends proposed, declared and approved during the year | ₽ | ₽ 2,207 | ₽ 4,843 | ||
Final dividend proposed, declared and approved | $ 11,520,798 | $ 30,210,153 | ||
Interim dividend proposed, declared and approved | 26,113,788 | 39,943,003 | ||
Dividends paid during the period | ₽ | ₽ 2,148 | 4,628 | ||
Final dividend paid | 11,520,798 | 30,210,153 | ||
Interim dividend paid | $ 26,113,788 | 39,943,003 | ||
Dividends proposed for approval (not recognized as a liability as of December 31 ) | $ 11,513,436 | ₽ 679 |
Income tax (Details)
Income tax (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of income taxes | |||
Accumulated unremitted earnings not intended to be distributed | ₽ 3,212 | ₽ 2,473 | |
Tax payable to distribute unremitted earnings not intended to be distributed | 161 | 124 | |
Unrecognised deferred tax asset on tax loss carry forward | ₽ 8 | ₽ 9 | ₽ 15 |
Cyprus | |||
Disclosure of income taxes | |||
Corporate income tax rate | 12.50% | ||
Capital gains tax | 20.00% | ||
Cyprus | Minimum | |||
Disclosure of income taxes | |||
Percentage of income derived from activities which do not lead to investment income | 50.00% | ||
Percentage of foreign tax burden on profit distributed as dividend | 6.25% | ||
Russia | |||
Disclosure of income taxes | |||
Corporate income tax rate | 20.00% | ||
Tax rate on income received from Russia government bonds | 15.00% | ||
Withholding tax rate on payment of dividends | 15.00% | ||
Reduced withholding tax rate on payment of dividends | 5.00% | ||
Kazakhstan | |||
Disclosure of income taxes | |||
Corporate income tax rate | 20.00% |
Income Tax - Deferred income ta
Income Tax - Deferred income tax assets and liabilities (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of deferred tax | ||||
Net deferred income tax asset/(liability) | ₽ (586) | ₽ (581) | ₽ (581) | ₽ (834) |
Deferred tax asset | 157 | 245 | ||
Deferred tax liability | (743) | (826) | ||
Deferred tax benefit/(expense) | (57) | ₽ 253 | ||
Intangible assets | ||||
Disclosure of deferred tax | ||||
Net deferred income tax asset/(liability) | (678) | (719) | ||
Deferred tax benefit/(expense) | 59 | 65 | ||
Trade and other payables | ||||
Disclosure of deferred tax | ||||
Net deferred income tax asset/(liability) | 181 | 166 | ||
Deferred tax benefit/(expense) | (7) | 36 | ||
Trade and other receivables | ||||
Disclosure of deferred tax | ||||
Net deferred income tax asset/(liability) | 31 | 101 | ||
Deferred tax benefit/(expense) | (74) | (37) | ||
Loans issued | ||||
Disclosure of deferred tax | ||||
Net deferred income tax asset/(liability) | 69 | 48 | ||
Deferred tax benefit/(expense) | (2) | 21 | ||
Taxes on unremitted earnings | ||||
Disclosure of deferred tax | ||||
Net deferred income tax asset/(liability) | (253) | (184) | ||
Deferred tax benefit/(expense) | (69) | (109) | ||
Other | ||||
Disclosure of deferred tax | ||||
Net deferred income tax asset/(liability) | 64 | 7 | ||
Deferred tax benefit/(expense) | ₽ 36 | ₽ 24 |
Income tax - Reconciliation of
Income tax - Reconciliation of deferred income tax assets (liability) (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income tax | |||
Deferred income tax asset/(liability), net as of January 1 | ₽ (581) | ₽ (581) | ₽ (834) |
Impact of adopting IFRS 9 (Note 2.3(e)) | 49 | ||
Effect of acquisitions of subsidiaries | 3 | ||
Deferred tax benefit/(expense) | (57) | 253 | |
Deferred income tax asset/(liability), net as of December 31 | ₽ (586) | ₽ (581) | ₽ (581) |
Income tax - Income tax expense
Income tax - Income tax expense (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total tax expense | |||
Current income tax expense | ₽ (818) | ₽ (698) | ₽ (871) |
Deferred tax benefit/(expense) | (57) | 253 | |
Income tax expense for the year | ₽ (875) | ₽ (698) | ₽ (618) |
Income taxes - Reconciliation b
Income taxes - Reconciliation between theoretical and actual income tax expense (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income tax | |||
Profit before tax | ₽ 4,501 | ₽ 3,840 | ₽ 3,107 |
Theoretical income tax expense at the domestic rate in each individual jurisdiction | (479) | (370) | (278) |
(Increase)/decrease resulting from the tax effect of: | |||
Non-taxable income | 70 | 12 | 39 |
Non-deductible expenses | (388) | (222) | (269) |
Income tax associated with earnings of foreign subsidiaries | (70) | (109) | (95) |
Unrecognized deferred tax assets | (8) | (9) | (15) |
Income tax expense for the year | ₽ (875) | ₽ (698) | ₽ (618) |
Commitments, contingencies an_3
Commitments, contingencies and operating risks (Details) ₽ in Millions | 1 Months Ended | ||
Jan. 31, 2014RUB (₽) | Dec. 31, 2018RUB (₽)item | Dec. 31, 2017RUB (₽) | |
Commitments, contingencies and operating risks | |||
Loss resulting from unauthorized activity in wallet accounts | ₽ | ₽ 88 | ||
Maximum effect of additional losses on consolidated financial statements | ₽ | ₽ 2,700 | ₽ 2,500 | |
Number of insurance policies held | item | 0 | ||
Number of types of consumers | item | 3 |
Commitments, contingencies an_4
Commitments, contingencies and operating risks - Operating lease commitments (Details) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018RUB (₽)item | Dec. 31, 2017RUB (₽) | |
Office buildings | ||
Operating lease commitments | ||
Lease expense | ₽ 597 | ₽ 357 |
Office buildings | Maximum | ||
Operating lease commitments | ||
Average life of commercial lease agreement | 7 years | |
Office buildings | Minimum | ||
Operating lease commitments | ||
Average life of commercial lease agreement | 1 year | |
Office building under material lease contract | ||
Operating lease commitments | ||
Lease expense | ₽ 154 | 154 |
Future minimum lease rentals | ₽ 307 | |
Number of lease payment parts | item | 3 | |
Within one year | Office buildings | ||
Operating lease commitments | ||
Future minimum lease rentals | ₽ 449 | 397 |
Within one year | Office building under material lease contract | ||
Operating lease commitments | ||
Future minimum lease rentals | 154 | |
After one year but not more than five years | Office buildings | ||
Operating lease commitments | ||
Future minimum lease rentals | 625 | ₽ 693 |
After one year but no more than two years | Office building under material lease contract | ||
Operating lease commitments | ||
Future minimum lease rentals | 153 | |
More than five years | Office buildings | ||
Operating lease commitments | ||
Future minimum lease rentals | ₽ 168 |
Commitments, contingencies an_5
Commitments, contingencies and operating risks - Pledge of assets and guarantees issued (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets pledged and guarantees | ||
Maximum term of guaranties issued to non-related parties | 5 years | |
Financial and performance guaranties issued | ₽ 1,260 | ₽ 74 |
Major partner | ||
Assets pledged and guarantees | ||
Pledged debt instruments as collateral for bank guarantee | 1,445 | 1,319 |
CBR | ||
Assets pledged and guarantees | ||
Pledged debt instruments as collateral for bank guarantee | ₽ 484 | ₽ 486 |
Commitments, contingencies an_6
Commitments, contingencies and operating risks - Credit related commitments (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments, contingencies and operating risks | ||
Unused limits on instalment card loans | ₽ 30,062 | ₽ 8,603 |
Commitments, contingencies an_7
Commitments, contingencies and operating risks - ECL allowances (Details) - Loss allowance / Impairment ₽ in Millions | 12 Months Ended |
Dec. 31, 2018RUB (₽) | |
Changes in the ECL allowances | |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | ₽ 27 |
ECL allowance under IFRS 9 as end of the year | (84) |
Opening balance after application of IFRS 9 | |
Changes in the ECL allowances | |
ECL allowance under IFRS 9 as of beginning of the year | ₽ (111) |
Balances and transactions wit_2
Balances and transactions with related parties (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Balances and transactions with related parties | |||
Customers accounts payable - cash held by related parties | ₽ 51 | ₽ 97 | |
Amounts owed (accounts payable) to related parties | 207 | 18 | |
Amounts owed (accounts receivable) by related parties | 180 | ||
Benefits of key management and Board of Directors - short-term benefits | 120 | 115 | ₽ 122 |
Benefits of key management and Board of Directors - share-based payments | ₽ 36 | ₽ 22 | ₽ 14 |
Risk management - Foreign excha
Risk management - Foreign exchange risk (Detail) ₽ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2014USD ($) | Dec. 31, 2018RUB (₽) | Dec. 31, 2017RUB (₽) | Dec. 31, 2018USD ($) | Dec. 31, 2018RUB (₽) | |
Disclosure of risk management | |||||
Cash and cash equivalents | ₽ | ₽ 18,406 | ₽ 40,966 | |||
Cash received upon last public offering | |||||
Disclosure of risk management | |||||
Proceeds from issuance of shares | $ | $ 89 | ||||
Cash and cash equivalents | $ | $ 30 | ||||
Foreign exchange (loss) gain | ₽ | ₽ 433 | ₽ (236) |
Risk management - Foreign exc_2
Risk management - Foreign exchange sensitivity (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
US Dollar | ||
Currency sensitivity | ||
Percentage of reasonably possible increase in exchange rate | 14.00% | 11.00% |
Effect on profit before tax of increase in exchange rate | ₽ 329 | ₽ 83 |
Percentage of reasonably possible decrease in exchange rate | (14.00%) | (11.00%) |
Effect on profit before tax of decrease in exchange rate | ₽ (329) | ₽ (83) |
Euro | ||
Currency sensitivity | ||
Percentage of reasonably possible increase in exchange rate | 14.00% | 12.50% |
Effect on profit before tax of increase in exchange rate | ₽ 196 | ₽ 36 |
Percentage of reasonably possible decrease in exchange rate | (14.00%) | (12.50%) |
Effect on profit before tax of decrease in exchange rate | ₽ (196) | ₽ (36) |
Risk management - Liquidity ris
Risk management - Liquidity risk and capital management (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial liabilities based on contractual undiscounted payments | ||
Minimal required level of capital ratio | 8.00% | |
Trade and other payables (Note 18) | ₽ 27,499 | ₽ 19,599 |
Customer accounts and amounts due to banks (Note 19) | 18,105 | 3,182 |
Total | 45,604 | 22,781 |
On demand | ||
Disclosure of financial liabilities based on contractual undiscounted payments | ||
Trade and other payables (Note 18) | 27,499 | 19,599 |
Customer accounts and amounts due to banks (Note 19) | 16,002 | 3,071 |
Total | 43,501 | 22,670 |
Within one year | ||
Disclosure of financial liabilities based on contractual undiscounted payments | ||
Customer accounts and amounts due to banks (Note 19) | 1,866 | 111 |
Total | 1,866 | ₽ 111 |
More than a year | ||
Disclosure of financial liabilities based on contractual undiscounted payments | ||
Customer accounts and amounts due to banks (Note 19) | 237 | |
Total | ₽ 237 |
Risk management - Credit risk p
Risk management - Credit risk provision matrix (Details) - Trade and other receivables (except for advances issued) ₽ in Millions | Dec. 31, 2018RUB (₽) |
Gross carrying amount | |
Disclosure of provision matrix | |
Financial assets | ₽ 8,121 |
Loss allowance / Impairment | |
Disclosure of provision matrix | |
Financial assets | ₽ (354) |
Current and less than 30 days | |
Disclosure of provision matrix | |
Expected credit loss rate | 0.26% |
Current and less than 30 days | Gross carrying amount | |
Disclosure of provision matrix | |
Financial assets | ₽ 7,672 |
Current and less than 30 days | Loss allowance / Impairment | |
Disclosure of provision matrix | |
Financial assets | ₽ (20) |
30-60 days | |
Disclosure of provision matrix | |
Expected credit loss rate | 3.00% |
30-60 days | Gross carrying amount | |
Disclosure of provision matrix | |
Financial assets | ₽ 96 |
30-60 days | Loss allowance / Impairment | |
Disclosure of provision matrix | |
Financial assets | ₽ (3) |
61-90 days | |
Disclosure of provision matrix | |
Expected credit loss rate | 36.00% |
61-90 days | Gross carrying amount | |
Disclosure of provision matrix | |
Financial assets | ₽ 22 |
61-90 days | Loss allowance / Impairment | |
Disclosure of provision matrix | |
Financial assets | ₽ (8) |
More than 91 days | |
Disclosure of provision matrix | |
Expected credit loss rate | 98.00% |
More than 91 days | Gross carrying amount | |
Disclosure of provision matrix | |
Financial assets | ₽ 331 |
More than 91 days | Loss allowance / Impairment | |
Disclosure of provision matrix | |
Financial assets | ₽ (323) |
Risk management - Credit risk c
Risk management - Credit risk concentration (Details) - Y | Dec. 31, 2018 | Dec. 31, 2017 |
Minimum | ||
Disclosure of credit risk exposure | ||
Target audience age | 18 | |
Maximum | ||
Disclosure of credit risk exposure | ||
Target audience age | 70 | |
Trade and other receivables | Top five counterparties | ||
Disclosure of credit risk exposure | ||
Concentration of credit risks by main counterparties, % from total amount | 40.00% | 47.00% |
Trade and other receivables | Others | ||
Disclosure of credit risk exposure | ||
Concentration of credit risks by main counterparties, % from total amount | 60.00% | 53.00% |
Financial Instruments - Fair va
Financial Instruments - Fair values (Details) - RUB (₽) ₽ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt instruments and long-term loans | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, carrying amount | ₽ 2,159 | ₽ 1,968 |
Financial assets, fair value | 2,161 | 1,991 |
Debt instruments | AC | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, carrying amount | 1,929 | 1,804 |
Financial assets, fair value | 1,931 | 1,827 |
Long-term loans | AC | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, carrying amount | 159 | 164 |
Financial assets, fair value | 159 | ₽ 164 |
Long-term loans | FVPL | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, carrying amount | 71 | |
Financial assets, fair value | ₽ 71 |
Financial instruments - Additio
Financial instruments - Additional information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Debt instruments | Minimum | |
Disclosure of detailed information about financial instruments | |
Debt instrument interest rate | 6.40% |
Debt instruments | Maximum | |
Disclosure of detailed information about financial instruments | |
Debt instrument interest rate | 7.50% |
Long-term loans | Minimum | |
Disclosure of detailed information about financial instruments | |
Comparable marketable interest rate | 9.00% |
Long-term loans | Maximum | |
Disclosure of detailed information about financial instruments | |
Financial assets maturity | 9 years |
Comparable marketable interest rate | 35.00% |
Financial instruments - Fair _2
Financial instruments - Fair value measurement (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about financial instruments | ||
Transfer of assets out of Level 1 into Level 2 | ₽ 0 | |
Transfer of assets out of Level 2 into Level 1 | 0 | |
Transfer of assets into Level 3 | 0 | |
Transfer of assets out of Level 3 | 0 | |
At fair value | Long-term loans | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, fair value | 71 | |
At fair value | Long-term loans | Significant unobservable inputs (Level 3) | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, fair value | 71 | |
Fair value disclosed | Debt instruments | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, fair value | 1,931 | ₽ 1,827 |
Fair value disclosed | Debt instruments | Quoted prices in active markets (Level 1) | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, fair value | 1,931 | 1,827 |
Fair value disclosed | Long-term loans | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, fair value | 159 | 164 |
Fair value disclosed | Long-term loans | Significant unobservable inputs (Level 3) | ||
Disclosure of detailed information about financial instruments | ||
Financial assets, fair value | ₽ 159 | ₽ 164 |
Share-based payments (Details)
Share-based payments (Details) | 12 Months Ended | ||||
Dec. 31, 2018item | Dec. 31, 2017USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Employee Stock Option Plan (ESOP) | |||||
Option plans | |||||
Exercise price | $ 23.94 | $ 13.65 | |||
Employee Stock Option Plan (ESOP) | Minimum | |||||
Option plans | |||||
Exercise price | $ 34.09 | $ 41.24 | |||
Employee Stock Option Plan (ESOP) | Maximum | |||||
Option plans | |||||
Percentage of instruments reserved (as percentage of total amount of shares) | 7.00% | ||||
Exercise price | $ 37.89 | $ 46.57 | |||
Vesting period | 4 years | ||||
Restricted stock units (RSU) | |||||
Option plans | |||||
Number of vesting | item | 3 | ||||
Restricted stock units (RSU) | Maximum | |||||
Option plans | |||||
Percentage of instruments reserved (as percentage of total amount of shares) | 7.00% | ||||
Vesting period | 2 years |
Share-based payments - Changes
Share-based payments - Changes in outstanding options (Details) - Options | 12 Months Ended | 42 Months Ended | 75 Months Ended |
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | |
Changes in outstanding options | |||
Beginning Balance | 2,073,518 | ||
Granted | 807,300 | ||
Forfeited | (31,959) | ||
Exercised | (518,859) | ||
Ending Balance | 2,330,000 | 2,330,000 | 2,330,000 |
Employee Stock Option Plan (ESOP) | |||
Changes in outstanding options | |||
Beginning Balance | 1,528,140 | ||
Granted | 4,128,521 | ||
Forfeited | (11,159) | ||
Ending Balance | 1,516,981 | 1,516,981 | 1,516,981 |
Restricted stock units (RSU) | |||
Changes in outstanding options | |||
Beginning Balance | 545,378 | ||
Granted | 807,300 | 1,903,008 | |
Forfeited | (20,800) | ||
Exercised | (518,859) | ||
Ending Balance | 813,019 | 813,019 | 813,019 |
Share-based payments - Addition
Share-based payments - Additional information (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)Options | Dec. 31, 2017Options | |
Option plans | ||
Number of share options outstanding | 2,330,000 | 2,073,518 |
Restricted stock units (RSU) | ||
Option plans | ||
Number of share options outstanding | 813,019 | 545,378 |
Number of share options vested | 126,067 | |
Number of share options unvested | 686,952 | |
Weighted average price for share options exercised | $ | $ 0 | |
Employee Stock Option Plan (ESOP) | ||
Option plans | ||
Number of share options outstanding | 1,516,981 | 1,528,140 |
Number of share options vested | 1,516,981 |
Share-based payments - Valuatio
Share-based payments - Valuations of share-based payments (Details) | 12 Months Ended | 42 Months Ended | 75 Months Ended |
Dec. 31, 2018USD ($)Options | Dec. 31, 2018USD ($)Options | Dec. 31, 2018USD ($)Options | |
Valuations of share-based payments | |||
Number of options/ RSUs | Options | 807,300 | ||
Minimum | |||
Valuations of share-based payments | |||
Forfeiture rate used in valuation models granted | 11.35% | ||
Maximum | |||
Valuations of share-based payments | |||
Forfeiture rate used in valuation models granted | 16.00% | ||
Employee Stock Option Plan (ESOP) | |||
Valuations of share-based payments | |||
Number of options/ RSUs | Options | 4,128,521 | ||
Weighted average share price | $ 28.10 | ||
Weighted average fair value per option | $ 7.14 | $ 7.14 | $ 7.14 |
Employee Stock Option Plan (ESOP) | Minimum | |||
Valuations of share-based payments | |||
Dividend yield, percentage | 0.00% | ||
Volatility, percentage | 28.00% | ||
Risk-free interest rate, percentage | 0.29% | ||
Expected term, years | 2 years | ||
Employee Stock Option Plan (ESOP) | Maximum | |||
Valuations of share-based payments | |||
Dividend yield, percentage | 5.03% | ||
Volatility, percentage | 49.85% | ||
Risk-free interest rate, percentage | 3.85% | ||
Expected term, years | 4 years | ||
Restricted stock units (RSU) | |||
Valuations of share-based payments | |||
Number of options/ RSUs | Options | 807,300 | 1,903,008 | |
Weighted average share price | $ 15.15 | ||
Weighted average fair value per option | $ 14.47 | $ 14.47 | $ 14.47 |
Restricted stock units (RSU) | Minimum | |||
Valuations of share-based payments | |||
Dividend yield, percentage | 0.00% | ||
Volatility, percentage | 44.43% | ||
Risk-free interest rate, percentage | 2.89% | ||
Expected term, years | 0 years | ||
Restricted stock units (RSU) | Maximum | |||
Valuations of share-based payments | |||
Dividend yield, percentage | 5.70% | ||
Volatility, percentage | 64.02% | ||
Risk-free interest rate, percentage | 4.34% | ||
Expected term, years | 2 years |
Share-based payments - Expense
Share-based payments - Expense (Details) - RUB (₽) ₽ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based payments | |||
Expense from equity-settled share-based payment transactions | ₽ 635 | ₽ 398 | ₽ 224 |