REG - IG Seismic Services - 1H 2015 Financial Report <Origin Href="QuoteRef">IGSSq.L</Origin> - Part 2
30/09/2015 16:50
- Part 2: For the preceding part double click ID:nRSd8034Aa
following:
Security Effectiveinterest rate As at As at31 December 2014
30 June 2015
Current liabilities
Short-term bank loans secured 9.9%-16.2% 3,365,651 4,386,155
Current portion of long-term bank loans secured 2.3%-17.8% 3,772,362 3,096,819
Total short-term loans and borrowings 7,138,013 7,482,974
Non-current liabilities
Long-term bank loans secured 2.3%-17.8% 3,152,274 4,958,489
Bonds 10.5% 2,975,116 2,971,379
Long-term borrowings - 9,775
Total long-term loans and borrowings 6,127,390 7,939,643
Total loans and borrowings 13,265,403 15,422,617
At the beginning of 2013 the Group entered into non-revolving credit line
agreement with Sberbank denominated in euro at interest rate calculated as
EURIBOR plus 2.15%. Amount of raised financing amounts to 14,900,000 euro
(599,522) and matures in December 2017. The liability over this credit line in
the amount of 274,838 and 274,838 is reported within Long-term bank loans and
Current portion of long-term bank loans, respectively as of 30 June 2015.
All other loans and borrowings presented in the table above are at fixed rates
and are denominated in Russian rubles.
In October 2013, the Group placed issue of documentary interest-bearing
non-convertible bearer stock bonds (registration number 4-01-55378-E) with a
total nominal value of RUB 3 billion and the term of 5 years at Moscow
Exchange. Coupon payments are made on semi-annual basis of fixed rate of 10.5%
p.a. for the first six coupon periods. According to the Bank of Russia Board
of Directors Resolution as of 29 November 2013, bonds were included into the
Lombard List.
11. Loans and borrowings (continued)
Long-term loans and borrowings are payable in the following periods:
As at As at31 December 2014
30 June
2015
1 to 2 years 1,004,072 1,897,392
3 to 5 years 5,123,318 6,042,251
Total 6,127,390 7,939,643
Pledge obligations and description of security are disclosed in Note 23.
12. Accounts payable and promissory notes payable
Trade and other payables comprised the following:
As at As at31 December 2014
30 June
2015
Trade payables 4,661,934 4,281,596
Payables to employees 791,435 991,684
Advances received 6,755 293,516
Interest payable 193,932 195,857
Amounts due to customers under construction contracts 10,716 151,768
Other payables 187,228 98,344
Total 5,852,000 6,012,765
Trade payables are non-interest bearing and are normally settled on 60-day
terms. Other payables are non-interest bearing and have an average term of six
month.
Notes issued comprised the following:
Interestrate As at As at31 December 2014
30 June
2015
Short-term promissory notes payable:
Notes issued to third parties for equipment (Sercel) 7% 144,043 287,656
Notes issued to third parties for equipment (UniQ) 4% 436,846 674,208
Notes issued to third parties for services and supplies 0% 114,231 -
Total 695,120 961,864
Effective interest rate for promissory notes issued by the Group to finance
the purchase of Uniq equipment in 2013 was 7% while contractual interest rate
comprised 4%.
Effective interest rate accrual in the amount of 18,208 and 12,404 was
recognized within finance expense for the six months ended 30 June 2015 and
2014 respectively.
12. Accounts payable and promissory notes payable (continued)
In August 2014 the Group entered into supply agreement with Sercel for
acquisition of new seismic equipment in the amount of 11,465,720 euro
(596,089). The purchase was made on deferred payments terms through ten equal
installments by September 2019 at EURIBOR 6m + 2.8% p.a.
As of 30 June 2015 current portion of this liability in the amount of 141,075
is recorded within trade payables and amounts of 493,765 due beyond 2015 are
presented within Other long-term liabilities (31 December 2014: 156,720 and
626,878, respectively).
13. Other taxes payable and provisions
Other taxes and charges payable comprised the following:
As at As at31 December 2014
30 June
2015
Value-added tax payable 1,896,148 1,470,947
Social taxes payable 785,129 403,613
Personal income tax payable 419,439 135,231
Property tax payable 34,073 23,186
Other taxes and charges 32,283 38,462
Total 3,167,072 2,071,439
As of 30 June 2015 provisions amounted to 118,146 (31 December 2014: 157,448)
and related to probable tax exposures which were revealed based on on-site tax
audits for several previous years.
14. Construction type contracts
The Group sales include revenues from seismic contracts of 9,757,009 and
10,109,912 for the six months ended 30 June 2015 and 2014, respectively.
As at As at
30 June 30 June
2015 2014
Accumulated costs under contracts in progress from inception at the reporting date 9,039,093 9,120,174
Accumulated recognized profits less recognized losses under contracts in progress from inception at the reporting date 1,132,151 2,729,971
Balance of advances received - 37,532
The recognition of the revenue from construction type contracts uncompleted as
of 30 June 2015 is primarily based on an assumption of profit margins expected
to be earned from inception to completion of each contract. If such expected
profit margin reduced by one percent, the revenue from such contracts would
reduce by 144,572 (30 June 2014: 120,110).
15. Revenue
Revenue comprised the following:
For the six months ended
30 June 30 June
2015 2014
Field seismic operations 9,757,009 10,109,912
Data processing and interpretation 191,097 145,768
Other revenue 87,254 142,552
Total 10,035,360 10,398,232
16. Cost of sales
Cost of sales comprised the following:
For the six months ended
30 June 30 June
2015 2014
Labor and wages, including mandatory social contribution 3,522,229 3,329,230
Materials and supplies 1,932,136 2,012,217
Depreciation of property, plant and equipment and amortization of intangible assets 1,312,868 1,314,146
Oilfield services 552,646 686,243
Operating lease payments 420,651 288,581
Transportation services 306,150 382,084
Other third parties services 301,046 296,956
Other 76,878 95,374
Total 8,424,604 8,404,831
17. General and administrative expenses
General and administrative expenses for the years ended 31 December comprised
the following:
For the six months ended
30 June 30 June
2015 2014
Labor and wages, including mandatory social contribution 682,034 773,328
Third party services 137,476 180,282
Taxes, other than income tax 61,481 52,785
Operating lease 47,878 46,021
Depreciation of property, plant and equipment and amortization of intangible assets 36,217 45,781
Bank charges 17,372 32,440
Other 42,533 73,684
Total 1,024,991 1,204,321
18. Other operating expenses
Other operating expenses comprised the following:
For the six months ended
30 June 30 June
2015 2014
Loss on disposals of property, plant and equipment and other assets 231,349 99,179
Bad receivables write-offs and provisions 104,473 22,174
Penalties and fines paid 89,485 50,538
Provision for probable claims from tax authorities 25,959 7,049
VAT not recoverable 30,299 12,141
Net loss from service plants and facilities 24,913 17,255
Welfare assistance 8,949 7,827
Free-of-charge transfer of assets and charity 4,761 6,222
Administrative charges and state duties 2,242 3,452
Other expenses 24,267 81,711
Total 546,697 307,548
Penalties and fines relate to additional charges for breach in contractual
obligations with counterparties in a normal course of business and additional
non-income tax charges.
19. Finance income and expenses
Finance income and expenses comprised the following:
For the six months ended
30 June 30 June
2015 2014
Interest expense on loans and borrowings 971,622 782,810
Bank guarantee 31,524 14,127
Interest expense on finance lease 861 600
Bank charges on loans and loan accounts 441 4,356
Other finance expenses - 1,332
Total finance expenses 1,004,448 803,225
Total finance income 35,041 43,646
Net finance income and expenses 969,407 759,579
20. Foreign exchange
Transactions in foreign currencies are translated to the respective functional
currency, which is Russian Ruble for the subsidiary companies located in the
Russian Federation and Kazakh Tenge for subsidiary companies located in the
Kazakhstan at exchange rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the
reporting date are translated to the functional currency at the exchange rate
at that date.
Foreign currency differences arising in translation are recognized in the
statement of comprehensive income. Net foreign exchange gain for the six month
period ended 30 June 2015 recognized in profit or loss amounted to 259,215
(loss for the six month period ended 30 June 2014 amounted to 10,512).
21. Earnings per share
The information on the earnings and number of shares used for determining
basic and diluted earnings per share is presented below:
For the six months ended
30 June 30 June
2015 2014
Net loss attributable to ordinary equity holders of the parent (481,966) (294,000)
Effect of dilution - -
Net loss attributable to ordinary equity holders of the parent adjusted to the effect of dilution (481,966) (294,000)
Weighted average number of ordinary shares for basic earnings per share 20,833,400 20,833,400
Effect of dilution - -
Weighted average number of ordinary shares adjusted to the effect of dilution 20,833,400 20,833,400
Loss per share (in rubles) (23.13) (14.11)
No other transactions with ordinary shares or potential ordinary shares were
performed between the reporting date and the date of these financial
statements.
22. Financial instruments
The Group's financial instruments comprise accounts receivable and payable,
loans receivable, loans payable, and cash, which arise directly from its
operations. During the reporting period, the Group did not undertake trading
in financial instruments.
Credit risk
Financial assets, which potentially subject Group entities to credit risk,
consist principally of trade receivables (Note 8).
The Group has policies in place to ensure that sales of services are made to
customers with an appropriate credit history. The carrying amount of accounts
receivable, net of provision for impairment of receivables, represents the
maximum amount exposed to credit risk.
The Group has no significant concentrations of credit risk. Although
collection of receivables could be influenced by economic factors, management
believes that there is no significant risk of loss to the Group beyond the
allowance already recorded.
The aging of accounts receivable at the reporting date was:
30 June 2015 31 December 2014
Gross Impairment Gross Impairment
Current 3,625,585 - 2,957,552 -
Past due and impaired 104,820 104,820 72,492 72,492
22. Financial instruments (continued)
Interest rate risk
At the beginning of 2013 the Group entered into non-revolving credit line
agreement with Sberbank denominated in euro at interest rate calculated as
EURIBOR plus 2.15% p.a. (Note 11). The following demonstrates the sensitivity
of the Group's profit before tax to a reasonably possible change in EURIBOR
rate, with all other variables held constant.
Effect on income/(loss) before taxfor the six months ended
Change of EURIBOR rate, %
30 June 30 June
2015 2014
'+0.1% (550) (304)
'-0.1% 550 304
In August 2014 the Group entered into supply agreement with Sercel for
acquisition of new seismic equipment in the amount of 11,465,720 euro (634,840
as of 30 June 2015, Note 12). The purchase was made on deferred payments terms
through ten equal installments by September 2019 at EURIBOR 6m + 2.8% p.a. The
following demonstrates the sensitivity of the Group's profit before tax to a
reasonably possible change in EURIBOR rate, with all other variables held
constant.
Effect on income/(loss) before taxfor the six months ended
Changeof EURIBOR rate, %
30 June 30 June
2015 2014
'+0.1% 635 -
'-0.1% (635) -
The interest rates on other long-term loans of the Group are fixed and
therefore do not result in susceptibility of upward interest rate risk through
market value fluctuations of interest-bearing loans payable. As at 30 June
2015 the Group did not hedge its interest rate risk.
Market risk
Market risk is the risk that the value of a financial instrument will
fluctuate as a result of changes in market prices. The Group manages market
risk through periodic estimation of potential losses that could arise from
adverse changes in market conditions.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in raising
funds to meet commitments associated with its financial liabilities. Liquidity
requirements are monitored on a regular basis and management ensures that
sufficient funds are available to meet any commitments as they arise.
22. Financial instruments (continued)
Liquidity risk (continued)
The following table shows the undiscounted contractual maturities of
liabilities as at 30 June 2015:
0-6 months 7-12 months 2 to 5 years Over 5 years Total
Bank loans 3,179,595 3,958,418 3,152,274 - 10,290,287
Bonds - - 3,000,000 - 3,000,000
Interest payable 902,623 616,743 1,038,660 - 2,558,026
Notes payable 637,092 114,231 - - 751,323
Lease liabilities 849 975 3,615 - 5,439
Trade accounts payable 4,591,396 70,538 493,765 - 5,155,699
Payables to employees 791,435 - - - 791,435
Other payables 187,228 - - - 187,228
Total 10,290,218 4,760,905 7,688,314 - 22,739,437
The following table shows the undiscounted contractual maturities of
liabilities as at 31 December 2014:
0-6months 7-12months 2 to 5 years Over 5 years Total
Bank loans 4,057,479 3,425,495 4,968,264 - 12,451,238
Bonds - - 3,000,000 - 3,000,000
Interest payable 966,151 750,003 2,404,398 - 4,120,552
Notes payable 395,788 645,518 - - 1,041,306
Lease liabilities 1,634 849 4,589 - 7,072
Trade accounts payable 4,203,236 78,360 626,878 - 4,908,474
Payables to employees 991,684 - - - 991,684
Other payables 98,344 - - - 98,344
Total 10,714,316 4,900,225 11,004,129 - 26,618,670
Foreign currency risk
The Group is not engaged in hedging activity to mitigate its foreign currency
risk. The Group limits foreign currency risk by monitoring changes in exchange
rates in the currencies in which its loans and borrowings are denominated.
The Group has the following USD-denominated financial assets and liabilities:
As at As at 31 December2014
30 June2015
(in thousands of US dollars)
Assets
Accounts receivable 83 37
Cash and cash equivalents 60 4,712
Liabilities
Promissory notes (9,026) (13,426)
Accounts payable (6,376) (6,799)
22. Financial instruments (continued)
Foreign currency risk (continued)
The Group has the following EUR-denominated financial assets and liabilities:
As at As at 31 December2014
30 June2015
(in thousands of EUR)
Accounts receivable 11 2,006
Cash and cash equivalents 73 26
Loans and borrowings (8,939) (8,941)
Accounts payable (10,408) (11,602)
Sensitivity analysis
The following demonstrates the sensitivity to a reasonably possible change in
the US dollar exchange rate, with all other variables held constant, of the
Group's profit before tax (due to changes in the fair value of monetary assets
and liabilities).
As at 30 June 2015, it is estimated that a 28.54% strengthening of RUR against
USD, with all other variables held constant, would increase the Group's profit
for the six months ended 30 June 2015 by 241,803 (30 June 2014: 10.21%
increase by 88,744). This analysis has been determined assuming that the
change in foreign exchange rates had occurred at the reporting date and had
been applied to the foreign currency balances to which the Group has
significant exposure as stated above, and that all other variables, in
particular interest rates, remain constant.
Respective 28.54% and 20.00% weakening of the RUR against USD at 30 June 2015
and 2014 would have had the opposite effect on the amounts shown above in the
amount of 241,803 and 173,838 respectively, on the basis that all other
variables remain constant.
Change of Effect on income/
RUR to USDexchange rate, % (loss)before tax
6 months 2015 '+28.54% (241,803)
-28.54% 241,803
6 months 2014 '+20.00% (173,838)
-10.21% 88,744
The following demonstrates the sensitivity to a reasonably possible change in
the EUR exchange rate, with all other variables held constant, of the Group's
profit before tax (due to changes in the fair value of monetary assets and
liabilities).
As at 30 June 2015, it is estimated that a 29.58% strengthening of RUR against
EUR, with all other variables held constant, would increase the Group's profit
for the six months ended 30 June 2015 by 350,544 (30 June 2014: 8.63% increase
by 41,315). This analysis has been determined assuming that the change in
foreign exchange rates had occurred at the reporting date and had been applied
to the foreign currency balances to which the Group has significant exposure
as stated above, and that all other variables, in particular interest rates,
remain constant.
22. Financial instruments (continued)
Sensitivity analysis (continued)
Respective 29.58% and 20.00% weakening of the RUR against EUR at 30 June 2015
and 2014 would have had the opposite effect on the amounts shown above in the
amount of 350,544 and 95,748 respectively, on the basis that all other
variables remain constant.
Change of Effect on income/
RUR to EURexchange rate, % (loss)before tax
6 months 2015 '+29.58% (350,544)
-29.58% 350,544
6 months 2014 '+20.00% (95,748)
-8.63% 41,315
Fair value of financial instruments
The management believes that the fair value of the Group's financial assets
and liabilities approximates their carrying amounts except for bonds. The
difference between fair value and carrying value of Group's rouble-denominated
bonds issued at 10.5% p.a. arises due to higher cost of capital, increased
inflation and uncertainty regarding economic growth discussed in Note 23.
Carrying value of bonds as of 30 June 2015 comprises 2,975,116 while their
fair value comprises 2,641,241.
Capital management
The primary objective of the Group's capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios in order to
maintain an optimal capital structure to reduce cost of capital and to support
its business and maximize shareholder value.
The Group manages its capital structure and makes adjustments to it, in light
of changes in economic conditions. To maintain or adjust the capital
structure, the Group may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares.
The Group's current policy is not to pay any dividends.
The Group monitors capital using a range of ratios, including gearing ratio,
which is net debt divided by total capital plus net debt. The Group includes
the following within net debt: loans payable, finance lease obligations, less
cash and cash equivalents and other financial instruments easily convertible
to cash.
As at 30 June2015 As at 31 December2014
Loans and borrowings payable 13,265,403 15,422,617
Notes issued for CAPEX 580,889 961,864
Finance lease obligations 5,439 7,072
Less: cash and cash equivalents (950,697) (1,206,691)
Net debt 12,901,034 15,184,862
Equity 8,154,202 8,814,759
Capital and net debt 21,055,236 23,999,621
Gearing ratio 0.61 0.63
23. Risks, commitments and contingencies
Operating environment of the Group
Russia continues economic reforms and the development of its legal, tax and
regulatory frameworks as required by a market economy. The future stability of
the Russian economy is largely dependent upon these reforms and developments
and the effectiveness of the economic, financial and monetary measures taken
by the government. Management believes it is taking the appropriate measures
to support the sustainability of the Company's business in the current
circumstances.
In 2014 and 2015 Russian economy was negatively impacted by a significant drop
in crude oil prices and a significant devaluation of the Russian Rouble, as
well as sanctions imposed on Russia by several countries. In December 2014,
the Rouble interest rates have increased significantly after the Central Bank
of Russia raised its key rate to 17 percent. The combination of the above
resulted in reduced access to capital, a higher cost of capital, increased
inflation and uncertainty regarding economic growth, which could negatively
affect the Group's future financial position, results of operations and
business prospects. As of the date of the issuance of these consolidated
financial statements the key rate of the Central Bank of Russia reduced to 11
percent.
The combination of the above resulted in a higher cost of capital, increased
inflation and uncertainty regarding further economic growth, which could
negatively affect the Company's future financial position, results of
operations and business prospects.
Management believes it is taking the appropriate measures to support the
sustainability of the Company's business in the current circumstances.
Liquidity
The Russian economy is vulnerable to market downturns and economic slowdowns
elsewhere in the world. The global financial crisis has resulted in capital
markets instability, significant deterioration of liquidity in the banking
sector, and tighter credit conditions within Russia. While the Russian
Government has introduced a range of stabilization measures aimed at providing
liquidity and supporting debt refinancing for Russian banks and companies,
there continues to be uncertainty regarding the access to capital and cost of
capital for the Group and its counterparties, which could affect the Group's
financial position, results of operations and business prospects (please also
refer to Note 25).
While management believes it is taking appropriate measures to support the
sustainability of the Group's business in the current circumstances,
unexpected further deterioration in the areas described above could negatively
affect the Group's results and financial position in a manner not currently
determinable.
Taxation
Legislation and regulations regarding taxation in Russia continue to evolve.
The various legislation and regulations are not always clearly written and
their interpretation is subject to the opinions of the local, regional and
national tax authorities. Instances of inconsistent opinions are not unusual.
23. Risks, commitments and contingencies (continued)
Taxation (continued)
The current regime of penalties and interest related to reported and
discovered violations of Russia's laws, decrees and related regulations is
severe. Interest and penalties are levied when an understatement of a tax
liability is discovered. As a result, the amounts of penalties and interest
can be significant in relation to the amounts of unreported taxes.
In Russia tax returns remain open and subject to inspection for a period of up
to three years. The fact that a year has been reviewed does not close that
year, or any tax return applicable to that year, from further review during
the three-year period.
Russian transfer pricing legislation, which came into force on 1 January 2012,
allows the Russian tax authority to apply transfer pricing adjustments and
impose additional profits tax liabilities in respect of all "controlled"
transactions if the transaction price differs from the market price. The list
of "controlled" transactions includes transactions performed with related
parties and foreign trade transactions. The adopted Russian transfer pricing
rules have considerably increased the compliance burden for the taxpayer
compared to the transfer pricing rules which were in effect before 2012 due
to, inter alia, shifting the burden of proof from the Russian tax authorities
to the taxpayers. Pursuant to the new rules, the taxpayer shall justify the
prices applied for such transactions. These rules are applicable not only to
the transactions taking place in 2012 but also to the prior transactions with
related parties if related income and expenses were recognized in 2012. The
new provisions apply for both foreign trade and domestic transactions. For
domestic transactions the transfer pricing rules apply only if the amount of
all transaction with related party exceeds RUR 3 billion in 2012, RUR 2
billion in 2013 and RUR 1 billion in 2014 and further. In cases where the
domestic transaction resulted in an accrual of additional tax liabilities for
one party, another party could correspondingly adjust its profit tax
liabilities. Special transfer pricing rules apply to transactions with
securities and derivatives.
On 24 November 2014 Federal Law No. 376-FZ of the Russian Federation,
effective 1 January 2015, concerning the introduction of amendments to part
one and two of the Tax Code of the Russian Federation (regarding the taxation
of profit of Controlled Foreign Companies and tax residence of Foreign
Companies in Russia) was enacted. The Company management does not expect the
above amendments would have a material impact on the Company's financial
position or results of operations.
The Group determined its tax liabilities arising from these "controlled"
transactions using actual transaction prices under such loan agreements. As
for other controlled transactions, control procedures to ensure consistency
between the prices used in the controlled transaction prices and the level of
market prices for the purposes of taxation have been developed and approved.
The activities performed focus on minimizing tax risks.
Overall, management believes that the Group has paid or accrued all taxes that
are applicable. For taxes where uncertainty exists, the Company has accrued
tax liabilities based on management's best estimate of the probable outflow of
resources embodying economic benefits, which will be required to settle these
liabilities. Possible liabilities which were identified by management at the
reporting date as those that can be subject to different interpretations of
the tax laws and regulations and are not accrued in the consolidated financial
statements as of the reporting date could be up to 1,506,562 (1,641,700 as of
31 December 2014).
23. Risks, commitments and contingencies (continued)
Compliance with covenants
The Group is obliged to comply with a number of restrictive financial and
other covenants contained in its loan agreements. Such covenants include
maintaining certain financial ratios. As of 30 June 2015 and as of 31 December
2014, the Group was in compliance with all restrictive financial and other
covenants contained in its loan agreements.
Insurance
The insurance industry in the Russian Federation is in a developing state and
many forms of insurance protection common in other parts of the world are not
yet generally available. The Group does not have full coverage for its plant
facilities, business interruption, or third party liability in respect of
property or environmental damage arising from accidents on Group property or
relating to Group operations. Until the Group obtains adequate insurance
coverage, there is a risk that the loss or destruction of certain assets could
have a material adverse effect on the Group's operations and financial
position.
Litigation
Group companies remain as a defendant in legal actions filed through 2013-2015
against them by a number of third parties. Management believes that there are
no current claims outstanding, which could have a material effect on the
consolidated results of operations or consolidated financial position of the
Group and which have not been accrued or disclosed in these consolidated
financial statements.
Pledge obligations
Pledged property, plant and equipment
As at 30 June 2015, the Group entered into a number of loan agreements and
revolving credit line agreements, which were secured by the Group's property,
plant and equipment. The carrying value of the property, plant and equipment
pledged at the reporting date amounts to 1,607,311 (31 December 2014:
1,865,065).
Pledged rights to claim cash
As at 30 June 2015, the Group entered into a number of loan agreements and
revolving credit line agreements, which were secured by the pledge of property
rights representing rights to claim cash under the customer agreements for
conducting seismic works. The pledged rights to claim cash at the reporting
date amounted to 3,497,472 (31 December 2014: 3,836,179).
24. Related party transactions
The following table provides the total amount of transactions that have been
entered into with related parties during the six month periods ended 30 June
2015 and 30 June 2014, as well as balances with related parties as of 30 June
2015 and 31 December 2014:
Revenue
Associated companyfor the six months ended
30 June 30 June
2015 2014
Revenue
Field seismic operations - 31,789
Other services 69 135
Total 69 31,924
Outstanding balances
Associated company
30 June 31 December 2014
2015
Accounts receivable 9,785 7,800
Advances issued 600 600
Accounts payable (3,194) (3,194)
Advances received (1,611) (1,611)
Total 5,580 3,595
All outstanding balances with related parties are to be settled in cash or
through services rendered in case of advances within six months after the
reporting date. None of the balances is secured.
Pricing policy
Related party transactions are based on market prices and are effected on an
arm's length basis in a manner similar to transactions with third parties.
Key management personnel
The Company enters into transactions with its directors and other key
management personnel in the normal course of business. Key management
personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly
and includes Chief Executive Officer, Executive Directors, members of the
Board of Directors, Chief Financial Officer and Vice-Presidents of the
Company.
For the six month period ended 30 June 2015, the remuneration paid to key
management personnel amounted to 36,180 (six month period ended 30 June 2014:
52,596).
25. Events subsequent to the reporting date
In August 2015 PJSC Bank "Otkritie Financial Corporation" provided a new
credit line facility to PJSC "GEOTECH Seismic Services" in the amount of 6.5
billion rubles maturing 29 July 2022 at 15% p.a. Following the receipt of
funds from Bank "Otkritie FC" the Group's total debt amount will remain
unchanged as credit line will be used to refinance existing obligations.
This information is provided by RNS
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