Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
The Company’s own issued equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration received upon any subsequent sale is recognised in equity.
Share capital
As of 31 December 2016 and 2015, the Company had 100,000,000,000 authorised ordinary shares with a par value of 0.1 Rubles, of which 595,700,967 were issued and outstanding and 24,299,033 were classified as treasury shares (held through its wholly owned subsidiary, MegaFon Investments (Cyprus) Limited).
Annual dividend payment
On 30 June 2016 the Annual General Meeting of Shareholders of the Company approved the payment of a final dividend for the 2015 financial year in the amount of 28,820, or 48.38 Rubles per ordinary share (or GDR), and an interim dividend for the first quarter of 2016 in the amount of 4,801, or 8.06 Rubles per ordinary share (or GDR). Such dividends were paid in full in August 2016.
On 9 December 2016 an Extraordinary General Meeting of Shareholders of the Company approved an additional 14,410 dividend payment, equivalent to 24.19 Rubles per ordinary share (or GDR), based on the Company’s performance through the end of the third quarter of 2016, of which 11,571, or 19.42 Rubles per ordinary share (or GDR), was paid in December 2016.
Accordingly, the total amount of dividends declared in 2016 is 48,031, or 80.63 Rubles per ordinary share (or GDR). Of that, the amount paid in 2016 was 45,192, or 75.86 Rubles per ordinary share (or GDR). At 31 December 2016 dividends payable to shareholders amounted to 2,839.
Other capital reserves
The disaggregation of other capital reserves and changes of other comprehensive income by each type of reserve in equity is shown below:
| Foreign currency translation reserve |
Cash flow hedge reserve |
Share-based compensation reserve |
Transactions with non-controlling interests |
Reserve fund |
Total other capital reserves |
|
| As of 1 January 2015 | (1,091) | 172 | 1,488 | (23) | 15 | 561 |
| Foreign currency translation | (792) | | | | | (792) |
| Change in fair value of cash flow hedges (Note 3.4.3) | | (2) | | | | (2) |
| As of 31 December 2015 | (1,883) | 170 | 1,488 | (23) | 15 | (233) |
| Foreign currency translation | 692 | | | | | 692 |
| Change in fair value of cash flow hedges (Note 3.4.3) | | (1,889) | | | | (1,889) |
| As of 31 December 2016 | (1,191) | (1,719) | 1,488 | (23) | 15 | (1,430) |
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations.
The cash flow hedge reserve is used to record the accumulated impact of derivatives designated as cash flow hedges (Note 3.4.3).
The share-based compensation reserve is used to recognise the value of equity-settled share-based payment transactions provided to employees, including key management personnel, as part of their remuneration (Note 5.1).
The reserve on transactions with non-controlling interests is used to record differences arising as a result of transactions with non-controlling interests that do not result in a loss of control.
The reserve fund has been established according to the requirements of Russian law and is used to cover the Company’s losses, redemption of its bonds and re-purchase of its own shares in the absence of other capital resources.
