5. Subsidiaries
(a) List of subsidiaries
| Country of incorporation | 31 December 2011 Ownership/voting, % |
31 December 2010 Ownership/voting, % |
|
|---|---|---|---|
| OJSC „Energetic” | Russian Federation | 100 | 100 |
| OJCS „Yaroslavskaya Setevaya Company” | Russian Federation | 51 | 51 |
| OJSC „Yargorelectroset” | Russian Federation | 100 | 100 |
| OJSC „Energy Service Company” | Russian Federation | 100 | — |
| СJSC „Innovation and energy efficiency center” | Russian Federation | 51 | — |
(b) Acquisition of subsidiary
In the fourth quarter of 2010 the Group obtained control of OJSC “Yargorelectroset” by acquiring 100% of the shares in the company from Committee for the Management of Municipal Property of Yaroslavl city. The acquisition is not considered as acquisition under common control.
The purpose of the acquisition was to benefit from the synergies of the combination in order to optimise the Group’s transmission process through access to territorial grids.
From the date of acquisition to 31 December 2010 OJSC “Yargorelectroset” contributed revenue of RUB 208,025 thousand and loss of RUB 3,623 thousand. If the acquisition had occurred on 1 January 2010, management estimates that consolidated revenue would have been RUB 61,000,853 thousand, and consolidated profit for the year would have been RUB 5,141,753 thousand. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2010.
(i) Identifiable assets acquired and liabilities assumed
The identifiable assets acquired and the liabilities assumed were as follows:
| Recognised fair value on at acquisition |
|
|---|---|
| Non-current assets | |
| Intangible assets | 395 |
| Property, plant and equipment | 1,709,987 |
| Deferred tax assets | 12,935 |
| Other non-current assets | 273,729 |
| Total non-current assets | 1,997,046 |
| Current assets | |
| Inventories | 45,772 |
| Income tax receivable | 10,054 |
| Other taxes receivable | 348 |
| Trade and other receivables | 149,110 |
| Cash and cash equivalents | 24,883 |
| Other current assets | 513 |
| Total current assets | 230,680 |
| Non-current liabilities | |
| Deferred tax liabilities | 88,487 |
| Other non-current liabilities | 377,920 |
| Total non-current liabilities | 466,407 |
| Current liabilities | |
| Trade and other payables | 197,060 |
| Employee payables | 4,813 |
| Taxes payable | 10,925 |
| Total current liabilities | 212,798 |
| Net identifiable assets and liabilities | 1,548,521 |
The trade and other receivables comprise gross contractual amounts due of RUB 186,326 thousand, of which RUB 37,216 thousand was expected to be uncollectable at the acquisition date.
(ii) Goodwill
Goodwill (negative goodwill) was recognised as a result of the acquisition as follows:
| Total consideration transferred (settled in cash) | 1,100,000 |
| Fair value of identifiable net assets | 1,548,521 |
| Gain on bargain purchase | (448,521) |
As OJSC “Yargorelectroset” was acquired at auction where the selling price was determined by the forces of demand, the transaction resulted in a gain. The gain of RUB 448,521 thousand was recognised within other income in the consolidated statement of comprehensive income.
(c) Establishment of subsidiaries
(i) OJSC “Energy Service Company”
On 11 January 2011 the Group established a joint stock company “Energy Service Company”. The authorized capital of the subsidiary consists of 1,000 ordinary shares, par value RUB 100 per share. The Group is the sole shareholder of OJSC “Energy Service Company”.
(ii) СJSC “IEEC”
On 10 August 2011 the Group established a joint stock company “Innovation and energy efficiency center”. The authorized capital of the subsidiary consists of 10,000 ordinary shares, par value RUB 100 per share. The Group is 51% shareholder of CJSC “IEEC”.
Return to Notes to the Consolidated Financial Statements for the year ended 31 December 2011