17. Investments in associates

PhosInt Limited

In September and October 2010, two Group subsidiaries, PhosInt Limited and PhosAsset GmbH, increased their share capital which was subscribed by a related party resulting in the dilution of the Group’s shareholding in these entities to 49%. As a consequence these entities and Nordwest AG, a subsidiary of PhosAsset GmbH (further the PhosInt Group) were deconsolidated from the Group. At the same time, the Group retained its right for the distribution of all accumulated earnings and reserves relating to these entities prior to the date of loss of control as determined by the executive management by reference to the IFRS financial statements of these entities. In 2011, dividend in the amount of RUB 1,840 million was accrued and paid from PhosInt Group to the Company out of the opening balance of retained earnings.

As at 31 December 2010, 2011 and 2012 these entities held primarily equity and debt instruments of Russian issuers recognized at fair value, loans issued and cash. Accordingly, the fair value of the net assets of these entities approximated the book value.

Once the total dividend distributed will reach the amount of retained earnings of PhosInt Group at the date of loss of control, any subsequent dividend will be made proportionate to the shareholding in these companies.

No consideration was received by the Group on disposal and the financial result of this transaction was nil.

LLC “Metachem”

In May 2011, the Group entered into acquisition agreement for 24% of LLC “Metachem” and 21.85% of CJSC “Pikalevskaya soda” for a total consideration of RUB 313 million. In July 2011, the Group sold its investment in CJSC “Pikalevskaya soda” for RUB 145 million to CJSC “Metachem”. In December 2012, the Group contributed RUB 1,200 million to the charter capital of LLC “Metachem” increasing the Group’s ownership to 74.76%, see note 35.

CJSC “Nordic Rus Holding”

In October 2012, the Group acquired 24% of CJSC “Nordic Rus Holding” for a total consideration of USD 31.76 million (RUB 987 million). CJSC “Nordic Rus Holding” is a minority shareholder of OJSC “Apatit”.

The movement in the balance of investments in associates is as follows:

	2012 RUB Million	2011 RUB Million
Balance at 1 January	7,910	9,365
Acquisition of LLC “Metachem” and CJSC “Pikalevskaya soda”	—	313
Disposal of CJSC “Pikalevskaya soda”	—	(145)
Share in profit for the year	166	2,318
Share in revaluation gain/(loss) on available-for-sale securities	282	(359)
Share in re-cycling of revaluation surplus on available-for-sale securities to profit and loss	—	(2,076)
Foreign currency translation difference	(396)	334
Dividends accrued	—	(1,840)
Additional equity contributions	1,081	—
Acquisition of CJSC “Nordic Rus Holding”	987	—
Consolidation of LLC “Metachem”	(410)	—
Balance at 31 December	9,620	7,910

Carrying values of the Group’s investment in associates at 31 December 2012 and 2011 are as follows:

	2012 RUB Million	2012 RUB Million
PhosInt Group	7,661	7,646
Metachem Group	—	264
PHOSAGRO-UKRAINE	111	—
Khibinskaya Teplovaya Kompaniya	400	—
Nordic Rus Holding		—
	9,620	7,910

Summary financial information for associates is as follows:

2012	Total assets RUB Million	Total liabilities RUB Million	Net assets RUB Million	Revenue RUB Million	Profit for the year RUB Million
PhosInt Group	9,435	(1,553)	7,882	2,754	325
Metachem Group	4,370	(1,309)	3,061	7,017	606
PHOSAGRO-UKRAINE	352	(359)	(7)	2,112	20
Khibinskaya Teplovaya Kompaniya	1,649	(750)	899	4	2
Nordic Rus Holding	5,888	(49)	5,839	—	49
	21,694	(4,020)	17,674	11,887	1,002

2011	Total assets RUB Million	Total liabilities RUB Million	Net assets RUB Million	Revenue RUB Million	Profit for the year RUB Million
PhosInt Group	10,213	(2,600)	7,613	291	2,441
Metachem Group	2,593	(1,493)	1,100	5,007	399
PHOSAGRO-UKRAINE	76	(363)	(287)	2,200	21
	12,882	(4,456)	8,426	7,498	2,861

вверх