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INVESTMENTS IN SUBSIDIARIES | 12 Months Ended
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Dec. 31, 2017
INVESTMENTS IN SUBSIDIARIES |
INVESTMENTS IN SUBSIDIARIES | 13 INVESTMENTS IN SUBSIDIARIES The Company held investments in the significant subsidiaries for the years ended December 31 as detailed in the table below. The equity interest presented represents the economic rights available to the Company.
|  |  |  |  |  | Equity interest held by the Group |
|  | Country of incorporation |  | Nature of subsidiary |
Name of significant subsidiary |  | 2017 |  | 2016 |
VEON Amsterdam B.V. |  | Netherlands |  | Holding |  |  | 100 | % |  | 100 | %
VEON Holdings B.V. |  | Netherlands |  | Holding |  |  | 100 | % |  | 100 | %
PJSC VimpelCom |  | Russia |  | Operating |  |  | 100 | % |  | 100 | %
JSC "Kyivstar" |  | Ukraine |  | Operating |  |  | 100 | % |  | 100 | %
LLP "KaR-Tel" |  | Kazakhstan |  | Operating |  |  | 75.0 | % |  | 75.0 | %
LLC "Tacom" |  | Tajikistan |  | Operating |  |  | 98.0 | % |  | 98.0 | %
LLC "Unitel" |  | Uzbekistan |  | Operating |  |  | 100 | % |  | 100 | %
LLC "VEON Georgia" |  | Georgia |  | Operating |  |  | 80.0 | % |  | 80.0 | %
CJSC "VEON Armenia" |  | Armenia |  | Operating |  |  | 100 | % |  | 100 | %
LLC "Sky Mobile" |  | Kyrgyzstan |  | Operating |  |  | 50.1 | % |  | 50.1 | %
VimpelCom Lao Co. Ltd. |  | Lao PDR |  | Operating |  |  | 78.0 | % |  | 78.0 | %
VEON Luxembourg Holdings S.à r.l. |  | Luxembourg |  | Holding |  |  | 100 | % |  | 100 | %
VEON Luxembourg Finance Holdings S.à r.l. |  | Luxembourg |  | Holding |  |  | 100 | % |  | 100 | %
VEON Luxembourg Finance S.A. |  | Luxembourg |  | Holding |  |  | 100 | % |  | 100 | %
Global Telecom Holding S.A.E |  | Egypt |  | Holding |  |  | 57.7 | % |  | 51.9 | %
Omnium Telecom Algérie S.p.A.* |  | Algeria |  | Holding |  |  | 26.3 | % |  | 23.7 | %
Optimum Telecom Algeria S.p.A.* |  | Algeria |  | Operating |  |  | 26.3 | % |  | 23.7 | %
Pakistan Mobile Communications Limited |  | Pakistan |  | Operating |  |  | 49.0 | % |  | 44.0 | %
Banglalink Digital Communications Limited |  | Bangladesh |  | Operating |  |  | 57.7 | % |  | 51.9 | %
Wind Telecom S.p.A.** |  | Italy |  | Holding |  |  | — |  |  | 100 | %
* The Group has concluded that it controls Omnium Telecom Algérie S.p.A and Optimum Telecom Algeria S.p.A even though its subsidiary, Global Telecom Holding S.A.E. owns less than 50% of the ordinary shares. This is because the Company can exercise operational control through a shareholders' agreement. ** On December 1, 2017, Wind Telecom S.p.A. merged into VEON Holdings. Pursuant to local laws and regulations and covenants in agreements relating to indebtedness, subsidiaries may be restricted from declaring or paying dividends to VEON. The company holds and controls its investments in Omnium Telecom Algérie S.p.A., Optimum Telecom Algeria S.p.A, Pakistan Mobile Communications Limited, Warid Telecom Limited and Banglalink Digital Communications Limited ("Banglalink") through its subsidiary GTH, in which it holds a 57.7% interest as of balance sheet date. MATERIAL PARTLY-OWNED SUBSIDIARIES Financial information of subsidiaries that have material non-controlling interests ("NCIs") is provided below:
|  | Equity interest held by NCIs |  | Book values of material NCIs |  | Profit / (loss) attributable to material NCIs |
Name of significant subsidiary |  | 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016 |
LLP "KaR-Tel" ("Kar-Tel") |  |  | 25.0 | % |  | 25.0 | % |  | 252 |  |  | 253 |  |  | 8 |  |  | 10 |
LLC "Sky Mobile" ("Sky Mobile") |  |  | 49.8 | % |  | 49.8 | % |  | 167 |  |  | 164 |  |  | 3 |  |  | (21 | )
Global Telecom Holding S.A.E ("GTH") |  |  | 42.3 | % |  | 48.1 | % |  | (778 | ) |  | (219 | ) |  | (40 | ) |  | 116 |
Omnium Telecom Algérie S.p.A. ("OTA") |  |  | 73.7 | % |  | 76.3 | % |  | 1,235 |  |  | 1,332 |  |  | 100 |  |  | 141 |
The summarized financial information of these subsidiaries before intercompany eliminations for the years ended December 31 are detailed below. Note that the amount of non-controlling interests presented for OTA of 73.7% represents the non-controlling interests in Algeria of 54.4% and the non-controlling interests in GTH, the intermediate parent company in Egypt, of 42.3%. Summarized income statement
|  | Kar-Tel |  | Sky Mobile |  | GTH |  | OTA |
|  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |
Operating revenue |  |  | 348 |  |  | 308 |  |  | 534 |  |  | 108 |  |  | 136 |  |  | 164 |  |  | 3,015 |  |  | 2,955 |  |  | 2,894 |  |  | 915 |  |  | 1,040 |  |  | 1,273 |
Operating expenses |  |  | (296 | ) |  | (255 | ) |  | (410 | ) |  | (97 | ) |  | (162 | ) |  | (93 | ) |  | (2,384 | ) |  | (2,463 | ) |  | (2,462 | ) |  | (703 | ) |  | (753 | ) |  | (922 | )
Other (expenses) / income |  |  | (7 | ) |  | 2 |  |  | 97 |  |  | (2 | ) |  | (12 | ) |  | 29 |  |  | (450 | ) |  | (213 | ) |  | (364 | ) |  | (27 | ) |  | (33 | ) |  | (72 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Profit / (loss) before tax |  |  | 45 |  |  | 55 |  |  | 221 |  |  | 9 |  |  | (38 | ) |  | 100 |  |  | 181 |  |  | 279 |  |  | 68 |  |  | 185 |  |  | 254 |  |  | 279 |
Income tax expense |  |  | (13 | ) |  | (14 | ) |  | (51 | ) |  | (4 | ) |  | (5 | ) |  | (10 | ) |  | (375 | ) |  | (144 | ) |  | (115 | ) |  | (49 | ) |  | (69 | ) |  | (106 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Profit / (loss) for the year |  |  | 32 |  |  | 41 |  |  | 170 |  |  | 5 |  |  | (43 | ) |  | 90 |  |  | (194 | ) |  | 135 |  |  | (47 | ) |  | 136 |  |  | 185 |  |  | 173 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total comprehensive income / (loss) |  |  | 32 |  |  | 41 |  |  | 170 |  |  | 5 |  |  | (43 | ) |  | 90 |  |  | (194 | ) |  | 135 |  |  | (47 | ) |  | 136 |  |  | 185 |  |  | 173 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Attributed to NCIs |  |  | 8 |  |  | 10 |  |  | 44 |  |  | 3 |  |  | (21 | ) |  | 40 |  |  | (40 | ) |  | 116 |  |  | 26 |  |  | 100 |  |  | 141 |  |  | 132 |
Dividends paid to NCIs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 116 |  |  | — |  |  | — |  |  | 82 |  |  | — |  |  | (57 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Summarized statement of financial position
|  | Kar-Tel |  | Sky Mobile |  | GTH |  | OTA |
|  | 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016 |
Property and equipment |  |  | 184 |  |  | 203 |  |  | 79 |  |  | 80 |  |  | 2,028 |  |  | 2,314 |  |  | 517 |  |  | 531 |
Intangible assets |  |  | 92 |  |  | 91 |  |  | 12 |  |  | 14 |  |  | 1,324 |  |  | 1,356 |  |  | 291 |  |  | 394 |
Other non-current assets |  |  | 204 |  |  | 205 |  |  | 131 |  |  | 147 |  |  | 1,806 |  |  | 2,268 |  |  | 1,361 |  |  | 1,417 |
Trade and other receivables |  |  | 22 |  |  | 16 |  |  | 6 |  |  | 6 |  |  | 250 |  |  | 222 |  |  | 31 |  |  | 44 |
Cash and cash equivalents |  |  | 14 |  |  | 29 |  |  | 32 |  |  | 33 |  |  | 375 |  |  | 606 |  |  | 125 |  |  | 309 |
Other current assets |  |  | 74 |  |  | 64 |  |  | 12 |  |  | 3 |  |  | 850 |  |  | 337 |  |  | 66 |  |  | 84 |
Financial liabilities |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,072 | ) |  | (2,903 | ) |  | (128 | ) |  | (343 | )
Provisions |  |  | (5 | ) |  | (7 | ) |  | (4 | ) |  | (15 | ) |  | (341 | ) |  | (396 | ) |  | (31 | ) |  | (28 | )
Other liabilities |  |  | (84 | ) |  | (94 | ) |  | (22 | ) |  | (29 | ) |  | (1,876 | ) |  | (1,787 | ) |  | (400 | ) |  | (492 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total equity |  |  | 501 |  |  | 507 |  |  | 246 |  |  | 239 |  |  | 1,344 |  |  | 2,017 |  |  | 1,832 |  |  | 1,916 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Attributed to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  | 249 |  |  | 254 |  |  | 79 |  |  | 75 |  |  | 2,157 |  |  | 2,236 |  |  | 597 |  |  | 584 |
Non-controlling interests |  |  | 252 |  |  | 253 |  |  | 167 |  |  | 164 |  |  | (778 | ) |  | (219 | ) |  | 1,235 |  |  | 1,332 |
Summarized statement of cash flows
|  | Kar-Tel |  | Sky Mobile |  | GTH |  | OTA |
|  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |
Net operating cash flows |  |  | 105 |  |  | 99 |  |  | 137 |  |  | 23 |  |  | 58 |  |  | 81 |  |  | 877 |  |  | 1,077 |  |  | (339 | ) |  | 345 |  |  | 446 |  |  | (706 | )
Net investing cash flows |  |  | (73 | ) |  | (124 | ) |  | (363 | ) |  | (24 | ) |  | 45 |  |  | (65 | ) |  | (924 | ) |  | (473 | ) |  | (823 | ) |  | (172 | ) |  | (238 | ) |  | (201 | )
Net financing cash flows |  |  | (48 | ) |  | (83 | ) |  | (110 | ) |  | — |  |  | (115 | ) |  | (88 | ) |  | (157 | ) |  | (492 | ) |  | (1,032 | ) |  | (350 | ) |  | (288 | ) |  | (1,270 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | — |  |  | 1 |  |  | (5 | ) |  | — |  |  | (1 | ) |  | (3 | ) |  | (18 | ) |  | (14 | ) |  | (151 | ) |  | (7 | ) |  | (14 | ) |  | (153 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net increase / (decrease) in cash equivalents |  |  | (16 | ) |  | (107 | ) |  | (341 | ) |  | (1 | ) |  | (13 | ) |  | (75 | ) |  | (222 | ) |  | 98 |  |  | (2,345 | ) |  | (184 | ) |  | (94 | ) |  | (2,330 | )
SIGNIFICANT ACCOUNTING JUDGEMENT Control over subsidiaries Subsidiaries, which are those entities over which the Company is deemed to have control, are consolidated. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In certain circumstances, significant judgment is required to assess if the Company is deemed to have control over entities where the Company's ownership interest does not exceed 50%.

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