Investments in associates

Investments in associates as at 31 December 2012, 2011 and 2010 were as follows:

Associate Main activity Voting share capital, % 2012 Carrying amount 2011 Carrying amount 2010 Carrying amount
OJSC Svyazinvest Investments 25.00 32,209 30,265 26,423
OJSC Bashinformsvyaz Communication services 41.42 (2011: 40.16) 4,394 3,820 -
CJSC Volgograd-GSM Mobile communication services 100.00 - - 695
CJSC Samara Telecom Communication services 27.78 159 147 144
OJSC MMTS-9 Communication services 49.14 347 260 186
OJSC WestBalt Telecom Communication services 38.00 131 127 87
OJSC Vostoktelecom Communication services 25.00 77 75 65
Other Various - 72 52 58
Total investments in associates     37,389 34,746 27,658

In September 2010, the Group acquired 25% plus one share of OJSC Svyazinvest for a cash payment of 26,000.

The acquisition of interest in OJSC Svyazinvest resulted in a crossholding because OJSC Svyazinvest is the Company’s parent. The Company is the main subsidiary of OJSC Svyazinvest and represents the major part of OJSC Svyazinvest group. The investment in OJSC Svyazinvest is accounted for using the equity method applicable for crossholding structures.

In March 2012 the decision about the merger of OJSC Svyazinvest and the Company was approved by the President of Russian Federation. The crossholding with OJSC Svyazinvest will be eliminated which will result in reduction of the Group’s equity by the amount of the difference of the Group’s investment in OJSC Svyazinvest and the carrying value of OAO Svyazinvest’s assets other than its investment in the Company. The timing of the transaction will be determined by a specific decision of the Government. At the date of these financial statements are authorised for issuance no decision on the timing was made.

In December 2012 the Group acquired 140,315,416 ordinary shares of OJSC Svyazinvest through additional issue of shares of OJSC Svyazinvest. (25% of the issue). The purchase price amounted to 1,720.

In December 2012 the Group made an offer to shareholders of OJSC Bashinformsvyaz to buy ordinary shares at the fix price of 11.42499 Rubles per share. In December 2012 the Group increased its share in OJSC Bashinformsvyaz to 41.42%. The purchase price amounted to 168.

In June 2011 the Group acquired 38.78 % equity interest (40.16% of voting share capital) in OJSC Bashinformsvyaz from LLC Bashtelecominvest. The purchase price amounted to 3,640.

Summarized financial information as at 31 December 2012, 2011 and 2010 and for the years then ended of the associates is presented below:

Aggregate amounts 2012 2011 2010
Assets 583,881 513,471 425,728
Liabilities 334,577 271,187 236,599
Revenue 333,036 304,006 282,241
Net income 14,892 17,187 27,969

None of the Group’s associates are publicly listed entities and consequently do not have published price quotations, except for OJSC Bashinformsvyaz, which is listed on Moscow exchange. Based on its closing bid price of 10.5 Roubles at the reporting date, (12.48 at 31 December 2011), the fair value of the Group’s investment is 4,127 (4,722 at 31 December 2011).

In 2012 the Group received dividends from its investments in equity accounted investees in the amount of 820 (2011: 182, 2010: 151).