REG - IG Seismic Services - FY2014 Financial Report <Origin Href="QuoteRef">IGSSq.L</Origin> - Part 1

IG Seismic ServicesAnnouncement

15/07/2015 15:13

RNS Number : 6525L
IG Seismic Services PLC
29 April 2015
IG Seismic Services Plc
Consolidated financial statements 
as of and for the year ended 31December 2014
Contents
General information................................................................................................................................. 1
Report of the Board of Directors.............................................................................................................. 2
Independent auditors' report..................................................................................................................... 4
Consolidated statement of financial position............................................................................................... 6
Consolidated statement of profit and loss and other comprehensive income................................................. 7
Consolidated statement of cash flows....................................................................................................... 8
Consolidated statement of changes in equity.............................................................................................. 9
Notes to the consolidated financial statements ........................................................................................ 10
Directors
Sergey Generalov, Chairman, Non-Executive Director (appointed on 24September 2012)
Nikolay Levitskiy, Chief Executive Officer, Executive Director (appointed on 30 December 2011)
Boris Aleshin, Independent Non-Executive Director (appointed on 30 December 2011)
Peter O'Brien, Independent Non-Executive Director (appointed on 10 January 2012)
Dmitry Lipyavko, Independent Non-Executive Director (appointed on 12 November 2012)
Denis Cherednichenko, Non-Executive Director (appointed on 30 December 2011)
Maurice Dijols, Non-Executive Director (appointed on 30 December 2011)
Gerald Rohan, Independent Non-Executive Director (appointed on 4 June 2014)
Company secretary
A.T.S. Services Limited
Arch. Makariou III, 2-4
Capital Center, 9th floor
1065 Nicosia
Cyprus
Registered office
Arch. Makariou III, 2-4, 
Capital Center, 9th floor
1065 Nicosia
Cyprus
Independent auditor
Ernst & Young Cyprus Limited
Jean Nouvel Tower
6 Stasinou Avenue P.O. Box 21656
1511 Nicosia
Cyprus

The Board of Directors of IG Seismic Services plc (the "Company") (together with its subsidiaries referred to as "the Group") present their report and audited consolidated financial statements as of and for the year ended 31December 2014. The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the requirements of Cyprus Companies Law, Cap. 113.
Principal activities
The principal activity of the Group during the year continued to be provision of land and transition zone seismic data acquisition and data processing and interpretation to the petroleum industry in the Russian Federation, the Commonwealth of Independent States ("CIS") and other countries outside of the CIS.
Review of developments, position and performance of the Group's business
The results of the Group for the year are set out on page 7 of the consolidated financial statements. Sales of the Group in 2014 reached 19,589,247 compared with 19,339,577 in 2013. Adjusted EBITDA in 2014 was 4,448,998 (2013: 4,228,807). EBIDTA calculation is presented in Note8. Losses for the year are retained.
Dividends
The holders of ordinary shares are entitled to receive dividends as declared. One share has one vote at annual and general shareholders' meetings of the Company. No dividends were declared and paid for ordinary shares in 2014 and 2013.
Principal risks and uncertainties
The Group's critical accounting estimates and judgements and financial risk management are disclosed in Notes 5 and 32 to the consolidated financial statements. The Group's commitments and contingencies are disclosed in Note 33 to the consolidated financial statements.
Future development
The Board of Directors does not expect any significant changes in the activities of the Group for the foreseeable future. The Group's strategic objective is to strengthen its position as a leading seismic player in Russia. The Group will also continue its focus on effective cost management.
Share capital
Share capital of the Group is described in Note 20 to the financial statements.

Board of Directors
The structure of the Board of Directors during the year and as at 31December 2014 and at the date of this report is presented on page 1. Directors are subject to appointment or removal according to the provision of Shareholders Agreement. Independent Directors are subject to reelection at regular intervals.
The Group is managed by the Board of Directors which is collectively responsible to the shareholders for the success of the Group. The Board sets the strategic objectives and ensures that the necessary resources are in place to enable these objectives to be met. The Board is fully involved in decision making in the most important areas of business and conducts regular reviews of the Group's operational and financial performance. 
There were no significant changes in the assignment of responsibilities of the Board of Directors. Composition of the Board of Directors remained unchanged except appointment of Gerald Rohan, Independent Non-Executive Director, on 4 June 2014.
Events after the reporting date
All significant events that occurred after the reporting date are described in Note 35 to the consolidated financial statements.
Independent auditor
The independent auditors, Ernst & Young Cyprus Limited, have expressed their willingness to continue in office. A resolution giving authority to the Board of Directors to fix their remuneration will be proposed at the Annual General Shareholder's Meeting.
By order of the Board
__________________________
Nikolay Levitskiy
Executive director
Nicosia
28 April 2015

Independent auditor's report
To the Members of IG Seismic Services plc
Report on the consolidated financial statements
We have audited the accompanying consolidated financial statements of IG Seismic Services plc (the "Company") and its subsidiaries (together with the Company, the "Group"), which comprise the consolidated statement of financial position as at 31December 2014, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Board of Directors' responsibility for the consolidated financial statements 
The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. 
Auditor's responsibility 
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. 
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 

Opinion 
In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31December 2014, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.
Report on other legal requirements 
Pursuant to the additional requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013, we report the following:
 We have obtained all the information and explanations we considered necessary for the purposes of our audit.
 In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of these books.
 The consolidated financial statements are in agreement with the books of account.
 In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required.
 In our opinion, the information given in the report of the Board of Directors is consistent with the consolidated financial statements.
Other matter
This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 34 of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to. 
Stavros Pantzaris
Certified Public Accountant and Registered Auditor
for and on behalf of
Ernst & Young Cyprus Limited
Certified Public Accountants and Registered Auditors
Nicosia
28 April 2015


Note
At 31December 
2014
At 31December 
2013
At 1January 
2013
Assets




Non-current assets




Property, plant and equipment
12
14,647,197
15,212,832
14,325,751
Goodwill
9
3,760,082
3,760,082
3,760,082
Intangible assets other than goodwill
11
429,783
310,149
368,366
Investments in associates
13
901,072
1,009,989
886,972
Exploration and evaluation asset
7
216,624
Other non-current assets
15
325,861
47,844
382,075
Deferred tax assets
14
309,511
235,649
37,988
Total non-current assets 

20,590,130
20,576,545
19,761,234





Current assets




Inventories
16
2,550,461
2,230,070
2,134,396
Accounts receivable and prepayments
17
10,201,249
7,564,265
7,003,673
Other financial assets
18
321,173
227,989
205,371
VAT receivable

580,124
691,727
560,414
Prepayments for income tax

127,928
99,394
60,121
Other current assets

55,754
26,158
31,129
Cash and cash equivalents
19
1,206,691
711,396
565,407
Total current assets 

15,043,380
11,550,999
10,560,511
Total assets

35,633,510
32,127,544
30,321,745
Equity and liabilities




Equity




Share capital
20
6,513
6,513
6,513
Share premium
20
13,837,978
13,837,978
13,837,978
Reverse acquisition reserve
20
(5,805,259)
(5,805,259)
(5,805,259)
Other non-distributable reserves
20
2,233,488
2,233,488
2,233,488
Foreign currency translations reserve

663,593
270
(21,632)
Accumulated losses

(2,790,036)
(1,099,123)
(134,867)
Total shareholders' equity attributable to equity holders of the parent

8,146,277
9,173,867
10,116,221
Non-controlling interest

668,482
1,806,717
1,207,011
Total equity

8,814,759
10,980,584
11,323,232





Non-current liabilities




Loans and borrowings
21
7,939,643
10,330,310
6,858,107
Finance lease liabilities

4,589
1,935
9,260
Promissory notes payable
22
599,518
295,179
Other long-term liabilities
22
626,878
Deferred tax liabilities
14
1,554,844
1,482,208
1,068,486
Total non-current liabilities

10,125,954
12,413,971
8,231,032





Current liabilities




Loans and borrowings
21
7,482,974
2,077,111
4,913,695
Promissory notes payable
22
961,864
459,780
170,720
Accounts payable
22
6,012,765
4,686,759
3,902,254
Income tax payable

3,824
21,349
103,327
Other taxes payable
23
2,071,439
1,444,045
1,416,848
Provisions
23
157,448
39,891
89,460
Finance lease liabilities

2,483
4,054
171,177
Total current liabilities

16,692,797
8,732,989
10,767,481
Total liabilities

26,818,751
21,146,960
18,998,513
Total liabilities and equity 

35,633,510
32,127,544
30,321,745
These consolidated financial statements were approved for issue by the Board of Directors on 28April 2015 and were signed on its behalf by:



Nikolay Levitskiy

Denis Cherednichenko
Executive director

Non-executive director


Note
2014
2013




Revenue
25
19,589,247
19,339,577
Cost of sales
26
(15,729,336)
(15,193,966)
Gross profit

3,859,911
4,145,611




General and administrative expenses
27
(2,180,298)
(2,179,940)
Other operating income
28
141,768
236,491
Other operating expense
28
(756,168)
(518,616)
Operating profit 

1,065,213
1,683,546




Finance income
29
76,696
18,429
Finance expense
29
(1,844,626)
(1,456,569)
Net foreign exchange loss
30
(1,514,405)
(248,477)
Share in (loss)/profit of an associate
13
(108,917)
127,024
(Loss)/profit before tax 

(2,326,039)
123,953




Current income tax expense
14
(3,833)
(1,802)
Deferred income tax expense
14
(80,100)
(522,822)
Loss for the year

(2,409,972)
(400,671)




Other comprehensive income to be reclassified to profitin subsequent periods



Translation difference

718,318
58,023
Total comprehensive expense 

(1,691,654)
(342,648)




(Loss)/profit for the year attributable to:



Shareholders of the IG Seismic Services plc

(2,272,450)
(530,173)
Non-controlling interest

(137,522)
129,502




Total comprehensive (expense)/income attributable to:



Shareholders of the IG Seismic Services plc

(1,609,127)
(508,271)
Non-controlling interest

(82,527)
165,623




Loss per share



Basic, loss for the year attributable to ordinary equity holders of the IG Seismic Services plc
31
(109.08).
(25.45).


Note
2014
2013
Cash flows from operating activities



(Loss)/profit before tax

(2,326,039)
123,953
Adjustments for:



Depreciation and amortization
26, 27
2,586,226
2,231,844
Bad debt and inventory allowance

24,880
162,294
Loss on disposal of property, plant and equipment and noncurrent assets
28
232,110
156,862
Net finance expense
29
1,767,930
1,438,140
Net foreign exchange loss
30
1,514,405
248,477
Share of profit/(loss) of an associate
13
108,917
(127,024)
Cash flow from operating activities before changes in working capital

3,908,429
4,234,546
Working capital adjustments net of acquisitions:



Change in accounts receivable

(2,558,021)
(524,693)
Change in inventories

(340,131)
(311,176)
Change in prepayments and other current assets

31,211
(217,847)
Change in accounts payable

1,539,598
490,654
Change in taxes payable other than income tax

825,786
606,415
Change in provisions

117,557
(49,587)
Cash flow before income tax

3,524,429
4,228,312
Income tax paid

(99,014)
(60,039)
Net cash from operating activities

3,425,415
4,168,273




Investing activities



Purchases of property, plant and equipment

(2,755,419)
(2,790,596)
Proceeds from the sale of property, plant and equipment

122,993
24,423
Short-term borrowings issued

(125,065)
(9,200)
Repayment of short-term borrowings issued

15,927
Acquisition of other assets
7
(494,168)
Purchase of promissory notes

(239,926)
Proceeds from redemption of promissory notes by thirdparties

241,455
Interest received

2,734
914
Dividends received

4,007
Net cash used in investing activities

(3,231,469)
(2,770,452)




Financing activities



Proceeds from loans and borrowings

33,027,993
18,370,508
Proceeds from bonds

2,999,625
Repayment of loans and borrowings

(30,244,636)
(20,781,723)
Repayment of finance lease obligations

(11,906)
(253,094)
Interest paid

(1,635,709)
(1,296,867)
Acquisition of non-controlling interest
6
(334,171)
(140,000)
Redemption of promissory notes

(521,728)
(165,368)
Net cash received/(used) from financing activities

279,843
(1,266,919)
Net increase in cash and cash equivalents

473,789
130,902
Cash and cash equivalents at the beginning of the reportingperiod
19
711,396
565,388
Effect of foreign exchange on cash and cash equivalents

21,506
15,106
Cash and cash equivalents at the end of the reporting period
19
1,206,691
711,396


Attributable to shareholders of IG Seismic Services plc 


Share
capital
Share
premium
Reverse
acquisition reserve
Other
non-distributable
reserves
Foreign currency translations reserve
Accumulated (losses) / retained earnings
Total
Non-controlling interest
Total
equity










Balance as at 1January 2013
6,513
13,837,978
(5,805,259)
2,233,488
(21,632)
(134,867)
10,116,221
1,207,011
11,323,232
Loss for the year
(530,173)
(530,173)
129,502
(400,671)
Other comprehensive income
21,902
21,902
36,121
58,023
Total compehensive expense
21,902
(530,173)
(508,271)
165,623
(342,648)
Change in non-controlling interest
(434,083)
(434,083)
434,083
Balance as at 31December 2013
6,513
13,837,978
(5,805,259)
2,233,488
270
(1,099,123)
9,173,867
1,806,717
10,980,584
Balance as at 1January 2014
6,513
13,837,978
(5,805,259)
2,233,488
270
(1,099,123)
9,173,867
1,806,717
10,980,584
Loss for the year
(2,272,450)
(2,272,450)
(137,522)
(2,409,972)
Other comprehensive income
663,323
663,323
54,995
718,318
Total compehensive income
663,323
(2,272,450)
(1,609,127)
(82,527)
(1,691,654)
Change in non-controlling interest
581,537
581,537
(1,055,708)
(474,171)
Balance as at 31December 2014
6,513
13,837,978
(5,805,259)
2,233,488
663,593
(2,790,036)
8,146,277
668,482
8,814,759
Companies which do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for defense at 20% for the tax years 2012 and 2013 and 17% for 2014 and thereafter will be payable on such deemed dividends distribution. Profits and to the extent that these are attributable to shareholders, who are not tax resident of Cyprus and own shares in the Company either directly and/or indirectly at the end of two years from the end of the tax year to which the profits relate, are exempted. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defense is payable by the Company for the account of the shareholders.

1. Corporate information
Organizational structure and operations
These are consolidated financial statements of IG Seismic Services plc (the "Company" or "IGSS") and its subsidiaries (together referred to as the "Group") which is engaged in provision of land and transition zone seismic data acquisition and data processing and interpretation to the petroleum industry in the Russian Federation, the Commonwealth of Independent States ("CIS") and other countries outside of the CIS. 
The Company was incorporated in Cyprus as a private limited liability company in accordance with the provisions of the Companies Law, Cap. 113. Its registered office is located at 2-4 Arch. Makariou III Avenue, Capital Center, 9th floor, P.C. 1065, Nicosia, Cyprus. On 10 October 2012 the Company changed its legal form from private limited company into public limited company.
On 11 December 2012 the Company's GDRs were admitted to the Official List maintained by theUK Listing Authority and started trading on the London Stock Exchange's main market on 12December 2012.Global Depositary Receipts (GDRs) of the Company representing twoordinary shares each are listed and traded on the Main Market of the London Stock Exchange under the ticker IGSS (Bloomberg: IGSS LI, Reuters: IGSSq.L). 
As of 31December 2014, the free float of the Company amounted to approximately 24.4% of the issued share capital. The JP Morgan Chase Bank is the depositary bank for the GDR programme of the Company. In April 2014 Mr. Nikolay Levitskiy became the ultimate controlling shareholder of the Group.
Shareholder structure as of 31December 2014:
Mr. Nikolay Levitskiy
55.82%
Industrial Investors Group
7.78%
Schlumberger
12.00%
Other institutional and private shareholders
24.40%

1. Corporate information (continued) 
The information related to major operating subsidiaries of the Group as at 31December 2014 and 2013 is presented below. 
The Group did not pursue any business acquisitions throughout 2014 except for acquisition of assets disclosed in Note 7. All changes in effective ownership interest didn't result in change in control. Operating segment information is presented in Note8.
Company
Segment activity
Country of incorporation
Effective ownership interest
at 31December
2014
2013
CJSC GEOTECH Holding Company
Holding company
Russian Federation
99.86%
99.76%
OJSC Geotech Seismic Services
Seismic services
Russian Federation
100.00%
88.41%
LLC Geoprime
Data processing and interpretation
Russian Federation
100.00%
88.41%
JSC Azimuth Energy Services
Seismic services
Kazakhstan
95.21%
84.18%
JSC Geostan
Data processing and interpretation
Kazakhstan
95.32%
84.27%
OJSC Naryan-Marseismorazvedka
Seismic services
Russian Federation
86.18%
76.19%
OJSC Severgeofizika 
Seismic services
Russian Federation
100.00%
88.41%
OJSC Khantymansiyskgeofizika
Seismic services
Russian Federation
94.00%
83.11%
OJSC Orenburgskaya Geophisicheskaya Expeditsiya
Seismic services
Russian Federation
72.78%
64.34%
LLC Boguchanskaya Geophisicheskaya Expeditsiya
Seismic services
Russian Federation
97.13%
84.52%
LLC GEOTECH-Vostochnaya Geophisicheskaya Kompaniya
Seismic services
Russian Federation
99.99%
88.40%
OJSC Yeniseigeofizika*
Seismic services
Russian Federation
47.23%
41.76%
LLC Ilimpeiskaya Geophisicheskaya Expeditsiya
Seismic services
Russian Federation
83.16%
73.52%
LLC Geologiya Reservuara
Data processing and interpretation
Russian Federation
80.84%
71.47%
LLC Evenkiageofizika
Seismic services
Russian Federation
99.99%
88.40%
*  Although the effective interest of the Group in the company didn't exceed 50%, this company was considered a subsidiary of the Group because the Group has had control over the operating and financial activities through a majority of representatives in the Board of Directors of the company, and non-Group ownership interest has been diluted among a significant number of non-controlling shareholders. 


2. Basis of preparation 
Basis of preparation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113.
The Group entities registered in the territory of the Russian Federation ("RF") maintain accounting records and prepare financial reports in accordance with Federal Law No.402-FZ Concerning Accounting, the Statute Concerning Accounting and Reporting in the RF and Accounting Statements as approved by relevant orders of the RF Ministry of Finance. The Group entities registered in the territory of the Kazakhstan ("KZ") maintain accounting records and prepare financial reports in accordance with Law of the Republic of Kazakhstan No. 234-III Concerning Accounting.
These consolidated financial statements have been prepared based on the Russian and Kazakh statutory accounting data adjusted for the purposes of compliance with IFRS.
Basis of measurement
These consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements are presented in Russian Rubles ("RUR") and all values are rounded to the nearest thousand except when otherwise indicated.
Functional and presentation currency
Functional currency is the currency of the primary economic environment in which an entity operates and is normally the currency in which the entity primarily generates and expends cash.
The Group's revenues, profits and cash flows are primarily generated in Russian Rubles, and are expected to remain principally denominated in Russian Rubles in the future. During the first half of 2014, the Group changed the currency in which it presents its consolidated financial statements from US dollars to Russian Rubles, in order to better reflect the underlying performance of the Group. A change in presentation currency is a change in accounting policy which is accounted for retrospectively. 
Consolidated financial statements including comparative amounts as of 31December 2013 previously reported in US dollars have been restated into Russian Rubles using the procedures outlined below:
 the cumulative translation reserves except for subsidiaries registered in the territory of the Kazakhstan were set to nil at 1January 2013, the earliest statement of financial position date which will be presented in the annual consolidated financial statements due to the abovementioned change in accounting policy, and these reserves have been restated on the basis that the Group had reported in Russian Rubles as if this had always been the Group's presentation currency.


2. Basis of preparation (continued) 
Functional and presentation currency (continued)
Translation from functional currency to the presentation currency is made in accordance with IAS 21 The Effect of Changes in Foreign Exchange Rate as follows:
 Assets and liabilities denominated in non-Russian Rubles currencies were translated into Russian Rubles at the closing rates of exchange on the relevant statement of financial position date;
 Non-Russian Rubles income and expenditure were translated at the average rates of exchange prevailing for the relevant period;
 Share capital, share premium and the other reserves were translated at the historic rates and subsequent rates prevailing on the date of each transaction;
 Translation gains or losses are recorded as a separate component of the shareholders' equity. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.
RUR exchange rates were derived from those rates established by the Central Bank of the Russian Federation ("CBR").
Foreign currencies
Transactions in foreign currencies are translated to the respective functional currency, which is Russian Ruble and Kazakh Tenge for the subsidiary companies 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. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency using the exchange rate at the date that the fair value was determined. Foreign currency differences arising in translation are recognized in the statement of comprehensive income.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31December 2014. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct and indirect ownership of voting rights. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. 
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends are eliminated in full. Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results in a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, itderecognises the related assets(including goodwill),liabilities,non-controlling interest and other components of equity while any resultantgain or loss is recognised in profitor loss. Anyinvestment retained is recognised at fair value.

2. Basis of preparation (continued) 
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
Going concern
These consolidated financial statements have been prepared on the going concern basis which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. These accompanying financial statements do not include any adjustments that may be necessary if the Group is unable to continue as a going concern.
In 2014 the Group reported net loss of 2,409,972 (net loss for 2013 of 400,671) which was significantly affected by one-off expenses discussed in note 8 and unfavorable shift in RUR to USD exchange rates resulting in significant foreign exchange loss. 
The Group's current liabilities as at 31December 2014 of 16,692,797 exceeded its current assets by 1,649,417 (as of 31December 2013 the Group's net current assets position comprised 2,818,010). The net current liability position as at 31December 2014 primarily relates to short-terms loans and borrowings of 7,482,974 and trade and other payables of 6,012,765.
For a number of years, the Group has been able to successfully refinance its short-term debt, obtain new equity capital from existing and new investors and generate sufficient operating cash flow as well as sufficient undrawn facilities under revocable credit lines to ensure that it does not face a liquidity shortfall or default on its debt obligations.
Having considered the above, the Group's management and the Company's directors believe that it is appropriate to prepare these consolidated financial statements on a going concern basis as the Group has undertaken certain actions aimed at improving performance and liquidity, including control and optimization of operating expenses, and refinancing of the current liabilities.
As a result, the Group's management considers that the application of the going concern assumption for the preparation of these consolidated financial statements is appropriate.
Seasonality
There is a limited season for providing seismic services in certain Siberian regions of the Russian Federation which remain in flood-like, or swampy conditions, in warm weather. Such conditions generally restrict the provision of seismic services in Siberia to a period from December to April.


3. Summary of significant accounting policies 
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IAS 39 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognised either in either profit or loss or as a change to other comprehensive income. If the contingent consideration is not within the scope of IAS 39, it is measured in accordance with the appropriate IFRS. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. 


3. Summary of significant accounting policies (continued) 
Investment in associates
The Group's investment in its associates, an entity in which the Group has significant influence, is accounted for using the equity method.
Under the equity method, the investment in the associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group's share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.
The profit or loss reflects the Group's share of the results of operations of the associate. When there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate.
The Group's share of profit or loss of an associate is shown on the face of the profit or loss and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
The financial statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, then recognises the loss as separate line item in the profit or loss.
Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
Non-controlling interest
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately within the Group's equity and consist of the amount of those interests at the date of obtaining control plus their share of changes in equity since that date. They are measured at acquisition fair value or at proportionate share of net assets acquired and this choice is made for each acquisition separately. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. Changes in the Parent's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.


3. Summary of significant accounting policies (continued) 
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for goods provided or services rendered less any trade discounts, value-added tax and similar sales-based taxes after eliminating sales within the Group. 
Revenue is recognized as follows:
 Revenue arising from production activity is recognized on the date of delivery of goods and the transfer of title thereto. 
 Interest income is accrued on a regular basis by reference to the outstanding principal amount and the applicable effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount. 
 Dividend income is recognized where the shareholder's right to receive a dividend payment is established.
 Revenue under long-term contracts is recognized in accordance with IAS 11 Construction Contracts as described below.
Construction type contracts
The Group principally operates fixed price contracts. If the outcome of such a contract can be reliably measured, revenue associated with the construction contract is recognized by reference to the stage of completion of the contract activity at year end (the percentage of completion method).
The outcome of a construction contract can be estimated reliably when: (i) the total contract revenue can be measured reliably; (ii) it is probable that the economic benefits associated with the contract will flow to the entity; (iii) the costs to complete the contract and the stage of completion can be measured reliably; and (iv) the contract costs attributable to the contract can be clearly identified and measured reliably so that actual contract costs incurred can be compared with prior estimates. When the outcome of a construction cannot be estimated reliably, contract revenue is recognized only to the extent of costs incurred that are expected to be recoverable.
In applying the percentage of completion method, revenue recognized corresponds to the total contract revenue (as defined below) multiplied by the actual completion rate based on the proportion of total contract costs (as defined below) incurred to date and the estimated costs to complete.
Contract revenue - contract revenue corresponds to the initial amount of revenue agreed in the contract and any variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue, and they are capable of being reliably measured.
Contract costs - contract costs include costs that relate directly to the specific contract and costs that are attributable to contract activity in general and can be allocated to the contract. Costs that relate directly to a specific contract comprise: site labor costs (including site supervision); costs of materials used in construction; depreciation of equipment used on the contract; costs of design, and technical assistance that is directly related to the contract.

3. Summary of significant accounting policies (continued) 
Construction type contracts (continued)
The Group's contracts are typically negotiated for the construction of a single asset or a group of assets which are closely interrelated or interdependent in terms of their design, technology and function. In certain circumstances, the percentage of completion method is applied to the separately identifiable components of a single contract or to a group of contracts together in order to reflect the substance of a contract or a group of contracts.
Assets covered by a single contract are treated separately when:
 The separate proposals have been submitted for each asset;
 Each asset has been subject to separate negotiation and the contractor and customer have been able to accept or reject that part of the contract relating to each asset;
 The costs and revenues of each asset can be identified.
A group of contracts are treated as a single construction contract when:
 The group of contracts is negotiated as a single package; the contracts are so closely interrelated that they are, in effect, part of a single project with an overall profit margin;
 The contracts are performed concurrently or in a continuous sequence.
Exploration and evaluation assets
The Company recognizes exploration and evaluation costs using the successful efforts method as permitted by IFRS 6 Exploration for and Evaluation of Mineral Resources. Under this method, costs related to exploration and evaluation (license acquisition costs, exploration and appraisal drilling) are temporarily capitalized until the drilling program results in the discovery of economically feasible oil and gas reserves. If a determination is made that the well did not encounter oil and gas in economically viable quantities, the well costs are expensed to Exploration expenses in the consolidated statement of profit or loss. Exploration and evaluation assets are recognized at cost less impairment, if any, as property, plant and equipment until the existence (or absence) of commercial reserves has been established.
Exploration and evaluation assets are subject to technical, commercial and management review as well as review for indicators of impairment at least once a year. This is to confirm the continued intent to develop or otherwise extract value from the discovery. When indicators of impairment are present, impairment test is performed. If subsequently commercial reserves are discovered, the carrying value, less losses from impairment of the respective exploration and evaluation assets, is classified as oil and gas properties (development assets). However, if no commercial reserves are discovered, such costs are expensed after exploration and evaluation activities have been completed.


3. Summary of significant accounting policies (continued) 
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses, if any. The initial cost of the asset includes the purchase price or expenditures incurred that are directly attributable to the acquisition of the assets. The purchase price is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Major replacements of property, plant and equipment are capitalized. All other repair and maintenance costs are charged to the profit and loss component of the consolidated statement of comprehensive income during the financial period in which they are incurred.
Depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives, as follows:
Buildings and structures
30-40 years
Machinery and equipment
5-25 years
Vehicles
3-8 years
Other
2-10 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Leases
Group as a lessee
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Finance leases that transfer substantially all the risks and benefits incidental to ownership of the leased item to the Group, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the profit or loss. 
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an operating expense in the profit or loss on a straight-line basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and benefits of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

3. Summary of significant accounting policies (continued) 
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Intangible assets other than goodwill
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit and loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the profit or loss as the expense category that is consistent with the function of the intangible assets.
Intangible assets with a finite life are amortized on a straight-line basis over their expected useful lives. The useful lives of the Group's intangible assets are as follows:
Software
5-10 years
Other
3-10 years
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:
 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale;
 Its intention to complete and its ability to use or sell the asset;
 How the asset will generate future economic benefits;
 The availability of resources to complete the asset;
 The ability to measure reliably the expenditure during development.


3. Summary of significant accounting policies (continued) 
Intangible assets other than goodwill (continued)
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation is recorded in cost of sales. During the period of development, the asset is tested for impairment annually.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the profit or loss when the asset is derecognised.
Financial assets
Initial recognition and measurement
Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments as defined by IAS 39.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative net changes in fair value) or finance income (positive net changes in fair value) in the profit or loss.
Financial assets designated upon initial recognition at fair value through profit or loss are designated at their initial recognition date and only if the criteria under IAS 39 are satisfied. TheGroup has not designated any financial assets at fair value through profit or loss.


3. Summary of significant accounting policies (continued) 
Financial assets (continued)
The Group evaluates its financial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and management's intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify them. The reclassification to loans and receivables, available-for-sale or held to maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation, as these instruments cannot be reclassified after initial recognition.
Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables.
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held to maturity when the Group has the positive intention and ability to hold them to maturity. After initial measurement, held to maturity investments are measured at amortised cost using the EIR, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss in finance costs. The Group did not have any held-to-maturity investments during the years ended 31December 2014 and 2013.
Available-for-sale financial investments
Available-for-sale financial investments include equity investments and debt securities. Equity investments classified as available for sale are those that are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions.


3. Summary of significant accounting policies (continued) 
Financial assets (continued)
After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or the investment is determined to be impaired, when the cumulative loss is reclassified from the available-for sale reserve to the profit or loss in finance costs. Interest earned whilst holding available-for-sale financial investments is reported as interest income using the EIR method.
The Group evaluates whether the ability and intention to sell its available-for-sale financial assets in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets and management's intention to do so significantly changes in the foreseeable future, the Group may elect to reclassify these financial assets. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Group has the intent and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held to maturity category is permitted only when the entity has the ability and intention to hold the financial asset accordingly.
For a financial asset reclassified from the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortised cost and any previous gain or loss on the asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Any difference between the new amortised cost and the maturity amount is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the profit or loss. The Group did not have any available-for-sale investments during the years ended 31December 2014 and 2013.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:
 The rights to receive cash flows from the asset have expired;
 The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

3. Summary of significant accounting policies (continued) 
Financial assets (continued)
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred "loss event") and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset's original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR. The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as finance income in the profit or loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to finance costs in the profit or loss.


3. Summary of significant accounting policies (continued) 
Available for sale financial investments
For available-for-sale financial investments, the Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.
In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. "Significant" is evaluated against the original cost of the investment and "prolonged" against the period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the profit or loss - is removed from other comprehensive income and recognised in the profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases in their fair value after impairment are recognised directly in other comprehensive income.
In the case of debt instruments classified as available for sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the profit or loss.
Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the profit or loss, the impairment loss is reversed through the profit or loss.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.
The Group's financial liabilities include trade and other payables, bank overdrafts, loans and borrowings, financial guarantee contracts, and derivative financial instruments.


3. Summary of significant accounting policies (continued) 
Financial liabilities (continued)
Subsequent measurement
The measurement of financial liabilities depends on their classification as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS39. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IAS 39 are satisfied. The Group has not designated any financial liability as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the profit or loss.
Financial guarantee contracts
Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the profit or loss.

3. Summary of significant accounting policies (continued) 
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Inventories
Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows:
 Raw materials: purchase cost on a first in, first out basis;
 Finished goods and work in progress: cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs.
Where payment for inventories is deferred and such an arrangement actually contains elements of financing, the difference between the purchase price which is normally paid on trade credit terms and the consideration paid is recognized as interest expense over the term of the credit and is charged to the statement of comprehensive income.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs to sell and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.


3. Summary of significant accounting policies (continued) 
Impairment of non-financial assets (continued)
Impairment losses of continuing operations, including impairment on inventories, are recognised in the profit or loss in expense categories consistent with the function of the impaired asset, except for a property previously revalued when the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.
The following assets have specific characteristics for impairment testing:
Goodwill
Goodwill is tested for impairment annually as at 31December and when circumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU (orgroup of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.
Intangible assets
Intangible assets with indefinite useful lives are tested for impairment annually as at 31December either individually or at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.
Cash and cash equivalents
Cash represents cash in hand and in the Group's bank accounts and interest bearing deposits, which can be effectively withdrawn at any time without prior notice or penalties reducing the principal amount of the deposit. Cash equivalents are highly liquid short-term investments that are readily convertible to known amounts of cash and have original maturities of three months or less from their date of purchase. They are carried at cost plus accrued interest, which approximates fair value.
Share capital 
Ordinary shares are classified as equity. Any excess of the fair value of consideration received over the par value of shares issued is recognized also as share premium.
Dividends
Dividends are not recognized as a liability or deducted from equity as at the reporting date unless they have been declared / approved by the shareholders on or before the reporting date. Dividends are disclosed in financial statements if they have been declared after the reporting date, but before the date when the financial statements are authorized for issue. 


3. Summary of significant accounting policies (continued) 
Government grants 
A government grant is recognized in the statement of financial position initially as deferred income when there is reasonable assurance that it will be received and that the company will comply with the conditions attached to it. Grants that compensate the company for expenses incurred are recognized as other operating income on a systematic basis in the same periods in which the expenses are incurred. Government grants include grants for research and development.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as finance costs.
Warranties
Provisions for warranty-related costs are recognised when the product is sold or service provided to the customer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.
Restructuring provisions
Restructuring provisions are recognised only when the recognition criteria for provisions are fulfilled. The Group has a constructive obligation when a detailed formal plan identifies the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline. Furthermore, the employees affected have been notified of the plans main features.
Contingent liabilities recognised in a business combination
A contingent liability recognised in a business combination is initially measured at its fair value. Subsequently, it is measured at the higher of the amount that would be recognised in accordance with the requirements for provisions above or the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with the requirements for revenue recognition.
Income tax for the year comprises current and deferred tax. Income tax is recognized in the statement of income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Parent company is Cyprus resident whereas all subsidiaries are registered in Russia and Kazakhstan.

3. Summary of significant accounting policies (continued) 
Income tax
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
 When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
 In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
 When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
 In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

3. Summary of significant accounting policies (continued) 
Income tax (continued)
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction to goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.
Value-added tax
The Russian tax legislation permits settlement of value added tax ("VAT") on a net basis. VAT is payable to the state budget upon invoicing and delivery of goods, performing work or rendering services, as well as upon collection of prepayments from customers. VAT on purchases, even not settled at the reporting date, is deducted from the amount of VAT payable.
Where provision has been made for impairment of receivables, impairment loss is recorded for the gross amount of the debtor, including VAT. VAT recoverable arises when VAT input related to purchases exceeds VAT output related to sales.
Offsetting 
Assets and liabilities are only offset and reported at the net amount in the consolidated statement of financial position when there is a legally enforceable right to offset the recognized amounts and the Group intends to either settle on a net basis, or to realize the asset and settle the liability simultaneously.
Social expenditures
To the extent that the Group's contributions to social programs benefit the community at large and are not restricted to the Group's employees, they are recognized in the statement of comprehensive income as incurred.


3. Summary of significant accounting policies (continued) 
Employee benefits
In the normal course of business the Group contributes to the Russian Federation state pension scheme on behalf of its employees. Mandatory contributions to the governmental pension scheme are expensed when incurred. Discretionary pensions and other post-employment benefits are included in labor costs in the statement of comprehensive income, however, separate disclosures are not provided as these costs are not material. There are no other pension plans. The Group contributes to the Russian Federation state social insurance, medical insurance and unemployment funds on behalf of its employees. 
Financial income and expenses
Finance income comprises interest income on funds invested, dividend income, and changes in the fair value of financial assets at fair value through profit or loss, and foreign currency gains. 
Interest income is recognized as it accrues in the statement of comprehensive income, using the effective interest method. Dividend income is recognized in the statement of income on the date that the Group's right to receive payment is established, except for dividends from associates, which are deducted from investment in associates and not recognised in profit and loss.
Finance expenses comprise interest expense on loans and borrowings, unwinding of the discount on provisions, dividends on preference shares classified as liabilities, foreign currency losses, changes in the fair value of financial assets at fair value through profit or loss and impairment losses recognized on financial assets. All borrowing costs are recognized in the statement of comprehensive income using the effective interest method. Foreign currency gains and losses are reported on a net basis.
Reclassifications
A number of items presented in the Group's 2013 consolidated financial statements have been reclassified to ensure the comparability of information in the consolidated financial statements for the year ended on 31December 2014. This primarily included classification of interest liability on promissory notes within accounts payable.
4. Changes in accounting policies and disclosures 
The accounting policies adopted are consistent with those of the previous financial year. 
During the current year the Group adopted all the new and revised International Financial Reporting Standards (IFRS) that are relevant to its operations and are effective for accounting periods beginning on 1January 2014. As of 31 December 2014 the Group has early adopted IFRS 10 "Consolidated Financial Statements", IFRS 11 "Joint Arrangements" and IFRS 12 "Disclosure of Interests in Other Entities". This adoption did not have a material effect on the accounting policies of the Group.


4. Changes in accounting policies and disclosures (continued) 
Standards, interpretations and amendments to published standards that are issued but not yet effective
Up to the date of approval of the financial statements, certain new Standards, Interpretations and Amendments to existing standards have been published that are not yet effective for the current reporting period and which the Group has not early adopted, as follows:
Issued by the IASB and adopted by the European Union
 IFRIC Interpretation 21 Levies (effective for annual periods beginning on or after 17 June 2014);
 Annual Improvements to IFRSs 2010-2012 Cycle (effective for annual periods beginning on or after 1 July 2014);
 Annual Improvements to IFRSs 2011-2013 Cycle (effective for annual periods beginning on or after 1 July 2014);
 Defined Benefit Plans: Employee Contributions (Amendments to IAS 19) (effective for annual periods beginning on or after 1 July 2014).
Issued by the IASB but not yet adopted by the European Union
 IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1January 2018);
 IFRS 14 Regulatory Deferral Accounts (effective for annual periods beginning on or after 1January 2016);
 IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1January 2017);
 Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception (effective for annual periods beginning on or after 1January 2016);
 Amendments to IAS 1 Disclosure Initiative Operations (effective for annual periods beginning on or after 1January 2016);
 Annual Improvements to IFRSs 2012-2014 Cycle (effective for annual periods beginning on or after 1January 2016);
 Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assetsbetween an Investor and its Associate or Joint Venture (effective for annual periods beginning on or after 1January 2018);
 Amendments to IAS 27 Equity Method in Separate Financial Statements (effective for annual periods beginning on or after 1January 2016);
 Amendments to IAS 16 and IAS 41 Bearer Plants (effective for annual periods beginning on or after 1January 2016);
 Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation (effective for annual periods beginning on or after 1January 2016);
 Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations (effective for annual periods beginning on or after 1January 2016).
The above are expected to have no significant impact on the Group's financial statements when they become effective.

5. Significant accounting judgments, estimates and assumptions 
The Group makes a number of assumptions and estimates, which may affect the reporting of assets and liabilities in the next financial year. Estimates and assumptions are continuously assessed and are based on the management experience and other factors, including expectations of future events, and are reasonable under the circumstances. In addition to these estimates, management also relies on certain judgments in applying the accounting policies. Most significant judgments, which affect the amounts recorded in the consolidated financial statements, and estimates, which may result in significant adjustment of the carrying value of assets and liabilities in the next financial year are presented below.
Business valuation and impairment test
The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from these estimates. The key assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The following methodologies (in the course of priority) were applied to most assets valuations:
 market valuation;
 discounted cash flow (DCF) method;
 multiples method. 
In most cases the asset value obtained using the primary method is controlled using a secondary method. If the controlling method produces a result which is different from that obtained using the primary method, the following algorithm is used:
 the assumptions used in the primary and controlling methods are double-checked;
 the factors causing the variation are tried to be determined.
In case of identification of objective factors explaining the variation in valuation results, the result produced by the primary method shall be used. In the absence of objective factors explaining the difference in valuation results, the average of the two value estimates is used. Valuation techniques are in part based on assumptions that are not supported by observable market prices or rates. Management believes that changing any such assumption would not result in a significantly different value.
Management has made a number of judgments, estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with IFRS. Actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.


5. Significant accounting judgments, estimates and assumptions (continued) 
Construction type contracts
The Group applies judgments in measuring and recognizing contracts accounted for in accordance with IAS 11 Construction Contracts. Revenue from construction contracts is recognized in the amount referred to the stage (percent) of the work performed depending on the completion of the contract. The percentage of completion is determined based on the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs.
Provision for doubtful accounts receivable
Provision for doubtful accounts receivable is based on the assessment of probability of collecting receivables from certain counterparties. In case of overall deterioration of the customers' solvency or when an actual outstanding debt exceeds the estimated level, the actual results may differ from these estimates.
Contingent tax liabilities
Russian tax legislation is subject to varying interpretations and changes occur frequently. When the Group's management believes that it is highly probable that tax authorities may challenge the Group's interpretation of the legislation applied and its position as related to the accuracy of tax calculation and payment, an appropriate provision is formed in the consolidated financial statements.
Litigations
The Group's management exercises considerable judgment in measuring and recognizing provisions and the exposure to contingent liabilities related to pending litigations or other outstanding claims subject to negotiated settlement, mediation, arbitration or government regulation, as well as other contingent liabilities.
Judgment is necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise, and quantifying the possible range of the final settlement. Because of the inherent uncertainties in this evaluation process, actual losses may be different from the originally estimated provision. These estimates are subject to change as new information becomes available, primarily with the support of internal specialists, if available, or with the support of outside consultants, such as actuaries or legal counsel. Revisions to the estimates may significantly affect future operating results.
6. Acquisition of non-controlling interest
In 2014, the Group acquired an additional 11.59% interest in the voting shares of its major operating subsidiary OJSC Geotech Seismic Services, increasing its ownership interest to 100.00%, and 1.53% in the share capital of LLC Boguchanskaya Geophisicheskaya Expeditsiya, increasing its ownership interest to 97.14%.
Cash consideration of 452,829 was paid to the non-controlling shareholders and 21,342expenses were incurred in relation to this transaction. As of 31December 2014 all obligations in relation to the acquisition of non-controlling interest were settled in full.

6. Acquisition of non-controlling interest (continued) 
Following is a schedule of additional interests acquired by the Group in its operational subsidiaries:
Cash consideration paid to non-controlling shareholders and related expenses
474,171
Carrying value of the additional interests
(1,055,708)
Difference recognized in retained earnings within Equity
(581,537)
7. Acquisition of assets
In September 2014 the Group has completed acquisition of LLC Luidor, an entity owning an exploration and production license for the Nitchemyu-Syninskiy oil-field (Komi republic). Theentity has been purchased for the purpose of performing seismic services with an aim for consequent resale of the asset with profit. Consideration comprised 495,000 and was settled in full amount by December 2014 to the unrelated party. The acquisition was accounted for as assets acquisition which did not meet a definition of a "business" acquisition under IFRS 3 Business Combinations. The Group recognised the individual identifiable assets acquired and liabilities assumed. The cost of the group of assets was allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase and comprised the following as of the date of acquisition:
Exploration and evaluation assets
216,624
Long-term loan issued
274,443
Other assets
14,075
Liabilities
(9,530)
Fair value of the exploration and production license was determined by the independent appraisal and accounted within exploration and evaluation assets in accordance with IFRS 6. Theloan issued to a third party, is denominated in Russian rubles, matures on 31December 2016 and bears interest rate of 10% p.a.
The difference between the consideration paid and the fair value of the acquired assets and liabilities of 612 was charged to the profit and loss.
8. Segment information
For management purposes, the Group is organized into business units based on their products and services, and has two reportable operating segments which are Seismic segment and Data processing and interpretation (DPI) segment. Seismic segment includes conducting seismic works with the purpose of search and exploration of oil and gas fields, comprising oilfield seismic works in two or three dimensions, field seismic works in a land-sea transit zone. DPI segment includes processing of seismic and geophysical data, structural interpretation of results of processing, dynamic processing and interpretation of results of processing. 
Information on transactions of the holding and managerial companies which conduct managerial services and financial and investment activities was included into the Corporate block, that is not separate operating segment. Information on transactions of the non-core companies (subsidiaries) was included into the Other block, that is not separate operating segment. 


8. Segment information (continued)
Transfer prices between Seismic segment, DPI segment and Corporate block are on an arm's length basis in a manner similar to transactions with third parties. Internal revenues and expenses primarily pertain to management services rendered by Corporate block to Seismic segment and DPI segment. In the periods presented below, the Group operated in the Russian Federation andKazakhstan.
The following table's present revenue and profit information regarding the Group's operating segments for years ended 31December 2014 and 2013, respectively. Intersegment revenues and intersegment costs are presented for reference only and are not taken into account in calculating gross profit.
For year ended 
31December 2014
Seismic
segment
DPI
segment
Others
Corporate
block
Adjustments and eliminations
Total
segments
Revenue - external
19,231,379
347,452
7,468
2,948
19,589,247
Revenue to other segments
111,142
167,559
24,592
647,813
(951,106)
Cost of sales
(15,198,783)
(479,967)
(48,949)
(1,637)
(15,729,336)
Intersegment expenses
(813,283)
(124,033)
(68)
(13,722)
951,106
Gross profit/(loss)
4,032,596
(132,515)
(41,481)
1,311
3,859,911
Selling, general and administrative expenses
(1,353,219)
(174,851)
(33,128)
(619,100)
(2,180,298)
Other operating income
117,079
452
21,104
3,133
141,768
Other operating expense
(729,280)
(7,868)
(14,455)
(4,565)
(756,168)
Operating profit/(loss)
2,067,176
(314,782)
(67,960)
(619,221)
1,065,213
For year ended 
31December 2013
Seismic
segment
DPI
segment
Others
Corporate
block
Adjustments and eliminations
Total
segments
Revenue - external
18,641,851
683,171
11,338
3,217
19,339,577
Revenue to other segments
89,461
365,838
64,906
1,009,517
(1,529,722)
Cost of sales
(14,450,316)
(654,412)
(89,238)
(15,193,966)
Intersegment expenses
(1,372,744)
(139,685)
(16,975)
(318)
1,529,722
Gross profit/(loss)
4,191,535
28,759
(77,900)
3,217
4,145,611
Selling, general and administrative expenses
(1,288,547)
(131,054)
(24,682)
(735,657)
(2,179,940)
Other operating income
195,631
1,369
33,727
5,764
236,491
Other operating expense
(421,161)
(22,071)
(46,657)
(28,727)
(518,616)
Operating profit/(loss)
2,677,458
(122,997)
(115,512)
(755,403)
1,683,546


8. Segment information (continued)
Calculation of the adjusted EBIT and adjusted EBITDA from operating profit/(loss):
For year ended 
31December 2014
Seismic
segment
DPI
segment
Others
Corporate
block
Adjustments and eliminations
Total
segments
Profit/(loss) from operating activities
2,067,176
(314,782)
(67,960)
(619,221)
1,065,213
Restructuring and redundancy costs
262,314
22,424
62,451
347,189
Prior year taxes and related provisions
232,264
232,264
Distribution of Corporate overheads
(535,734)
(9,679)
545,413
Adjusted EBIT
2,026,020
(324,461)
(45,536)
(11,357)
1,644,666
Depreciation of property, plant and equipment
2,406,586
68,545
20,340
6,400
2,501,871
Amortization of intangible assets
18,945
46,560
10
4,836
70,351
Loss/(gain) on disposal of non-current assets
224,089
2,251
6,188
(418)
232,110
Adjusted EBITDA
4,675,640
(207,105)
(18,998)
(539)
4,448,998
For year ended 
31December 2013
Seismic
segment
DPI
segment
Others
Corporate
block
Adjustments and eliminations
Total
segments
Profit/(loss) from operating activities
2,677,458
(122,997)
(115,512)
(755,403)
1,683,546
Restructuring and redundancy costs
109,111
14,777
25,797
149,685
Transaction related expenses
56,214
56,214
Loss from the contract in Yemen
8,695
8,695
Distribution of Corporate overheads
(648,711)
(23,759)
672,470
Adjusted EBIT
2,146,553
(131,979)
(89,715)
(26,719)
1,898,140
Depreciation of property, plant and equipment
2,041,106
43,473
48,759
4,299
2,137,637
Amortization of intangible assets
19,937
71,531
2,739
94,207
Loss/(gain) on disposal of non-current assets
93,760
(2,166)
(32)
7,261
98,823
Adjusted EBITDA
4,301,356
(19,141)
(40,988)
(12,420)
4,228,807
Restructuring and redundancy costs incurred during the year ended 2014 primarily relates to the reduction of staff in connection with the optimization of the Company's corporate structure and business units management structure and certain restructuring of several operating subsidiaries of the Group.
In the second half of 2014 the Group has decided to liquidate three small non-core subsidiaries to eliminate unfeasible maintenance costs. Two subsidiaries Seysmos LLC and Khantymansiyskgeofizika-service LLC are incorporated in Russian Federation and one, Ishimgeofizika, is domiciled in Kazakhstan. The liquidation is expected to be finalized by the mid 2015. A loss before tax was incurred by these subsidiaries which is included within restructuring and redundancy costs of other subsidiaries for the year ended 31December 2014.

8. Segment information (continued)  
During the years ended 31December 2014 and 2013, the Group earned its external sale by its geographical areas as follows:

2014
2013
Russia
18,411,893
18,493,758
Kazakhstan
1,177,354
845,819
Total external sales
19,589,247
19,339,577
As of 31December 2014 and 31December 2013, the Group had its goodwill and intangible assets, property, plant and equipment and investments in associates by their geographical areas as follows:

31December

2014
2013
Russia
18,646,043
19,379,614
Kazakhstan
1,092,091
913,438
Total goodwill and intangible assets, property, plant and equipment and investments in associates
19,738,134
20,293,052
In 2014, the Group earned transaction revenues from operations each exceeding 10 percent of the Group's consolidated revenues with three major customers in the amounts of 3,213,713, 3,110,614 and 2,067,331, reported within revenues from field seismic operations (2013: fourcustomers in the amounts of 4,036,493, 2,167,553, 1,873,928 and 1,867,418).
9. Goodwill 
For impairment testing purposes, goodwill acquired as a result of the business combination was attributable to one separate cash-generating unit - Seismic works.
As at 31December 2014 and 2013, the carrying amount of goodwill was 3,760,082.
Recoverable amount of the cash generating unit has been determined by calculating value-in-use using cash-flow projections up to 2020 and terminal value of working capital and non-current assets as of the projection period end. A pre-tax discount rate of 18.9% (2013: 16.3%) derived from the weighted average cost of capital has been applied to the projected cash-flows. These calculations are based on 5-year projections and all the assumptions in relation to production volumes and pricing growth rates are determined by reference to management's past experience and industry forecasts. The cash flow forecasts beyond the five-year period were extrapolated using perpetuity formula and zero terminal growth rate (2013: 2.0%). 
In calculating the value-in-use of the assets, the following assumptions have been regarded as most significant: marginal income, discount rates and the growth rate used to extrapolate cash flows beyond the planned period.
Risks inherent in the oil service industry are directly related to economic conditions in the oil sector shaped by global oil prices. The key factors of risk include slumping oil prices, which cause oil companies to sharply cut their exploration costs and minor investors to quit the industry. 
In addition, these trends are exacerbated by deteriorating customer solvency leading to growth in receivables and a slower turnover or shortage of working capital and ultimately triggering growth in payables.

9. Goodwill (continued)
As at 31December 2014, the Group determined that the recoverable amount of seismic CGU exceeds the carrying amount of the unit and, therefore, no impairment on this unit was recognized.
With regard to the assessment of value in use cash-generating units, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount.
Level of WACC when impairment occurs is 24.4%. Level of terminal growth rate when impairment occurs is - 7.7%.
10. Material partly-owned subsidiaries
Financial information of subsidiaries that have material non-controlling interests is provided below:
Proportion of equity interest held by non-controlling interests:
Name
Country of incorporation and operation
2014
2013
OJSC Yeniseigeofizika
Russian Federation
52.77%
58.24%
JSC Azimuth Energy Services
Kazakhstan
4.79%
15.82%
Accumulated balances of material noncontrolling interest



OJSC Yeniseigeofizika

239,467
341,937
JSC Azimuth Energy Services

122,569
340,059
(Loss)/profit allocated to material noncontrolling interest



OJSC Yeniseigeofizika

(70,334)
45,887
JSC Azimuth Energy Services

(16,509)
(288)
The summarised financial information of these subsidiaries is provided below. This information is based on amounts before inter-company eliminations.
Summarised statement of profit or loss for 2014
OJSC Yeniseigeofizika
JSC Azimuth Energy Services
Revenue
207,853
1,264,996
Cost of sales
(323,630)
(1,250,459)
Administrative expenses
(31,771)
(120,826)
Other operating expense, net
(3,783)
(35,345)
Finance income / (expense), net
(6,738)
80,478
Net foreign exchange loss
(1)
(286,318)
Loss before tax
(158,070)
(347,474)
Income tax
24,786
2,816
Loss for the year 
(133,284)
(344,658)
Total comprehensive loss
(133,284)
(344,658)
Attributable to non-controlling interests
(70,334)
(16,509)


10. Material party-owned subsidiaries (continued)
Summarised statement of profit or loss for 2013
OJSC Yeniseigeofizika
JSC Azimuth Energy Services
Revenue
1,014,181
1,009,429
Cost of sales
(905,827)
(896,629)
Administrative expenses
(38,478)
(120,376)
Other operating expense, net
(23,831)
(20,891)
Finance(expense)/income, net
(10,157)
84,496
Net foreign exchange loss
(43)
(60,711)
Profit/(loss) before tax
35,845
(4,682)
Income tax
42,944
2,863
Profit/(loss) for the year 
78,789
(1,819)
Total comprehensive income
78,789
(1,819)
Attributable to non-controlling interests
45,887
(288)
Summarised statement of financial position 
as at 31December 2014
OJSC Yeniseigeofizika
JSC Azimuth Energy Services
Property, plant and equipment, intangible assets and other non-current assets
447,963
2,041,783
Inventories, receivables, cash and cash equivalents and other current assets
263,659
967,432
Loans and borrowings, promissory notes and finance lease liabilities
(87,285)
Deferred tax liabilities, net
(12,457)
(72,986)
Accounts payable and other current liabilities
(158,086)
(377,368)
Total equity
453,794
2,558,861
Attributable to shareholders of the IG Seismic Services plc
214,327
2,436,292
Non-controlling interest
239,467
122,569
Summarised statement of financial position 
as at 31December 2013
OJSC Yeniseigeofizika
JSC Azimuth Energy Services
Property, plant and equipment, intangible assets and other non-current assets
488,030
1,672,353
Inventories, receivables, cash and cash equivalents and other current assets
661,333
706,604
Loans and borrowings, promissory notes and finance lease liabilities
(192,483)
Deferred tax liabilities, net
(38,230)
(62,868)
Accounts payable and other current liabilities
(331,533)
(166,538)
Total equity
587,117
2,149,551
Attributable to shareholders of the IG Seismic Services plc
245,180
1,809,492
Non-controlling interest
341,937
340,059


10. Material party-owned subsidiaries (continued)
Summarised cash flow information 
for year ending 31December 2014
OJSC Yeniseigeofizika
JSC Azimuth Energy Services
Operating
(60,985)
138,905
Investing
96,303
(181,481)
Financing
(108,580)
Net decrease in cash and cash equivalents
(73,262)
(42,576)
Summarised cash flow information 
for year ending 31December 2013
OJSC Yeniseigeofizika
JSC Azimuth Energy Services
Operating
54,686
29,296
Investing
(2,977)
(271,951)
Financing
214,848
Net increase/(decrease) in cash and cash equivalents
51,709
(27,807)
11. Intangible assets other than goodwill

As of 31December

2014
2013
Development costs
90,276
85,547
Software
558,039
357,305
Patents and licenses
27,732
27,932
Other
7,703
5,862
Total cost
683,750
476,646
Less: accumulated amortization
(253,967)
(166,497)
Total net book value
429,783
310,149
During the year ended 31December 2014 the Group has acquired new software from Geoquest System which cost USD 5.8 million (197,851) and is used for data processing and interpretation contracts.


12. Property, plant and equipment
Property, plant and equipment as at 31December 2014 comprised the following:

Buildings and structures
Machinery and equipment
Vehicles
Other
Construction in progress
Total
Gross book value






Balance as at 31December 2013
4,076,382
13,901,371
3,509,750
269,992
7,162
21,764,657
Additions
177,928
1,647,241
412,167
88,750
4,597
2,330,683
Transfers
3,210
6,632
(9,842)
Disposals
(53,783)
(878,045)
(228,432)
(25,117)
(106)
(1,185,483)
Translation difference
123,704
358,079
101,907
13,875
597,565
Balance as at 31December 2014
4,327,441
15,035,278
3,795,392
347,500
1,811
23,507,422







Accumulated depreciation
and impairment






Balance as at 31December 2013
(920,846)
(4,097,018)
(1,399,114)
(134,847)
(6,551,825)
Depreciation charge
(299,163)
(1,807,453)
(378,803)
(42,516)
(2,527,935)
Disposals
14,797
354,017
109,835
16,415
495,064
Translation difference
(38,408)
(190,341)
(42,382)
(4,398)
(275,529)
Balance as at 31December 2014
(1,243,620)
(5,740,795)
(1,710,464)
(165,346)
(8,860,225)







Net book value






Balance as at 31December 2013
3,155,536
9,804,353
2,110,636
135,145
7,162
15,212,832
Balance as at 31December 2014
3,083,821
9,294,483
2,084,928
182,154
1,811
14,647,197
Property, plant and equipment as at 31December 2013 comprised the following:

Buildings
and structures
Machinery and equipment
Vehicles
Other
Construction in progress
Total
Gross book value






Balance as at 31December 2012
3,849,502
11,756,148
3,014,888
273,824
137,453
19,031,815
Additions
229,337
2,398,313
548,773
25,255
5,414
3,207,092
Transfers
16,561
109,812
3,344
6,147
(135,864)
Disposals
(57,358)
(303,671)
15,828
3,949
(341,252)
Translation difference
38,340
(59,231)
(73,083)
(39,183)
159
(132,998)
Balance as at 31December 2013
4,076,382
13,901,371
3,509,750
269,992
7,162
21,764,657







Accumulated depreciation
and impairment






Balance as at 31December 2012
(664,587)
(2,818,483)
(1,113,314)
(109,680)
(4,706,064)
Depreciation charge
(265,867)
(1,443,160)
(367,494)
(37,485)
(2,114,006)
Disposals
11,847
161,724
11,465
892
185,928
Translation difference
(2,239)
2,901
70,229
11,426
82,317
Balance as at 31December 2013
(920,846)
(4,097,018)
(1,399,114)
(134,847)
(6,551,825)







Net book value






Balance as at 31December 2012
3,184,915
8,937,665
1,901,574
164,144
137,453
14,325,751
Balance as at 31December 2013
3,155,536
9,804,353
2,110,636
135,145
7,162
15,212,832


12. Property, plant and equipment (continued) 
The above amounts include several vehicles under finance lease agreements. Net book value of these vehicles comprised 13,913 as of 31December 2014 (31December 2013: 11,778):

As of 31December

2014
2013
Vehicles
15,907
14,158
Total cost
15,907
14,158
Less: accumulated depreciation
(1,994)
(2,380)
Total net book value of leased property
13,913
11,778
Collateral
Properties with a carrying amount of 1,865,065 are subject to a registered debenture to secure bank loans (31December 2013: 556,986) (Note 33).
13. Investments in associates
The Group's equity associates were as follows:

As at 31December

2014
2013
OJSC Sibneftegeofizika
39.5%
39.5%
OJSC Stavropolneftegeofizika
25.4%
25.4%
The principal activity of the associates is seismic data acquisition to the petroleum industry in the Russian Federation. Details on transactions and balances with associates which are only related parties to the Group are disclosed in Note 34.
Movements in the carrying value of the Group's investments in associate are summarized in the table below:

2014
2013
Carrying amount at the beginning of the year
1,009,989
882,965
Share in (loss)/profit, net of income tax
(108,917)
127,024
Carrying amount at the end of the year
901,072
1,009,989
Summarised statement of financial position of OJSC Sibneftegeofizika:

As at 31December

2014
2013
Non-current assets
1,607,137
1,731,833
Current assets
2,469,878
2,127,889
Total assets
4,077,015
3,859,722



Non-current liabilities
(716,198)
(694,186)
Current liabilities
(2,283,992)
(1,823,704)
Total liabilities
(3,000,190)
(2,517,890)


13. Investments in associates (continued) 
Summarised statement of comprehensive income of OJSC Sibneftegeofizika:

For the year ended 31December

2014
2013
Revenues
2,437,617
2,685,295
(Loss)/profit for the period
(264,981)
389,979
Summarised cash flow information of OJSC Sibneftegeofizika: 

For the year ended 31December

2014
2013
Operating
(979)
355,869
Investing
(184,436)
(95,512)
Financing
325,338
(356,506)
Net increase/(decrease) in cash and cash equivalents
139,923
(96,149)
Summarised statement of financial position of OJSC Stavropolneftegeofisika:

As at 31December

2014
2013
Non-current assets
189,586
219,482
Current assets
324,874
156,740
Total assets
514,460
376,222



Non-current liabilities
(78,526)
(29,522)
Current liabilities
(336,851)
(230,839)
Total liabilities
(415,377)
(260,361)
Summarised statement of comprehensive income of OJSC Stavropolneftegeofisika:

For the year ended 31December

2014
2013
Total revenues
455,292
319,181
Loss for the period
(16,733)
(122,233)
14. Income tax 
Income tax expense for the years ended 31December comprised the following:

2014
2013
Current income tax expense
(3,833)
(1,802)
Provisions in respect of current income tax for previous periods
(98,374)
37,352
Deferred income tax benefit/(expense)
18,274
(560,174)
Total income tax expense
(83,933)
(524,624)


14. Income tax (continued) 
Reconciliation of effective tax rate is presented below:

2014
2013
(Loss)/profit before tax
(2,326,039)
123,953
Income tax at the Company's tax rate
(20% from Russian operations)
465,208
(24,791)
Deferred tax assets on tax loss not recognized
(276,729)
(36,280)
Adjustments in respect to current income tax of previous years
(98,374)
37,352
Deferred tax expense related to Group restructuring
(434,391)
Deferred tax effect on share of (loss) / profit of an associate not recognized (Note 13)
(21,783)
25,405
Deferred tax effect on provision for taxes other than income tax not recognized (Note 23)
(31,490)
(7,978)
Recognised deferred tax asset on tax loss for the prior periods
16,296
Other non-deductible income and expenses
(137,061)
(83,941)
Income tax expense
(83,933)
(524,624)
In the context of the Group's current structure, tax losses and current tax assets of the different subsidiaries may not be set off against current tax liabilities and taxable profits of other subsidiaries and, accordingly, taxes may accrue even where there is a net consolidated tax loss. Therefore, deferred tax asset of one subsidiary of the Group is not offset against deferred tax liability of another subsidiary.
In Cyprus losses in respect of the years up to 2009, which were not set off against profits up to the years 2014, may not be carried forward to the year 2015 according to Cyprus tax legislation. As far as the Russian subsidiaries are concerned, tax loss carry forwards available for utilization expire in 2015-2024. 
Certain deductible temporary differences, unused tax losses or credits for which no deferred tax asset is recognised as of 31December 2014 amounts to 1,519,445 and expires in 2023-2024 (31December 2013: 385,940). 
At 31December 2014, there was no recognised deferred tax liability (2013: Nil) for taxes that would be payable on the unremitted earnings of the Group's subsidiaries. The Group has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future to the full extent. As of 31December 2014 temporary differences associated with investments in associates, for which no deferred tax asset is recognised amount to 215,364 (31December 2013: 106,447).


14. Income tax (continued) 
Deferred tax relates to the following:

Consolidated statement of financialposition

As at 31December

2014
2013
Deferred tax assets and liabilities


Trade and other receivables
32,938
43,365
Inventories
31,887
33,351
Trade and other payables
77,096
6,055
Provisions
13,255
Tax loss
1,322,135
1,146,111
Other items
1,962
8,771
Property, plant and equipment
(1,277,817)
(1,419,007)
Trade and other receivables
(1,399,789)
(1,053,095)
Other items
(33,745)
(25,365)
Net deferred tax liabilities
(1,245,333)
(1,246,559)
Reflected in the statement of financial position as follows


Deferred tax assets
309,511
235,649
Deferred tax liabilities
(1,554,844)
(1,482,208)

Consolidated income statement

2014
2013
Deferred tax assets


Property, plant and equipment
(154)
Trade and other receivables
(10,429)
(51,562)
Inventories
(1,728)
(754,192)
Investments
(782)
Loans and borrowings
215

Trade and other payables
6,509
(28,950)
Provisions
(13,243)
(6,051)
Tax loss
240,549
601,449
Other items
(6,209)
(207,967)
Deferred tax liabilities


Property, plant and equipment
157,868
171,820
Trade and other receivables
(346,331)
(264,912)
Inventories
(6,184)
Loans and borrowings
(1,326)
Trade and other payables
3,623
Provisions
(316)
Other items
(3,788)
(19,809)
Deferred income tax benefit/(expense)
18,274
(560,174)
The table below presents movement in the deferred tax positions:

2014
2013
Net deferred tax liability as at the beginning of the period
(1,246,559)
(686,393)
Deferred income tax benefit for the period
18,274
(517,628)
Translation difference (recognized in Other comprehensive income)
(17,048)
(42,538)
Net deferred tax liability as at end of the period
(1,245,333)
(1,246,559)


15. Other non-current assets
Other non-current assets at 31December comprised the following:

As at 31December

2014
2013
Long-term borrowings issued (Note 7)
274,443
Advances issued for CAPEX
47,106
43,432
Other
4,312
4,412
Total cost
325,861
47,844
16. Inventories
Inventories at 31December comprised the following:

2014
2013
Raw materials, fuel and spare parts (net of provision for obsolete and slow-moving items)
2,209,506
2,089,901
Work-in-progress
241,108
53,208
Finished goods and goods for resale
99,847
86,961
Total
2,550,461
2,230,070
The amount of inventories recognized in cost of sales in 2014 and 2013 was 3,190,589 and 3,154,766 respectively. The amount of provision for inventory obsolescence was 35,982 as at 31December 2014 (31December 2013: 44,657).
17. Accounts receivable and prepayments
Trade and other receivables as at 31December comprised the following:

2014
2013
Financial receivables


Trade receivables (net of bad debt provision) 
2,599,043
1,463,477
Other receivables
358,509
145,707
Non-financial receivables


Amounts due from customers for construction works
6,726,845
5,313,303
Advances issued
516,852
641,778
Total
10,201,249
7,564,265
Trade receivables are non-interest bearing and are normally settled within 12 months from the origination date. Receivables and advances issued are presented net of provision for impairment of 140,101 and 248,783 as at 31December 2014 and 31December 2013, respectively.
See below the movements in the provision for impairment of receivables:
At 31December 2012
154,324
Charge for the period
170,546
Written off for the period
(71,244)
Translation difference
(4,843)
At 31December 2013
248,783
Charge for the period
60,955
Written off for the period
(169,034)
Translation difference
(603)
At 31December 2014
140,101


18. Other financial assets
Other financial assets comprised the following:

2014
2013
Loans issued
239,848
168,967
Interest receivable on loans issued
81,325
59,022
Total
321,173
227,989
Loans issued to third parties are unsecured and mature within one year and bear interest rate between 12% and 14%.
19. Cash and cash equivalents
Cash and cash equivalents as at 31December comprised the following:

2014
2013
Cash in hand
1,934
2,328
Cash in bank denominated in RUR
420,418
423,164
Cash in bank denominated in USD
199
11,590
Cash in bank denominated in EUR
1,798
1,740
Cash in bank denominated in other currencies
11,494
33,223
Short-term deposits
770,848
239,351
Total
1,206,691
711,396
Cash represents current bank accounts that carry no interest and demand deposits maturing in less than 3 months at 18.5%-25% in RUR and at 3.5% in USD in the amounts of 506,000 and 264,848, respectively (2013: 5%, only RUR-denominated deposits).
20. Share capital
The following table summarises the change in share capital for the years ended 31December 2014 and 2013 as follows:

Number
of shares
Share
capital
Share
premium
Balance at 31December 2013
20,833,400
6,513
13,837,978
Balance at 31December 2014
20,833,400
6,513
13,837,978
GDRs 
On 11 December 2012 the Company's GDRs were admitted to the Official List maintained by the UK Listing Authority and started trading on the London Stock Exchange's main market at 8.00a.m. London Time on 12 December 2012.
The authorised share capital of the Company consists of 20,833,400 shares with a nominal value of US$0.01 per share. All authorised shares are issued and fully paid.
Global Depositary Receipts (GDRs) of the Company representing two ordinary shares each are listed and traded on the Main Market of the London Stock Exchange under the ticker IGSS (Bloomberg: IGSS LI, Reuters: IGSSq.L).
There were no changes in share capital through year ended 2014. Share premium reserve is not available for distribution by way of dividends.

20. Share capital (continued) 
Reverse acquisition reserve 
As of 31December 2010, 2009 and 1January 2009 reverse acquisition reserve comprises the difference between the issued share capital of IGSS and issued share capital of GEOTECH Holding JSC. As of 31December 2011 reverse acquisition reserve represents the aggregate of fair value of consideration transferred in a business combination and issued share capital of GEOTECH Holding JSC immediately before the business combination less issued share capital of IGSS as of 31December 2011.
Other non-distributable reserves
In March 2008 the parent Company of GEOTECH Holding JSC, Geotech Oil Services Holding contributed cash to its wholly owned subsidiary in the amount of 2,233,488 (USD 95 million) which was recorded in Equity as other non-distributable reserves as of 1January 2009.
21. Loans and borrowings
Long-term and short-term borrowings as at 31December comprised the following:

Security
Effective, %
2014
2013
Current liabilities




Short-term bank loans
Secured
9.5%-14.4%
4,386,155
1,539,501
Current portion of long-term bank loans
Secured
2.5%-15.05%
3,096,819
537,610
Total short-term loans and borrowings


7,482,974
2,077,111
Non-current liabilities




Long-term bank loans
Secured
2.5%-16.85%
4,958,489
7,366,469
Bonds

10.50%
2,971,379
2,963,841
Long-term borrowings

10.0-11.0%
9,775
Total long-term loans and borrowings


7,939,643
10,330,310
Total loans and borrowings


15,422,617
12,407,421
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 407,087 and 203,544 is reported within Long-term bank loans and Current portion of long-term bank loans, respectively as of 31December2014.
All other loans and borrowings presented in the table above are at fixed rates and are denominated in Russian rubles.
Long-term loans and borrowings are payable in the following periods:

As at 31December

2014
2013
1 to 2 years
1,897,392
2,576,737
3 to 5 years
6,042,251
7,753,573
Total
7,939,643
10,330,310
Pledge obligations and description of security are disclosed in Note 33.

22. Accounts payable and promissory notes payable
Trade and other payables as at 31December comprised the following:

2014
2013
Trade payables
4,281,596
3,145,162
Payables to employees
991,684
843,843
Advances received
293,516
395,653
Interest payable 
195,857
114,041
Amounts due to customers under construction contracts
151,768
114,161
Other payables
98,344
73,899
Total
6,012,765
4,686,759
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 months. 
Notes issued comprised the following:

Interest rate
As at 31December

2014
2013
Long-term promissory notes payable:



Notes issued to third parties for equipment (Sercel)
7%
163,665
Notes issued to third parties for equipment (UniQ)
4%
435,853
Short-term promissory notes payable:



Notes issued to third parties for equipment (Sercel)
7%
287,656
169,080
Notes issued to third parties for equipment (UniQ)
4%
674,208
290,700
Total

961,864
1,059,298
Effective interest rate for promissory notes issued by the Group in 2013 was 7% while contractual interest rate comprised 4%. 
Effective interest rate accrual in the amount of 40,063 was recognized within finance expense for the year ended 31December 2014 (2013: 12,994). 
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 31December 2014 current portion of this liability in the amount of 156,720 is recorded within trade payables and amounts of 626,878 due beyond 2015 are presented within Other long-term liabilities.


23. Other taxes payable and provisions
As at 31December other taxes and charges payable comprised the following:

2014
2013
Value-added tax payable
1,470,947
1,029,670
Social taxes payable
403,613
168,353
Personal income tax payable
135,231
187,659
Property tax payable
23,186
29,934
Other taxes and charges
38,462
28,429
Total
2,071,439
1,444,045
As of 31December 2014 provisions amounted to 157,448 (31December 2013: 39,891) and related to probable tax exposures in respect to value-added tax payable which were revealed based on on-site tax audits for several previous years. 
24. Construction type contracts
The Group sales include revenues from seismic contracts of 18,987,943 and 18,249,424 for 2014 and 2013, respectively. 
The status of construction type contracts in progress as at 31December 2014 and 2013 is presented below:

As at 31December

2014
2013
Accumulated costs under contracts in progress from inception
at the reporting date
13,114,865
9,454,023
Accumulated recognized profits less recognized loss under
contracts in progress from inception at the reporting date
4,382,804
2,503,394
Balance of advances received
538,324
385,115
The recognition of the revenue from construction type contracts uncompleted as of 31December 2014 and 31 December 2013 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 194,427 (31December 2013: 156,907).
25. Revenue
Revenue for the years ended 31December comprised the following:

2014
2013
Field seismic operations
18,987,943
18,249,424
Data processing and interpretation
442,986
741,784
Other revenue 
158,318
348,369
Total
19,589,247
19,339,577


26. Cost of sales 
Cost of sales for the years ended 31December comprised the following:

2014
2013
Labor and wages, including mandatory social contribution
6,203,070
5,786,843
Materials and supplies
3,190,589
3,154,766
Depreciation of property, plant and equipment and amortization of intangible assets
2,498,584
2,151,172
Oilfield services
1,621,323
2,023,717
Transportation services
845,613
925,088
Other third parties services
708,952
601,895
Operating lease payments
487,363
419,215
Loss from the contract in Yemen
8,695
Other
173,842
122,575
Total
15,729,336
15,193,966
27. General and administrative expenses
General and administrative expenses for the years ended 31December comprised the following:

2014
2013
Labor and wages, including mandatory social contribution
1,409,485
1,197,930
Third party services
278,342
298,192
Taxes, other than income tax
115,755
150,896
Operating lease
95,361
91,149
Depreciation of property, plant and equipment and amortization of intangible assets
87,642
80,672
Bank charges
25,733
47,167
Bad receivables write-offs and provisions
31,231
162,998
Auditors' audit fees
33,120
33,313
Auditors' other fees
12,421
Other
103,629
105,202
Total
2,180,298
2,179,940
Transaction costs in relation to LSE listing and related continuing obligations compliance of 56,214 have been included within third party services for year ended 31December 2013.
28. Other operating income and expenses
Other operating income for the years ended 31December comprised the following:

2014
2013
Write-off of accounts payable
74,927
77,692
Restoration of provision for probable claims from tax authorities
7,092
57,023
Penalties and fines received
6,364
1,486
Other income
53,385
100,290
Total
141,768
236,491


28. Other operating income and expenses (continued) 
Other operating expenses for the years ended 31December comprised the following:

2014
2013
Loss on disposals of property, plant and equipment and other assets
232,110
156,862
Penalties and fines paid
202,496
123,123
Provision for probable claims from tax authorities
107,108
7,092
VAT not recoverable
73,009
33,044
Net loss from service plants and facilities
32,811
24,646
Welfare assistance
17,301
23,507
Free-of-charge transfer of assets and charity
11,073
22,933
Administrative charges and state duties
6,143
24,665
Other expenses
74,117
102,744
Total
756,168
518,616
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.
29. Finance income and expenses
Finance income and expenses for the years ended 31December comprised the following:

2014
2013
Interest received
31,017
18,429
Discounting of promissory notes to fair value (Note 22)
45,679
Total finance income
76,696
18,429



Interest expense on loans and borrowings
1,707,963
1,390,784
Bank charges on loans and loan accounts
65,859
31,674
Interest expense on finance lease
1,064
14,407
Other finance expenses 
69,740
19,704
Total finance expenses
1,844,626
1,456,569
Net finance income and expenses
1,767,930
1,438,140
30. 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 loss for year ended 31December 2014 recognized in profit or loss comprised 1,514,405 (year ended 31December 2013: 248,477). 


31. Earnings per share
The information on the earnings and number of shares used for determining basic and dilutive earnings per share is presented below:

2014
2013
Net loss attributable to ordinary equity holders of the parent 
(2,272,450)
(530,173)
Effect of dilution
Net loss attributable to ordinary equity holders of the parent adjusted to the effect of dilution 
(2,272,450)
(530,173)

2014
2013
Weighted average number of ordinary shares for basic earnings pershare 
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

2014
2013
Loss per share (in rubles)
(109.08)
(25.45)
No other transactions with ordinary shares or potential ordinary shares were performed between the reporting date and the date of these financial statements.
32. 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 year, 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 17). 
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:

31December 2014
31December 2013

Gross
Impairment
Gross
Impairment
Current
2,957,552
1,609,184
Past due
72,492
72,492
160,181
160,181
Interest rate risk 
At the beginning of 2013 the Group entered into non-revocable credit line agreement with Sberbank denominated in euro at interest rate calculated as EURIBOR plus 2.15%. 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.

32. Financial instruments (continued) 
Interest rate risk (continued)
Change of EURIBOR rate, %
Effect on income/(loss) before tax
2014
2013
'+0.1%
(611)
(478)
'-0.1%
611
478
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 (783,598 as of 31 December 2014). 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.
Change of EURIBOR rate, %
Effect on income/(loss) before tax
2014
2013
'+0.1%
(784)
'-0.1%
784
The interest rates on other financial instruments 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 31December 2014 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. 
The following table shows the undiscounted contractual maturities of liabilities as at 31December 2014:

0-6
months
7-12
months
2 to 5 years
Over 5years
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


32. Financial instruments (continued)
Liquidity risk (continued)
The following table shows the undiscounted contractual maturities of liabilities as at 31December 2013:

0-6
months
7-12
months
2 to 5 years
Over 
5years
Total
Bank loans
279,502
1,797,609
7,366,469
9,443,580
Bonds
3,000,000
3,000,000
Interest payable
637,270
466,227
1,479,065
2,582,562
Notes payable
230,250
230,250
605,785
1,066,285
Lease liabilities
2,029
2,029
1,931
5,989
Trade accounts payable
3,145,162
3,145,162
Payables to employees
843,843
843,843
Other payables 
73,899
73,899
Total
5,211,955
2,496,115
12,453,250
20,161,320
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:

(in thousands of US dollars)

As at 31December

2014
2013
Accounts receivable
37
1,300
Cash and cash equivalents
4,712
354
Promissory notes
(13,426)
(23,542)
Accounts payable
(6,799)
(28,417)
As at 31December 2014 and 2013 the Group has the following EURdenominated financial assets and liabilities:

(in thousands of EUR)

As at 31December

2014
2013
Accounts receivable
2,006
Cash and cash equivalents
26
39
Loans and borrowings
(8,941)
(11,913)
Accounts payable
(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 31December 2014, 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 year ended 31December 2014 by 248,490 (31December 2013: 10.21% increase by 167,310).

32. Financial instruments (continued) 
Sensitivity analysis (continued)
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 31December 2014 and 2013 would have had the opposite effect on the amounts shown above in the amount of 248,490 and 327,737 respectively, on the basis that all other variables remain constant.

Change of
RUR to USD
Effect on income/(loss)
2014
'+28.54%
(248,490)

-28.54%
248,490
2013
'+20.00%
(327,737)

-10.21%
167,310
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 31December 2014, 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 year ended 31December 2014 by 374,214 (31December 2013: 8.63% increase by 46,233). 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 29.58% and 20.00% weakening of the RUR against EUR at 31December 2014 and 2013 would have had the opposite effect on the amounts shown above in the amount of 374,214 and 107,145 respectively, on the basis that all other variables remain constant.

Change of
RUR to EUR
Effect on income/(loss)
2014
+29.58%
(374,214)

-29.58%
374,214
2013
+20.00%
(107,145)

-8.63%
46,233
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 Note33. Carrying value of bonds as of 31December 2014 amounted to 2,971,379 while their fair value amounted to 2,553,901.

32. Financial instruments (continued) 
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 31December

2014
2013
Loans and borrowings payable
15,422,617
12,407,421
Notes issued
961,864
1,059,298
Finance lease obligations
7,072
5,989
Less: cash and cash equivalents
(1,206,691)
(711,396)
Net debt
15,184,862
12,761,312



Equity
8,814,759
10,980,584
Capital and net debt
23,999,621
23,741,896
Gearing ratio
0.63
0.54
33. Risks, commitments and contingencies
Operating environment of the Group
In 2014 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 14percent. Management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances.
In March-September 2014, the United States, European Union and other countries have introduced a series of unilateral restrictive political and economic actions against the Russian Federation and a number of Russian and Ukrainian individuals and organizations. These official actions, particularly in the case of a further escalation, may result in reduction of economic cooperation between business of before mentioned countries and Russian companies on the international capital markets, as well as other economic consequences. The impact of these events on the future results of operations and financial position of the Company at this time is difficult to determine.

33. Risks, commitments and contingencies (continued) 
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.
While management believes it is taking appropriate measures to support the sustainability of theGroup'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. 
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. Thefact 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. 
The new Russian transfer pricing legislation, which came into force on 1January 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.

33. Risks, commitments and contingencies (continued) 
Taxation (continued)
In 2014, 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. 
On 24 November 2014 Federal Law No. 376-FZ of the Russian Federation, effective 1January 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.
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 1,641,700 (1,491,830as of 31December 2013).
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. Asof 31December 2014 and 2013, 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. TheGroup 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 2012-2014 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.

33. Risks, commitments and contingencies (continued) 
Pledge obligations
Pledged property, plant and equipment
As at 31December 2014, 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 1,865,065 (31December 2013: 556,986).
Pledged rights to claim cash
As at 31December 2014, 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 3,836,179 (31December 2013: 5,617,214).
34. Related party transactions
The following table provides the total amount of transactions that have been entered into with related parties (Note13) during years ended 31December 2014 and 2013, as well as balances with related parties as of 31December 2014 and 31December 2013:
Revenue

Associated company

2014
2013
Field seismic operations
31,789
21,593
Operating lease services
295
Total
32,084
21,593
Expenses

Associated company

2014
2013
Services rendered
2,360
3,726
Total
2,360
3,726
Outstanding balances

Associated company

31December
2014
31December
2013
Accounts receivable
7,800
35,981
Advances issued
600
600
Accounts payable
(3,194)
(27,096)
Advances received
(1,611)
(1,611)
Total
3,595
7,874
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.

34. Related party transactions(continued) 
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 Director, members of the Board of Directors, Chief Financial Officer and Vice-Presidents of the Company. 
In 2014, remuneration paid to key management personnel amounted to 81,081 (2013: 111,946).
35. Events subsequent to the reporting date
On April 2015 IGSS sent a request to the London Stock Exchange and the Financial Conduct Authority to cancel the listing and trading of Global Depositary Receipts. IGSS intends to terminate GDR program and cancel the listing and trading of GDRs as it wishes to be listed in Russia. 

This information is provided by RNS
The company news service from the London Stock Exchange
  END
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