Annual
Report &
Accounts
2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Contents
4
Overview
18
Strategic
Report
78
Sustainability
Report
106
Governance
132
Financial
Statements
354
Additional
Information
Highlights of 2021 .............................6
Chairman’s Statement ............20
Highlights of 2021 .........................80
Board of Directors ....................108
At a Glance ..............................................8
Our Strategy .................................... 26
Our Assets ............................................12
CEO Review ........................................ 28
Our History ......................................... 14
Market Review ................................ 34
Our Industry ......................................16
Financial and Operational
Review ....................................................38
ESG Committee Chair’s
Message................................................82
Stakeholder Engagement ...84
Ethics and Behaviour ................87
Employees .........................................90
Risk Management ........................ 62
Environment ....................................96
Communities .................................100
Climate-Related Financial
Disclosure (TCFD) ....................... 102
Executive Management ........114
Consolidated Management
Report and Consolidated
Financial Statements .............134
Corporate Governance
Report ...................................................118
Share Capital ..................................130
Management Report
and Parent Company
Financial Statements ............264
Corporate Structure ................131
Selected Operational
Information ........................ 356
Definitions .......................................362
Presentation of Financial
and Other Information .........366
GRI Content Index ...................368
TCFD Index........................................371
Contacts ............................................372
Summary of presentation
of financial and other information
Cyprus Companies Law, Cap. 113 (EU IFRS).
as of its Cypriot and Russian subsidiaries.
the end of this Annual Report. Reconciliations
regarding future events or the future financial
the Group’s actual results of operations,
The Group’s Consolidated Management
Certain financial information derived
of the non-IFRS measures to the closest EU
performance of the Group. Forward-looking
financial condition, liquidity, prospects,
Report and Consolidated Financial
from management accounts is marked in
IFRS measures are included in the body of
statements can be identified by terms such
growth and strategies, and the development
All financial information presented in
Statements and the Parent Company
this Annual Report with an asterisk (*). In
this Annual Report. Rounding adjustments
as expect, believe, estimate, anticipate,
of the industry in which the Group operates,
this Annual Report is derived from the
Financial Statements for the year ended 31
this Annual Report, the Group has used
have been made in calculating some of the
intend, will, could, may or might, and the
may differ materially from those described
Consolidated Management Report and
December 2021 are included in the Financial
certain “non-IFRS financial information”
financial and operational information included
negative of such terms or other similar
in or suggested by the forward-looking
Consolidated Financial Statements of
Statements section of this Annual Report.
(i.e. measures not recognised by EU IFRS or
in this Annual Report. As a result, numerical
expressions. By their nature, forward-looking
statements contained in this Annual Report.
Globaltrans Investment PLC (the “Company”
Financial statements for prior years can be
IFRS) as supplementary explanations of the
figures shown as totals in some tables may
statements involve risks and uncertainties,
For a detailed description of the presentation
and, together with its subsidiaries,
found on Globaltrans’ corporate website
Group’s operating performance. Information
not be exact arithmetical aggregations of the
because they relate to events and depend
of financial and other information, please
“Globaltrans” or the “Group”) and has been
(www.globaltrans.com). The presentational
(non-IFRS financial and operating measures)
figures that precede them.
on circumstances that may or may not
see the Presentation of Financial and Other
prepared in accordance with International
currency of the Group’s financial results
requiring additional explanation or defining
occur in the future. The Group cautions
Information section of this Annual Report.
Financial Reporting Standards as adopted by
is the Russian rouble (RUB), which is the
is marked with initial capital letters and the
This Annual Report, including its appendices,
that forward-looking statements are not
the European Union and the requirements of
functional currency of the Company as well
explanations or definitions are provided at
may contain forward-looking statements
guarantees of future performance and that
2
3
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Overview
" Globaltrans’ commitment to its employees is as strong
today as it was when I joined in 2008. Everything is
based on trust and openness, with respect for diversity
and a truly collaborative culture. Great importance is
attached to continuous learning and professional growth.
Beyond salaries and bonuses, Globaltrans offers a range
of outstanding benefits to keep people motivated and
encourage high performance. Exciting, challenging and
inspiring – that is how I would describe my personal
journey at Globaltrans.
Ekaterina Glazunova,
Head of PR, New Forwarding Company
5
Highlights of 2021 ............................................................... 6
At a Glance ................................................................................ 8
Our Assets ...............................................................................12
Our History ............................................................................14
Our Industry .........................................................................16
Directors’ Responsibility
Each of the Directors confirms that, to the best of his or her knowledge, the Strategic Report presented
on pages 20 to 77 of this Annual Report includes a fair review of the development and performance
of the business and the position of Globaltrans Investment PLC and its subsidiary undertakings,
included in the consolidation taken as a whole, together with a description of the principal risks
and uncertainties they face.
By order of the Board,
4
Sergey Tolmachev
Director
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Highlights of 2021
Thanks to the underlying strengths of Globaltrans, we were able
to deliver an excellent performance in 2021. We achieved strong
financial results with another year of disciplined operational
performance despite market volatility and the ongoing impact
of COVID-19.
In the reporting year, we generated good momentum focused
on our core competencies of superior service, operational excellence,
cost management, and prudent capital allocation.
We deepened our customer engagement, secured important contract
extensions with major customers, expanded our leased-in gondola
fleet to satisfy strong demand for our services, maintained our
efficiency, and optimised our portfolio by divesting a non-core asset.
RUB 58.5 bln
6%
Adjusted Revenue in 2021
RUB 29.0 bln
8%
Adjusted EBITDA in 2021
32 %
Net Debt reduction to RUB 18.5 bln
at year-end 2021 vs. the end of 2020
50 %
Adjusted EBITDA Margin
in 2021 (2020: 49%)
7%
RUB 16.1 bln
Free Cash Flow in 2021
0.6 x
Net Debt to Adjusted EBITDA
at year-end 2021 (2020 end: 1.0x)
Valery
Shpakov
Chief Executive
Officer
The summary information on pages
6 and 7 covers the Group’s key
financial and operating performance
indicators. These include non-IFRS
measures that the Group believes
are helpful to investors in analysing
the Group’s performance and well
understood in the freight rail
transportation industry. The key
non-IFRS financial metrics are not
a substitute for the IFRS financial
information included and discussed
in the Financial and Operational
Review section of this Annual Report.
STRONG MARKET RECOVERY
• Significant H2 market recovery with
overall Russian freight rail turnover
at an all-time high in 2021 driven
by robust bulk cargo demand.
• Recovery in gondola market rates
starting in late Q2 2021 continued
in H2 2021, with 2021 bulk cargo
volumes exceeding pre-COVID
levels; tank market pricing remained
robust with volume recovery
accelerating in H2 2021.
ROBUST ABOVE-TARGET INTERIM 2021
DIVIDENDS DELIVERED; FINAL 2021
DIVIDEND ON HOLD
•
Improving dividend capacity over H1 2021 with
gondola prices recovering enabled payment
of above-target Interim 2021 dividends
(regular and special) of RUB 4.0 billion or
RUB 22.50 per share/Global Depositary
Receipt ("GDR") in September 2021.
• Final dividends for 2021 temporarily
suspended in April 2022 due to both technical
limitations regarding upstreaming cash to the
Cyprus holding company and the objective
of establishing liquidity buffers.
THE GROUP’S FREIGHT RAIL
TURNOVER GROWTH RESUMED
IN H2 AND GONDOLA RATES
RECOVERED AMID GROWING
DEMAND FOR GLOBALTRANS’
SERVICES
• The Group’s Freight Rail Turnover
returned to growth in H2 2021, rising
8% on H1 2021, with full-year Freight
Rail Turnover 2% lower year on year.
• Two key service contracts extended
in 2021 – Rosneft for 5 years
and Metalloinvest for 2 years (with
higher service volumes agreed).
• Average Price per Trip rose 11% year
on year in 2021, reflecting a recovery
in gondola market rates in H2 2021
with continued solid pricing in the oil
products and oil segment.
• Growing demand for Globaltrans’
services drove the expansion
of the Leased-in Fleet of gondolas
and underpinned the purchase
of tank cars.
• Gondola Empty Run Ratio further
improved to 44% (2020: 45%) – one
of the lowest in the Russian market.
INCREASED PROFITABILITY
SUPPORTED BY COST CONTROL;
STRONG FREE CASH FLOW
SUPPORTED DELEVERAGING
• Adjusted Revenue rose 6% year on year
to RUB 58.5 billion on the back of the recovery
in gondola rates in H2 2021 coupled with
continued robust pricing in the tank car
segment.
• Total Operating Cash Costs were held
in check contributing to an increase in the
Adjusted EBITDA Margin to 50% in 2021
comparing to 49% in 2020.
• Adjusted EBITDA rose 8% year on year
to RUB 29.0 billion.
• Strong Free Cash Flow increased 7% year
on year to RUB 16.1 billion despite a 22%
increase in Total CAPEX to RUB 8.4 billion
following purchases of tank cars
and increased Maintenance CAPEX.
• Net Debt reduced 32% in 2021 to RUB 18.5
billion compared to the end of 2020; leverage
was at a low level with Net Debt to Adjusted
EBITDA at 0.6x compared to 1.0x at end 2020.
• All the Group’s debt has fixed interest rates
and is denominated in roubles.
6
7
Globaltrans Investment PLC
Annual Report & Accounts 2021
At a Glance
WHO WE ARE
Robust business model and efficient operations
• Strong positions in key freight rail segments
Financial stability and strength
• High proportion of multi-year outsourcing
of metals and oil products and oil
contracts
• Diversified blue-chip customer portfolio
underpinned by long-term service
agreements
Industry-leading operational efficiency
•
• Robust balance sheet
• Strong Free Cash Flow generation
• Significant liquidity available
Entrepreneurial culture combined
with best-in-class governance
• Founded and led by entrepreneurs with
a focus on quality and innovation
• Experienced Board and management team
• Adherence to best-practice governance
standards
• Sustainable business with a strong ESG
focus
• Dual-listed on the London Stock Exchange1
and the Moscow Exchange
Focus on shareholder returns
• Track record of delivering consistent
dividends and achieving dividend targets,
transparent dividend policy, semi-annual
dividend payments
• Ongoing share buyback programme
capable of providing support during
market volatility
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
500+
Industrial clients
WHAT WE DO
We are leaders in the provision
of complex freight rail logistics
and transportation services in our
target market segments of metals
and mining and oil products and oil as
well as in other segments.
We have a high-quality customer base
including large blue-chip companies
across our key segments. Customers
benefit from our state-of-the-art
logistics, large and modern fleet,
customer-focused approach and our
constant drive for innovation.
Market Share, 2021, %2
Historical Empty Run Ratio,
2017–2021, %
Net Revenue from Operation
of Rolling Stock by cargo type, 2021, %2
Russia's freight rail transportation
volumes
69.1 ths
Total Fleet at year-end 2021 (units)
Metallurgical cargoes
Oil products and oil
Coal
Construction materials
7%
17%
9%
4%
5%
2021
2020
2019
2018
2017
44%
45%
42%
38%
37%
51%
51%
49%
46%
45%
Empty Run Ratio for gondola cars
Total Empty Run Ratio
(for all types of railcars)
29%
Metallurgical cargoes
59 %
Share of Net Revenue
from Operation of Rolling Stock
covered by long-term service
contracts in 2021
38% Oil products and oil
21% Coal
5% Construction materials
7% Other
Source: Globaltrans
1
Imposed suspension of GDRs trading on the London Stock Exchange on 3 March 2022 continued as of the date of publication.
2 Metallurgical cargoes including ferrous metals, scrap metal and ores; coal including coke; construction materials including cement.
8
9
Globaltrans Investment PLC
Annual Report & Accounts 2021
At a Glance
HOW WE DELIVER VALUE
We consistently deliver value to our clients through our pursuit of operational and service excellence.
Our operating platform is fundamental to our success.
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
OUR APPROACH TO ESG
Delivering sustainable value through:
Sophisticated logistics
High-quality long-term client base
Clear governance
We are experts in managing complex freight
logistics that improve our customers’
productivity, saving them time and money.
Sector-leading operational efficiency
Our centralised gondola dispatch hub is the
nerve centre of our railcar operations. Working
around the clock, it keeps our fleet running
smoothly, maintains high utilisation levels and low
Empty Runs, delivering efficiency which in turn
drives profitability.
We are trusted partners for our clients, ranging
from major industrial groups to smaller, more
specialised companies. We focus on long-term
outsourcing partnerships, whereby we manage
most of a client’s freight rail logistics. Our clients
benefit from operational scale, 24-hour services,
advanced logistics, and access to one of Russia’s
largest fleets.
In-house locomotives improve productivity
Our in-house locomotive fleet transports
oil products and oil in block trains where all
the cargo is bound for a single destination,
obviating the need to stop at multiple sorting
stations, improving delivery schedules and fleet
utilisation.
GONDOLA LOGISTICS KEY ILLUSTRATIVE ROUTES
Kamennogorsk
Novy Port
Export
Khanty-Mansi AO
Yamalo-Nenets AO
Denisovsky
Cherepovets-2
Vorontskova
Lena
Vostochnaya
Berkakit
Moscow
Smychka
Yegozovo
Kiltchug
Zheleznogorsk
Pervouralsk
Polevskoy
Yekaterinburg
Belovo
Cargo routes:
Stoylenskaya
Trubnaya
Taganrog
Metallurgicheskaya
Novorossiysk
Export
Zhirnov
Magnitogorsk
Novotroitsk
Kamensk-
Uralsky
Chelyabinsk
Yuzhny
Novokuznetsk
Mezhdurechensk
Bazaikha
Vladivostok
Export
º Oversight from the ESG
Board committee
º Transparent reporting
of key metrics
Sustainable business
practices
º Embedding sustainability
in our way of working
and business mindset
º Minimising our impact
on the environment
º Improving energy
efficiency
º Reducing carbon
emissions
Positive social impact
º Focus on employee
development
º Providing support
to our communities
Read more on the Group’s
sustainability commitments
and actions on pages 80-105
We strive to be a responsible and attractive employer,
business partner and investment target. We recognise that
by prioritising sustainability and gradually integrating it into
everything we do, we will improve our long-term prospects,
reduce our business risk and build greater engagement with
our stakeholders. Our progress in 2021 gives me confidence
that we are on the right track and we will continue to pursue
our sustainability ambitions.
Elia Nicolaou
Chair of the ESG Committee,
Non-executive Director
10
Source: Globaltrans
11
Metals Iron ore Pipes Scrap metal Crushed stone Empty Runs Coal
Globaltrans Investment PLC
Annual Report & Accounts 2021
Our Assets
69,106
Total Fleet (units)
Total Fleet composition at year-end 2021
69%
Gondola cars
94%
Owned Fleet
28% Tank cars
2% Other railcars
<1% Locomotives
6% Leased-in Fleet
ONE OF THE LARGEST
RAILCAR FLEETS IN RUSSIA
Operational flexibility maintained
by striking appropriate balance
between Owned Fleet (94%)
and Leased-in Fleet (6%).
Fleet composition corresponds to the
industrial segments served: 69%
are universal gondola cars for bulk
cargoes, 28% are tank cars for liquid
cargoes and 3% are other units.
The average age of the Group’s
Owned Fleet is currently 13.8 years
compared with a useful life for gondola
cars of 22 years and for tank cars
of 32 years.
Exceptional fleet maintenance
programme maintains the focus
on operational and service excellence.
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
69%
28%
GONDOLA CARS
TANK CARS
• Open-top, high-sided universal
• Designed to carry liquid cargoes
railcar
• Backbone of Globaltrans’ fleet
• Designed to carry bulk
cargoes like metals, ores, coal,
construction materials, etc.
• Able to be rapidly redeployed
between different bulk cargoes
in response to changing market
demand
including oil and petroleum
products, chemicals, liquefied
gas and other liquid substances
• Principally used by Globaltrans
in the transportation of oil
products
47,775 units
19,587 units
2%
<1%
OTHER RAILCARS
LOCOMOTIVES
• Globaltrans’ fleet largely includes
flat cars among the other cars
• Globaltrans has its own fleet
of mainline locomotives, which
haul block trains principally in the
oil products and oil segment
1,673 units
71 units
13.8 years
Average age of Owned Fleet
Source: Globaltrans
12
Source: Globaltrans
13
Globaltrans Investment PLC
Annual Report & Accounts 2021
Our History
17 YEARS OF GROWTH AND LEADERSHIP
Globaltrans was formed in 2004 with the merger of two
entrepreneur-led companies and from these roots
has grown to become one of the leading freight rail
transportation groups in Russia and the CIS. Through
strong organic growth and the acquisition of both
railcars and other freight rail businesses, we have created
a profitable company with best-in-class capabilities.
Our commitment to transparency and good corporate
governance helped us to become the first Russia-
focused freight rail group to list on an international
stock exchange. Since the Initial Public Offering (IPO)
on the London Stock Exchange in 2008, we have had
a consistent focus on value creation and growth. Today,
we operate a fleet that is almost three times larger than
at the time of our IPO. In 2020 we also listed our Global
Depositary Receipts (“GDRs”) on the Moscow Exchange
in order to diversify our investor base.
2016
Extended long-term
partnerships with Rosneft
(five years) and with
Metalloinvest
(three years).
2017
The enhanced Dividend
Policy introduced linking
dividends to Attributable
Free Cash Flow
and Leverage Ratio.
2013
Acquired MMK-Trans,
the captive freight rail
operator of MMK Group,
one of the world’s largest
steel producers.
Signed a long-term
outsourcing contract
with MMK.
Created a single 24/7
gondola dispatching
centre.
2014–2015
The Group's corporate
structure simplified to drive
efficiency and cut costs.
Formed specialised
SyntezRail subsidiary
with partners to transport
petrochemicals in tank
containers.
See the Total Fleet diagram on the next page
2010
Organic expansion of the
business — purchases
of new rolling stock
and the expansion
of the Leased-in Fleet.
2012
Acquired Metalloinvesttrans,
the captive freight rail
operator of Metalloinvest,
a leading producer of hot
briquetted iron (HBI), iron ore
products and high-quality
steel.
Signed industry’s first ever
long-term outsourcing
contract with Metalloinvest.
2004
Established as a merger
of two enterpreneur-led
companies.
2008
Successful IPO on the
London Stock Exchange.
2009
Secondary Public Offering
(SPO) to fund further
business expansion.
14
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
2021
Established ESG Committee.
Two key service contracts
extended – Rosneft for 5 years
and Metalloinvest for 2 years
with higher volumes.
60% stake in SyntezRail
(a small non-core specialised
container operator) was sold
in Oct. 2021.
2020
Globaltrans' GDRs
began trading on MOEX
on 28 Oct. 2020. The GDRs
have ticker symbol GLTR
and are included in Level
One, MOEX’s highest
quotation list.
The service contract
with MMK was extended
for a further two years and
is now valid until the end
of Sept. 2024. The service
contract with Metalloinvest
was extended for a further
one-year period to the end
of 2021.
2019
Service contracts extended
with MMK (to end Sept.
2022) and Metalloinvest
(to end 2020), in line
with the Group’s strategy
to develop its outsourcing
client partnerships.
A new three-year service
contract (to end June 2022)
signed with Gazprom Neft,
a long-standing client of the
Group.
A new service for the
steel industry launched,
transporting high-quality
rolled steel in specialised
containers.
2018
The Group celebrated its 10th
anniversary of its Main Market
listing on the London Stock
Exchange.
Partnership with MMK
extended to end
Sept. 2020.
Two new five-year service
contracts signed: with
TMK, a leading global
manufacturer and supplier
of steel pipes for the oil
and gas industry, and with
ChelPipe Group, a leading
Russian manufacturer of pipe
products and provider
of integrated solutions for fuel
and energy companies.
Total Fleet at year-end, ths units
about 3x
27
37
51
...
67
69
71
72
69
2008
2009
2010
...
2017
2018
2019
2020
2021
Source: Globaltrans
15
Globaltrans Investment PLC
Annual Report & Accounts 2021
Our Industry
RUSSIA’S RAIL NETWORK AT A GLANCE
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Globaltrans' operating subsidiaries,
their branches and representative offices
Key illustrative routes of Russia’s rail
network
3 rd
largest rail network globally
connects the world’s largest
country across its 11 time zones
Vital
industry connecting
Russian regions and linking
Russia to the global economy
Murmansk
St. Petersburg
Arkhangelsk
Chrepovets
Moscow
Zeleznogorsk
Stary Oskol
Voronezh
Kstovo
Rostov-on-Don
Samara
Taganrog
Volzhsky
Krasnodar
Novorossiysk
Stavropol
Magnitigorsk
Novotroitsk
Orsk
87 %
of the Russia's overall freight
turnover, excluding pipeline traffic,
travels by rail
Nizhny Tagil
Yekaterinburg
Chelyabinsk
Tyumen
Omsk
Novosibirsk
Kemerovo
Krasnoyarsk
Novokuznetsk
Angarsk
Chita
Komsomolsk-on-Amur
Khabarovsk
Vladivostok
2.6 tn
Overall Russia's freight rail
turnover in 2021 (tonnes-km)
16
Sustainable choice
most eco-friendly means of long-distance freight transportation over land
Deregulated freight rail sector
with about
88 %
of Russia's total railcar fleet
controled by private players
Structural growth
drivers supported by government investment in rail infrastructure
to expand the Far East rail corridor
17
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Strategic
Report
" We now have over 70 mainline locomotives at Globaltrans
and I’m one of the 145 engine drivers. The Group has
significantly increased its in-house locomotive crew
capability in recent years, with the establishment of the BTS
locomotive solutions subsidiary. The advantage this gives us
is that we can use our locomotives to run “block trains” where
all the cargo on board - mainly oil products and oil - is shipped
from the same loading point to the same destination.
This is a more effective and efficient transportation solution
for both our customers and Globaltrans.
Anatoly Buevskiy
Locomotive engine driver
Chairman’s Statement ...............................................20
Our Strategy .......................................................................26
CEO Review ...........................................................................28
Market Review ...................................................................34
Financial and Operational
Review .......................................................................................38
Risk Management ...........................................................62
18
19
Chairman’s Statement
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
" It was a year
of rapid recovery
for Globaltrans
and for the Russian
rail freight sector.
The strength of the
global economic
rebound created
overwhelming
demand for freight
logistics, driving
overall Russian
freight rail
turnover
to an all-time high.
Sergey Maltsev
Chairman of the Board,
Executive Director,
Chief Strategy Officer,
Co-founder and shareholder
of Globaltrans
In such volatile markets, the robustness
of Globaltrans balanced business model
focused exclusively on bulk cargoes and oil
products and oil, was again evident.
The business was quick to benefit from
the industry’s rapid resurgence in the second
half of the year.
Globaltrans delivered strong financial results
and met its operational and strategic goals
in 2021. Our full year results were strong thanks
to an impressive second half performance that
compensated for a weak first half. Adjusted
Revenue of RUB 58.5 billion, Adjusted EBITDA
of RUB 29.0 billion and a Profit for the year
of RUB 15.1 billion were all ahead of the previous
year. Free cash flow generation remained
robust, with the Group’s Free Cash Flow up
7% year on year to RUB 16.1 billion, our cost
control was exemplary and we achieved further
deleveraging with Net Debt to Adjusted EBITDA
at 0.6x.
Our operational wins included the successful
renewal of two major service contracts
and the expansion of our Leased-in Fleet
to meet growing customer demand. Despite
operational pressures caused by volatility
in demand and ongoing rail network expansion
projects, we maintained consistently high
levels of efficiency. By doing so, we reinforced
our reputation as one of the industry’s most
efficient operators.
The pandemic has profoundly impacted
global logistics, generating debate about
the need for greater supply chain resilience.
The discussion is especially relevant for our
industry, as rail dominates the movement
of goods in Russia. Large industrial customers
need reliable, 24-hour freight logistics solutions
to support their operations. Increasingly, it is
evident that only by outsourcing a significant
proportion of their transport needs to large
efficient operators like Globaltrans that can
guarantee the service levels they require.
RUB 29.0 bln
8%
Adjusted EBITDA in 2021
24%
RUB 15.1 bln
Profit for the year in 2021
20
21
Globaltrans Investment PLC Annual Report & Accounts 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Chairman’s Statement
The pandemic experience is likely to accelerate
matters even further, and it is pleasing to report
that we maintained close relationships with our
client base over 2021. We signed critical service
contract extensions with two longstanding
clients, Rosneft and Metalloinvest. At the same
time, we leveraged the flexibility provided
by the Leased-in Fleet to meet the growing
demand seen in the second half of 2021.
Dynamic fleet management is a central
pillar of our business model, meaning we
can respond quickly to demand shifts whilst
maintaining the optimal fleet balance between
owned and leased-in assets and between
universal gondola cars and tank cars.
In 2020, the Group completed a secondary
listing of its GDRs on the Moscow Exchange
(MOEX). The listing has enabled the Board
to meet its objectives of widening share
ownership, improving liquidity of the GDRs,
and raising the Group’s profile with retail
investors. Over the first year of MOEX listing,
the combined average daily liquidity of the
Company's GDRs across both its trading venues
increased four-fold1.
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
THE BOARD
RESPONSIBLE BUSINESS
Good governance is essential to the long-
term success of Globaltrans, and as chair, I am
fortunate to call upon an experienced and high-
quality group of directors. The Board intensified
its engagement in several critical governance
areas past year.
The Board worked closely with the leadership
team to develop a post-pandemic strategy
and plan. We also paid close attention to the
immediate wellbeing of our employees
and customers, ensuring the Group continued
to protect and support them fully during
the period.
7%
RUB 16.1 bln
Free Cash Flow in 2021
As a publicly listed company, our job is to
deliver long-term value to our shareholders via
competitive returns on their capital. For these
returns to be sustainable and grow over time, we
must act responsibly, consistent with society’s
broader interests.
Recognising the importance of sustainability
for our stakeholders, the Board approved
the establishment of a new ESG Committee
of the Board in January 2021, chaired
by Elia Nicolaou, a Non-executive Director.
The committee's goal is to monitor
the development of the Group’s sustainability
strategy and oversee our Environment, Social
and Governance (ESG) programme and related
activities. The committee’s oversight has
already yielded results in the form of improved
ESG disclosures, leading to better ESG ratings
for Globaltrans and positive stakeholder
feedback.
Given the persistent challenges posed
by COVID-19, the Board focused on the social
aspects of our ESG activities in 2021. Over
the past year, the health and mental wellbeing
of our colleagues across the Group has
remained a key area of focus for the Board.
The environment, particularly the theme
of climate change, was the other key
sustainability focus.
As rail is one of the greenest modes
of transportation, our industry plays an
important role in tackling climate change.
As a business, we are committed to the
environmentally responsible transport of freight
and reducing our carbon footprint. The Board
supports the need for our industry to become
even more ecologically mindful and invest
in cleaner supply chains by adopting technology
and green energy.
INDUSTRY DYNAMICS
In my statement last year, I reflected on how
the pandemic had highlighted the importance
of the freight rail industry to Russia’s economy.
I noted that the industry had exhibited
remarkable resilience and adaptability during
the pandemic. This was again the case in 2021
as the impact of lockdowns on industrial
production collided with a resurgence
in demand, causing worldwide disruption
to supply chains.
While this spurred strong demand for bulk
commodities, which led to surging freight rail
volumes, it also put additional pressure on the
rail system. The resulting bottlenecks have
exacerbated existing congestion issues caused
by the large-scale modernisation of our rail
infrastructure in the Russian Far East. However,
I would like to stress that Globaltrans performed
well even with these industry-wide challenges.
1 Source: Moscow Exchange; London Stock Exchange; Company’s estimations; Information for the first nine months of 2021;
and comparing to the same period of the previous year.
22
23
Globaltrans Investment PLC
Annual Report & Accounts 2021
Chairman’s Statement
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
DIVIDENDS
SUMMARY
OUR APPROACH TO DIVIDENDS
We have a strong track record of generating
sustainable returns for our shareholders.
Our dividend policy rewards investors with
regular returns of excess capital if not required
to support business growth.
The combination of stronger-than-anticipated
markets and solid free cash flows meant
the Group’s capacity to pay dividends was
greater than we had forecasted at the start
of the year. The Group has already paid
an above-target interim 2021 dividend
to shareholders of RUB 4.0 billion or RUB 22.50
per share/GDR but has had to temporarily
suspend the anticipated final 2021 dividend
due to both technical limitations regarding
upstreaming cash to the Cyprus holding
company and the objective of establishing
liquidity buffers, in response to the
unprecedented environment in early 2022.
In addition, at the AGM in April 2022,
shareholders approved a new buyback
programme for up to 10% of the Company’s
share capital1. As of the date of this report
the Group held in treasury 0.24% of its share
capital.
Globaltrans delivered a strong financial
and operational performance in 2021. Our
colleagues across the business again showed
great fortitude and resilience throughout
the year, and, on behalf of the Board, I would
like to thank them for all they have done to help
deliver this result.
While the long-term outlook for the freight
railway industry remains positive, the near term
outlook is challenging and dependent on further
geopolitical and macroeconomic developments.
Globaltrans has a proven business model, robust
finances, experienced management, and a
strong client base. Therefore, the Group is well
placed to meet future challenges.
Sergey Maltsev
Chairman of the Board,
Executive Director,
Chief Strategy Officer,
Co-founder and shareholder of Globaltrans
The Group’s Dividend Policy strikes a balance between investing in business expansion
and delivering returns to shareholders.
• Focusing on maximising shareholder
• Clear formula linking dividends
value, the policy boosts pay-outs during
low investment cycles and limits them
in periods when sizeable expansion
opportunities meeting Globaltrans’ strict
return criteria are identified.
to Attributable Free Cash Flow and Leverage
Ratio2 provides flexibility and transparency
in capital allocation.
Leverage Ratio (Net Debt to Adjusted EBITDA)
Less than 1.0x
Dividends as a % of Attributable Free Cash Flow
Not less than 50%
From 1.0x to 2.0x
2.0x or higher
Not less than 30%
0% or more
To view the Dividend Policy, please visit
our corporate website www.globaltrans.com
Our Approach to Dividends, RUB per share/GDR3
89.65
92.40
93.10
74.55
4.42 10.34 18.86 22.20 22.28 12.41 39.20 44.80 44.85 45.90 46.50 46.55 46.55 46.55 28.00 22.50
1 The new programme is for the Company's GDRs listed on the Main Market of the London Stock Exchange and the Moscow
Exchange and is executed under the authority that was granted by shareholders at the AGM held on 26 April 2022. This authority
lasts for a period of twelve months from that date and permits the Company to repurchase a total number of GDRs not to exceed
10% of the Company’s share capital (including GDRs already held by the Company). The actual number of GDRs repurchased
by the Company will depend on market conditions.
24
2009
2010
2011
2012
2013
2014–
20154
2016
H1
20175
H2
20175
H1
20185
H2
20185
H1
20195
H2
20195
H1
20205
H2
20205
H1
20215,6
2 The Board of Directors of Globaltrans reserves the right to recommend to the General Meeting of shareholders dividends in the
amount calculated on a reasonable basis other than described in this Annual Report in its sole discretion. For more details please
see the Dividend Policy as adopted by the Board on 31 March 2017 and amended on 24 August 2018, which is available
at www.globaltrans.com.
3 Prior to 2016, dividends on Globaltrans' shares/GDRs were declared and paid in US dollars, thus the amounts in Russian roubles
are presented for information purposes only and calculated at the Central Bank of Russia’s official exchange rate for the Russian
rouble as of the date of the General Meeting that approved the respective dividend. From 2016, dividends on Globaltrans shares/
GDRs are declared in Russian roubles and paid in US dollars.
4 The dividend declared in 2016 related to both the 2014 and 2015 financial years.
5 Including regular and special dividends.
6 Final 2021 dividends were temporarily suspended in April 2022 due to both technical limitations regarding upstreaming cash
to the Cyprus holding company and the objective of establishing liquidity buffers.
25
Globaltrans Investment PLC
Annual Report & Accounts 2021
Our Strategy
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
VISION
STRATEGY
HISTORICAL KEY FINANCIAL RESULTS
Our vision is to maintain our position as a leading freight rail group and
to be the partner of choice for blue-chip industrial customers by continually
developing our business to ensure we meet customers’ changing needs.
Our shared principles
• Value customers:
• Prioritise safety:
they are at the heart of our
business and we work hard
to exceed their expectations.
safety is our number one
priority and we act safely
and responsibly at all times.
• Uphold good governance:
we aim to pursue a course
that benefits all
stakeholders.
• Deliver excellence:
we strive to excel
in everything that we do.
• Respect people:
we respect the rights of all
employees and invest in their
training and development.
• Protect our environment:
we value our communities
and the world around
us and treat them with
the respect and consideration
they deserve.
Our shared principles
Deliver operational
excellence
and efficiency
in operations
Focus on opportunistic
investments and pursue
prudent capital
allocation
Strategic
priorities
Promote a strong
entrepreneurial
and governance
culture
Deliver value
throught sustainable
business practices
26
Our strategy is to offer our industrial
customers reliable and innovative
transportation solutions aimed
at ensuring the cost-effective
and timely management of their
cargoes. We invest opportunistically
to grow our business, subject to strict
returns criteria, and maintain a prudent
balance sheet. Together these
elements underpin our ability to create
lasting value for our shareholders,
employees and other stakeholders.
Our entrepreneurial spirit, disciplined
approach and focus on efficiency
and innovation are at the heart
of this strategy. These, alongside our
large fleet and advanced logistics
platform, form our major competitive
advantages. By focusing on long-term
outsourcing partnerships, we can
use our deep understanding of our
clients’ needs to improve our service
quality while increasing our logistical
efficiency.
We allocate our capital prudently,
investing in attractive growth
opportunities when they arise,
and returning capital to shareholders
at times when no such opportunities
exist. We review organic and non-organic
growth opportunities subject to our strict
returns criteria. Maintaining a strong
balance sheet is critical to us as it allows
us to seize opportunities and remain
flexible in the face of any change in the
business environment or market.
Adjusted Revenue, RUB bln
Adjusted EBITDA, RUB bln
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
58.5
54.9
68.8
60.9
52.1
Adjusted EBITDA Margin, %
Free Cash Flow1, RUB bln
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
50
49
57
54
50
29.0
26.8
39.6
33.1
25.8
16.1
15.1
13.3
12.3
17.0
Net Debt to Adjusted EBITDA
Total dividends2, RUB per share/GDR
at year-end
2021
2020
2019
2018
2017
H1 2021
2020
2019
2018
2017
0.6
1.0
0.6
0.6
0.4
1 Free Cash Flow is net of principal elements of lease payments for leases with financial institutions presented for both periods (2019 and 2020).
During H1 2020 the entire financial lease portfolio was refinanced to bilateral loans, therefore principal elements of lease payments were eliminated
from both periods for comparison purposes.
2 Total dividends (including interim, final and special) in respect of declared year.
3 Final 2021 dividends were temporarily suspended in April 2022 due to both technical limitations regarding upstreaming cash
to the Cyprus holding company and the objective of establishing liquidity buffers.
22.503
74.55
93.10
92.40
89.65
27
CEO Review
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
" Dear Shareholders,
Thanks to the
underlying strengths
of Globaltrans, we
were able to deliver an
excellent performance
in 2021. We achieved
strong financial results
with another year of
disciplined operational
performance despite
market volatility and
the ongoing impact
of COVID-19.
Valery Shpakov
Chief Executive Officer
In the reporting year, we generated good
momentum focused on our core competencies
of superior service, operational excellence,
cost management, and prudent capital
allocation. We deepened our customer
engagement, secured important contract
extensions with major customers, expanded our
leased-in gondola fleet to satisfy strong demand
for our services, maintained our efficiency,
and optimised our portfolio by divesting
non-core asset.
Results Highlights
From a results standpoint, 2021 was definitely
a year of two halves.
The first half was impacted by sustained
weakness in gondola market rates for most
of the period. However, gondola rates
staged a prolonged recovery between May
and December, supported by buoyant demand
in bulk cargoes. Consequently, Globaltrans’
financial performance in the second half
rebounded strongly with the result that FY2021
key financials were ahead of the previous year.
Adjusted Revenue increased 6% year on year
to RUB 58.5 billion driven by improving gondola
rates and a continued recovery in demand
for bulk cargoes and oil products and oil.
Adjusted EBITDA rose 8% year on year
to RUB 29.0 billion. Profit for the year increased
24% year on year to RUB 15.1 billion. The full-year
Adjusted EBITDA Margin was 50% versus 49%
in 2020. We kept tight control over our operating
expenses and our Total Operating Cash Costs
were held in check.
We delivered strong cash generation with
Net cash from operating activities up 8%
year on year to RUB 27.2 billion. Free Cash
Flow also increased by 7% to RUB 16.1 billion.
Capital expenditure rose 22% year on year
to RUB 8.4 billion due to an increase
in maintenance and expansion CAPEX.
Underpinned by a strong balance sheet and low
leverage, the Group took the opportunity
to purchase 381 new tank cars at the close of the
year to support the recovery of demand in the
oil products and oil sector. Net Debt fell sharply,
down 32% year on year, to RUB 18.5 billion.
As a result, the Group’s Net Debt to Adjusted
EBITDA ratio fell to 0.6x from 1.0x at the prior
year end.
Industry Overview
The sector’s performance in 2021 was
exceptional, with Russia’s freight rail turnover
reaching an all-time high, primarily driven
by strong export demand for industrial
commodities combined with a concerted
rebound in domestic demand.
Growth in freight rail turnover rebounded
sharply from its pandemic lows, with overall
turnover up 3.6% year on year. Before the 2020
pandemic, the industry had enjoyed a period
of sustained growth in freight rail turnover,
reaching a five-year peak in 2019. 2021 saw
a resumption of growth, with total freight rail
turnover 1.3% ahead of the 2019 result.
The total volume of rail freight moved in Russia
increased 3.2% year on year. Results for the
individual cargo categories were somewhat
mixed, although the overall performance was
very positive.
11 %
Average Price per Trip growth in 2021, y-o-y
44 %
Empty Run Ratio for gondola cars
in 2021 (2020: 45%)
28
29
Globaltrans Investment PLC Annual Report & Accounts 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
CEO Review
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Overall bulk cargo volumes grew strongly,
up 3.0% year on year and 1.8% ahead
of pre-pandemic volumes of 2019.
Coal and metallurgical cargoes contributed
most, benefiting from booming export markets
and strong prices. Coal (including coke) volumes
rose 5.3% year on year, while metallurgical
volumes (including ferrous metals, scrap metal
and ores) grew 2.2% over the prior period.
Volumes in construction materials (including
cement) however fell 2.4% albeit from a high
base of 2020, but were still ahead of the
pre-pandemic level of 2019.
Freight volumes in the oil products and oil
category also experienced solid growth, up
4.2% from the previous year, albeit 6.2% below
pre-pandemic 2019 levels. After a sluggish first
half, second-half volumes surged 8.9% year
on year as global energy demand expanded
rapidly as economies reopened.
In terms of freight rates, weak gondola market
pricing in the first half gave way to a price
recovery in the second half as demand for bulk
commodities gathered pace. In the oil products
and oil segment, rates remained solid through
the COVID-19 crisis, despite weak demand
dynamics lasting until the second half of 2021.
Our Performance
Our business model is designed to allow
the Group to deliver consistent results through
the business cycle by maintaining a balanced
fleet split between gondola cars and tank cars
whose markets tend to have different cyclicality
patterns. Our ability to mitigate the impact
of the changing market environment is further
supported by how we flex the size of our
Leased-in Fleet to match market demand,
and actively manage our discretionary CAPEX
to closely align it to market conditions.
Our service performance was generally excellent,
highlighting Globaltrans’ reputation for service
quality and delivery. We signed two important
contract renewals with major customers.
Our contract with Metalloinvest was extended
for another two years to the end of 2023, lifting
our share of Metalloinvest’s total contracted
freight rail needs from 50% to 70%. We also
extended our contract with Rosneft for an extra
five years out to March 2026.
In 2021, long-term contracts covered 59% of the
Group’s Net Revenue from Operation of Rolling
Stock. These contracts are important as they
help underpin and derisk our revenues. They are
also a source of valuable real-time data on our
customers’ logistics, helping to deliver faster,
more effective cargo routings that minimise
Empty Runs and improve operational efficiency.
Operations in the first half were affected
by various factors, including weather-related
delays, congestion at key gondola client facilities,
and sluggish demand in the oil products and oil
segment. The second half performance was
much better, and the Group’s Freight Rail
Turnover was 8% up on the first half. However,
2021’s performance lagged behind the overall
market, falling 2% year on year.
Favourable pricing dynamics meant our Average
Price Per Trip increased 11% year on year in 2021,
supported by our superior service offering
and logistics expertise.
Operational excellence is an area of relentless
focus for us, as without it, we cannot deliver
contract and revenue growth. Our team worked
tirelessly to maintain efficient fleet operations,
focusing on issues like utilisation rates, routing
issues and changes to cargo patterns that
impact fleet logistics. Their efforts contributed
to a stable Total Empty Run Ratio (for all types
of railcars) for 2021, unchanged at 51%.
Our gondola Empty Run Ratio remained
at elevated levels as customer cargo flows
were still impacted by the COVID-19 pandemic.
However it still remains one of the lowest in the
sector at 44%, down slightly from 45% in the
prior year.
Capital Allocation
So that we can deliver sustainable through-
cycle growth for shareholders, all investments
must meet strict returns criteria. Our capital
expenditure in 2021 was targeted primarily
at necessary maintenance, with Total CAPEX
for the year at RUB 8.4 billion.
We maintain a balanced approach to fleet
investment, alternating between leasing-in units
and rolling stock purchases, depending
on market conditions. In 2021, we leased
an additional 2.2 thousand gondolas to capture
the high demand in the bulk cargo segment.
As a result, the total leased-in gondola fleet
increased to 5% of the total gondola fleet.
To take advantage of the rapid recovery in the
oil products and oil segment, we purchased
381 tank cars at the close of 2021 and an
additional 119 units at the start of 2022.
Sustainability Focus
Being a responsible business is fundamental
to how we deliver long-term success, so our
focus on environmental, social and governance
(ESG) issues is a vital part of our future growth
strategy. The Board and leadership are aligned
in our commitment to sustainable business
development that creates value.
Last year the Board formalised our ESG agenda
by creating a separate Board committee
to monitor and oversee the Group’s ESG
activities. As CEO, I welcome this move
to provide a focal point for our Group-wide ESG
activities and help us improve our sustainability
programmes. As the Chairman mentions
in his report, as a direct result of dialogue
with the committee, we upgraded our levels
of ESG disclosures, resulting in an improvement
in the Group’s sustainability rating from one
of the leading global ESG rating agencies,
Sustainalytics.
My focus, and that of my team in 2021, was
primarily on the social aspects of our ESG
strategy, especially the health and wellbeing
of our employees. COVID-19 continued
to impact day-to-day operations, and as
a leadership team, we focused on ensuring our
employees had the right practical, emotional,
and financial support to help them perform their
jobs.
Safety is critical in our business and a top
priority for the management team. There was
a clear improvement in our safety performance
in 2021, with zero fatalities and an improved Lost
Time Injury Frequency Rate from 0.66 in 2020
to zero in 2021.
LTIFR1
(2020: 0.66)
zero
30
1 LTIFR (Lost Time Injury Frequency Rate) is the number of lost time injuries multiplied by 1,000,000, divided by the employee total hours
worked in the reporting period.
31
Globaltrans Investment PLC
Annual Report & Accounts 2021
CEO Review
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Optimising Our Asset Base
Summary
PORTFOLIO OPTIMISATION TO INCREASE FOCUS ON CORE SEGMENTS
In 2021, we made good progress against our
strategic goals. And while we face challenges
ahead, on the evidence of our strong
performance in 2021, I am confident that
the business is well positioned to weather any
difficulties. As a management team we are adept
at managing through changing business cycles,
and we have a tried and tested business model.
Valery Shpakov
Chief Executive Officer
We regularly review our business portfolio
to focus on those businesses that have the most
potential to deliver long-term sustainable
growth.
In October 2021, we sold our 60% stake
in SyntezRail, a standalone business within
the Group, for a total cash consideration
of RUB 1.1 billion. SyntezRail is a successful
operator of specialised containers units with
customers in the petrochemicals, metals
and other industrial sectors. However, the Board
concluded that SyntezRail had few synergies
with our core business and that the potential
for value growth was limited.
The transaction price represented a return
on investment of 3.8 times and an EV/EBITDA
multiple of about 6.8 times. Proceeds of the sale
were used to strengthen the Group’s balance
sheet and improve its capacity to pay dividends.
Since the year end, we have acquired full
control of BaltTransServis, a leading operator
of rail tank cars used to transport oil products
and oil. In February this year, we increased our
stakeholding to 100% from 60% by acquiring
the 40% minority stake for RUB 9.1 billion in cash
implying 2021 P/E of about 4.5 times.
BaltTransServis has a strong market position,
long-term service contracts with industry
leaders, owns its locomotive fleet, and is cash
generative. We believe BaltTransServis has great
potential to create sustainable long-term value
for our shareholders.
• BaltTransServis stake acquisition – unique
competencies and 100% consolidation
º Acquisition of the remaining 40%
• SyntezRail disposal – limited scope
for value growth or synergies
º Sale of 60% stake in small non-core
outstanding stake in BaltTransServis
(bringing the Company’s ownership
to 100%), one of the leading Russian
freight rail operators of tank cars,
for RUB 9.1 billion in cash implying 2021
P/E of about 4.5 times.
º BaltTransServis has a strong market
position, long-term service contracts
and unique competencies in operating
its own locomotives with a total fleet
of 13,136 units1.
º Provides increased focus on and
exposure to an attractive oil products
and oil segment and enables
the consolidation of 100% of the Free
Cash Flow of this cash generative
business.
º Globaltrans became the effective sole
owner of BaltTransServis in February
2022 with closing completed
in March 2022.
container operator SyntezRail completed
in October 2021 for RUB 1.1 billion in cash,
implying an EV/EBITDA multiple of about
6.8 times2 and a return on invested capital
of about 3.8 times.
º Scope for synergies with core operations
and potential for further value growth
were both considered limited.
13,136
BaltTransServis'
Total Fleet (units)
32
Including 5,471 units leased in from other Group subsidiaries and 1,693 units leased in from third parties.
1
2 Based on estimated financial results of SyntezRail for 2021, normalised assuming that all 500 new specialised containers
delivered in 2021 were operational from 1 January 2021 and excluding the impact of IFRS 16.
33
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Market Review
Russian freight rail turnover hit
an all-time high in 2021 after
a strong recovery
Recovery in gondola rates
in the second half of 2021
• Demand quickly recovered in 2021 with overall
• Gondola market rates recovered in the second
Russian freight rail turnover up 3.6% year on year,
1.3% above the pre-pandemic level of 2019.
• Bulk (non-oil) cargoes powered a rebound
half of 2021, after remaining weak for most of the
first half, supported by strong bulk cargo demand.
• Tank car market rates were robust throughout
in overall volumes which rose 3.0% year on year
and 1.8% compared to the pre-pandemic 2019
level, supported by robust global demand
and growing domestic demand.
• The recovery in the oil products and oil segment
accelerated in the second half of 2021, driving
a year-on-year rise in volumes of 4.2%, although
this remained 6.2% below the result for pre-
pandemic 2019.
2021.
Fundamentals of the freight rail
network remain solid
• One of the most eco-friendly means of freight
transportation.
• Dominates the freight transport sector,
accounting for about 87% of overall Russian
freight turnover in 2021 (excluding pipeline traffic).
• Ongoing expansion of the rail infrastructure
in Russia supports increasing export cargo flows.
3.6 %
Russia's freight rail turnover growth
in 2021, y-o-y
34
Russia’s freight rail turnover,
bln tonnes-km1
Russia’s freight rail transportation
volumes, mln tonnes1
2021
2020
2019
2018
2017
3.6%
-2.2%
0.2%
4.2%
2,639
2,545
2,601
2,597
2,493
2021
2020
2019
2018
2017
3.2%
-2.7%
-0.9%
2.0%
1,284
1,245
1,279
1,292
1,266
Russia’s freight rail turnover, bln tonnes-km
Change in freight turnover 2019–2021, quarter on quarter
2.1%
8.4%
2.6%
1.5%
-2.6%
2.0%
2.4%
3.6%
Change, 2021/2020
Change, 2021/2019
652
622
635
655
616
668
640
639
656
654
668
679
2019
2020
2021
2019
2020
2021
2019
2020
2021
2019
2020
2021
Q1
Q2
Q3
Q4
Russia’s freight rail transportation
volumes by cargo type in 20211
Russia's total railcar fleet
by car type at year-end 2021, ths units2
30%
Coal (incl. coke)
47% (590)
Gondola cars
17% Oil products and oil
18% Metallurgical cargoes (incl.
ferrous metals, scrap metal, ores)
12% Construction materials
(incl. cement)
24% Other
20% (252) Tank cars
32% (400) Other railcars
1 Source: Rosstat, Globaltrans
2 Source: Globaltrans
35
Globaltrans Investment PLC
Annual Report & Accounts 2021
Market Review
The market in 2021
It was a successful year for the freight
rail industry, which rapidly recovered
from the 2020 pandemic lows fueled
by strong exports and rising demand.
The Russian economy continued
to strengthen with gross domestic
product (GDP) rising 4.7% year on year.
The freight rail sector in Russia
tends to track industrial production,
which increased 5.3% year on year.
The extractive industries sector index
rose 4.8% year on year, with a notable
increase in coal extraction which
climbed 7.6%. The manufacturing index
was up 5.0% year on year.
With the benefit of a strong economic
backdrop and favourable logistics,
overall Russian freight rail turnover
(measured in tonnes-km) increased
3.6% year on year to reach an all-time
high, surpassing the pre-pandemic
peak of 2019 by 1.3%. The total volume
of freight transported in Russia
(measured in tonnes) increased 3.2%
year on year and was slightly above
the level achieved in 2019 (up 0.4%).
Rail maintained its position as
the primary mode of freight transport
in Russia, carrying about 87% of overall
Russian freight turnover in 2021
(excluding pipeline traffic).
Addressing congestion on the Far
Eastern rail network is a top priority
for the government and Russian
Railways (RZD), which plans to increase
the Far Eastern rail network's capacity
by 26% by the end of 2024. This
expansion builds on the 2018–2020
phase that increased throughput
capacity on this part of the network
by about 17% and further underpins
the strong rail industry fundamentals.
Russia's total railcar fleet increased
overall in line with the previous year's
rate of 3%, or about 38 thousand units,
rising to 1.242 million units by the
end of 2021. Gondola cars accounted
for 47% of the total fleet as of year-end
2021 while tank cars made up 20%,
and other types, including flat cars
and hopper cars, constituted 32%.
Net additions to the total gondola fleet
declined about 20% year on year, with
about 15 thousand units or 3% added
to take the overall size of the fleet to 590
thousand units as of the end of 2021.
In the tank car segment, net additions
of about 3 thousand units (a 1% increase
compared to the end of 2020), with
the overall size of Russia’s tank car fleet
(including oil and oil products tanks)
rising to 252 thousand units.
Russia’s freight rail transportation
volumes by type of cargo,
2017–20211, mln tonnes
1 Metallurgical cargoes including ferrous metals,
scrap metal and ores; coal including coke;
construction materials including cement.
Source: Rosstat, Globaltrans
36
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
BULK (NON-OIL) CARGO
SEGMENT
This segment delivered a strong
performance in 2021 with overall
volumes up 3.0% year on year, 1.8%
ahead of the 2019 level. The continued
recovery largely stemmed from strong
global demand for bulk commodities
and a rebound in the Russian economy.
Coal and metallurgical cargoes were
the main drivers of the segment’s
performance, with construction
materials decreasing only slightly after
producing robust results in 2020.
The pricing environment in the
gondola segment recovered in the
second half of the year, following
weakness for most of the first
half, due to an improving supply
and demand balance.
Coal (including coke): Coal accounted
for 30% of Russia’s total freight
volumes in 2021, remaining the largest
industrial cargo segment. Overall
coal volumes rose 5.3% year on year,
exceeding the 2019 performance
by 0.3%, driven by robust export
demand for thermal coal and strong
pricing. In the coking coal segment,
conditions remained favourable with
volumes growing in 2021, up 7.5% over
the previous year and 11.8% compared
to 2019.
Metallurgical cargoes (including
ferrous metals, ores and scrap
metal): This segment represented 18%
of overall Russian freight rail volumes
in 2021. The total segment volumes
increased 2.2% over the previous
year, reflecting higher global demand
and increased domestic economic
activity, but yet remained 1.3% below
2019 levels.
Volume trends varied from segment
to segment: ferrous metals volumes
rose 4.3% year on year but remained
6.1% below 2019 levels; iron ore
volumes continued to show resilience,
up 0.2% year on year and only 0.2%
below 2019 levels; scrap metal
volumes were more robust, up 14.4%
year on year and 11.3% compared
to 2019.
Construction materials (including
cement): This segment posted a good
performance in 2021. Although
volumes were down 2.4% year on year
following a strong performance
in 2020, they were 1.8% ahead of 2019,
supported by solid construction
activity levels. This segment
contributed 12% of the overall Russian
freight rail volumes in 2021.
OIL PRODUCTS AND OIL CARGO
SEGMENT
In 2021 the oil products and oil
transport segment continued its
recovery from the difficult trading
conditions of 2020, stemming from
COVID-19 containment measures and
OPEC+ production limits. A strong
resurgence in global demand
accelerated the segment’s recovery
in the second half of 2021. Overall
volumes increased 4.2% year on year
in 2021, but were 6.2% below 2019
volumes. The pricing environment
for this segment was generally robust
throughout 2021.
+26 %
Planned increase in the capacity
of the Far Eastern railway network
by the end of 2024
Coal
2021
2020
2019
2018
2017
5.3%
-4.8%
-0.9%
3.6%
384
364
383
386
373
Oil products and oil
Metallurgical cargoes
Construction materials
2021
2020
2019
2018
2017
4.2%
-10.0%
-1.9%
0.4%
2021
2020
2019
2018
2017
218
209
232
237
236
2.2%
2021
-2.4%
-3.5%
-1.0%
5.1%
225
220
228
231
219
2020
4.2%
2019
0.9%
2018
-6.8%
2017
153
157
150
149
160
37
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational
Review
FINANCIAL RESULTS
DIVIDENDS
OPERATIONAL PERFORMANCE
Globaltrans delivered excellent results in 2021
converting a favourable market environment
into a strong financial performance.
Our robust financial position was made even
stronger as we further reduced our Net Debt,
all of which is in the local currency with fixed
interest rates. I believe we are well positioned
to weather what lies ahead.
Increased profitability as costs controlled; strong Free
Cash Flow supported successful deleveraging
• Adjusted Revenue rose 6% year on year
to RUB 58.5 billion on the back of the recovery
in gondola rates in H2 2021 coupled with continued
robust pricing in the tank car segment.
• Total Operating Cash Costs were held in check
contributing to an increase in the Adjusted EBITDA
Margin to 50% in 2021 compared to 49% in 2020.
• Adjusted EBITDA rose 8% year on year
to RUB 29.0 billion.
• Strong Free Cash Flow increased 7% year on year
to RUB 16.1 billion despite a 22% increase in Total
CAPEX to RUB 8.4 billion following purchases of tank
cars and increased maintenance CAPEX.
• Net Debt reduced 32% in 2021 to RUB 18.5 billion
compared to the end of 2020; leverage was at a low
level with Net Debt to Adjusted EBITDA at 0.6x
compared to 1.0x at end 2020.
• All the Group’s debt has fixed interest rates
and is denominated in roubles.
Robust above-target interim 2021
dividends delivered; final 2021
dividend on hold
•
Improving dividend capacity
over H1 2021 with gondola prices
recovering enabled payment
of above-target Interim 2021
dividends (regular and special)
of RUB 4.0 billion or RUB 22.50 per
share/GDR1 in September 2021.
• Final dividends for 2021
temporarily suspended in April
2022 due to both technical
limitations regarding upstreaming
cash to the Cyprus holding
company and the objective
of establishing liquidity buffers.
Alexander Shenets
Chief Financial Officer
Adjusted Revenue, RUB mln
Adjusted EBITDA, RUB mln
Net Debt, RUB mln
2021
2020
6%
2021
2020
58.5
54.9
8%
2021
32%
29.0
26.8
2020
18.5
27.0
Net cash
from operating activities, RUB mln
2021
2020
8%
27.2
25.2
Freight Rail Turnover growth resumed
and gondola rates recovered amid
growing demand for Globaltrans’
services
• The Group’s Freight Rail
Turnover (excluding Engaged
Fleet) returned to growth in H2
2021, rising 8% on H1 2021, but
could not fully compensate
for the weather-related delays,
congestion at key client facilities
and sluggish demand in the oil
products and oil segment seen
in H1 2021 with full-year Freight
Rail Turnover 2% lower year
on year2.
• Average Price per Trip rose 11%
year on year in 2021 reflecting
a recovery in gondola market rates
in H2 2021 with continued solid
pricing in the oil products and oil
segment.
• Growing demand for Globaltrans’
services drove the increase in the
number of leased-in gondola cars
with 2.2 thousand units added
and underpinned the purchase
of 381 tank cars, with 197
delivered in 2021. The remainder
was delivered in March 2022 along
with an additional 119 tanks cars
acquired in early 2022.
• Gondola Empty Run Ratio further
improved to 44% (2020: 45%) –
one of the lowest in the Russian
market - reflecting continued
adjustments to cargo and client
mix due to the ongoing impact
of the COVID-19 pandemic.
• Total Empty Run Ratio (for all types
of rolling stock) was unchanged
year on year at 51%.
• Total Fleet declined 4% or 2,582
units to 69,106 units as of the end
of 2021 largely reflecting the sale
of the specialised container
operator SyntezRail in October
2021. The average age of the
Group’s Owned Fleet was 13.8
years as of the end of 2021.
Robust client retention with
successful key contract extensions
in 2021
• Strong portfolio of service
contracts contributed 59% of Net
Revenue from Operation of Rolling
Stock in 2021.
• These long-term service contracts
provide for better volume visibility
and lower pricing volatility
and enable logistical efficiencies.
• Two key service contracts were
successfully extended in 2021:
º Rosneft for 5 years to the end
of March 2026.
º Metalloinvest for 2 years
to the end of 2023 with
serviced volumes increased
to approximately 70%
of Metalloinvest’s freight rail
needs from 50% previously.
Total Operating Cash Costs, RUB mln
Adjusted EBITDA Margin, %
Net Debt to Adjusted EBITDA at year-end
Total CAPEX, RUB mln
Free Cash Flow, RUB mln
2 %
2021
2020
29.8
29.1
2021
2020
50
49
0.6
1.0
2021
22%
2020
7%
2021
2020
8.4
6.9
2021
2020
38
16.1
15.1
1 Global Depositary Receipt.
2 The Group’s Transportation Volumes
(excluding Engaged Fleet) decreased 4% y-o-y
in 2021 and were up 1% in H2 2021 compared
to H1 2021.
39
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
Results in Detail
Non-IFRS financial information
The following tables provide the Group’s key financial and operational information for the years ended
31 December 2021 and 2020.
EU IFRS financial information
Revenue
Total cost of sales, selling and marketing costs and administrative expenses
Operating profit
Finance costs - net
Profit before income tax
Income tax expense
Profit for the year
Profit attributable to:
Owners of the Company
Non-controlling interests
Basic and diluted earnings per share for profit attributable to the equity holders
of the Company during the year (RUB per share)
2020
RUB mln
68,367
(50,664)
18,811
(2,100)
16,712
(4,525)
12,187
10,587
1,600
59.24
2020
2021
Change
Adjusted Revenue
Including
RUB mln
RUB mln
54,934
58,492
2021
Change
Net Revenue from Operation of Rolling Stock
50,527*
54,319*
RUB mln
73,151
(52,630)
21,627
(2,189)
19,438
(4,338)
15,100
12,987
2,113
72.69
%
7%
4%
15%
4%
16%
–4%
24%
23%
32%
23%
Operating lease of rolling stock
Net Revenue from Specialised Container Transportation
Total Operating Cash Costs
Including
Empty Run Cost
Employee benefit expense
Repairs and maintenance
Fuel and spare parts - locomotives
Adjusted EBITDA
Adjusted EBITDA Margin, %
Total CAPEX (including maintenance CAPEX)
Free Cash Flow
Attributable Free Cash Flow
1,932
1,923*
29,121
1,832
1,643*
29,751
15,799*
15,429*
4,154
4,261
1,630
5,491
3,969
1,972
26,807
29,044
49%
6,941
15,103
13,503
50%
8,439
16,131
14,018
%
6%
8%
–5%
–15%
2%
-2%
32%
-7%
21%
8%
22%
7%
4%
2020
2021
Change
Debt profile
Cash generated from operations (after changes in working capital)
Tax paid
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
RUB mln
RUB mln
28,278
(3,052)
25,226
(6,528)
(20,357)
30,058
(2,808)
27,250
(6,854)
(12,517)
%
6%
–8%
8%
5%
–39%
Total debt
Cash and cash equivalents
Net Debt
Net Debt to Adjusted EBITDA (x)
As of 31 December
2020
As of 31 December
2021
Change
RUB mln
RUB mln
32,015
4,978
27,037
1.0
31,318
12,855
18,464
0.6
%
–2%
158%
–32%
40
41
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
Operational information
Adjusted Revenue
Freight Rail Turnover, billion tonnes-km (excluding Engaged Fleet)
Transportation Volume, million tonnes (excluding Engaged Fleet)
Average Price per Trip, RUB
Average Rolling Stock Operated, units
Average Distance of Loaded Trip, km
Average Number of Loaded Trips per Railcar
Total Empty Run Ratio (for all types of rolling stock), %
Empty Run Ratio for gondola cars, %
Share of Empty Run Kilometres paid by Globaltrans, %
Total Fleet, units (at year end), including:
Owned Fleet, units (at year end)
Leased-in Fleet, units (at year end)
Leased-out Fleet, units (at year end)
Average age of Owned Fleet, years (at year end)
Total number of employees (at year end)
REVENUE
2020
150.3
88.9
36,909
57,484
1,681
23.8
51%
45%
99%
71,688
67,762
3,926
7,032
12.4
1,697
2021
146.8
85.1
41,075
57,347
1,716
23.1
51%
44%
99%
69,106
65,067
4,039
8,458
13.8
1,777
Change, %
–2%
–4%
11%
0%
2%
–3%
–4%
–4%
3%
20%
5%
In 2021, the Group’s Total revenue increased 7% year on year to RUB 73,151 million reflecting a 6% year-on-year rise
in Adjusted Revenue and an 18% year-on-year increase in “pass through item “Infrastructure and locomotive tariffs: loaded
trips”. Net Revenue from Operation of Rolling Stock (a key component of Adjusted Revenue) benefited from improved
pricing conditions in the gondola segment in the second half of 2021 and increased 8% year on year.
The following table provides details of Total revenue, broken down by revenue-generating activity, for the years ended
31 December 2021 and 2020.
Adjusted Revenue is a non-IFRS financial measure defined as “Total revenue” adjusted for “pass through” items:
“Infrastructure and locomotive tariffs: loaded trips” and “Services provided by other transportation organisations”.
“Infrastructure and locomotive tariffs: loaded trips” comprises revenue resulting from tariffs that customers pay to the Group
and the Group pays on to RZD, which are reflected in equal amounts in both the Group’s Total revenue and Cost of sales.
“Services provided by other transportation organisations” is revenue resulting from the tariffs that customers pay to the
Group and the Group pays on to third-party rail operators for subcontracting their rolling stock, which are reflected in equal
amounts in both the Group’s Total revenue and Cost of sales. The net result of Engaged Fleet operations is reflected as Net
Revenue from Engaged Fleet and is included in Adjusted Revenue.
The Group’s Adjusted Revenue was RUB 58,492 million up 6% year on year primarily as a result of the 8% year-on-year rise
in Net Revenue from Operation of Rolling Stock.
The following table provides details of Adjusted Revenue for the years ended 31 December 2021 and 2020 and its
reconciliation to Total revenue.
Total revenue
Minus “pass through” items
Infrastructure and locomotive tariffs: loaded trips
Services provided by other transportation organisations
Adjusted Revenue
2020
2021
Change
RUB mln
RUB mln
68,367
73,151
10,957
2,476
54,934
12,964
1,695
58,492
%
7%
18%
–32%
6%
The principal components of Adjusted Revenue include: (i) Net Revenue from Operation of Rolling Stock, (ii) Revenue
from operating leasing of rolling stock, (iii) Net Revenue from Specialised Container Transportation, (iv) Net Revenue from
Engaged Fleet, and (v) other revenues generated by the Group’s auxiliary business activities, including freight forwarding,
repair and maintenance services provided to third parties, and other.
2020
2021
Change
The following table provides a breakdown of the components of Adjusted Revenue for the years ended 31 December 2021
and 2020.
Railway transportation – operators services (tariff borne by the Group)1
Railway transportation – operators services (tariff borne by the client)
Operating lease of rolling stock
Revenue from specialised container transportation
Other
Total revenue
RUB mln
RUB mln
27,197
36,671
1,932
2,168
400
68,367
31,744
37,238
1,832
1,824
514
73,151
%
17%
2%
–5%
–16%
29%
7%
Net Revenue from Operation of Rolling Stock
Operating leasing of rolling stock
Net Revenue from Specialised Container Transportation
Net Revenue from Engaged Fleet
Other
Adjusted Revenue
1
Includes “Infrastructure and locomotive tariffs: loaded trips” for 2021 of RUB 12,964 million (2020: RUB 10,957 million) and “Services provided by other
transportation organisations” of RUB 1,695 million (2020: RUB 2,476 million).
42
2021
Change
2020
RUB mln
50,527*
1,932
1,923*
152*
400
RUB mln
54,319*
1,832
1,643*
184*
514
54,934
58,492
%
8%
–5%
–15%
21%
29%
6%
43
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
Net Revenue from Operation of Rolling Stock
Net Revenue from Operation of Rolling Stock is a non-IFRS financial measure, derived from management accounts,
describing the net revenue generated from freight rail transportation services which is adjusted for respective “pass
through” loaded railway tariffs charged by RZD (included in the EU IFRS line item “Infrastructure and locomotive tariffs:
loaded trips”).
The Group’s Net Revenue from Operation of Rolling Stock, which accounted for 93% of the Group’s Adjusted Revenue
in 2021, increased 8% year on year to RUB 54,319 million*, principally due to the improved pricing conditions in the gondola
segment in the second half of 2021.
Other revenue
Other revenue, comprising 1% of the Group’s Adjusted Revenue in 2021, includes revenues generated by the Group’s
auxiliary business activities such as freight forwarding, repair and maintenance services provided to third parties,
and other. It increased 29% year on year to RUB 514 million in 2021 primarily due to higher revenues from repair
and maintenance services.
COST OF SALES, SELLING AND MARKETING COSTS AND ADMINISTRATIVE EXPENSES
• Average Price per Trip was RUB 41,075, an 11% year-on-year increase resulting from a recovery in gondola pricing
and continued solid pricing in the tank cars segment.
The following table provides a breakdown of Cost of sales, selling and marketing costs and administrative expenses for the
years ended 31 December 2021 and 2020.
• Average Rolling Stock Operated remained unchanged year on year at 57,347 units.
• Average Number of Loaded Trips per Railcar declined 3% year on year as weather related delays at the main export
ports as well as congestion at key gondola client facilities impacted the gondola segment performance.
Revenue from operating leasing of rolling stock
Cost of sales
Selling and marketing costs
Administrative expenses
Revenue from operating leasing of rolling stock contributed 3% of the Group’s Adjusted Revenue in 2021 and was 5% lower
year on year at RUB 1,832 million reflecting the decline in average leasing rates in the tank car segment.
Total cost of sales, selling and marketing costs and administrative expenses
2020
2021
Change
RUB mln
RUB mln
47,066
205
3,394
50,664
48,334
249
4,046
52,630
%
3%
22%
19%
4%
Net Revenue from Specialised Container Transportation
Net Revenue from Specialised Container Transportation is a non-IFRS financial measure, derived from management
accounts, that represents the revenue generated from the specialised container operations (included in the EU IFRS line
item: “Revenue from specialised container transportation”) less the respective “pass through” loaded railway tariffs charged
by RZD (included in the EU IFRS line item “Infrastructure and locomotive tariffs: loaded trips”).
Net Revenue from Specialised Container Transportation, which accounted for 3% of Adjusted Revenue in 2021, was
down 15% year on year to RUB 1,643 million* in 2021 due the deconsolidation of this business segment reflecting the sale
of SyntezRail from October 2021.
Net Revenue from Engaged Fleet
Net Revenue from Engaged Fleet is a non-IFRS financial measure, derived from management accounts, that represents
the net sum of the price charged to clients for transportation by the Group utilising Engaged Fleet less the respective “pass-
through” loaded railway tariffs charged by RZD (included in the EU IFRS line item “Infrastructure and locomotive tariffs:
loaded trips”) and less the “pass-through” cost of engaging fleet from third- party rail operators (included in the EU IFRS line
item “Services provided by other transportation organisations”).
Net Revenue from Engaged Fleet, which contributed less than 1% of the Group’s Adjusted Revenue in 2021, increased
21% year on year in 2021 to RUB 184 million*, largely reflecting a rise in the number of Engaged Fleet operations in the oil
products and oil segment.
A 4% year-on-year rise in the Group’s Total cost of sales, selling and marketing costs and administrative expenses to RUB
52,630 million in 2021 was principally due to the following factors:
• “Pass through” cost items (a combination of “Infrastructure and locomotive tariffs: loaded trips” and “Services
provided by other transportation organisations”) increased to RUB 14,659 million up 9% year on year resulting
mainly from an increase in the proportion of clients that pay Infrastructure and locomotive tariffs: loaded trips
through the Group.
• The Group’s Total cost of sales, selling and marketing costs and administrative expenses adjusted for “pass-
through” cost items rose 2% year on year to RUB 37,971 million in 2021, due to:
º Optimisation measures that helped the Company to hold Total Operating Cash Costs relatively steady,
increasing just 2% year on year to RUB 29,751 million in 2021. Reductions in Empty Run Costs, Repairs
and maintenance, Engagement of locomotive crews and Expense relating to short-term leases (rolling
stock) were more than offset by year-on-year increases in Employee benefit expense, Fuel and spare parts -
locomotives expenses and Infrastructure and Locomotive Tariffs - Other Tariffs.
º Total Operating Non-Cash Costs increased 1% year on year to RUB 8,221 million as a 5% year-on-year decrease
in the Depreciation of property, plant and equipment and a 99% year-on-year decline in the Amortisation
of intangible assets were more than offset by a 72% rise in the Depreciation of right-of-use assets as the Group
increased the number of leased-in gondola cars.
44
45
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
In order to show the dynamics and nature of the Group’s cost base, individual items of Total cost of sales, selling
and marketing costs and administrative expenses have been regrouped as shown below:
Services provided by other transportation organisations
2020
2021
Change
“Pass through” cost items
Infrastructure and locomotive tariffs: loaded trips
Services provided by other transportation organisations
Total cost of sales, selling and marketing costs and administrative expenses
(adjusted for “pass through” cost items)
Total Operating Cash Costs
Empty Run Costs
Employee benefit expense
Repairs and maintenance
Fuel and spare parts – locomotives
Infrastructure and Locomotive Tariffs - Other Tariffs
Engagement of locomotive crews
Expense relating to short-term leases (rolling stock)
Other Operating Cash Costs
Total Operating Non-Cash Costs
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Loss on derecognition arising on capital repairs
Net impairment losses on trade and other receivables
Amortisation of intangible assets
Net loss/(gain) on sale of property, plant and equipment
RUB mln
RUB mln
13,434
10,957
2,476
37,231
29,121
15,799*
4,154
4,261
1,630
998*
421
824
1,034
8,109
6,969
655
420
6
60
0.3
14,659
12,964
1,695
37,971
29,751
15,429*
5,491
3,969
1,972
1,219*
294
274
1,103
8,221
6,643
1,127
484
8
0.7
(42)
Total cost of sales, selling and marketing costs and administrative expenses
50,664
52,630
%
9%
18%
–32%
2%
2%
–2%
32%
–7%
21%
22%
–30%
–67%
7%
1%
–5%
72%
15%
40%
–99%
NM
4%
“Pass through” cost items
Infrastructure and locomotive tariffs: loaded trips
Infrastructure and locomotive tariffs: loaded trips is in principle a “pass through” cost item for the Group1 and is reflected
in equal amounts in both the Group’s Total revenue and Cost of sales.
The 18% year-on-year increase in this item in 2021 to RUB 12,964 million primarily reflected the higher proportion of clients
that pay infrastructure and locomotive tariffs: loaded trips through the Group.
Services provided by other transportation organisations is in principle a “pass through” cost item for the Group and is
reflected in equal amounts in both the Group’s Total revenue and Cost of sales and includes tariffs that the Group pays
to third-party rail operators for subcontracting their rolling stock (Engaged Fleet).
Services provided by other transportation organisations fell 32% year on year to RUB 1,695 million in 2021 primarily due to a
lower number of Engaged Fleet operations in the gondola segment.
Total Operating Cash Costs
Total Operating Cash Costs (a non-IFRS financial measure) represents operating cost items payable in cash and calculated
as “Total cost of sales, selling and marketing costs and administrative expenses” less the “pass through” cost items
and non-cash cost items.
Total Operating Cash Costs for 2021 of RUB 29,751 million were 2% higher compared to 2020 due to a combination of the
factors described below.
The following table provides a breakdown of the Total Operating Cash Costs for the year ended 31 December 2021
and 2020.
Empty Run Costs
Employee benefit expense
Repairs and maintenance
Fuel and spare parts - locomotives
Infrastructure and Locomotive Tariffs - Other Tariffs
Engagement of locomotive crews
Expense relating to short-term leases (rolling stock)
Other Operating Cash Costs
Total Operating Cash Costs
2021
2020
2021
Change
% of total
RUB mln
RUB mln
52%
18%
13%
7%
4%
1%
1%
4%
100%
15,799*
15,429*
4,154
4,261
1,630
998*
421
824
1,034
29,121
5,491
3,969
1,972
1,219*
294
274
1,103
29,751
%
–2%
32%
–7%
21%
22%
–30%
–67%
7%
2%
1 Under contracts where the RZD tariff is borne by the Group, the Group has a contractual relationship with the client. The Group sets the terms
of the transactions, such as selling and payment terms and, in some cases, bears credit risk and controls the flow of receipts and payments.
46
47
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
Empty Run Costs
Empty Run Costs (a non-IFRS financial measure meaning costs payable to RZD for forwarding empty railcars) is derived from
management accounts and presented as part of the “Infrastructure and locomotive tariffs: empty run trips and other tariffs”
component of “Cost of sales” reported under EU IFRS.
Empty Run Costs, which accounted for 52% of the Group’s Total Operating Cash Costs in 2021, declined 2% year on year
to RUB 15,429 million* due to:
• A 3.7% year-on-year increase in regulated RZD tariffs for the traction of empty railcars.
• A 2% year-on-year decrease in the Group’s Freight Rail Turnover.
• A Total Empty Run Ratio (for all types of rolling stock) that was unchanged year on year at 51% with the Share of Empty
Run Kilometers paid by Globaltrans also remaining broadly stable year on year at 99%.
Employee benefit expense
Inflation driven growth in wages and salaries.
Employee benefit expense for 2021, which represented 18% of the Group’s Total Operating Cash Costs, increased 32% year
on year to RUB 5,491 million. This resulted from:
•
• A 5% year-on-year increase in the average headcount due to the continued shift to in-house locomotive crews.
•
Increases in bonuses reflecting the strong 2021 business performance and an increase in reserves for the share
price linked key management remuneration programme.
Repairs and maintenance
Repairs and maintenance costs, which comprised 13% of the Group’s Total Operating Cash Costs in 2021, declined 7% year
on year to RUB 3,969 million as lower prices for depot repairs and expenses for other spare parts and repair works were
partially offset by the increase in depot repairs undertaken in the reporting year.
Fuel and spare parts - locomotives
Fuel and spare parts - locomotives expenses, which accounted for 7% of the Group’s Total Operating Cash Costs in 2021, rose
21% year on year to RUB 1,972 million in 2021 reflecting an inflation-driven rise in the cost of fuel and certain spare parts along
with greater usage of owned locomotives in light of the post-COVID recovery in the oil products and oil sector.
Infrastructure and Locomotive Tariffs - Other Tariffs
Infrastructure and Locomotive Tariffs - Other Tariffs (a non-IFRS financial measure, derived from management accounts),
which is presented as part of the ”Infrastructure and locomotive tariffs: empty run trips and other tariffs” component of cost
of sales reported under EU IFRS. This cost item includes the costs of the relocation of rolling stock to and from maintenance,
the transition of purchased rolling stock to its first place of commercial utilisation, and the relocation of rolling stock in and
from lease operations, as well as other expenses.
Infrastructure and Locomotive Tariffs - Other Tariffs represented 4% of the Group’s Total Operating Cash Costs in 2021
and rose 22% year on year to RUB 1,219 million* in 2021, impacted by higher regulated RZD tariffs and increased costs
for relocating rolling stock to and from maintenance.
Engagement of locomotive crews
Costs related to the engagement of locomotive crews from RZD in 2021 (1% of the Group’s Total Operating Cash Costs)
declined 30% year on year to RUB 294 million due to the reduction in the amount of outsourcing of locomotive crews as
the Group increased its use of in-house crews.
Expense relating to short-term leases (rolling stock)
In 2021, Expense relating to short-term leases (rolling stock), representing 1% of the Group’s Total Operating Cash Costs, fell
67% year on year to RUB 274 million primarily due to the intentional decrease in the number of leased-in tank cars.
Other Operating Cash Costs
Other Operating Cash Costs (a non-IFRS financial measure) include the following cost items: “Advertising and promotion”,
“Auditors’ remuneration”, “Communication costs”, “Information services”, “Legal, consulting and other professional fees”,
“Expense relating to short-term leases (tank containers)”, Expense relating to short-term leases (office)”, “Taxes (other than
income tax and value added taxes)” and “Other expenses”.
The following table provides a breakdown of the Other Operating Cash Costs for the years ended 31 December 2021
and 2020.
Expense relating to short-term leases (office)
Legal, consulting and other professional fees
Auditors’ remuneration
Advertising and promotion
Taxes (other than on income and value added taxes)
Communication costs
Expense relating to short-term leases (tank containers)
Information services
Other expenses
Other Operating Cash Costs
2020
2021
Change
RUB mln
RUB mln
109
69
55
35
25
26
24
16
675
1,034
99
74
57
46
27
25
23
16
735
1,103
%
–10%
7%
3%
32%
11%
–4%
–1%
5%
9%
7%
Other Operating Cash Costs, which comprised 4% of the Group’s Total Operating Cash Costs, climbed 7% year on year to RUB
1,103 million in 2021.
48
49
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
Total Operating Non-Cash Costs
Total Operating Non-Cash Costs (a non-IFRS financial measure) include the following cost items: “Depreciation of property,
plant and equipment”, “Amortisation of intangible assets”, “Loss on derecognition arising on capital repairs”, “Depreciation
of right-of-use assets”, “Net impairment losses on trade and other receivables”, “Impairment/(reversal of impairment)
of property, plant and equipment” and “Net (gain)/loss on sale of property, plant and equipment”.
The following table provides a breakdown of the Total Operating Non-Cash Costs for the years ended 31 December 2021
and 2020.
Profit for the year
Plus (Minus)
Income tax expense
Finance costs – net
The following table provides details on Adjusted EBITDA for the years ended 31 December 2021 and 2020, and its
reconciliation to EBITDA and Profit for the year.
2020
2021
Change
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Loss on derecognition arising on capital repairs1
Net impairment losses on trade and other receivables
Amortisation of intangible assets
Net loss/(gain) on sale of property, plant and equipment
Total Operating Non-Cash Costs
2020
2021
Change
Net foreign exchange transaction gains/(losses) on financing activities
RUB mln
RUB mln
6,969
6,643
655
420
6
60
0.3
8,109
1,127
484
8
0.7
(42)
8,221
%
-5%
72%
15%
40%
–99%
NM
1%
Amortisation of intangible assets
Depreciation of right-of-use assets
Depreciation of property, plant and equipment
EBITDA
Minus (Plus)
Loss on derecognition arising on capital repairs
Net foreign exchange transaction gains/(losses) on financing activities
Other gains – net
Net (loss)/gain on sale of property, plant and equipment
RUB mln
RUB mln
12,187
15,100
4,525
2,100
147
60
655
6,969
26,642
(420)
147
108
(0.3)
4,338
2,189
(10)
0.7
1,127
6,643
29,388
(484)
(10)
796
42
%
24%
–4%
4%
NM
–99%
72%
–5%
10%
15%
NM
639%
NM
8%
A 1% year-on-year increase in Total Operating Non-Cash Costs to RUB 8,221 million in 2021 stemmed primarily from: a 72%
year-on-year rise in Depreciation of right-of-use assets as the Group increased the number of leased-in gondola cars, a 5%
year-on-year decline in Depreciation of property, plant and equipment and a 99% year-on-year decline in Amortisation
of intangible assets reflecting the full amortisation of intangible assets linked to the service contract with MMK.
ADJUSTED EBITDA (NON-IFRS FINANCIAL MEASURE)
EBITDA (a non-IFRS financial measure) represents “Profit for the period” before “Income tax expense”, “Finance costs -
net” (excluding “Net foreign exchange transaction (gains)/losses on financing activities”), “Depreciation of property, plant
and equipment”, “Amortisation of intangible assets” and “Depreciation of right-of-use assets”.
Adjusted EBITDA (a non-IFRS financial measure) represents EBITDA excluding “Net foreign exchange transaction (gains)/
losses on financing activities”, “Share of profit/(loss) of associate”, “Other gains/(losses) - net”, “Net gain/(loss) on sale
of property, plant and equipment”, “Impairment/(reversal of impairment) of property, plant and equipment”, “Impairment
of intangible assets”, “Loss on derecognition arising on capital repairs” and “Reversal of impairment of intangible assets”.
The Group’s 2021 Adjusted EBITDA rose 8% year on year to RUB 29,044 million. The Adjusted EBITDA Margin widened
to 50% in 2021 from 49% in 2020 reflecting the 6% year-on-year increase in Adjusted Revenue while Total Operating Cash
Costs rose 2% year on year.
1 The cost of each major periodic capital repair (including the replacement of significant components) is recognised in the carrying amount of the relevant
item of rolling stock repaired and separately depreciated. Simultaneously, the carrying amount of the repaired rolling stock that is attributable to the
previous periodic capital repair and/or significant component replacement, if any, is derecognised and debited in “Cost of sales” in the income statement as
“Loss on derecognition arising on capital repairs” for the period during which the repair was carried out.
50
Adjusted EBITDA
26,807
29,044
FINANCE INCOME AND COSTS
The following table provides a breakdown of Finance income and costs for the years ended 31 December 2021 and 2020.
2020
2021
Change
RUB mln
RUB mln
%
Interest expense:
Bank borrowings
Non-convertible bonds
Interest expenses on loans
Other interest expense
(1,482)
(808)
(5)
(2)
(1,483)
(772)
—
—
Total interest expense calculated using the effective interest rate method
(2,298)
(2,255)
0%
–4%
–100%
–100%
-2%
Leases with financial institutions
Other lease liabilities
Total interest expense
Other finance costs
Total finance costs
(74)
(113)
(2,485)
(25)
(2,510)
—
–100%
(202)
(2,457)
(50)
(2,507)
78%
–1%
96%
0%
51
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
(Continued from the previous page)
Interest income:
Bank balances
Short term deposits
Interest income on loans
Total interest income calculated using the effective interest rate method
Finance leases - related parties
Finance leases - third parties
Total interest income
Other finance income
Total finance income
Net foreign exchange transaction (losses)/gains on borrowings and other liabilities
Net foreign exchange transaction gains/(losses) on cash and cash equivalents and other
monetary assets
Net foreign exchange transaction gains/(losses) on financing activities
Net finance costs
Finance costs
2020
2021
Change
RUB mln
RUB mln
%
Income tax expense
190
27
0.1
217
—
47
264
—
264
(6)
153
147
209
72
3
284
0.4
42
326
0.8
327
3
(12)
(10)
(2,100)
(2,189)
10%
166%
NM
31%
NM
–12%
24%
NM
24%
NM
NM
NM
4%
Income tax expense fell 4% year on year to RUB 4,338 million in 2021 following a decline in the average tax rate to 22%
in 2021 compared to 27% in 2020.
Profit for the year
The 24% year-on-year increase in the Group’s Profit for the year to RUB 15,100 million reflected the factors described above.
Profit for the year attributable to the owners of the Company increased 23% year on year to RUB 12,987 million reflecting
the factors described above.
LIQUIDITY AND CAPITAL RESOURCES
In 2021, the Group’s capital expenditure consisted principally of maintenance CAPEX (including capital repairs) and the
selective acquisition of fleet.
The Group was able to meet its liquidity and capital expenditure needs through operating cash flow, available cash
and cash equivalents and proceeds from borrowings.
The Group manages its liquidity based on expected cash flows. As at 31 December 2021, the Group had Net Working
Capital of RUB 2,571 million*. Given its anticipated operating cash flow and borrowings, the Group believes that it has
sufficient working capital to operate successfully.
Total finance costs for 2021 remained unchanged year on year at RUB 2,507 million.
Finance income
Cash flows
In 2021, the Group’s Total finance income increased 24% year on year to RUB 327 million primarily due to increases in short
term deposits and bank balances along with the rise in deposit rates over the period.
Net foreign exchange transaction gains/(losses) on financing activities
The Group had Net foreign exchange transaction losses on financing activities of RUB 10 million in 2021 compared to Net
foreign exchange transaction gains on financing activities of RUB 147 million in 2020. This resulted from foreign exchange
volatility on the available cash and cash equivalents denominated in foreign currency.
PROFIT
Profit before income tax
The Group reported an increase of 16% in Profit before income tax to RUB 19,438 million in 2021 compared to 2020,
reflecting in large part the 15% year-on-year increase in the Group’s Operating profit to RUB 21,627 million, which was largely
linked to the factors described above.
52
The following table sets out the principal components of the Group’s consolidated cash flow statement for the years ended
31 December 2021 and 2020.
Cash flows from operating activities
Changes in working capital:
Inventories
Trade receivables
Other assets
Other receivables
Trade and other payables
Contract liabilities
Cash generated from operations
Tax paid
Net cash from operating activities
2020
2021
RUB mln
RUB mln
26,932
29,104
1,346
816
(427)
1,439
10
(208)
(283)
28,278
(3,052)
25,226
954
620
(139)
(488)
23
524
414
30,058
(2,808)
27,250
53
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
(Continued from the previous page)
Cash flows from investing activities
Cash inflow from disposal of subsidiary undertakings - net of cash disposed of
Loans granted to third parties
Loan repayments received from third parties
Purchases of property, plant and equipment
Proceeds from sale of property plant and equipment
Interest received
Receipts from finance lease receivable
Other
Net cash used in investing activities
Cash flows from financing activities
Net cash inflows from borrowings and financial leases1:
Proceeds from bank borrowings
Repayments of borrowings
Repayments of non-convertible unsecured bonds
Principal elements of lease payments for leases with financial institutions
Principal elements of lease payments for other lease liabilities
Interest paid on bank borrowings and non-convertible unsecured bonds
Interest paid on leases with financial institutions
Interest paid on lease liabilities
Dividends paid to the owners of the Company
Dividends paid to non-controlling interests in subsidiaries
Purchase of treasury shares
Prepayment for acquisition of non-controlling interest
Payments to non-controlling interest
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Exchange gains/(losses) on cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at the end of the year
2020
2021
RUB mln
RUB mln
—
—
4
1,110
(75)
79
Net cash from operating activities
Net cash from operating activities rose 8% year on year to RUB 27,250 million due to:
• The increase in Cash generated from operations (after “Changes in working capital”) which increased 6% year
on year to RUB 30,058 million largely due to the 8% year-on-year increase in Cash flows from operating activities.
• Tax paid was 8% lower year on year at RUB 2,808 million primarily reflecting the decline in the average tax rate.
(6,941)
(8,439)
Net cash used in investing activities
67
264
78
—
78
326
108
(41)
(6,528)
(6,854)
1,946
23,265
(19,603)
—
(1,716)
(672)
(2,315)
(81)
(114)
(16,637)
(2,272)
(31)
—
(180)
(20,357)
(1,659)
116
6,522
4,978
1,521
18,058
(15,287)
(1,250)
—
(1,068)
(2,239)
—
(183)
(9,023)
(1,225)
—
(300)
—
(12,517)
7,879
(3)
4,978
12,855
Net cash used in investing activities increased 5% year on year to RUB 6,854 million largely reflecting:
• A 22% or RUB 1,498 million year-on-year increase in Purchases of property, plant and equipment (on a cash basis;
including maintenance CAPEX) to RUB 8,439 million. This was primarily due to the acquisition of 381 tank cars
in response to the accelerated post-COVID recovery in the oil products and oil segment in the second half of 2021
along with a rise in maintenance CAPEX.
• RUB 1,110 million of cash inflows from the sale of the Group’s 60% stake in the non-core specialised container
subsidiary SyntezRail in October 2021.
Net cash used in financing activities
The 39% year-on-year decline in Net cash used in financing activities which decreased to RUB 12,517 million in 2021, was
due to the factors described below:
• The Group continued refinancing its debt portfolio in 2021 with repayments of borrowings largely matched
by proceeds from borrowings. The net cash inflows from borrowings and financial leases declined 22% year
on year to RUB 1,521 million in 2021.
Interest paid (including “Interest paid on bank borrowings and non-convertible unsecured bonds” and “Interest
paid on leases with financial institutions”) was 7% lower year on year at RUB 2,239 million in 2021.
•
• Cash outflows in the amount of RUB 300 million related to the prepayment for the acquisition of the outstanding
40% stake in BaltTransServis.
• As per the announced targets, the amount of dividends paid to owners of the Company in 2021 (which includes
total final dividends paid in respect of second half of 2020 and total interim dividends paid in respect of first half
of 2021) declined 46% to RUB 9,023 million largely due to the weak pricing environment in the gondola segment
which continued to the end of first half of 2021.
• Dividends paid to non-controlling interests in subsidiaries decreased 46% year on year to RUB 1,225 million in 2021
as Globaltrans upstreamed a lower amount of dividends year on year from its non-wholly owned subsidiaries.
1 Net cash inflows (outflows) from borrowings and financial leases (a non-IFRS financial measure) is defined as the balance between the following line items:
“Proceeds from bank borrowings”, “Proceeds from issue of non-convertible unsecured bonds”, “Repayments of borrowings” and “Principal elements
of lease payments for leases with financial institutions”.
54
55
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
Capital expenditure
Total CAPEX (a non-IFRS financial measure) calculated on a cash basis as the sum of “Purchases of property, plant
and equipment” (which includes maintenance CAPEX), “Purchases of intangible assets”, “Acquisition of subsidiary
undertakings - net of cash acquired” and “Principal elements of lease payments for leases with financial institutions” (as part
of the capital expenditures was financed with a finance lease).
In 2021 the Group’s Total CAPEX (on a cash basis, including maintenance CAPEX) was 22% or RUB 1,498 million higher year
on year at RUB 8,439 million, reflecting:
• A 14% or RUB 809 million year-on-year increase in Maintenance CAPEX to RUB 6,612 million* due to a larger
number of capital repairs and higher wheel pairs costs.
• A 60% or RUB 689 million year-on-year increase in Expansion CAPEX (on a cash basis) to RUB 1,828 million1 mainly
consisting of the acquisition of 381 tank cars and 350 specialised containers (compared to the purchase of 300
flat cars and 151 specialised containers in the previous year).
The Group’s capital expenditure (including maintenance CAPEX) on an accrual basis was RUB 7,994 million in 2021 (2020:
RUB 8,626 million). The difference between capital expenditure given on a cash basis and on an accrual basis is principally
because of a time lag between the prepayments for and the delivery of rolling stock.
Free Cash Flow increased 7% year on year or RUB 1,028 million to RUB 16,131 million in 2021, primarily due to:
• A 6% or RUB 1,779 million year-on-year increase in Cash generated from operations (after “Changes in working
capital”) to RUB 30,058 million.
• Total CAPEX (including maintenance CAPEX) of RUB 8,439 million which was 22% or RUB 1,498 million higher year
on year.
• Lower Tax paid, down 8% or RUB 244 million year on year to RUB 2,808 million.
• A 59% or RUB 395 million year-on-year rise in Principal elements of lease payments for other lease liabilities which
rose to RUB 1,068 million as the Group substantially increased the number of leased-in gondola fleet to meet
the growing demand for its services.
The following table sets out details on Free Cash Flow and Attributable Free Cash Flow for the years ended 31 December
2021 and 2020, and its reconciliation to Cash generated from operations.
Cash generated from operations (after “Changes in working capital”)
Total CAPEX (including maintenance CAPEX)
Tax paid
The following table sets out the principal components of the Group’s Total CAPEX for the years ended 31 December 2021
and 2020.
Interest paid on bank borrowings and non-convertible unsecured bonds
Principal elements of lease payments for other lease liabilities
Purchase of property, plant and equipment
Purchase of intangible assets
Total CAPEX
Not included
Principal elements of lease payments for leases with financial institutions2
Free Cash Flow
2020
RUB mln
6,941
—
6,941
1,716
2021
Change
RUB mln
8,439
—
8,439
%
22%
—
22%
—
–100%
Interest paid on leases with financial institutions
Interest paid on other lease liabilities
Cash inflow from disposal of subsidiary undertakings - net of cash disposed of
Prepayment for acquisition of non-controlling interest
Free Cash Flow2
Minus
Adjusted Profit Attributable to Non-controlling Interests
Attributable Free Cash Flow2
2020
RUB mln
28,278
(6,941)
(3,052)
(2,315)
(672)
(81)
(114)
—
—
15,103
1,600
13,503
2021
Change
RUB mln
30,058
(8,439)
(2,808)
(2,239)
(1,068)
%
6%
22%
–8%
–3%
59%
—
–100%
(183)
1,110
(300)
16,131
2,113
14,018
61%
NM
NM
7%
32%
4%
Free Cash Flow (a non-IFRS financial measure) is calculated as “Cash generated from operations” (after “Changes in working
capital”) less “Tax paid”, “Purchases of property, plant and equipment” (including maintenance CAPEX), “Purchases
of intangible assets”, “Acquisition of subsidiary undertakings - net of cash acquired”, “Principal elements of lease payments
for leases with financial institutions”, “Principal elements of lease payments for other lease liabilities”, “Interest paid
on other lease liabilities”, “Interest paid on bank borrowings and non-convertible unsecured bonds”, “Interest paid on leases
with financial institutions” and “Acquisition of non-controlling interest” plus “Cash inflow from disposal of subsidiary
undertakings – net of cash disposed of”.
Including “Purchases of intangible assets”.
1
2 Free Cash Flow, Attributable Free Cash Flow and Total CAPEX are presented net of principal elements of lease payments for leases with financial institutions
for 2020. During the first six months of 2020 the entire financial lease portfolio was refinanced to bilateral loans, therefore principal elements of lease
payments were eliminated.
56
Capital resources
As of 31 December 2021, the Group’s financial indebtedness consisted of borrowings and non-convertible unsecured bonds
for an aggregate principal amount of RUB 31,318 million (including accrued interest of RUB 398 million*), a decrease of 2%
compared to the end of 2020.
Under IFRS 16, Other lease liabilities (not included in Total debt) of RUB 5,842 million were recognised on the balance
sheet as of 31 December 2021 (31 December 2020: RUB 1,405 million) which was primarily related to the long-term
leasing of certain fleet and offices. The increase largely reflects a significant rise in the number of leased-in gondola cars
in response to strong demand for the Group’s services in 2021.
The Group’s Net Debt decreased 32% to RUB 18,464 million compared to 31 December 2020 with the Net Debt to Adjusted
EBITDA ratio improving to 0.6x compared to 1.0x at the end of 2020.
57
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
The following table sets out details on the Group’s total debt, Net Debt and Net Debt to Adjusted EBITDA at 31 December
2021 and 2020, and the reconciliation of Net Debt to Total debt.
RELATED PARTY TRANSACTIONS
Total debt
Minus
Cash and cash equivalents
Net Debt
Net Debt to Adjusted EBITDA
As of 31 December
2020
As of 31 December
2021
RUB mln
32,015
4,978
27,037
1.0
RUB mln
31,318
12,855
18,464
0.6
Change
%
–2%
158%
–32%
Rouble-denominated borrowings accounted for 100% of the Group’s debt portfolio as of 31 December 2021. The Russian
rouble is the functional currency of the Company.
The weighted average effective interest rate rose to 7.5% as of 31 December 2021 (31 December 2020: 6.9%) reflecting
a backdrop of higher rates across the financial markets in Russia. All of the Group’s debt had fixed interest rates as of the
end of 2021.
The Group has a balanced maturity profile supported by the Group’s cash flow generation, available cash and cash
equivalents, as well as undrawn borrowing facilities of RUB 42,888 million as of 31 December 2021.
The following table gives the maturity profile of the Group’s borrowings (including accrued interest of RUB 398 million*) as
of 31 December 2021.
As of 31 December 2021
RUB mln
3,318*
2,631*
5,473*
2,246*
11,189*
5,431*
1,031*
31,318
Q1 2022
Q2 2022
Q3 2022
Q4 2022
2023
2024
2025
Total
58
The information below represents an extract from Note 35 to the Group’s Consolidated Management Report
and Consolidated Financial Statements which is included in full in the Financial Statements section of this Annual Report.
For the purposes of financial statements, parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in making financial and operational decisions as
defined by IAS 24 “Related Party Disclosures”. In considering each possible related party relationship, attention is directed
to the substance of the relationship, not merely the legal form. Related parties may enter into transactions, which
unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions
and amounts as transactions between unrelated parties.
Litten Investments Ltd, controlled by a Director of the Company, has a shareholding in the Company of 5.1% as at 31
December 2021 (31 December 2020: 5.1%)1. Goldriver Resources Ltd, controlled by a Director of the Company, has
a shareholding in the Company of 3.1% as at 31 December 2021 (31 December 2020: 4.0%)2. As at 31 December 2021,
another 0.2% (2020: 0.2%) of the shares of the Company is controlled by Directors and key management of the Company.
The following transactions were carried out with related parties:
Key management compensation
Key management salaries and other short-term employee benefits
Share based compensation (Note 21)3
2020
2021
RUB mln
RUB mln
1,139
29
1,168
1,887
124
2,011
The key management compensation above includes directors’ remuneration paid to the directors of the Company both
by the Company and by subsidiaries of the Company in respect of services provided to such subsidiaries amounting
to RUB 604 million (2020: RUB 433 million) and analysed as follows:
Non-executive directors’ fees
Emoluments in their executive capacity
Share based compensation in their executive capacity
2020
RUB mln
2021
RUB mln
26
406
1
433
26
561
17
604
1 Beneficially owned by Alexander Eliseev, Non-executive Director and co-founder of Globaltrans.
2 Beneficially owned by Sergey Maltsev, Chairman of the Board of Directors, Chief Strategy Officer and co-founder of Globaltrans.
3 More information is available in the Group’s Consolidated Management Report and Consolidated Financial Statements which is included in full in the
Financial Statements section of this Annual Report.
59
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial and Operational Review
Sale of goods and services
Contract liabilities
Revenue from entity under control of member of key management:
Operating lease of rolling stock
Other
Other gains
Other gains from entity under control of member of key management:
Other gains
Year-end balances arising from sales/purchases of goods or services
Trade receivables from related parties - current (Note 22):
Entity under control of member of key management
Other receivables from related parties – current (Note 22):
Entity under control of member of key management
Key management remuneration – current (Note 31):
Accrued salaries and other short-term employee benefits
Share based payment liability (Note 21)
Interest income
Finance leases (Note 23):
Entity under control of members of key management
2020
2021
RUB mln
RUB mln
—
—
—
134
0.1
134
2020
2021
RUB mln
RUB mln
—
—
0.5
0.5
2020
RUB mln
2021
RUB mln
—
—
255
104
359
0.6
0.02
919
124
1,043
2020
2021
RUB mln
RUB mln
—
—
0.4
0.4
Contract liabilities relating to railway transportation contracts – current (Note 10):
Entity under control of member of key management
Contract liabilities relating to railway transportation contracts – non-current (Note 10):
Entity under control of member of key management
Finance leases
Finance leases to related parties – current (Note 23):
Entity under control of member of key management
Finance leases to related parties – non-current (Note 23):
Entity under control of member of key management
2020
RUB mln
2021
RUB mln
—
—
1
5
2020
RUB mln
2021
RUB mln
—
—
9
12
Disposal of investment in subsidiary to member of key management
During the year 2021, the Company disposed of its 60% shareholding in SyntezRail Ltd (Note 20). Within this, 20% was sold
to an entity controlled by a director of the Company for a consideration of RUB 376 million.
Operating lease commitments – Group as lessor
Entity under control of member of key management
Not later than 1 year
Later than 1 year and not later than 5 years
2020
2021
RUB mln
RUB mln
—
—
—
821
1,693
2,514
60
61
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Risk Management
Globaltrans faces a wide range of potential and current risks to its business. To identify, evaluate
and mitigate these risks, the Group has established a system for monitoring and controlling
uncertainties and risks that it faces. This system is overseen by a dedicated risk management
function.
The Board of Directors has overall responsibility for the Group’s risk management.
The Board, as part of its role in providing strategic
oversight and stewardship of the Company,
is responsible for maintaining a sound risk
management and internal control system. As part
of that system, the Board determines principal
risks and sets respective risk tolerance levels.
Globaltrans has adopted a risk management
policy that provides a consistent framework
for the identification, assessment, management
and, where possible, mitigation of risks.
The oversight of risk management is delegated
to the Audit Committee. In January 2021,
the Board established the ESG Committee
to analyse and oversee risks related
to environmental, social and governance issues.
In addition, the Board has delegated to the CEO
the responsibility for the effective and efficient
implementation and maintenance of the risk
management system.
The Directors, through the Audit Committee,
review the systems that have been established
for this purpose and regularly evaluate their
effectiveness. Appropriate actions are then taken
to manage the risk to an acceptable level as
defined by the Board.
Ultimately, risk management aims to establish
and maintain a holistic view of risks across
the enterprise, so capabilities and performance
objectives are achieved via risk-informed
resources and investment decisions.
Globaltrans bases its risk management activity
on a series of well-defined risk management
principles, derived from experience, best
practice and in accordance with corporate
governance principles. The Group’s risk
management principles consist of nine
interdependent and interconnected components
that aim to provide a holistic view of risk across
the whole organisation.
62
Risk management principles
Enterprise-wide
Systematic and structured
Risks that the Group faces should
be managed on an enterprise-wide
basis as a continuous and developing
process that runs throughout
the Group’s strategy and the
implementation of that strategy.
Risk management should involve
recognised processes and activities
in a systematic, methodical way that
ensures the results of risk
management activities are reliable,
robust and comparable.
Risk
management
principles
Forward-thinking approach
Risk management should be forward-
thinking. It should involve identifying
and preparing for what might
happen rather than always managing
retrospectively. Risk management
should encourage the Group to
manage proactively rather than
reactively.
Aligned with the Group’s
objectives
Risk management should be aligned
with the Group’s objectives and
provide reasonable assurance
regarding the achievement of those
objectives.
Based on top-down and
bottom-up approach
Risk management should evaluate
the potential upside and downside
of all risks that could affect the
Group. It should increase the
probability of success and reduce
both the probability of failure and
the uncertainty of achieving the
Group’s overall objectives. Risk
management activity should include
the development and implementation
of risk response actions to remove
or mitigate all risks the Group faces,
transfer them to a third party or accept
them.
Integrated into the Group’s
business
Risk management should be
embedded in all the Group’s practices
and business processes (including
business and strategic planning,
budgeting and decision-making) so
that it is relevant, effective, efficient
and sustained. All Group staff should
be responsible and accountable for
managing the risks in their activities.
Integrated into corporate culture
Clear and understandable
Evolving
Risk management should be a part
of the Group’s corporate culture. All
employees should be aware of the
relevance of risk to the achievement of
their objectives.
Risk management principles, methods
and tools should be clear and easily
understood by the Group’s employees.
The Group’s risk management system
should be continually evolving. The
management of risk is an ongoing
process and it is recognised that
the level and extent of the risk
management system will evolve as the
Group evolves.
63
Globaltrans Investment PLC
Annual Report & Accounts 2021
Risk Management
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Principal risks and uncertainties
Globaltrans has grouped risks that it considers significant into key categories –
strategic, operational, compliance and financial.
This list is not exhaustive, and the order of information does not reflect
the probability of occurrence or the magnitude of any potential effect. The current
geopolitical situation and conflict surrounding Russia and Ukraine creates additional
risks, which may have significant impacts on the business of the Group and its
business environment. Additional risks not currently known or that are currently
considered immaterial could also have an impact on the Group’s business, financial
condition, operational results and prospects, as well as on the trading price of its
Global Depositary Receipts (“GDRs”). We monitor and assess risks on an ongoing
basis and we make efforts to control and mitigate such risks to the extent possible.
STRATEGIC: RISKS THAT INFLUENCE THE GROUP’S ABILITY TO ACHIEVE ITS
STRATEGY
General economic situation and operating environment
Description
The Group and its subsidiaries operate
mainly in Russia and other emerging markets.
Emerging markets, such as Russia, Kazakhstan
and Ukraine, are subject to greater risks than
more developed markets, including significant
economic, political, social, legal and legislative
uncertainties. Moreover, the Group’s business
depends on demand in the Russian freight rail
transportation market, which in turn depends
on certain key commodity sectors and,
accordingly, on economic conditions in Russia,
Europe and elsewhere. A decrease in production
and demand for key commodities in Russia, or
in adjacent countries where the commodities
of the Group’s key customers are shipped by rail,
as a result of a technological shift, economic
downturn, political crisis or another event
in Russia or another relevant country (such as
the recent conflict between Russia and Ukraine),
may negatively impact the Group’s business
and growth prospects.
In addition to the human impact, the spread
of Coronavirus (COVID-19) continues to affect
global businesses and may lead to further and/or
continued lockdowns, trade wars and turbulence
in different currencies. The Group’s outlook
for 2022 may be further impacted by the
Coronavirus outbreak, which continues
to cause uncertainty. The freight rail market
may experience reduced demand stemming
from the effects of COVID-19. The Company
cannot predict the full impact of COVID-19 on its
markets, business or prospects although they
may be materially adversely impacted by the
rapidly evolving situation. Also, the appearance
of new pandemics or other dangerous illnesses
could seriously affect the global and local
business environment and lead to negative
consequences for the Group’s business.
Significant levels of COVID-19 illness in the Group
or its key clients could interfere with the stability
of the Group’s operations.
The sanctions imposed on Russian Central
Bank, its restrictions for capital movements
outside Russian Federation, sanctions imposed
by the United States, the European Union and a
number of other countries on the biggest
Russian industrial groups may adversely affect
the business environment in which the Group
operates and the prospects of the Group and may
result in long term disruption and economic
downturn in Russia and/or the other countries
to which the Group is directly or indirectly
exposed. The restrictions on the export
of certain Russian commodities or change
in directions of supply for Russian commodities
may have a negative impact on the freight rail
transportation market and the Group’s business.
The threat of sanctions against the Group’s
existing customers and the existing sanctions
imposed, any deterioration in or threat to their
financial condition and/or the temporary closure
of certain markets (whether as a result of the
current situation in Ukraine or otherwise) may
decrease demand for the Group’s services and/
or negatively impact the Group’s logistics.
In addition, the current situation in Ukraine could
have a negative impact on the Group’s business
and assets in Ukraine and/or on the ability
of the Group’s customers to carry on business
in Ukraine. Should further or intensified sanctions
be imposed against companies who have
businesses in, or are based in, Russia, there
is a risk that some of the Group’s railcars which
were used to transport cargo from Russia into or
through the territory of Ukraine (about 5% of the
Group's Total Fleet) could be blocked in Ukraine.
64
65
Globaltrans Investment PLC
Annual Report & Accounts 2021
Risk Management
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
General economic situation and operating environment (continued)
Regulatory risk and relations with government authorities and state-owned enterprises
The restrictions on Russian-based companies’
ability to transfer capital outside the Russian
Federation currently impacts and may further
impact the ability of the Company’s subsidiaries
to make payments to the Company or to make
payments between the Company’s bank accounts
in Russia and abroad. At present, the Group is
unable to upstream cash to the Company’s bank
accounts outside of Russia as a result of these
restrictions. Further, the weakening of Russian
Rouble against the US dollar and Euro and the
accelerated inflation in Russian may have a
negative impact on the Group’s operating costs
and costs of repairs. In addition, the Group may
experience difficulties in making the payments
due to potential refusal of certain banks to
maintain the Group’s bank accounts or to make
payments from these accounts.
The situation in Russia and Ukraine and the
resulting sanctions imposed on Russia by various
countries around the world may have unforeseen,
long term and far reaching consequences for
the global economy, the Russian economy and
the freight rail transportation industry in Russia.
These consequences, including restrictions and
limitations on the business activity of Russian
companies (including access to funds located
outside of Russia) and widespread and/or
localised economic downturn and/or volatility,
could have an adverse and unforeseen impact
on the Group’s business, operational results and
financial effect on the Group’s performance.
Controls and mitigating factors
Mitigation methodology involves understanding
the political and economic uncertainties
of the operating environment and the risks
faced in our business operations. The Group’s
compliance and legal teams constantly monitor
changes in legislation and report them to the
Group’s management and Board of Directors
while the finance and business teams monitor
economic developments and do the same. The
counterparties, banks and transactions of the
Group are constantly reviewed by the Group’s
compliance and legal teams to ensure full
compliance with all applicable legislation. Risk
managers have direct access to the Group’s key
management.
The Group maintains a balanced fleet as one
of the cornerstones of its business model. A
balanced fleet (between universal gondola cars,
adaptable to the demand for the transportation
of various bulk cargoes, and rail tank cars, which
are used for the transportation of oil products
and oil) enables the Group to adapt to market
conditions and reduces its dependence on any
one cargo flow.
In addition, the Group has entered into long-
term service contracts with several large clients.
Management assesses the possible impairment
of the Group’s tangible assets by considering the
current economic environment and outlook.
Management believes that it is taking all
necessary measures to support the sustainability
and development of the Group’s business in the
current business and economic environment.
Management is closely monitoring the
implications of recent sanctions imposed on
the Russian Central Bank and various Russian
businesses and individuals and of the global
outbreak of COVID-19 and acts depending on
the development of the situation. The Group
constantly evaluates and implements options for
distant work for its workforce to mitigate risks of
spreading and catching COVID-19 illness.
Description
The Group is subject to regulatory risks
relating to the operation of the Russian
railway transportation market and railway
industry reform. Any changes to the regulatory
environment of the Russian railway transportation
market or in other markets where the Group
operates, including, but not limited to, railway
tariff regulations and technical requirements
for fleet operation and maintenance, could
negatively impact the Group’s business, its
profitability and prospects for further business
growth. Government authorities have significant
influence over the functioning of the Russian
railway transportation market. Any deterioration
in the Group’s direct or indirect relationship with
government authorities at either the local or
federal level could result in greater government
scrutiny of the Group’s business and how
it conducts its operations or less effective
access to services dependent upon government
authorities.
In addition, the Group relies on its relationship
with and the services (including maintenance
and repairs), infrastructure and information
provided by RZD, an entity controlled by the
state. While the Group has enjoyed a good
relationship with RZD, there is no assurance
it will always continue to do so in the future or
that RZD will not increase its charges for such
service provision and infrastructure use. Railway
transportation regulations in countries bordering
Russia may change, limiting the access of the
Group’s rolling stock to certain territories.
Controls and mitigating factors
The management of the Group regularly monitors
changes to the regulatory regime of the railway
transportation market in the countries in which
it operates. The Group has a diversified portfolio
of service providers (e.g. for rolling stock repair
services), which allows it to use private repair
depots (including three in-house repair facilities)
to ensure less dependence on RZD-owned
depots, obtain higher-quality service
and minimise the costs of that service.
RZD remains the only provider of infrastructure
and locomotive traction services, although
the Group does operate its own locomotives
in the form of block trains (cargo or client specific
Group-operated block trains all going in the same
direction) on some routes.
The Group also continues to monitor market
liberalisation reforms to ensure that it can take
advantage of any opportunities when they arise.
The Group monitors Federal Antimonopoly
Service (“FAS”) initiatives regarding railway
tariff regulation and also seeks to minimise
its exposure to adverse changes in RZD’s
regulated tariffs for the usage of infrastructure
and locomotive traction by providing that these
changes are adequately passed on to the Group’s
customers where possible.
66
67
Globaltrans Investment PLC
Annual Report & Accounts 2021
Risk Management
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Regulatory risk, risks of banking system and risk of termination of listing of Company’s GDRs
on London Stock Exchange (LSE) and admission to trading
Description
Since late February 2022, the Russian economy
and the Group’s operating environment have
been negatively impacted by the escalated
military and political conflict between
Russia and Ukraine and the associated
international sanctions against a number
of Russian institutions, companies, banks
and individuals. These events have drastically
changed the business environment of the
Group and changed the regulation of business
processes in a number of European countries,
the US, Russian Federation and Ukraine.
On March 3, 2022, the London Stock Exchange
suspended the trading of Company’s GDRs
and as at the date of publication this suspension
is still in place. There is a risk that the admission
of Company’s GDRs to trading on the London
Stock Exchange will be cancelled due to a
potential change in the listing rules of LSE. In this
case, the Company’s GDRs may be converted
into ordinary shares of the Company. The major
clearing systems Euroclear and Clearstream
have, as at the date of publication, suspended
the instructions for transfers and settlements
of accounts connected to Russian Federation.
In addition, an increasing number of Russian
banks have been banned from SWIFT, the global
messaging system for financial transactions.
The conversion between the Russian Rouble
and other currencies is, as at the date
of publication, not possible in most cases.
Controls and mitigating factors
Management is closely monitoring the situation
with the assistance of legal and tax consultants
and is ready to act depending on the
developments.
Growth strategies
Description
Business growth can be constrained by an
increase in prices for new rolling stock
and spare parts, overproduction of rolling
stock, partial scrappage of Group’s rolling stock
due to expiration of its useful life, sanctions
imposed on Russian Federation and some
Russian industrial groups, a limited supply
of long-term funding, an increase in the cost
of borrowing and/or adverse market conditions
that can have a negative impact on the return
on any investments. Although the Group takes
a conservative approach to investments, any
deterioration in the market environment may
negatively impact the profitability and payback
period of investments in rolling stock, thus
limiting the Group’s return on its investments
and ability to expand its business. Alongside
pursuing organic growth strategies, the Group
has expanded its operations through acquisitions
in the past and may pursue more in the future if
appropriate opportunities arise. The pursuit of an
acquisition strategy entails certain risks, including
problems with integrating and managing such
new acquisitions. The expiry of long-term service
contracts with its key customers may also limit
the Group’s growth opportunities as these may
result in volatility in logistics, a reduction in the
Group’s business volumes and/or profitability
of its operations.
Controls and mitigating factors
Any acquisition of rolling stock is matched
against projected demand for railway
transportation and the economically viable
expected payback period for such investments.
The Group cooperates with numerous rolling
stock producers in Russia and other CIS countries
without placing too much reliance on any
particular supplier.
The Group is also focused on the diversification
of its business.
Any valuation of an acquisition target is subject
to review by external advisers, and fairness
opinions are normally provided by reputable
appraisal companies to the Group’s Board
of Directors when a transaction is considered.
Competition and customer concentration
Description
Controls and mitigating factors
The Russian freight rail transportation market
is highly competitive in terms of unregulated
operators’ services tariffs. The ongoing market
consolidation may lead to greater price
competition. The risk of an irrational supply
of railcars on the market by railcar producers
and/or irrational behavior of competitors
(including new market entrants) may place
additional pressure on the profitability of railcar
operations and thus negatively impact the Group.
Competition between railway transportation
and other means of transportation, including, but
not limited to, oil product and oil transportation
by pipeline, river and road, may negatively impact
the Group’s business volumes and profitability.
The Group’s customer base is characterised
by significant concentration: the business
is heavily dependent on a few large industrial
groups and their suppliers, with its top 10
customers and their suppliers accounting
for around 68% of the Group’s Net Revenue
from Operation of Rolling Stock in 2021. While
the Group has long-term service contracts with
several key customers, failure to extend and/
or maintain the current service contracts or
for such customers to no longer have the volume
requirements they have had in the past may have
a negative impact on the Group’s operational
results and financial performance.
Globaltrans has significant competitive
advantages that mitigate some of the risks
of competition. These advantages include
its strong reputation for high-quality service
and reliability; its independent status; its
long-term partnership with customers; its
sophisticated operating capabilities; and its
modern fleet. The Group has long-term,
established relationships with its key customers
and their affiliates and suppliers. In most cases,
Globaltrans has become an integrated part
of their operations. Around 59% of the Group’s
Net Revenue from Operation of Rolling Stock
in 2021 was covered by long-term service
contracts with several large clients. Such
contracts provide additional stability and greater
certainty regarding transport volumes for the
Group. Globaltrans continues its focus
on expanding business with small and medium
companies to further diversify its customer
base. In 2021, the share of small and medium
companies amounted to 32% of Net Revenue
from Operation of Rolling Stock (2020: 28%).
Furthermore, the Group’s marketing function
regularly monitors competitors’ business
strategies, their use of technology, their price
strategies and industry trends.
68
69
Globaltrans Investment PLC
Annual Report & Accounts 2021
Risk Management
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Locomotive traction
OPERATIONAL: RISKS THAT INFLUENCE THE GROUP’S OPERATIONAL EFFICIENCY
Description
Controls and mitigating factors
The Group is dependent on RZD to issue permits
allowing it to operate locomotives and to
approve its use of locomotives for particular
routes. If those routes are not in demand
by the Group’s clients, their utilisation could be
lower. Furthermore, there is uncertainty about
the prospects for, and the timing of, further
deregulation of locomotive traction.
The Group has a competitive advantage
in providing freight rail transportation
services to some clients, as it operates its own
locomotives for the traction of block trains
dedicated to particular routes. By assembling
full trains composed only of its own railcars,
the Group increases the speed and reliability
of transportation for its clients. The Group
has established controls to obtain the timely
renewal of locomotive operation licenses and the
respective permits from RZD. The Group regularly
monitors the progress of the reform relating
to continued deregulation of locomotive traction.
In addition, the Group’s management actively
participates in the development of the required
regulation through various dedicated industrial
organisations and partnerships.
Shareholder Activism
Description
Controls and mitigating factors
The Group has an active shareholder engagement
programme and seeks to maintain a constructive
dialogue with the Company’s major shareholders.
Feedback from shareholders is provided to the
Company’s Board of Directors.
GDRs of Globaltrans have been listed on the
Main Market of the London Stock Exchange since
May 2008 (although trading was suspended
by London Stock Exchange on 3 March 2022)
and on the Moscow Exchange since October
2020 with a free float of over 50%. Publicly traded
companies are often subject to shareholder
activism, and the Company’s shareholders may
seek to advocate for changes to corporate
governance practices, social issues, or for certain
corporate actions or reorganisations via media
campaigns or other activities. Responding
to these campaigns can be costly and time
consuming and may have an adverse effect
on the Group’s reputation or ability to execute its
business plan.
Infrastructure
Description
The rail network and physical infrastructure
in Russia, owned and operated by RZD, as well as
the networks and infrastructure of other countries
on which the Group depends to operate its
rolling stock, like Kazakhstan, Ukraine and other
neighbouring countries, largely date back to the
Soviet era. In some cases, these rail networks
have not been adequately maintained, which
could negatively affect the condition of the
Group’s rolling stock, performance and business.
In addition, the oversupply of rolling stock,
inefficient logistics at local destinations as
well as maintenance and modernisation of rail
infrastructure undertaken from time to time
by RZD could negatively impact the average
speed of transportation and therefore affect
the operational performance of railcars. RZD
tariffs for the use of the railway network and the
provision of locomotive services are regulated
by the FAS and are in principle “pass-through”
items for the Group and other private freight
rail operators. Meanwhile, RZD tariffs for the
traction of empty railcars are in most cases
Operational performance
a direct cost to the Group and other private
freight rail operators. Significant upward changes
in the regulated tariffs, whether as a result
of annual indexation or changes in the tariff-
setting methodology, could have an adverse
effect on the Group’s business. The railway
infrastructure in Ukraine may also be partially
damaged/destroyed following the military
and political conflict between Russia and Ukraine.
Controls and mitigating factors
With immaterial exceptions, all of the Group’s
rolling stock is insured against damage.
Moreover, as a freight carrier on the railway
network, RZD bears full responsibility for third-
party losses caused by accidents on the network.
The Group monitors its rolling stock through
its dispatch centre on a 24/7 basis and plans
its routes accordingly to optimise logistics
and minimise the risks of disruption. The Group
monitors FAS initiatives to detect possible
changes in tariff-setting methodology and tries
to reflect relevant changes in contracts with
customers.
Description
Controls and mitigating factors
Rising inflation in Russia and an increase in prices
for spare parts and railcar repair works may
increase the Group’s costs and maintenance
CAPEX, while the Group may have limited
opportunities to increase tariffs to customers.
Among the Group’s key objectives are to increase
operational efficiency and to focus on controlling
and reducing costs. The Group seeks to diversify
and control its supply chain to maintain cost
efficiency.
70
71
Globaltrans Investment PLC
Annual Report & Accounts 2021
Risk Management
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Employees
Description
Controls and mitigating factors
The Group’s future success will partly depend
on its ability to continue to attract, retain
and motivate key employees and qualified
personnel, in particular an experienced
management team and logistics and railway
experts. Competition in Russia for such personnel
with relevant expertise is intense due to the small
number of qualified individuals with suitable
practical experience in the rail industry.
Adequate remuneration packages, which are
in line with or above market levels, are offered
to all employees and key managers and the
remuneration of key managers is linked to the
Group’s financial results. The human resources
function regularly monitors salary levels
and other benefits offered by competitors
to ensure that the Group’s remuneration
packages are appropriate.
Customer satisfaction
Description
Controls and mitigating factors
Customers rely on the Group for the provision
of high-quality freight rail transportation
and other related services and expect the Group
to be commercially responsive to their needs.
These include the timely collection and delivery
of cargo and availability of rolling stock,
which is not always within the direct control
of the Group because it is dependent upon
RZD for locomotive traction and maintenance
of infrastructure. Accordingly, timely delivery
of cargo is highly dependent on a third party
whose performance could be unsatisfactory
to the Group’s customers.
The Group has a strong reputation for delivering
good quality, reliable and flexible freight rail
transportation services to its customers.
Customer satisfaction is one of the key metrics
that the Group’s management monitors. Each
customer is assigned an account manager
responsible for the day-to-day relationship with
that customer. Customer feedback is analysed
and appropriate follow-up actions are taken.
The Group has a track record of high customer
retention and the majority of key customers
stay with the Group for many years. In addition,
the Group serves several key clients on a long-
term basis and has recently added new contracts
and extended others.
IT availability/continuity
Description
The Group uses specialised rail transport
and logistics software to ensure the efficiency
and effectiveness of its logistics, dispatching
and rolling stock tracking services. These
systems are either licensed to the Group and then
customised to the Group’s needs or delivered
to the Group and maintained for its needs
by third parties under service agreements.
Due to recent sanctions imposed by the US,
European Union and a number of other countries,
a number of IT solutions used by the Group
will no longer be maintained by American
and European Union suppliers. The Group may
potentially face risks related to access privileges,
audit trails, authentication, authorisation,
backup procedures, business continuation,
change management (software and hardware),
data integrity, disaster recovery, infrastructure,
information/data security and cyber-attacks.
The Group may lose access to IT products if
third party providers do not renew commitments
under existing or expiring service agreements.
Further systems and products that the Group
uses could cease to be maintained by third party
service providers, requiring the Group to adopt
new systems or products.
Controls and mitigating factors
Local IT specialists have introduced solutions
to maintain the availability and proper licensing
of IT services and ensure their recovery in case
of disruption. Where applicable, the Group
is working to identify and engage alternative
suppliers of IT solutions. The IT function
and internal audit function monitor all IT-related
activities and performance for compliance with IT
policies and procedures.
Risks of terrorist attacks, natural disasters or other catastrophic events beyond the Group’s control
Description
The Group’s business operations could be
adversely affected or disrupted by terrorist
attacks, natural disasters (such as earthquakes,
floods, tsunamis, hurricanes, fires or typhoons)
or other catastrophic or otherwise disruptive
events – including changes to predominant
natural weather, sea and climatic patterns,
piracy, sabotage, insurrection, military conflict
or war, riots or civil disturbance, radioactive or
other material environmental contamination, an
outbreak of a contagious disease or changes
to sea levels – which may adversely affect global
or regional trade volumes or customer demand
for cargo transported to or from affected areas,
or lead to denial of the use of any railway,
port, airport, shipping service or other means
of transport and disrupt customers’ logistics
chains. In addition, the Group may be exposed
to extreme weather conditions such as severe
cold periods and icy conditions that disrupt
activities in ports that are destination points
for customer cargoes. Furthermore, many
of these events may not be covered by the
Group’s insurance or any applicable insurance
may not adequately cover any resulting losses.
The Group’s rolling stock could be adversely
affected by unlawful acts in Russia or
neighbouring countries. The occurrence of any
such events may reduce the Group’s business
volumes, cause idle time for its rolling stock
or disruptions to its operations in part or
whole, subject the Group to liability, impact
its brand and reputation and otherwise hinder
normal operations. This could have a material
adverse effect on the Group’s business, results
of operations or financial condition.
Controls and mitigating factors
The Group’s rolling stock is insured against
damage, and the responsibility for third-party
losses caused by accidents on the network
lies with RZD. The Group consistently monitors
any disruptive events and applies a business
continuity policy to:
• Ensure the safety of employees and human
life;
• Maintain continuity of time-critical services;
• Minimise disruptions to clients and partners;
• Minimise the operational, financial
and reputational impact.
72
73
Globaltrans Investment PLC
Annual Report & Accounts 2021
Risk Management
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
COMPLIANCE: RISKS THAT INFLUENCE THE GROUP’S ADHERENCE TO RELEVANT
LAWS AND REGULATIONS
Pending and potential legal actions
Description
Controls and mitigating factors
The Group is involved in legal actions from time
to time. Such actions may have an adverse effect
on the Group. The ambiguity of the law in Russia
and CIS countries creates regulatory uncertainty
and could result in claims from government
authorities not expected by the Group.
ESG risks
Description
Environmental, social and governance (ESG) risks
include those related to climate change impacts
mitigation and adaptation, environmental
management practices, environmental
protection and duty of care, working and safety
conditions, respect for human rights, gender
equality, supporting a culture in which all
relevant stakeholders are valued and respected,
compliance with relevant laws and regulations
and ensuring compliance with regulations
governing the protection of human rights,
operational and occupational health and safety,
and ESG practices in the jurisdictions in which we
operate.
More information on climate-related
risks is available in the Sustainability
section on pages 102-105
74
The Group runs its operations in compliance
with tax, currency, sanctions, labour, customs,
antimonopoly and other applicable legislation
and constantly monitors any changes in the
regulatory environment. The Group monitors its
compliance with the terms of its agreements.
Standard forms of agreements are used
for transportation services, and various
controls are in place to ensure that the terms
of agreements are adhered to. All contracts are
subject to rigorous review by all of the Group
functions concerned and to a formal approval
process prior to execution.
Controls and mitigating factors
Although rail is one of the greenest modes
of transport, the Group is committed to the
protection of the environment by seeking to reduce
the environmental footprint of its business
and develop a sustainable supply chain. The Group
aims to ensure compliance with regulations
governing the protection of human rights,
operational and occupational health and safety,
and ESG practices in the jurisdictions in which
the Group operates. The Group promotes high
ethical standards and respect for human rights.
In January 2021, the Group formally adopted an ESG
policy and also established the ESG Committee
of the Board of Directors. The main purpose
of ESG Committee is to oversee the development
and implementation of the corporate environmental
and social responsibility initiatives of the
Group, monitor and review activities, and make
recommendations to the Board of Directors of the
Company on actions needed to address any
issues identified or to make improvements where
desirable.
Compliance with regulations and sanctions
Description
The Group functions in several jurisdictions,
including Cyprus, Russia, Estonia and Ukraine.
In addition, the Group has its GDRs listed on the
London Stock Exchange (although London
Stock Exchange suspending trading of the
Group’s GDRs on 3 March 2022) and the Moscow
Exchange. Thus, the Group is subject to the
laws and regulations of those countries in which
it is active, the regulations of stock exchanges
on which its securities are traded and any
applicable sanctions legislation, all of which
may change from time to time. As a result
of the situation in Ukraine, the United States,
the European Union and a number of other
countries have imposed heightened sanctions
and restrictions on numerous Russian businesses,
banks and individuals.
Controls and mitigating factors
The legal and compliance teams of the
Group together with the external lawyers
engaged by the Group monitor the applicable
requirements in each of jurisdiction in which
it is active and stock exchanges on which its
securities are trading, including monitoring US
personal and sectoral sanctions (SDN OFAC, SSI
OFAC and CAATSA), and the appropriate controls
are in place to ensure that all subsidiaries of the
Group comply with applicable regulations.
Fiscal risk
Description
Controls and mitigating factors
Local tax, currency and customs legislation,
especially in Russia, other emerging markets
and Cyprus, may be subject to varying
interpretations, inconsistencies between
federal laws, regional and local laws, rules
and regulations, frequent changes and a
lack of judicial and administrative guidance
on interpreting legislation.
The Group has controls in place, including
highly qualified and experienced personnel,
to monitor changes in legislation and determine
the appropriate action needed to minimise
the risk of a challenge to such treatments
by the authorities. For complex matters,
the Group engages and cooperates with external
consultants and law firms.
Any increase in applicable tax rates, as well as
introduction of new taxes in the countries where
the Group is active, may reduce the profitability
of the Group.
75
Globaltrans Investment PLC
Annual Report & Accounts 2021
Risk Management
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Impact of Brexit and Takeover regulations
Description
Controls and mitigating factors
From 1 January 2021, as a result of the end of the
transitional period following the United Kingdom’s
exit from the European Union, as a company
organised under the laws of Cyprus, the Takeover
Panel no longer exercises shared jurisdiction over
transactions involving the Company which would
otherwise be subject to the Takeover Code,
including takeover bids, merger transactions, or
schemes of arrangement resulting the change
or consolidation of control over the Company.
In addition, from 1 January 2021, the London
Stock Exchange (where the Company’s GDRs
are admitted to trading) is no longer a regulated
market as defined in Directive 2014/65/EU
of the European Parliament and of the Council
on markets in financial instruments; as a result,
the legislation in Cyprus regulating takeovers,
including those requiring mandatory takeover
offers in certain situations, no longer applies
to the Company.
The absence of Takeover regulations applicable
to the Company allows existing significant
shareholders, or persons acting in concert,
to increase their holdings (or new significant
shareholders, or persons acting in concert,
to acquire more than 30% of the outstanding
share capital of the Company) without being
obliged to make a mandatory tender offer
to other shareholders. The Group monitors
developments in applicable regulations,
making appropriate disclosures of any relevant
new regulations and will make all required
notifications of significant shareholdings (or
changes in respect of such shareholdings) in the
Company.
FINANCIAL: RISKS THAT INFLUENCE THE GROUP’S FINANCIAL PERFORMANCE
Currency risks
Description
Controls and mitigating factors
Currently, the Group has neither borrowings
nor lease liabilities denominated in US dollars
and therefore does not have formal arrangements
for hedging foreign exchange risk with
the exception of hedging foreign currency risk
associated with dividend payments that are
considered highly probable and the associated
dividend payable that are declared in Russian
roubles and paid in US dollars until their
settlement. The Group may however keep bank
balances in US dollars and other currencies.
The Group therefore has limited exposure to the
effects of currency fluctuations on bank balances
between the US dollar and the Russian rouble.
A large proportion of the Group’s revenues
and expenses are denominated and settled
in Russian roubles. At present, the risks related
to liabilities denominated in foreign currency
are not material and are partly compensated
for by assets and income denominated in foreign
currency. The Group has refinanced all of its
liabilities denominated in US dollars with long-
term debt denominated in Russian roubles. Since
2008, the Group has taken action to mitigate
currency risks and adjusted the profile of the
borrowings in its credit portfolio. As of 31
December 2021, all the Group’s debt was
denominated in Russian roubles.
Interest-rate risks
Description
The Group’s income and operating cash flows
are exposed to changes in market interest rates.
These arise mainly from floating rate lease
liabilities and borrowings. An increase in market
interest rates in Russia may negatively influence
the Group’s profits.
Controls and mitigating factors
The Group enters into long-term borrowing
and leases with financial institutions to finance
Credit risk
Description
Financial assets that potentially subject
the Group to credit risk consist principally
of trade receivables, cash and cash equivalents.
Furthermore, the Group’s business is substantially
dependent on a few large key customers,
including their affiliates and suppliers. Its top 10
clients accounted for around 76% of the Group’s
trade and other receivables as of 31 December
2021 and around 68% of the Group’s Net Revenue
from Operation of Rolling Stock in 2021.
Liquidity risk
Description
The Group’s business is capital-intensive.
The current situation in Ukraine and the resulting
increased and intensified sanctions imposed
by the United States, the European Union
and numerous other countries on Russia have
had a negative impact on the Russian financial
markets and have limited the Group’s access
to international sources of funding. Any lack
of available funding and potential increases
in market interest rates could have a negative
impact on the Group’s ability to obtain financing
for the settlement of its liabilities or cash to meet
its financial obligations.
purchases of rolling stock and acquisitions
of subsidiaries. The Group borrows at current
market interest rates and does not use any
hedging instruments to manage interest-rate
risk. Management monitors changes in interest
rates and takes steps to mitigate these risks as
far as practicable by ensuring that the Group has
financial liabilities with both floating and fixed
interest rates as appropriate. As of 31 December
2021, all of the Group’s debt was at fixed interest
rates. Management also considers alternative
means of financing.
Controls and mitigating factors
The Group has policies in place to ensure
that sales of goods and services are made
to customers with an appropriate credit history.
Substantially all of the Group’s bank balances are
held with reputable banks.
Controls and mitigating factors
The Group has a budgeting policy in place
that allows the management to control current
liquidity based on expected cash flows. These
include, among other things, operating cash
flows, capital expenditure needs, funds borrowed
from financial institutions and funds raised from
listed debt instruments.
76
77
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
" At Globaltrans nothing is more
important than the safety and well-
being of our employees. We are
committed to developing a strong
culture of zero-harm and promoting
a safe work environment. The Group
regards safety as both an individual
and collective responsibility, thus employee
involvement is key to our safety programme.
In 2021 we put our efforts into boosting employee
awareness and increasing the number of ongoing
training opportunities needed for our employees
to perform their job tasks in a safe manner.
Stanislav Khromov
H&S expert, BaltTransServis
Sustainability
Report
Highlights of 2021 ............................................................80
ESG Committee Chair’s Message ......................82
Stakeholder Engagement .......................................84
Ethics and Behaviour ....................................................87
Employees .............................................................................90
Environment ........................................................................96
Communities .....................................................................100
Climate-Related Financial
Disclosure (TCFD) ........................................................... 102
78
79
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Sustainability
HIGHLIGHTS OF 2021
ESG
Committee formed
to guide Globaltrans’ ESG agenda
2.6 x
increase in training hours
largely attributable to safety training
LTIFR1
zero
Improved safety performance with Lost Time Injury
Frequency Rate (LTIFR) falling from 0.66 to zero while
business continuity maintained throughout
the COVID-19 pandemic
GPG2
-3%
First time disclosure of gender pay gap (measured at non-
managerial level) - women earn on average 3% more due
to greater proportion of women in highly skilled positions
Scope 2
emissions
First time reporting
Reinforced ESG disclosure
with the publication of the Integrated Report,
ESG Data Book and TCFD Report
Green
office initiative
Introduced
External
recognition
Further external recognition of the Group’s ESG efforts
with improved rating by leading rating agency Sustainalytics
OUR APPROACH
HOW IT WORKS:
MATERIALITY MATRIX
The Sustainability Report which
is integrated into the 2021 Annual
Report has been prepared
in accordance with the sustainability
reporting guidelines of the Global
Reporting Initiative (GRI).
The overall aim is to achieve high
standards in the areas of balance,
comparability, accuracy, timeliness,
clarity and reliability, as defined by
the GRI Standards. The structure
and content of this sustainability report
reflects the relevant GRI Reporting
Principles.
The details within this sustainability
report cover the key results
and activities of Globaltrans Investment
PLC and its subsidiaries in the field
of sustainable development for the
year ended 31 December 2021.
Identification
of material topics
Step 1
Step 2
Step 3
Prioritisation
of material topics
Preparation
of materiality matrix
We identified material topics relevant to the Group’s
business operation by carefully reviewing and analysing
global sustainability trends, our sustainability performance,
internal regulations and non-financial reports issued
by peers.
To develop a broader, deeper understanding of the
materiality of the sustainability issues the Group faces, we
sought input from a range of stakeholders (employees,
shareholders, investors, clients, regulators and other
authorities) on what mattered to them.
We developed a materiality matrix to identify those topics
that are deemed most important/significant to the Group’s
system of sustainability reporting. A validity check was also
conducted on identified material topics to ensure that all
of them are disclosed in the Annual Report.
1 LTIFR (Lost Time Injury Frequency Rate) is the number of lost time injuries multiplied by 1,000,000, divided by the employee total hours worked
in the reporting period.
2 The gender pay gap at non-managerial level is the difference between the average hourly earnings of a company’s male and female employees who are
below management level. Calculating the mean gender pay gap involves adding the hourly rates for all male employees and then for all female employees
in two groups and then dividing these totals by the number of male or female employees in each list. Then one needs to subtract the female hourly rate
from the male hourly rate, divide the total by the male hourly rate, and multiply the figure by 100. This will give a percentage difference in pay.
80
l
r
e
d
o
h
e
k
a
t
s
r
o
f
y
t
i
l
a
i
r
e
t
a
M
y
l
e
m
e
r
t
x
E
t
n
a
t
r
o
p
m
i
t
n
a
t
r
o
p
m
I
5
2
6
4
10
12
1
9
8
3
7
11
Important
Materiality for business
Extremely
important
Economic impact
Social impact
1 Economic performance
2 Socioeconomic development of regions
3 Business ethics, risk management and anti-corruption
4 Customer satisfaction
9 Employee education and development
10 Employee motivation
11 Diversity and equal opportunity
12 Occupational health and safety
Environmental impact
5 Risks and opportunities posed by climate change
6 Responsible water use and reduction
of water consumption
7 Reduction of energy consumption
8 Non-compliance with environmental laws
and regulations
81
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
ESG COMMITTEE CHAIR’S MESSAGE
Advancing ESG at Globaltrans
2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
I joined the Board of Globaltrans in 2008, the year the company
went public, and strong governance, based on the highest standards
of ethical business practices, has always been held by the Board
as an absolute prerequisite for future success. In other words, our
commitment to sustainable business development that benefits all
stakeholders started long ago, even as the approach has evolved
and changed significantly over the years.
Elia
Nicolaou
Chair of the ESG Committee,
Non-executive Director
In 2021, we expanded our
governance approach to better
monitor and organise our ESG work.
In January, we issued our ESG policy
and established the ESG Committee,
which I chair, to advise and oversee
the Group’s sustainability programmes.
I see these as major milestones in our
journey towards full integration
of sustainable business practices
across our operations at all levels
of the organisation. Managing our
business increasingly sustainably
is by definition a work in progress, but
I am pleased our efforts last year were
recognised, resulting in improved
sustainability scores, notably from
Sustainalytics, one of the leading
global ESG rating agencies, as well as
approval from shareholders.
82
We faced a second year of health
and safety challenges, travel
restrictions and remote working as
the pandemic persisted. However, we
learned to adapt quickly to changes
and adopted new ways of doing
things effectively during this period.
Our top priorities were the well-
being of our employees and the
continuation of all business processes.
Last year, the ESG Committee met
twice to discuss a broad range
of ESG-related topics, approve our
2020 integrated sustainability report
and review the Group’s current
environmental and employee-related
policies and initiatives planned for 2021.
Over the past year, the ESG Committee
continued to support the establishment
of more substantial ESG foundations
across the businesses. As part of this,
the Group recruited several specialists
to increase our internal expertise
in critical areas such as health
and safety, environment, and training
and development. In addition,
as part of our support for employees,
Globaltrans significantly increased its
provision of skills and learning in this
area, resulting in a more than doubling
of the number of training hours over
the year.
Safety is one of our core values: it is
the primary consideration in terms
of our employees’ welfare. Although
the Group has a strong safety track
record, there is still more we can do.
Hence, we introduced a stringent
new safety compliance regime last
year, which promotes a ‘zero-harm’
culture and included a formal Health &
Safety Code as well as increased hours
of safety training. As a result, I am
pleased to report that in 2021, there
was a reduction to zero in our Lost
Time Injury Frequency Rate and, most
importantly, there were no recorded
fatalities.
In terms of our environmental
performance, it is reassuring
to report that there were no cases
of non-compliance with environmental
laws and regulations during
the reporting period. However,
as a responsible business, we
are determined to move beyond
compliance and proactively reduce our
impact on the environment. As many
of you know, rail is not a significant
contributor to greenhouse gas
emissions, but we still have a duty
to reduce our carbon footprint.
The most effective way we achieve
this is by delivering highly efficient
logistics, minimising the mileage
that railcars travel empty. In 2021, we
again led the industry in operational
efficiency, and maintained low levels
of Empty Runs.
Our GHG emissions for 2021 were
impacted by the increased use of our
locomotive fleet our most significant
source of GHG emissions — on the
back of accelerating growth
in volumes for oil products and oil.
However, while these emissions were
up 11% compared to the extraordinarily
low levels of 2020 (as a result of the
pandemic), they were still 5% lower
than the pre-COVID level of 2019.
We are at the same time taking steps
to offset our impact. For instance,
BaltTransServis, which operates
the bulk of our locomotive fleet,
is planting trees in 2022 in order to help
offset our CO2 emissions, a project that
could grow over the next few years.
We included for the first time
a description of the climate-
related risks and opportunities
facing the business, in line with
the recommendations of the
Taskforce on Climate-related Financial
Disclosures (TCFD). We intend to raise
awareness of climate-related risks
internally and develop a greater
understanding of the TCFD framework
so we can use it to track our climate
action progress in future.
Closing remarks
on the future development
We strive to be a responsible
and attractive employer, business
partner and investment target.
We recognise that by prioritising
sustainability and gradually
integrating it into everything we
do, we will improve our long-term
prospects, reduce our business
risk and build greater engagement
with our stakeholders. We are fully
aware that we have a long journey
ahead to become a truly sustainable
organisation. However, we are
working hard to raise awareness
of our sustainability work among
stakeholders, and executing well
across multiple initiatives throughout
the Group. Our progress in 2021 gives
me confidence that we are on the right
track and we will continue to pursue
our sustainability ambitions.
As well as making our fleet operations
more eco-friendly, we are doing
our best to promote green policies
in day-to-day office activities. In 2021,
we introduced a Green Office initiative
which will be rolled out across
the Group, with the aim of reducing
overall waste levels, particularly plastic.
We believe that such actions contribute
to society’s broader efforts to protect
the environment.
Last year, we took steps to improve
disclosure of the Group's ESG factors
to meet stakeholder expectations. New
metrics were included in our integrated
sustainability report to enhance our
disclosure levels. For the first time
we included analysis of gender pay
differences in 2021 our gender pay
gap1 at the non-managerial level stood
at –3%, meaning our female employees
earn, on average, a 3% higher wage.
The report which was prepared with
reference to the Global Reporting
Initiative (GRI) Standards, also saw
a greater focus on materiality.
1 The gender pay gap at non-managerial level is the difference between the average hourly earnings of a company’s male and female employees who are
below management level. Calculating the mean gender pay gap involves adding the hourly rates for all male employees and then for all female employees
in two groups and then dividing these totals by the number of male or female employees in each list. Then one needs to subtract the female hourly rate
from the male hourly rate, divide the total by the male hourly rate, and multiply the figure by 100. This will give a percentage difference in pay.
83
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
STAKEHOLDER ENGAGEMENT
STAKEHOLDER ENGAGEMENT MECHANISMS
For the second consecutive year,
all client communications, investor
roadshows and conferences,
and the Annual General Meeting
of shareholders, were held online.
During the pandemic we saw an
increase in demand for information, as
would be expected during any period
of market uncertainty. The Group
devoted considerable time and effort
to maintaining close engagement with
our stakeholders and we believe we
made effective use of the digital format
to respond to information requests.
The corporate website is the main
source of information on the Company:
news releases, results presentations,
webcasts, current and historical
financial information, market statistics,
and other important data can be
found there. We have a separate
section on Sustainability, in light of our
increased commitment and reporting
on this important issue.
OUR RESPONSE TO THE
ONGOING COVID-19
PANDEMIC
Supporting our people
In 2021, COVID-19 continued
to present many challenges
to the wellbeing of people around
the world. That is why the safety
of our employees, clients
and other stakeholders remained
the Group’s highest priority
throughout the year. Despite
a high percentage of vaccinated
employees, as a responsible
employer Globaltrans
continued to promote hybrid
working, offering all employees
the opportunity to work from
home with voluntary and more
limited office attendance.
In response to the pandemic,
we enhanced our internal
policies to further support
a safe environment at our
offices and facilities. In addition
to ensuring the basic health
and safety of our people, we
also focused on their mental
wellbeing, maintaining an
active and open dialogue with
them. We introduced a number
of initiatives to support the needs
of our employees, and to enable
us all to get through this difficult
period.
Building good, strong relationships
with a diverse range of stakeholders
sets the foundation for sustainable
growth and, therefore, the success
of any business. Globaltrans has always
listened to and considered the interests
of its stakeholders and is committed
to maintaining an open, constructive
and ongoing dialogue with all.
Through a programme of active
year-round engagement using
various channels and processes,
we strive to improve transparency
for our stakeholders and deepen
their understanding of our strategy,
performance and initiatives. These
interactions also allow us to gather
valuable feedback, opinions
and expectations and, in due course,
to reflect them in our business.
In terms of our day-to-day operations,
Globaltrans’ stakeholders include
employees, customers, investors,
government and regulators and our
local communities. At the Group level,
we maintain ongoing contact with
investors, shareholders, credit rating
agencies, financial institutions and the
media.
As 2021 was another year of COVID-19
restrictions and physical distancing,
we continued to rely on digital
communication methods.
Employees
Mechanisms of engagement
•
• Labour-management
Intranet
consultations
• Staff surveys
• Corporate booklets, information
boards
Outcomes in 2021
• Regular, direct communication
between managers, teams
and individuals
• Career development, training
and performance reviews
• No COVID-related redundancies
• COVID-related measures
to protect health and safety
of employees implemented
• Number of training hours up 2.6x
due to resumption of training
programs and increased volume
of safety training
• Reduction of LTIFR to 0
• Provision of social benefits
and guarantees, including
medical insurance
Shareholders and investors
Mechanisms of engagement
• Open, effective and transparent
Customers and business partners
Mechanisms of engagement
• Regular meetings, presentations,
and formal consultations
• Customer analytics and
customer evaluation system
Industry conferences and forums
•
• Customer satisfaction surveys
• Transparent supply chain
Outcomes in 2021
• Strong portfolio of service
contracts with superior clients
in metallurgical and oil products
and oil segments maintained
contributing 59% of Net Revenue
from Operation of Rolling Stock
in 2021
• Successful service contract
extensions with two key
customers: Metalloinvest
and Rosneft
communication
•
Investor Relations website
• Dedicated Investor Relations
team
• Annual General Meetings
• Corporate reporting, webcasts
• Broker-hosted investor events
and roadshows, conference
calls, and Company-initiated
roadshows
Outcomes in 2021
•
Information disclosure
on a semi-annual basis
• Analyst and investor conference
calls and webcasts
• Virtual non-deal roadshows:
more than 200 international
investor meetings held
• Series of investor meetings
with Russian retail investors
introducing Globaltrans to local
investors
• Publication of Annual Report
and integrated sustainability
report
• Completion of numerous ESG
questionnaires received from
international and local investors,
financial institutions and rating
agencies
Interaction with international
and local credit rating agencies
•
84
85
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
Stakeholder engagement mechanisms (continued)
Government, regulators
and professional authorities
Mechanisms of engagement
• Regular communication
with regulators and policy
makers on industry issues
Industry and regulatory forums
•
Outcomes in 2021
• Participation in industry
associations including the
Council of Railway Operators and
the Russian Union of Transport
Workers
• All applicable guidelines to
manage the impact of COVID-19
implemented
Local communities
Media
Mechanisms of engagement
• Corporate philanthropy and
charitable contributions
• Community investment
Outcomes in 2021
• Assistance to support
socioeconomic development of
our communities
Mechanisms of engagement
• Communication with media
representatives
• Transparent disclosure through
various channels
• Dedicated Media section on
corporate website
• Dedicated media relations
contacts
• Regular contributions to aid
• Press conferences and
charitable projects
exhibitions
Outcomes in 2021
• Distribution of news and
information announcements
• Providing access to results calls
with CEO & CFO
• Responding to media queries
•
Interviews with senior
management, ad hoc
commentary on industry issues,
and responding to journalists’
questions
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
ETHICS AND BEHAVIOUR
A company’s reputation is the
bedrock on which its business is built.
At Globaltrans, maintaining our good
name is of paramount importance
and we are well aware of how easily
it could be damaged by actual or
suspected unethical behaviour. We are
committed to operating to the highest
ethical and professional standards
and to ensuring that all our business
dealings are conducted openly
and transparently.
Our Code of Ethics and Conduct
sets out the ethical standards that our
Group adheres to and how we expect
our employees to act to maintain them.
It describes the Group’s principles with
respect to confidential information,
anti-bribery, conflicts of interest
and reporting concerns. Its purpose
is to help our employees understand
the Group’s core values and what
is expected of them to ensure
compliance with our policies and all
relevant laws and regulations.
We do not tolerate any violations of the
Code. All employees are required
to read and fully understand the Code
and sign an acknowledgement to this
effect.
Our partners are an integral part of our
business, and how they behave also
reflects on us. Therefore, they must
understand and commit to upholding
the same ethical standards as we set
for ourselves. Accordingly, in 2020
the Group formally adopted a Supplier
Code of Conduct, based on the
principles set out in the UN Global
Compact, which describes what
Globaltrans expects from its suppliers
with regards to business ethics, human
and labour rights, employee relations,
health and safety and other related
topics. By building on our shared
values, Globaltrans and its suppliers
can create stronger and more
successful businesses.
In January 2021, Globaltrans
established an ESG Committee
to support and direct the Group
towards improving its sustainability-
related practices and policies and its
reporting and transparency. Its
creation reflects the Group’s conviction
that behaving responsibly underpins
our ability to deliver sustainable
value for all our stakeholders.
By assisting the Board with oversight
of ESG-related issues, the Committee
supports the development of a
practical Group-wide approach
to sustainability and disclosure.
The Committee's efforts were
bolstered by the adoption in January
2021 of a formal ESG policy that
set out formal ESG commitments
and established lines of responsibility
and accountability.
The ESG Committee consists of two
Board members: Elia Nicolaou,
Non-executive Director, who is the
Chair, and John Carroll Colley,
Independent Non-executive Director.
In addition, Globaltrans CEO Valery
Shpakov is actively engaged in all
ESG-related matters, emphasising
the importance of these issues for the
Group.
Globaltrans has adopted a number
of formal Group-wide policies that
address human rights, freedom
of association, data protection,
diversity and inclusion, and supplier
conduct. These documents
are subject to ongoing review
and monitoring to ensure their
relevance and compliance with legal
requirements. The Group requires all
employees to acknowledge that they
understand and accept the relevant
policies. All the documents are publicly
available and can be viewed on the
Company’s website.
Charts of Code of Ethics and Conduct
Tolerance
Impartiality
Respect
Equality
Safety
Understanding and
respecting diverse
cultures and people
with different views
Acting objectively
and professionally
Acknowledging people’s
abilities, qualities and
achievements and
complying with all
applicable labour laws
Creating opportunities
and a working
environment that
excludes any form of
discrimination
Compliance
with required rules
to create a safe
and healthy
workplace
86
87
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
employees to speak up and report
any concerns that they may have. We
provide confidential, safe and secure
mechanisms for anonymous reporting
of suspected violations, as well as
safeguards and support for those who
report such breaches.
Senior management meets regularly
to discuss, inter alia, anti-fraud and anti-
corruption measures. During 2021,
no instances of alleged fraud, bribery
or corruption were reported within
the Group.
We respect and protect
the confidentiality and security of our
stakeholders’ personal information.
We comply with the EU General Data
Protection Regulation (GDPR) which
was adopted in April 2016. Data
privacy and security are of the utmost
importance to the Group and we have
a dedicated Privacy Policy that can be
accessed on the Group’s website.
KEY ESG ACTIVITIES:
Corporate governance
Environment
The objective of corporate governance is to
support the Board in its efforts to provide effective,
transparent and ethical oversight of the Group. Our
governance framework is in line with the highest
international standards supporting the Board
to make decisions that are in the best long-term
interests of the Group and its communities that will
create value for all its stakeholders.
Employees
Creating and sustaining a safe workplace
is the key role of a responsible employer.
Our goal is to enable people to work with
dignity and respect, to provide opportunities
for growth and development and to create a just
and rewarding work culture. We also ensure that
we operate in full compliance with all relevant
employment legislation.
Employing more energy-efficient practices,
reducing carbon emissions and promoting
recycling are ways in which we work to minimise
the adverse impact of Globaltrans’ activities on the
environment.
Communities
We are very conscious of our role in supporting our
communities. We do this through our employees'
interactions, the opportunities our businesses
create and the economic value generated
by our Company. We also actively participate
in community initiatives and provide direct support
to important community causes through charitable
giving.
Globaltrans continuously strives to improve the way
it controls, manages and mitigates the impact
of non-financial risks, which include strategic, operational
and compliance risks. This is not just to satisfy regulatory
obligations but also to meet the expectations of our
stakeholders.
Further details on Globaltrans’ risk management
are set out on pages 62-77.
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
Ethics and behaviour (continued)
Globaltrans makes every effort to be
an employer, partner and community
member who values people
and respects their fundamental rights
and freedoms. We are committed
to maintaining strong human rights
and labour practices not just in our own
operations and business network, but
within the broader community as well.
The Human Rights Policy we introduced
in 2020 sets out the minimum human
rights standards that everyone who
works for and with Globaltrans must
meet. To ensure that we are constantly
progressing on this front, we regularly
review our conduct, policies and training
and integrate any changes or learnings
required into our operations. Our
approach is consistent with international
human rights standards such as
the UN Guiding Principles on Business
and Human Rights. Our commitment
to human rights is also clearly stated
in our Code of Ethics and Conduct,
Supplier Code of Conduct, and in our
Diversity and Inclusion Policy.
We believe that working in a diverse
and inclusive work environment
is rewarding for our people
and ultimately for our business.
By treating everyone with dignity
and respect, by providing equal
opportunities regardless of ethnicity,
gender, religious beliefs, nationality, age
or any physical disability, we can create
an environment where people can be
themselves and excel in what they do.
Our Diversity and Inclusion Policy
details our commitment to creating an
inclusive and welcoming environment.
That commitment is supported at the
highest levels within the Group and is
reflected in our approach to new
appointments and Board membership.
Alongside our commitment to inclusivity
is our respect for all applicable
labour laws and regulations and our
recognition that it is a fundamental
right of Globaltrans employees to form
and join workers’ organisations and to
engage in collective bargaining.
This is enshrined in our Freedom
of Association Policy, adopted
in 2020, which reflects the Group’s
commitment to respecting employees’
choices and maintaining a regular
and constructive dialogue with them
and their designated representatives.
Globaltrans has a zero-tolerance
approach to bribery and corruption
in all its forms. While this is detailed
in our Anti-fraud Policy, we have
always endeavoured to act ethically,
professionally, fairly and with
integrity in all our business activities
and relationships. We are very clear
on the standards of conduct that all
employees must adhere to, and we
provide guidance on how to avoid
and recognise unacceptable behaviour.
Our approach is consistent with all
applicable regulations and we have
established rules and procedures
to deal with any alleged violations. We
ensure that each employee understands
the types of violations that can occur
within their area of responsibility
and closely monitor for any signs
of potential non-compliance.
To support this, the Group maintains
a Whistleblowing Policy which
encourages the investigation
and reporting of improper activities,
including non-compliance with our
Code of Ethics and Conduct, and helps
fosters a culture based on honesty
and good behaviour. We encourage
88
89
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
EMPLOYEES
People are the driving force
behind the success of any
business. Globaltrans is committed
to caring for its employees,
creating a safe and supportive
workplace, promoting professional
development, and protecting their
working conditions and well-being.
Our role and responsibility as an
employer is to create an environment
where every employee is engaged,
heard, valued and rewarded. This aligns
with our culture and central principles
of various Group’s commitments,
policies and programs. We are
committed to creating the conditions
in which every employee can work
productively and grow professionally.
At Globaltrans, we offer fair
remuneration that recognises individual
performance. In doing so, we strive
to encourage our people to reach
their full potential by providing them
with expertise, education and training
opportunities.
We apply a zero-tolerance approach
to all forms of discrimination, hostility,
harassment or unprofessional
behaviour.
We continue to put the safety of our
employees first. The pandemic
period has led us to strengthen our
commitment to health and safety
issues.
To enable our people to work safely,
we have implemented the appropriate
frameworks and reviewed our training
programmes. As a result, the company
has improved its safety indicators.
At our Company, we strive
to effectively manage people issues
through our robust HR strategy
and policies that define our philosophy
and values. These are policies related
to human rights, health and safety,
workplace relations, performance
and development processes
and non-discrimination.
Our core policies and guidance include:
• Anti-fraud Policy;
• Code of Ethics and Conduct;
• Compensation and benefits Policy;
• Diversity and Inclusion Policy;
• Freedom of Association Policy;
• Health and Safety Policy;
• Human Rights Policy;
•
• Regulations on business trips;
• Regulations on contractual work;
• Regulations on protection of
personal data of employees.
Internal code of labour conduct;
In 2021 average employee headcount
increased 5% year on year to 1,750
(2020: 1,664) employees. Overall
headcount as at the year end rose
5% compared to 2020 to 1,7771
employees (2020: 1,697). The increase
was mostly attributable to the shift
to using in-house locomotive crews.
Consequently, the Group’s subsidiary
BaltTransServis continued to employ
the most people within the Group.
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Diversity
Headcount by companies, 2020-21 (at year-end)
We believe that equality, inclusion
and diversity are essential elements
that must be incorporated into
the culture and business strategy
of any business. Globaltrans strives
to be an equal opportunity employer
and our philosophy is to treat everyone
fairly and respectfully. Regardless
of age, disability, ethnicity, country,
gender, race, color, religion, or sexual
orientation, we value and embrace our
employees' individuality and respect
them for their performance, talents,
and contributions.
We seek to prevent any act
of discrimination and provide our
people with equal employment. This
zero tolerance for discrimination
is set out in the Group’s Diversity
and Inclusion Policy, the breaches
of which are grounds for disciplinary
action.
Globaltrans’ commitment to diversity
extends to all of our business activities
including hiring, employee retention,
promotions, pay and benefits, career
development and training, working
arrangements and appointments
to the Board.
551
540
659
800
359
350
49
49
79
38
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
New Forwarding
Company
BaltTransServis
(incl. its subsidiaries)
Ural Wagonrepair
GTI Management
Other subsidiaries
Headcount by gender in 2021
(at year-end)
Headcount by age in 2021
(at year-end)
70%
Men
65%
30–50 years
30% Women
24% > 50 years
11% < 30 years
Permanent contract in 2021
(at year-end)
Temporary contract in 2021
(at year-end)
Part time
56%
Full time
29%
44%
71%
Full time
58%
42%
Women
Men
1 The difference between the headcount and the average headcount is due to different calculation techniques. The headcount is presented as at the end
of 2021, while the average headcount is calculated by summing up the number of employees in each month of the reporting period and dividing this sum
by the number of months.
Source: Globaltrans
90
91
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
The Group has always sought
to provide equal pay opportunities
for both women and men. To increase
the transparency of our diversity
data this year we are publishing
our first-ever gender pay gap1
figures. The gender pay gap relates
to differences in average pay between
men and women within an organisation;
it does not compare the wages paid
to men and women for doing identical
or similar jobs (known as equal pay).
In 2021 the average pay gap between
men and women in our non-managerial
workforce was –3% which indicates
that female employees’ average hourly
pay is higher than male employees.
This reflects the fact that there are
proportionally more men in our
workforce in less-skilled roles.
We are committed to building
a more diverse workforce and a more
inclusive workplace where
everyone feels accepted, respected
and empowered. Historically, the freight
rail transportation sector has been
male dominated. By concentrating
on attracting more women into
the workforce, we are progressively
and successfully addressing the gender
imbalance within our Group.
As at year end 2021, women comprised
30% of our workforce. At board level,
women comprised 13% of the Board
of Directors (two Board members).
The second priority of how we manage
diversity is the inclusion of employees
with disabilities. There Group currently
employs 27 individuals with disabilities
whose daily contributions help
the Group meet its business goals
and achieve success.
-3 %
Average pay gap between men
and women in our non-managerial
workforce in 2021
95 %
of all training and development
happening online
1 The gender pay gap at non-managerial level is the difference between the average hourly earnings
of a company’s male and female employees who are below management level. Calculating
the mean gender pay gap involves adding the hourly rates for all male employees and then
for all female employees in two groups and then dividing these totals by the number of male
or female employees in each list. Then one needs to subtract the female hourly rate from the male
hourly rate, divide the total by the male hourly rate, and multiply the figure by 100. This will give
a percentage difference in pay.
92
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Training and education
Globaltrans regards education
and talent development as important
contributors to the Group’s high
efficiency and long-term success.
We strive to retain our people and their
knowledge and enable them to grow
professionally by providing them with
the experience and skills they need.
In doing so, we keep them engaged
in their work and with the Company
and help them reach their full potential.
At Globaltrans, we educate and train our
people in many ways, including training,
workshops, seminars and programmes
that are tailored to individual work
requirements and current needs.
Over 2021, the Group increased
its training hours by 2.6 times
devoting 55,780 hours to learning
and development activities (2020:
21,226). Those areas where training
was provided included health
and safety, accounting, business
administration, environmental
safety, information security, financial
management and marketing, as well as
the development of technical
and soft skills.
In 2021, as the pandemic persisted
and our people kept working from
home, the majority of learning activities
remained digital, with 95% of all training
and development happening online.
The pandemic has accelerated our
digital transformation, especially in two
key areas: deepening digital literacy
for all our employees and advancing
the digitisation of processes throughout
the Group.
Source: Globaltrans
Distribution of training among
employees by employee
categories in 2021
68%
Employees
32% Managers
Average training hours by gender
77
118
73
in 2021
2021
2020
51
Women
Men
Motivation
Nothing can be achieved without our
people. In order to demonstrate strong
results and achievements, we have
to keep our workforce engaged,
enthusiastic about what they do
and highly motivated. These are critical
drivers of sustainable business success.
Globaltrans strives to offer the best
employee experience. Our goal
is to inspire and motivate our people
and provide them with a safe,
creative and collaborative workplace
and culture. We are determined to stay
closely in touch with our colleagues
and respond to their needs. We can
best serve our people by listening
carefully, collaborating together
and adapting. We help them monitor
their performance and achievements
through ongoing feedback.
The pandemic created a very different
social environment for our people,
which prompted us to reassess
and strengthen our support for them.
We arranged flexible working
arrangements for our staff, ensured
their well-being, provided learning
opportunities, communicated
frequently and shared feedback.
Globaltrans did not make any
COVID-related redundancies and,
most importantly, kept salaries
at pre-COVID levels.
We are committed to maintaining
a motivated and productive workforce
that values being part of Globaltrans.
To retain talent within the organisation,
we must continually improve working
conditions and offer attractive
compensation and benefits as well
as rewarding work and opportunities
for learning and development.
Our staff reward packages include
health insurance, childcare support,
extra holidays and other benefits.
Eligible employees can participate
in various incentive schemes operated
by the Group.
In 2021 our overall staff turnover rate
increased slightly to 16% (12% for men
and 3% for women) (2020:14%).
We still regard it as a low figure,
but nevertheless, the Group will
work in future to reduce the level
of employee exits. The HR function
of each subsidiary conducts exit
interviews when colleagues leave
to analyse the reasons for leaving
and improve the loyalty of our
employees.
Employee Turnover Rate based on gender and age, 2020-21
14% 16%
10% 12%
4%
3%
3%
3%
8%
8%
3%
4%
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
Total
Men
Women
< 30 years
30-50 years
> 50 years
93
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
Corporate culture and internal
communications
Our culture is built around what we
value: respect, mutual appreciation,
transparency and collaboration.
We believe that they contribute
to sound business decisions, foster
a trustworthy and supportive
workplace, and help us achieve better
outcomes in everything we do.
At Globaltrans, we listen to every
employee’s voice. For us, it is
a powerful way of helping our business
grow and progress. That is why we
prioritise, promote and practice open
communication with our people.
All employees are encouraged to raise
any issues and concerns and provide
input and feedback to improve
the business. Our communication
channels enable everyone to learn more
about our performance, major events
and projects, and to connect with
senior management. To understand our
employees’ needs and improve their
experience, we conduct various surveys
and some Group subsidiaries have
employee helplines.
To encourage a sense of community
and promote better teamwork, we
also regularly host sports, cultural
and recreational events for our
employees and their families.
During COVID-19, taking care of people
became our everyday priority. We did
our best to make our employees feel
connected and engaged. The Group
communicated regularly with staff via
reports and updates, management
calls, webinars, and formal and informal
virtual meetings.
Health and safety
Health and safety are a fundamental
part of our philosophy. We strongly
believe that supporting the physical
and mental health and well-being of our
employees is the correct thing to do
for us and our business. The Group has
always been committed to maintaining
high standards of occupational safety
and to complying with all applicable
health and safety regulations
and legislation.
However, during the pandemic, safety
took on a new meaning and became
an entirely new level of concern.
In 2021, Globaltrans continued to apply
safety management and distancing
measures to support our employees
and suppliers. We provided our
office-based staff with flexible
working arrangements and the option
to continue working remotely. For our
on-site (repair depot) employees, we
revised our work procedures to ensure
their safety, implementing precautions
that included workplace disinfection,
shift rotations, social distancing, mask-
wearing, and the use of temperature
scans and hand sanitisers.
Our Code of Conduct and Human
Rights Policy sets out our commitment
to act in a socially responsible manner
that protects our people, suppliers
and partners, all of whom we expect
to share that commitment. Globaltrans
has health and safety procedures,
practices and policies which are being
continuously reviewed. We strive
to ensure that all levels of the Group
conform to the rules. Our Group
companies are implementing
the following policies:
• Fire-safety instructions;
•
Instruction for carrying out health
and safety briefings;
Instruction on pre-medical first aid;
•
• Occupational safety regulations;
• Workplace safety guidance for PC
users.
In 2022, following the pandemic,
in order to formalise our commitment
to safety at the Group level
and strengthen our workplace
safety programme we introduced
a Group Health and Safety Policy.
We believe this will help us improve
and promote our culture of zero
harm and risk awareness among our
people, thereby reducing the number
of work-related incidents. While we
have a positive occupational health
and safety track record, as typically
most of our employees work in a low
risk environment, we remained focused
on our ultimate target of zero incidents.
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
LTIFR zero
Improved safety performance with Lost
Time Injury Frequency Rate (LTIFR) falling
from 0.66 to zero while business continuity
maintained throughout the COVID-19
pandemic
Our continued focus on safety
and proactive measures allowed
us to improve our overall safety
performance in 2021 and achieve a zero
Loss Time Injury Frequency Rate (LTIFR).
In 2020, the LTIFR (per million hours
worked) performance of the Group
stood at 0.66.
In 2022, our approach to health
and safety will continue to be proactive
and preventative. We will continually
reinforce employees’ risk awareness,
increase internal audits and improve
accountability.
Safety is always a team effort.
We encourage our employees to adopt
good health and safety practices and to
make the right decisions about their
everyday wellbeing. As a responsible
employer, we provide appropriate
information and training opportunities
to all employees to prevent future
workplace incidents.
We conduct regular safety spot-checks
at our operations to ensure that they
continue to meet high standards.
In 2021, due to the pandemic and the
move to remote working, we reduced
the number of workplace safety audits
to 173 visits (2020: 341 visits). Instead,
we focused on providing on-line
training sessions on occupational
health and safety, the numbers
of which increased significantly across
the Group.
We are glad to report that there were
no work-related incidents or fatalities
in 2021. Following our first-ever
workforce fatality at one of our repair
depots in 2020, the Group made
every effort to prevent the recurrence
of such tragic incidents. The Group
immediately investigated the incident,
took corrective measures and improved
internal safety protocols. All employees
underwent extensive training following
the incident. We also enhanced
our expertise in the area of health
and safety by hiring specialists to help
implement a continuous improvement
plan for occupational safety
management.
94
95
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
ENVIRONMENT
Rail is one of the greenest and most
efficient modes of transport.
Therefore, with its limited impact
on the environment, rail is well
positioned to meet the growing need
for low-carbon freight transportation,
due to its lower greenhouse gas
emissions1 and low rates of energy
consumption.
Globaltrans recognises its
operations have the potential
to impact the environment.
The Group is committed
to minimising the environmental
impact of its activities, recognising
it has a responsibility to protect
the environment on behalf of the
communities it serves, its stakeholders
and society as a whole. To this end, we
focus not just on controlling emissions
but also on other areas such as
energy efficiency, water management,
and waste recycling.
The Group is fully compliant with
all applicable environmental laws,
industry regulations and requirements,
and we continually seek to improve
our environmental performance to stay
compliant. Our overall environmental
management approach is underpinned
by the Group’s formal ESG Policy
and Environmental and Energy
policies. These policies define our
commitment to conduct our activities
in an environmentally responsible way.
We ensure that all of our employees
understand and act in a manner
consistent with our policies.
Guided by these policies, we are
constantly investigating ways
to improve our subsidiaries'
environmental management
and reporting systems to better
monitor, measure and assess
the environmental
aspects of our
activities.
We are also raising environmental
awareness among our employees’
and suppliers and improving
transparency for our investors.
To support this, we disclose the Group’s
environmental performance over
a number of metrics consistent with
external reporting frameworks such
as the Global Reporting Initiative
(GRI). Annual data and information
on monitoring and progress are
included in our integrated sustainability
reports, which are publicly available
on the Group’s website.
Our 2021 results are set out
below. There were no violations
of environmental legislation or
regulations during the reporting period.
Energy usage
At Globaltrans, our focus is always
on energy efficiency. We are
determined to use energy prudently
and strive to be climate conscious.
This goal is something that we are
working to promote and improve at all
levels of the organisation. The Group’s
operations use different forms
of energy, including diesel, electricity,
gas, and we are constantly working
to improve our energy efficiency
and reduce our carbon footprint.
In 2021, our pattern of energy
consumption showed mixed dynamics
due to several factors. There was a 5%
year-on-year increase in electricity use,
primarily attributable to the reopening
of offices, following the gradual
lifting of COVID-19 restrictions.
Also, increased locomotive operations
due to the post-pandemic recovery
in demand in oil products and oil
segment contributed to an 11% year-on-
year rise in diesel consumption.
Petrol consumption, 2020-21
litres per employee
2021
17%
2020
Diesel consumption, 2020-21
litres per employee
2021
6%
Total consumption of energy resources by type, 2020-21
2020
Energy type
Electricity (KWh)
Diesel (litres)
Petroleum (litres)
2020
2021
Change
4,182,373
4,401,655
45,584,067
50,758,074
158,816
137,723
5%
11%
–13%
Source: Globaltrans
1 Greenhouse gas (GHG) emissions are the emission into the earth's atmosphere of any of various gases, esp carbon dioxide, that contribute
to the greenhouse effect.
96
79
95
29,005
27,394
97
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Use of water
Paper recycling
Green office
Greenhouse gas management
We are very familiar with the issue
of office waste because the Group
consumes relatively large quantities
of paper. Consequently, we actively
promote the value of a green workplace
and encourage employees to reduce
the frequency and volume of printing.
We have focused on digitising business
processes and using electronic
documentation over recent years,
but the COVID-19 pandemic has
accelerated these trends. In 2021,
we further reduced employee paper
consumption by 14% year-on-year, as
most of our office activities remained
"virtual".
As part of our commitment to conserve
resources, we monitor water usage
to optimise its use and consumption.
While Globaltrans is not a major
user of water, we recognise that it is
a vital resource for society and we are
committed to using it responsibly.
Our internal management systems
and practices ensure effective oversight
of water use in our everyday operations.
Since 2018, we have been improving
our monitoring, collection
and processing of water usage data
across the Group’s subsidiaries.
In 2020, we released our first annual
water consumption results. In 2021,
water consumption declined by 2% year
on year to 16,279 m3 (2020: 16,627 m3)1.
Globaltrans continues to look for ways
to improve water use and adopt
practices to help its employees
manage and use water efficiently.
-2 %
The decrease in water
consumption
in 2021, y-o-y
-14 %
The reduction in paper
consumption by employees
in 2021, y-o-y
Paper consumption, 2020-21
kg per employee
2021
14%
2020
Source: Globaltrans
6
7
We strive to take proactive steps
to reduce the Group’s environmental
impact, for instance, by undertaking
various corporate sustainability
initiatives. One of the latest is our
Green Office initiative, which we
introduced in 2022. As a responsible
business, we want to make all of our
processes and day-to-day activities
more efficient, including in the
workplace. This initiative is designed
to promote the adoption of the green
office best practices across the Group
and encourage employees to adopt
environmentally friendly behaviours.
We are committed to reducing
energy and natural resource use
and waste generation by improving
the environmental efficiency of the
Group’s offices. Concerning energy
savings, we plan to replace lighting
containing mercury with energy-
efficient LED lighting and optimise
the efficiency of our facilities’
heating and cooling systems.
Waste management measures
include paperless communication
methods, reduced use of plastic
and environmentally responsible waste
collection and recycling.
As part of the Green office initiative,
we are encouraging our employees
to participate and take responsibility
for their day-to-day actions, as these
will significantly influence the success
of the project. Moreover, we hope that
in future years this initiative will enable
us to increase transparency and better
manage and report on our waste
management data.
Our industry is among the greenest
and least polluting forms of transport
from an energy and emissions
perspective. Rail remains the most
fuel-efficient mode of transport.
Nevertheless, we recognise that we
can do more to minimise our impact
on the environment.
From a strategic standpoint,
Globaltrans’ core operational
and environmental objectives
align perfectly: delivering efficient
logistics and carefully managing
assets are our top priorities. Since
its creation, Globaltrans has focused
on operational efficiency, in particular
on reducing the number of empty
railcars transported as part of the
Group’s logistics movements.
This not only helps us achieve solid
financial and business results, it also
helps us improve our environmental
performance. We have led the industry
for many years in terms of efficiency,
consistently delivering one of the
sector’s lowest gondola Empty
Run Ratios, which speaks to our
commitment in this area.
In the freight rail industry, GHG
emissions are directly linked to fuel
consumption and, therefore,
the primary source of emissions
is from locomotives.
The Russian state railway company
JSC Russian Railways (RZD) retains
a monopoly in the provision of rail
infrastructure, and is by far the largest
provider of locomotive traction
services.
For the first time, we calculated
the indirect GHG emissions generated
by our energy purchases (Scope 2)
using Scope 2 GHG Protocol guidelines.
In 2021 the Group’s indirect emissions
totalled 1,555 tonnes of CO2 equivalent.
We will continue to take action
and explore ways to improve fuel
efficiency and lower our emissions.
For instance, we will investigate
whether different diesel additives
can help us achieve the goal of lower
emissions in the future. In addition,
in 2022, we are investing in a small
environmental project that may expand
in the coming years: BaltTransServis,
which operates the bulk of our
locomotive fleet, will be planting trees
to help offset our CO2 emissions.
Minimising our environmental
footprint is a fundamental part of our
sustainability strategy. Therefore,
we will continue to monitor
our environmental practices
and performance, improve our energy
efficiency and explore appropriate
options and proposals to reduce our
GHG emissions.
Globaltrans runs one of Russia’s largest
privately-owned locomotive fleets,
providing a specialist service for its
clients primarily in the oil products
and oil segment. Therefore, we only
measure, report and record those
emissions (Scope 1) directly attributable
to our fleet of 71 mainline locomotives.
Operating a modern and well-
maintained fleet also helps reduce
our environmental footprint. Of our
locomotive fleet, 14% consists of new,
more fuel-efficient and cleaner diesel
locomotives.
Since 2018 we have made significant
progress in measuring, managing
and disclosing direct GHG emissions
information in our operations, and this
process is ongoing. In 2021, our GHG
emissions were impacted by greater
utilisation of our locomotive fleet due
to a post-COVID-19 recovery in oil
product and oil volumes. Direct GHG
emissions at 153,794 tonnes of CO2
equivalent2 were 11% higher than
the COVID-affected levels of 2020
(2020: 138,198 tonnes of CO2
equivalent). However, they were still
5% lower than the pre-pandemic levels
of 2019 (2019: 161,299 tonnes of CO2
equivalent).
We are constantly working
to improve the quality and
consistency of our data.
In recent years, we have
been working toward
a better understanding
of our carbon footprint.
1 This excludes data from AS Spacecom and BaltTransServis (except for data from the BTS railcar repair depot in Ivanovo which is included).
2 The Group’s greenhouse gas emissions were calculated per IPCC Guidelines for National
Greenhouse Gas Inventories (2006).
98
99
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
sense of well-being and helps instill our
core values of respect and cooperation
within our communities. We contribute
directly to charitable efforts in the
areas of health, well-being, sports,
culture and education. We also support
groups working with vulnerable groups
like the disabled and elderly. We have
supported the Life Line Fund for many
years, which provides vital assistance
to children with life-threatening
conditions.
We understand that we can play
a pivotal role in improving the lives
of those in and around our business.
By creating opportunities to grow,
feel valued and prosper — within our
business and within our communities —
we are setting in place the best
foundations for success, for us and all
our stakeholders.
and national taxes of license and other
fees and the use of third-party services
and suppliers.
The table on page 101 illustrates how
our company creates financial value
for its stakeholders.
We want our people and those we work
with to feel valued and supported,
to know that they work in a safe, fair
and respectful environment where
they can prosper, where diversity
is valued and, where, as a result, they
feel they can fully contribute to the
success of their communities and of
Globaltrans. By providing childcare
support and health insurance, or
offering employees the option
of working part-time, we show our
employees that they are valued and we
aim to improve the quality of life
for them and their families.
We believe participation in charitable
activities, sports and community
initiatives gives our
employees a greater
COMMUNITIES
Globaltrans works hard to make
a positive impact on the communities
where it operates. As an employer
and business partner, we have
a responsibility to our society and the
people around us. This approach
is evident in our commitment
to following applicable rules and our
transparent approach to financial
and non-financial reporting. Our ethos
is also apparent in how we engage
with our employees, partners and the
environment.
It is by continuing to be a successful
and sustainable business that we
will remain a vibrant contributor
to our communities, supporting their
economic and social development.
We add value through our business
operations in various ways: direct
and indirect employment, tax
payments and social activities, and by
providing internships and educational
support. Our employees welcome
the opportunity to engage with
interns or take part on our pro bono
social programmes to develop their
capabilities and contribute more
to society. Having a close relationship
with our local communities means
we can identify what support — skills,
time or financial assistance — will help
deliver the best outcome.
It is our business success that
enables us to provide this support
and create opportunities for both
current and future employees.
It also means we are making a direct
financial contribution to the broader
economy through the payment local
Direct economic value generated, distributed and retained1
Direct economic value generated2
Economic value distributed
Total cost of sales (excluding Employee benefit expense)
Total selling, marketing and administrative expenses
(Community investments and excluding Employee benefit
expense and Taxes (other than income tax and value added tax)
Employee benefit expense
Payments to the providers of capital3
Payments to the government4
Economic value retained
2021
RUB mln
73,151
68,108
46,148
0.964
5,491
12,670
2,835
5,043
1
Information in the table is derived from the Consolidated Management Report and Consolidated
Financial Statements for the year ended 31 December 2021.
2 Direct economic value generated includes “Revenue”.
3 Payments to providers of capital include “Interest paid”, “Dividends paid to owners of the Company”
and “Dividends paid to non-controlling interests in subsidiaries”.
4 Payments to government include “Tax paid” and “Taxes (other than income tax and value added
taxes)”. The Company also pays Russian Value Added Tax (“VAT”). VAT related to sales and purchases
is recognised in the balance sheet on a gross basis and disclosed separately as an asset and liability.
Purchases of property, plant and equipment are shown net of VAT. Related input VAT is included in
movement in changes of working capital, within trade and other receivables.
100
101
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Climate-related Financial
Disclosure (TCFD)
THE GROUP’S EFFORTS TO RESPOND TO CLIMATE CHANGE —
ENDORSING THE RECOMMENDATIONS OF THE TCFD
GOVERNANCE
AND RISK MANAGEMENT
In line with applicable regulations, the Group will make disclosures as required
by the TCFD recommendations in its 2022 Annual Report. In preparation for full
compliance, the Group has undertaken to proactively include the following TCFD-
compliant disclosures addressing the key elements ofthe TCFD recommendations.
Core Elements of Recommended Climate-Related Financial Disclosures
Governance
Strategy
Risk
Management
Metrics
and Targets
Governance
The organisation’s governance around
climate-related risks and opportunities
Strategy
The actual and potential impacts of climate-related
risks and opportunities on the organisation’s
businesses, strategy, and financial planning
Risk Management
The processes used by the organisation to identify,
assess, and manage climate-related risks
Metrics and Targets
The metrics and targets used to assess and manage
relevant climate-related risks and opportunities
Globaltrans has long identified
climate change as a material issue,
and we include the most relevant
climate-related risks in the Group’s
risk management process. However,
we understand that companies are
increasingly expected to take more
proactive measures to combat climate
change.
Therefore, to improve transparency
and respond to our stakeholders’
growing interest in our approach
to climate change, Globaltrans
has chosen to adopt the Taskforce
for Climate-related Financial
Disclosures methodology (TCFD)
to align its climate-change reporting.
As our understanding of the risks
and opportunities posed by climate
change develops, we will incorporate
climate-related issues into our business
strategy and further increase the levels
of related disclosure.
In the coming year, we will conduct
an assessment of the climate-related
risks and opportunities relevant
to our business and report on the four
areas of Governance, Strategy, Risk
Management and Metrics.
Our intention is to increase the level
of disclosures year-by-year.
The Board of Directors, through
the work of its Audit and ESG
committees, is accountable for the
overall management of all risks,
including climate-related risks.
The ESG Committee ensures that all
the appropriate policies, mechanisms
and processes are in place
to allow the Board to effectively
manage sustainability matters
and address stakeholder needs.
Furthermore, the Board has delegated
responsibility for the efficient
implementation and maintenance
of the risk management system
to the Group’s CEO.
The CEO is actively involved in all
sustainability-related matters,
including climate change, and closely
monitors the Group’s overall ecological
performance. He receives updates
from the Group’s subsidiaries on their
performance and planned initiatives.
This careful monitoring of the Group’s
environmental activities allows
the CEO to set the right tone and guide
the development of Globaltrans’
sustainability strategy.
Management of climate-related
issues
Responsibilities of the Board include:
• Overseeing the management
of climate-related issues;
• Monitoring and reviewing
the effectiveness of the
management approach (review
of the policies, initiatives, metrics
and action plans);
• Overseeing the climate-related
disclosures.
Responsibilities of the management
team include:
• Monitoring, managing and assessing
climate-related issues;
• Providing analyses,
recommendations and updates
for the Board or Board committees;
• Maintaining effective data
collection, including environmental
and climate-related data;
• Determining the allocation of costs
and resources, such as personnel,
and coordinating within the Group
to identify, manage and mitigate
environmental and climate-related
issues.
102
103
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
METRICS
AND TARGETS
Globaltrans is committed to openness
and transparency. Since 2018, we
have reported annually on our key
environmental performance metrics.
We measure, monitor and report
on our carbon emissions relating to the
operations of our locomotive fleet,
energy usage, and water consumption.
We have for some time disclosed our
Scope 1 GHG emissions that the Group
makes directly.
In 2021, for the first time we also
provided data on our Scope 2 GHG
indirect emissions.
Scope 1:
153,794 tonnes of CO2 equivalent.
Scope 2:
1,555 tonnes of CO2 equivalent.
Going forward, the Group will
work to demonstrate its progress
in addressing climate change through
our sustainability reports. We will
continue to identify mitigation
measures to minimise climate-
related risks and improve reporting
transparency.
Reputation
Description
Increased expectations among
stakeholders of more aggressive
environmental measures and climate
change actions may lead to greater
scrutiny from investors and other
stakeholders. If this happens and the
Group fails to meet these expectations
and/or it fails to properly prepare
for changes in applicable climate
change regulations, it may lead to a fall
in investment, rising funding costs and a
potential loss of clients.
Controls and mitigating factors
The Group will continue to engage with
stakeholders and improve transparency
around all ESG topics material to our
business, including climate change,
to meet stakeholder expectations.
Globaltrans Investment PLC
Annual Report & Accounts 2021
Sustainability
STRATEGY
Globaltrans’ operations and financial results could be adversely affected by climate change and regulatory and legislative
responses to climate change. Following the TCFD’s methodology, we identify and consider both the transitional risks
(those associated with the transition to a low-carbon society) and the physical risks of climate change.
Physical
Acute physical risk
Description
Natural disasters, severe weather
events and extreme temperatures pose
a material risk to rail infrastructure
in Russia and other countries and,
therefore, to the Group’s operations
and rolling stock.
Delays, disruptions, derailments,
infrastructure damage and other
events may result in significant
interruption to, or disruption of,
the Group’s business operations
and damage to its rolling stock, which
may negatively affect the Group’s
operations and performance. Moreover,
disruptions to our clients’ operations
may also impact demand for the
Group’s services and affect its business
and performance. Although the Group’s
rolling stock is fully insured, replacing
damaged rolling stock may take
a considerable amount of time.
Transition
Policy/regulation
Description
As a fuel-intensive industry, the rail
freight sector is exposed to the
risk of increased regulation related
to carbon emissions and the use of fossil
fuels which may lead to:
• Increased fuel and energy costs, as
well as spare parts and rolling stock
due higher prices for iron and steel;
• Problems operating diesel
locomotives if one is unable
to comply with increased regulations;
• Increases in the cost of cleaner, more
fuel-efficient locomotives;
• Higher costs related to the
introduction of carbon taxes
and increased carbon offset costs
and carbon footprint reduction
solutions;
• Early asset write-downs/impairment
due to new and stricter energy
standards.
Controls and mitigating factors
In addition to implementing its
business continuity policy, the Group
plans to refine its analysis of potential
physical risks and mitigation plans.
The Group intends to conduct future
climate assessments and adapt
strategies to enhance its business
resilience.
Controls and mitigating factors
In response to these types of transitional
risks, the Group will continue to improve
its operational efficiency and reduce its
environmental footprint. Furthermore,
Globaltrans will proactively monitor
the carbon emissions associated with
the operation of the Group’s locomotive
fleet to identify and evaluate operational
and technological improvements in fuel
efficiency. Annual emissions testing
will help us better prepare for future
changes to the regulatory environment.
Market
Description
Market risks include potential declines
in demand for certain types of freight
transported by rail due to strengthened
and/or new climate change regulations
and shifts in consumer preferences
(for example, coal demand is affected
by energy policy and GHG emission
regulations). This may negatively
impact demand for the Group’s
services, cause increased competition
and affect the Group’s operations
and performance.
Controls and mitigating factors
The Group has always focused
on maintaining a balanced fleet that
better positions its operations to face
the consequences of increased
regulation and evolving market demand.
By operating a fleet balanced between
universal gondola cars that can carry
various different bulk cargoes, and tank
cars that just transport oil-related
cargoes, the Group reduces its
dependence on any one cargo flow.
It also means it can adjust quickly
to changing market conditions.
104
105
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
" Our people are at the heart of everything
that we do and in 2021 our focus was again
on protecting our employees’ well-being
with Health & Safety our top priority. We
also focused on supporting their mental
health and motivation through positive
engagement with staff throughout the
year. The pandemic taught us to quickly
adapt to the rapidly changing environment.
The acceleration in the Group’s digital
transformation we believe is benefitting
both our people and our Company.
Julia Ryzhkova
Head of HR, New Forwarding Company
Governance
Board of Directors ...................................................... 108
Executive Management ...........................................114
Corporate Governance Report .........................118
Share Capital .....................................................................130
Corporate Structure .................................................. 131
106
107
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Board of Directors
The Board of Globaltrans
is responsible for providing
effective leadership for the Group,
establishing its values and culture,
overseeing its governance,
and promoting the success
of the Group for the benefit
of all stakeholders. The Board
is composed of highly experienced
directors equipped with the diverse
skills, expertise and commercial
experience required to lead
the Group effectively and provide
support for, and constructive
challenge to, the executive
management.
Committee Memberships
A – Chairman
A – Member
A – Audit Committee
N – Nomination Committee
R – Remuneration Committee
E – ESG Committee
Sergey Maltsev
Chairman of the Board, Executive
Director, Chief Strategy Officer,
co-founder and shareholder
of Globaltrans
Appointed: Chairman in April 2018
and Chief Strategy Officer in August
2017.
Skills and experience: Mr. Maltsev
was instrumental in the development
of the freight rail market in Russia
and has worked in the industry for over
30 years. He co-founded Globaltrans
and served as Chief Executive Officer
from 2008 until 2015 when he left
the Group to join JSC Russian Railways
as Senior Vice President for strategy
and corporate governance. He rejoined
Globaltrans as Chief Strategy Officer
in 2017 before becoming Chairman
the following year.
Mr. Maltsev was a founding member
and Chairman of the non-profit
partnership “Council of Railway
Operators”. In recognition of his
services to the rail industry, Mr. Maltsev
received the “Honoured Railwayman
of Russia” award. He has a degree
in railway engineering.
15 members
of the Board of Directors
John Carroll Colley
Independent Non-executive Director,
Chairman of the Audit Committee
Dr. Johann Franz Durrer
Senior Independent Non-executive
Director, Chairman of the Remuneration
and Nomination committees
Vasilis Hadjivassiliou
Independent Non-executive Director,
member of the Audit committee
Appointed: April 2013.
Appointed: March 2008.
Appointed: September 2019.
Committee Memberships:
Committee Memberships:
Committee Memberships:
A N R
E
NR
A
Other appointments:
Mr. Hadjivassiliou holds directorships
in several companies affiliated with his
family and is also a Board member in a
number of other private companies.
Skills and experience: Mr. Colley has
extensive experience in international
trade and risk management both in the
public and private sectors. From 2007
to 2010, Mr. Colley served as country
manager for Russia at Noble Resources
SA. Prior to that, he held a variety
of positions in the public sector,
including at the office of the US Trade
Representative and the US Department
of Commerce in Washington, DC.
He worked for Linkful Ltd and Noble
Resources SA in Moscow from 1992
to 1999. Mr. Colley, a fluent Russian
speaker, holds an MA in History and a
BA in International Affairs and Russian
Studies from the University of Virginia.
Other appointments: Mr. Colley
is currently the principal of Highgate
Consulting LLC, a global advisory
consulting company.
Skills and experience: Dr. Durrer
began his career at Union Bank
of Switzerland and in 1970 founded
Fidura Treuhand AG which provides
bookkeeping, auditing and financial
services.
Dr. Durrer graduated from the University
of Zurich with a doctorate in Economics
and is a member of the Swiss Fiduciary
Association.
Skills and experience:
Mr. Hadjivassiliou was a partner
in Assurance and Advisory services
at PricewaterhouseCoopers (PwC),
Cyprus, from 1990 until 2018 when
he retired. During this time he held
various leadership positions with PwC
including as an elected member of the
Executive Board, Head of the Limassol
office as well as a number of other
offices in Cyprus and was a leading
figure in business development. He
has extensive experience in auditing,
International Financial Reporting
Standards and business advisory
services having advised major local
and international groups including
companies publicly listed on the
London Stock Exchange as well
as in Cyprus. Mr. Hadjivassiliou
is a graduate of The University
of Manchester and a Fellow of the
Institute of Chartered Accountants
of England and Wales.
108
109
Globaltrans Investment PLC
Annual Report & Accounts 2021
Board of Directors
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
George Papaioannou
Independent Non-executive
Director
Alexander Eliseev
Non-executive Director,
co-founder of Globaltrans
Andrey Gomon
Non-executive Director
Elia Nicolaou
Non-executive Director, Company
Secretary, Secretary to the Board
Melina Pyrgou
Non-executive Director
Appointed: April 2013.
Appointed: March 2008.
Appointed: April 2017.
Appointed: March 2008.
Appointed: April 2013.
Skills and experience: Mr. Eliseev
co-founded Globaltrans in 2004
and has played a leading role
in introducing market-based reforms
to the Russian freight rail transportation
market. He has spent more than 17 years
in senior management positions, mostly
within the rail sector, and sits on the
boards of two Globaltrans subsidiaries –
New Forwarding Company
and BaltTransServis.
Skills and experience: Mr. Gomon
has over 13 years management
experience in the railway industry.
From 2006 to 2012 he was CEO
of Transoil, one of the largest oil rail
transportation companies in Russia,
having previously served as CFO
between 2003 and 2006. He sits on the
boards of two Globaltrans subsidiaries –
New Forwarding Company
and BaltTransServis.
Mr. Eliseev is a graduate of the Russian
State Medical University where he
studied biophysics.
Mr. Gomon studied economics
at St Petersburg State University
and holds an MBA from INSEAD.
Other appointments: Mr. Eliseev
is Chairman of the Board of Globaltruck,
a leading freight trucking operator
in Russia, listed on the Moscow
Exchange.
Committee Memberships:
A
Skills and experience:
Mr. Papaioannou has more than 20 years
in financial reporting, risk management,
auditing, financial performance
analysis and taxation. In 2004, he
founded G. Papaioannou Auditors Ltd,
which provides accounting, audit,
tax and consulting services. From
2002 to 2004, he worked at Grant
Thornton in Cyprus and before that
for PricewaterhouseCoopers in Cyprus.
Mr. Papaioannou holds a degree
in Accounting and Financial
Management from the University
of Essex. He is a qualified chartered
accountant and a Fellow of the Institute
of Chartered Accountants in England
and Wales.
Other appointments: Mr. Papaioannou
holds directorships in a number
of family owned companies and in
a very limited number of other private
companies.
110
Skills and experience: Ms. Pyrgou
is a barrister and registered insolvency
practitioner and has practised
corporate law for over 25 years.
She is currently Managing Director
of Pyrgou Vakis Law Firm, a Cyprus
based corporate and commercial
law practice. Previously she
was Director of Legal Services
at PricewaterhouseCoopers in Cyprus.
Ms. Pyrgou served as the Chairman
of EuropeFides Association, a European
network of accounting, audit, tax
and legal firms, from 2015 to 2016
and is a member of various business
associations.
Ms. Pyrgou graduated from
the University of Keele with a degree
in Law and Sociology and holds
a diploma in Environmental Law from
the University of Geneva. She was
called to the bar in Cyprus in 1992
and in London (Grays Inn) in 1995.
Committee Memberships:
E
Skills and experience: Ms.
Nicolaou has extensive experience
in commercial, corporate and funds law.
She is currently the Managing Director
of Amicorp (Cyprus) Ltd. Previously,
she was head of the Corporate Legal
department at Polakis Sarris LLC
and also worked at C. Patsalides LLC.
Ms. Nicolaou is a member of the Board
of CIFA and WICCI, the Chair of Cyprus-
South East Asia Business Association,
participates in various associations
of the Cyprus Chamber of Commerce
and sits on the boards of other listed
and private companies.
Ms. Nicolaou graduated with
an LLB in Law from the University
of Nottingham and holds an LLM
in Commercial and Corporate Law from
University College London. She has
an advanced diploma in Business
Administration from the Cyprus
International Institute of Management.
She was admitted to the Bar in Cyprus
in 2003.
4 independent
Non-executive Directors
Other appointments: Ms. Pyrgou
currently serves as a member of the
Cyprus Investments Promotion Agency
(CIPA). She also sits on the Disciplinary
Committee of the Institute of Certified
Public Accountants of Cyprus (ICPAC).
Ms. Pyrgou is also a Board member
of the Health Insurance Organisation.
111
Globaltrans Investment PLC
Annual Report & Accounts 2021
Board of Directors
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Konstantin Shirokov
Executive Director,
Head of Internal Audit
Alexander Storozhev
Executive Director, Chief Procurement
Officer
Alexander Tarasov
Non-executive Director
Michael Thomaides
Non-executive Director
Marios Tofaros
Non-executive Director
Appointed: March 2008.
Appointed: April 2013.
Appointed: April 2013.
Appointed: April 2014.
Appointed: April 2013.
Skills and experience: Mr. Shirokov
has over 12 years of senior international
management experience. Prior
to joining Globaltrans, he worked
in senior finance roles at Mechel and as
an economist at Glencore International.
He served as a non-executive
member on the board of Global Ports
Investments PLC between 2008
and April 2018 where he was a member
of the Audit and Risk committee.
Mr. Shirokov graduated from
the Finance Academy under the Russian
government and studied business
management at Oxford Brookes
University.
Skills and experience: Mr. Storozhev
has held senior management roles
throughout a 20-year career in the rail
industry and has been with Globaltrans
since it was established. He is chairman
of a number of Globaltrans subsidiary
boards, including AS Spacecom, AS
Spacecom Trans, GTI Management
and BaltTransServis and serves on the
boards of other Globaltrans subsidiaries
including New Forwarding Company
and Ural Wagonrepair Company.
Since February 2015 he has been
Director of Investments and Business
Development at New Forwarding
Company. Mr. Storozhev is a recipient
of the “Honoured Transport Worker
of CIS” Award.
Mr. Storozhev graduated from
the Kiev Military Academy of Aviation
and Engineering in 1990 with a degree
in Engineering. He holds a diploma from
the Mirbis Business School in Moscow
and a Master’s degree in Business
Administration and Finance.
Skills and experience: Mr. Tarasov
served as a deputy director general
in Sevtekhnotrans, a Globaltrans
subsidiary that subsequently
merged with Ferrotrans. He has held
management positions at a number
of leading Russian companies
across different sectors, with a focus
on financial management and analysis.
Mr. Tarasov graduated from the Bauman
Moscow State Technical University
with a degree in Engineering
and holds a degree in Economics
from the Moscow State University
of Commerce.
Skills and experience: Mr. Thomaides
served as a director at Globaltrans
from 2004 to 2008 and sat on the
Board of Global Ports Investments PLC,
Russia’s leading container port operator.
He has been a director at Leverret
Holding Ltd (Cyprus) since 2007.
Mr. Thomaides graduated from London
Southbank University with a BSc degree
in Consumer Product Management.
Skills and experience: Mr. Tofaros
is a director of the Client Accounting
department at Amicorp (Cyprus) Ltd.
He was a financial accountant at Depfa
Investment Bank Ltd from 2004
to 2008 and a finance officer at Louis
Catering Ltd from 2003 to 2004. He
has held various positions in the Audit
department at KPMG Cyprus.
Mr. Tofaros has a degree in Accounting,
Finance and Economics and a master’s
degree in Business Studies, both
from the University of Kent. He holds
a chartered certified accountant
(FCCA) diploma and is a member of the
Institute of Certified Public Accountants
of Cyprus.
Sergey Tolmachev
Executive Director,
Managing Director
Appointed: Non-executive Director
in April 2013 and Executive Director
in October 2013.
Skills and experience: Mr. Tolmachev
became the Group’s Managing Director
in October 2013. He joined N-Trans
Group in 2001 and has held various
management positions focused
on corporate finance and treasury. He
also serves on Globaltrans subsidiary
boards, including AS Spacecom and AS
Spacecom Trans. He has extensive
experience in financial analysis
and modelling.
Mr. Tolmachev graduated from
Lomonosov Moscow State University
with a degree in Mechanics and Applied
Mathematics.
112
113
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Executive Management
The executive leadership has
responsibility for managing
the Group’s day-to-day business
operations and support functions.
The senior management team
comprises the executive directors
along with individuals responsible
for the key subsidiaries and Group
functions. Senior management
is in turn supported by a team
of highly skilled and competent line
managers.
Valery Shpakov
Chief Executive Officer
Mr. Shpakov became CEO in March
2016, having served as interim CEO
since November 2015. He joined New
Forwarding Company, a Globaltrans
subsidiary, in 2003 and has been its
CEO since 2007.
He is an experienced manager with
a track record of over 30 years in the
rail industry. He began his career in
the private sector in 1999 and has
held managerial positions at various
companies in the transport sector.
He is a recipient of the “Honoured
Railwayman of Russia” award.
Sergey Maltsev
Chief Strategy Officer,
Chairman of the Board, Executive
Director, co-founder and shareholder
Mr. Maltsev has served as Chief
Strategy Officer of the Group since
August 2017 and was elected as
Chairman of the Board of Directors of
Globaltrans in April 2018.
Mr. Maltsev has worked in the rail
sector for over 30 years and was
instrumental in the development of
the private freight rail market in Russia.
He was a founding member and
Chairman of the non-profit partnership
“Council of Railway Operators”. Having
co-founded Globaltrans, he served as
the Company’s CEO and a member
of the Board for over a decade before
stepping down in 2015. Subsequently,
he worked as the Senior Vice President
for strategy and corporate governance
at JSC Russian Railways. He is a
recipient of the “Honoured Railwayman
of Russia” award.
Alexander Shenets
Chief Financial Officer
Vyacheslav Stanislavsky
Deputy Chief Executive Officer,
Head of Operations
Alexander Storozhev
Chief Procurement Officer,
member of the Board,
Executive Director
Mr. Shenets has been CFO of
Globaltrans since the Group’s
establishment and has more than
16 years of experience in senior
finance positions, mostly in the
rail sector. He is a member of the
boards of GTI Management, New
Forwarding Company, BaltTransServis,
AS Spacecom, AS Spacecom Trans
and Ural Wagonrepair Company, all
Globaltrans subsidiaries.
Mr. Stanislavsky joined New Forwarding
Company, a Globaltrans subsidiary, as
Deputy General Director for Operations
and Commerce in March 2010 and
became First Deputy General Director in
April 2011.
He has more than 30 years of
experience in the rail industry and is a
recipient of the “Honoured Railwayman
of Russia” award.
He holds an MBA from Lomonosov
Moscow State University.
Mr. Storozhev joined the Board
as an Executive Director in April
2013. He has held a series of senior
management roles over a 20-year
career in the rail industry. He has been
with Globaltrans since the company
was established and is chairman of
a number of Globaltrans subsidiary
boards, including AS Spacecom, AS
Spacecom Trans, GTI Management and
BaltTransServis. He also serves on the
boards of New Forwarding Company
and Ural Wagonrepair Company, both
Globaltrans subsidiaries.
Mr. Storozhev is a recipient of the
“Honoured Transport Worker of CIS”
award. He graduated from the Kiev
Military Academy of Aviation and
Engineering in 1990 with a degree in
Engineering. He also holds a diploma
from the Mirbis Business School in
Moscow and a Master’s degree in
Business Administration and Finance.
114
115
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Executive Management
Kirill Prokofiev
CEO of BaltTransServis
Roman Goncharov
Head of Treasury
Sergey Avseykov
Business Development Officer
Svetlana Brokar
Government Relations Officer
Mr. Prokofiev was appointed CEO
of BaltTransServis, a Globaltrans
subsidiary, in February 2017. Prior to his
appointment, he spent more than seven
years working in senior executive roles
in the rail sector.
Mr. Goncharov has served as CFO
of New Forwarding Company, a
Globaltrans subsidiary, since 2005
and has over 15 years of management
experience.
He has an MBA from the Moscow
International School of Business.
He graduated from Saint Petersburg
State University of Economics where he
majored in economics. He also holds
an MBA in Strategic Management from
Moscow’s Higher School of Economics.
Mr. Avseykov is in charge of business
development for the Group. He
joined New Forwarding Company, a
Globaltrans subsidiary, in 2011 as Head
of the Marketing and Development
Division. Between 2017 and 2018, Mr.
Avseykov served as acting Head of
Business Project Management at JSC
Russian Railways before rejoining
Globaltrans in 2018.
Mr. Avseykov graduated from Tomsk
State University and holds a PhD in
political science from the Russian
Presidential Academy of National
Economics.
Ms. Brokar joined as Government
Relations Officer in December 2018.
She is an attorney with significant
expertise in civil, tax, commercial,
corporate, finance and railway
transport matters. She has worked with
government departments including
the Russian Transport, Finance and
Railway Ministries. From 2009 to
2013, Ms. Brokar was a member of the
Board of New Forwarding Company, a
Globaltrans subsidiary, and since 2014
has acted as its in-house legal counsel
or provided it with legal services.
She also previously worked with the
non-profit partnership “Council of
Railway Operators”.
Ms. Brokar graduated with a law degree
from Kaliningrad State University.
Artem Gabestro
General Counsel, Corporate
Governance Advisor to CEO
Artem Gabestro joined the Group in
2007 as a lawyer before becoming
general counsel of Globaltrans two
years later. He is a member of the Audit
committee of Globaltrans subsidiary
New Forwarding Company and in
January 2020 was appointed as an
advisor to Globaltrans’ CEO on issues of
corporate governance.
Mr. Gabestro is a graduate of Moscow
State University of International Affairs
and holds a Master’s degree in law.
116
117
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Corporate Governance Report
" Dear Shareholders,
On behalf of the Board,
I am pleased to introduce
the Group’s Corporate Governance
Report for 2021. The report
provides an overview of what
the Board focused on during
the year, with details on our
governance framework that
supports the business.
The Board believes that good governance is essential to the
long-term success of the Group and has committed to high
standards of compliance. Our governance principles are
based on the UK Code of Corporate Governance and are
regularly updated and adapted to ensure we remain in line
with best practice and meet our obligations to stakeholders.
The Board’s governance focus over the last year was on our
sustainability agenda, the health and wellbeing of our
people, dialogue with shareholders and business resilience.
Sustainability is central to the achievement of our strategic
goals and the long-term viability of the business. It is critical
that the Group has the governance structure to support its
environmental, social and governance strategies, and in
January 2021 the Board established a new ESG committee
to oversee our sustainability strategy. Thanks to the
committee’s work, and improved ESG disclosures, our ESG
profile improved, and we were rewarded with upgraded
ESG ratings and supportive shareholder feedback.
We greatly value the views of shareholders
and we appreciate their support of the business.
The Board is committed to maintaining high
levels of engagement with shareholders. In 2021,
we expanded our contact programme to include
Russian investors following the successful
secondary listing of the Company’s GDRs
on MOEX in 2020. Our 2021 discussions with
shareholders covered a wide range of topics
with corporate strategy, governance, and ESG
matters especially in focus.
As I have briefly outlined, I am pleased with our
progress this year.
Sergey Maltsev
Chairman of the Board,
Executive Director,
Chief Strategy Officer,
Co-founder and shareholder
of Globaltrans
Climate change is high on the Board’s agenda.
Our industry is well-positioned to facilitate
the green transport development and we
continue to support management in its efforts
to reduce emissions and optimise energy
usage. Reflecting our commitment to strong
sustainability governance, sustainability plan
identifies and focuses on specific sustainability
priorities. The Board oversees, and is ultimately
responsible for, sustainability and the progress
made against the sustainability plan. In response
to stakeholders’ increasing interest in our
climate change approach, Globaltrans has
chosen to use the Taskforce for Climate-
related Financial Disclosures methodology
(TCFD) to align its climate-change reporting.
Looking ahead, we intend to increase the level
of disclosure as we develop our understanding
of the risks and opportunities posed by climate
change, as reflected in the Governance
of climate-related issues section of this report.
COVID-19 has focused interest on the social
aspects of ESG. The Board recognises that
the demand for companies to do more in areas
such as health and safety, staff development,
workforce diversity and equality can only
intensify. One of the most important and visible
manifestations of how a business treats its
employees is safety. Our Company’s culture has
always been one of safety first, helping to ensure
that our people are not put in harm’s way.
However we can still do more build a sustainable
safety culture.
118
119
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Corporate Governance Report
Corporate governance policies
Globaltrans’ corporate governance policies and practices are designed to
ensure that the Group upholds its responsibilities to shareholders and other
stakeholders. This key principle is promoted and applied across all levels of
the Group supported by effective and transparent governance structures.
To that end, Globaltrans’ Board of Directors has adopted and updated the
Company’s Code of Corporate Governance (based on the principles of
the UK Corporate Governance Code), guaranteeing that the interests of all
shareholders are given due consideration.
Globatrans’ policies include, inter alia:
Corporate documents and policies
Business ethics
• Articles of Association
• Appointment Policy for the Board
of Directors and committees
• Audit committee – terms of
reference
• Anti-Fraud Policy
• Business Continuity Policy
• Code of Ethics and Conduct
• Corporate Diversity
and Inclusion Policy
• Board of Directors – terms of
• Environmental
reference
• Dividend Policy
• ESG (Environmental, Social and
Governance) committee – terms of
reference
• Nomination committee – terms of
reference
• Policy on assessment of
independence and objectivity of
external auditor
• Remuneration committee – terms
of reference
and Energy Policy
• ESG Policy
• Freedom of Association Policy
• Health and Safety Policy
• Human Rights Policy
• Policy on reporting and
investigating allegations of
suspected improper activities
(Whistleblowing Policy)
• Supplier Code of Conduct
Disclosure, transparency and market
abuse regulation
• Continuing Obligations Policy
• Corporate Policy on the
treatment of the rights of minority
shareholders
• Disclosure Policy
•
Internal control rules for insider
information
• List of insider information
• Securities Dealing Code and the
PDMR Securities Dealing Code
Privacy
• Privacy Policy
For the Group’s corporate
governance documents and policies,
please visit our corporate website at:
https://globaltrans.com/governance/
corporate-documents
120
Board responsibilities and activities
Globaltrans’ Board of Directors is accountable to the Company’s shareholders
for standards of governance across the Group’s activities. The Board is
committed to providing effective, transparent and ethical oversight of the
Group so that the Board can take decisions which it believes benefit all its
stakeholders and communities and create value for the Group.
Responsibilities
Membership
• Providing leadership, setting the
overall strategy and ensuring that
the necessary components are
in place for the Group to meet its
objectives.
• Setting Group values and
standards, and ensuring that
obligations to all stakeholders are
understood and met.
• Monitoring and reviewing the
performance of the Group and its
management.
• Maintaining an effective system
of internal control and risk
management to safeguard
shareholders’ rights and interests
and the Group’s assets.
• Ensuring an effective governance
framework and compliance with
relevant regulations.
• Assessing from time to time
whether the Independent Non-
executive Directors continue to
demonstrate independence.
The process for Board appointments is
led by the Nomination committee and
members of the Board are elected at
the General Meeting. Board members
are nominated based on their industry
knowledge, expertise and experience
in areas such as accounting, finance,
business management and strategic
planning.
In selecting candidates for the Board,
the Group seeks to create an effective
and complementary Board whose
capability is appropriate for the scale,
complexity and strategic positioning
of the business. Non-executive
Directors are drawn from a wide
range of industries and backgrounds
including infrastructure, transport,
audit and financial services, and
have appropriate experience working
with and for large international
organisations. In addition, the Group
selects Independent Directors
intending to ensure that the views
of the free-float shareholders are
represented and that the interests of
all stakeholders are taken into account.
The Board comprises 15 members,
eleven of whom are Non-executive
Directors. Four of the Non-executive
Directors are independent.
Globaltrans separates the positions
of Chairman and CEO to ensure
appropriate segregation of roles and a
clear division of responsibilities.
In 2021, members of the Board of
Directors held 14,716,545 shares and
GDRs in Globaltrans.
Diversity
The Board does not operate a formal
diversity policy concerning age,
gender or educational and professional
backgrounds. However, in line with
best practice, the Board does take
into account these aspects when
making new Board appointments and
considering the composition of the
Board.
There are 2 female members on the
Board, equivalent to about 13% of
the Board. The average age of the
Board is 53.5 years, and ranges in age
from 40 to over 70 years old. Board
members have experience across the
following areas: the transportation
and ports industry, audit, accounting,
economics, finance and banking,
legal, engineering and mechanics,
biophysics and mathematics,
history, international affairs and risk
management.
121
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Corporate Governance Report
Induction and professional
development
Activities
The Chair is responsible for ensuring
that there is a properly constructed
and timely induction for new directors
upon joining the Board. Directors
have full access to a regular supply
of financial, operational, strategic
and regulatory information to help
them discharge their responsibilities.
Performance evaluation
The Board’s performance is assessed
annually and the evaluation process is
conducted through a combination of
self-assessment and annual appraisals.
The Chairman’s performance is
evaluated by the Non-executive
Directors.
The Board meets at least four times a year. Fixed meetings are scheduled at the
end of each quarter, while ad hoc meetings are called when there are pressing
matters requiring the Board’s consideration in between the scheduled meetings.
The Board met 17 times during 2021 and considered 70 items including the
following:
Regular meetings
Ad hoc meetings
• Review of the Group’s financial
and operational performance.
• Approval of the annual budget.
• Review of the Group’s
• Approval of material borrowings
and pledges by the Company and
its subsidiaries.
• Approval of the contracts of the
performance against the approved
annual budget.
• Approval of the annual and
semi-annual financial statements
and the respective regulatory
announcements.
Company.
• Approval of the remuneration of
key management and executive
directors.
• Appointment of the key
management of the Group.
• Review of the results of risk
• Approval of dividend distribution
assessments.
by subsidiaries.
• Approval of the Annual General
Meeting agenda, including
dividend proposals and Board
reappointments.
• Approval of appointments to the
Board of Directors of subsidiaries.
• Approval of the interim dividend
of the Company.
• Review and consideration of
various business development
opportunities and major
transactions.
• Approval of the prolongation of
the buy-back of the Company’s
GDRs from the market.
• Consideration of M&A
transactions.
17 times
The Board met in 2021
The Board and the Board Committees meetings in 2021 and the attendance of Directors
Board of Directors
Nomination
committee
Remuneration
committee
Audit
committee
ESG
committee
E
1
1
A
1
1
E
5
5
A
5
5
E
6
6
6
A
6
6
6
E
2
A
2
2
2
Sergey Maltsev (Chairman)
John Carroll Colley
Dr. Johann Franz Durrer
Alexander Eliseev
Andrey Gomon
Vasilis Hadjivassiliou
Elia Nicolaou
George Papaioannou
Melina Pyrgou
Konstantin Shirokov
Alexander Storozhev
Alexander Tarasov
Michael Thomaides
Marios Tofaros
Sergey Tolmachev
E – Eligible
A – Attended
E
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
A
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
Remuneration of the Board
and the management
Directors serve on the Board under
letters of appointment which specify
their terms of appointment and
remuneration. Appointments are
effective until the following Annual
General Meeting. Remuneration levels
for Non-executive Directors reflect
their expertise, time commitment,
responsibilities and membership of any
Board Committees. Directors are also
reimbursed for expenses associated
with the discharge of their duties.
Non-executive Directors are not
eligible for bonuses, retirement
benefits or participation in any
incentive plans operated by the Group.
The Group’s shareholders approved
the remuneration of Board members
for 2021 at the Annual General Meeting
held on 29 April 2021. For details of the
remuneration paid to the Board and
key executives in 2021, please refer to
Note 35a of the Group’s Consolidated
Management Report and Consolidated
Financial Statements included in the
Financial Statements section of this
Annual Report.
122
123
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Corporate Governance Report
Board committees
Globaltrans has 4 principal committees that advise the Board: the Audit
committee, the Nomination committee, the Remuneration committee
and the ESG committee. These committees oversee, review and monitor
key areas on behalf of the Board and while they have the authority to make
recommendations, ultimate decision-making responsibility for all matters lies
with the full Board. Each committee has written terms of reference, approved
by the Board, that summarise the committee’s role and responsibilities.
4
Board committees
AUDIT COMMITTEE
Members and meetings
NOMINATION COMMITTEE
Members and meetings
The role of the Audit committee is to
ensure the integrity of the Group’s
published financial information and the
effectiveness of the internal audit
function and the systems for internal
control and risk management, as well as
the external audit process.
Number
of members
Members
as at 31 December 2021
3
members;
all independent
John Carroll Colley,
Independent Non-executive
Director (Chairman)
Vasilis Hadjivassiliou,
Independent Non-executive
Director
George Papaioannou,
Independent Non-executive
Director
Minimum
meetings a year
Number
of meetings
in 2021
4
6
The role of the Nomination
committee is to monitor and review
the size, composition and balance
of the Board and its committees
to ensure Globaltrans has the right
structure, skills and diversity for the
effective management of the Group.
Number
of members
Members
as at 31 December 2021
Minimum
meetings a year
Number
of meetings
in 2021
2
members;
all independent
Johann Franz Durrer,
Senior Independent Non-
executive Director (Chairman)
John Carroll Colley,
Independent Non-executive
Director
1
1
Responsibilities
Issues considered in 2021
Responsibilities
•
Integrity of the Group’s financial
statements.
• Review of the Group’s Consolidated Financial Statements for 2020 and interim
• Preparation of selection criteria and appointment procedures for Board
financial results for the six months ended 30 June 2021.
members.
• Effectiveness of the Group’s internal
• Review of the external auditor’s report to the Audit Сommittee following its full-
control and risk management
systems.
• Relationship with the Group’s
external auditors, including
the audit process and reports.
• Terms of the auditor’s appointment
•
and remuneration.
Implementation of codes
of conduct.
• Assessment of the Chairman of the
year audit for 2020 and review for the six months ended 30 June 2021.
• Review of the Group’s external auditor and terms of reappointment for 2021.
The Committee recommended reappointment of the external auditors to the
Board which, in turn, proposed their reappointment at the Annual General Meeting
of the Group held on 29 April 2021.
• Review of the report of the external auditor on the audit strategy for 2021.
• Review of regulatory announcements by the Group.
• Review of internal controls and risk management processes.
• Approval of non-audit services to be provided to the Group by the external auditor.
• Review of the internal audit function and reports on its activities, and on the
Board’s performance.
internal audit model and plan.
• Regular review of the Board’s structure, size and composition.
• Future Board appointments.
• Recommendations regarding the membership of the Audit
and Remuneration committees.
The Nomination Committee meetings in 2021
Dr. Johann Franz Durrer
John Carroll Colley
Eligible
1
1
Attended
1
1
Issues considered in 2021
• Advice to the Annual General
Meeting on the appointment
of Board members.
• Recommendation on appoitment
of Directors to the Committees
of the Board.
The Audit Committee meetings in 2021
John Carroll Colley
George Papaioannou
Vasilis Hadjivassiliou
Eligible
6
Attended
6
6
6
6
6
124
125
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Corporate Governance Report
REMUNERATION COMMITTEE
Members and meetings
ESG COMMITTEE
Members and meetings
The role of the Remuneration
committee is to ensure that executive
remuneration aligns appropriately
with the business strategy and that
the remuneration policy remains
appropriate.
Number
of members
Members
as at 31 December 2021
Minimum
meetings a year
Number
of meetings
in 2021
2
members;
all independent
Johann Franz Durrer,
Senior Independent Non-
executive Director (Chairman)
John Carroll Colley,
Independent Non-executive
Director
1
1
The role of the ESG committee is to
monitor the development of the
Group’s sustainability strategy, review
and recommend ESG disclosures
for Board approval and approve
the Group’s sustainability reports.
Number
of members
Members
as at 31 December 2021
Minimum
meetings a year
Number
of meetings
in 2021
2
members;
1 independent
Elia Nicolaou,
Non-executive Director
(Chair)
John Carroll Colley,
Independent Non-executive
Director
2
2
Responsibilities
Issues considered in 2021
Responsibilities
Issues considered in 2021
• Remuneration of Executive Directors (Chairman and Executive
Directors determine the remuneration for independent
members).
• Review of the Group’s remuneration policies.
• Approval of bonuses to the chief
strategy officer, chief financial
officer and managing director.
The Remuneration Committee meetings in 2021
Dr. Johann Franz Durrer
John Carroll Colley
Eligible
5
5
Attended
5
5
• Monitoring of the development of the
Group’s sustainability strategy (issues,
policies, initiatives related to ESG).
• Oversight of ESG disclosures.
• Approval of annual integrated sustainability
reports.
• Review of the ESG activities of the Group.
• Review of key performance indicators.
• Review of the Group’s ESG activities and key performance
indicators in 2020 covered in the annual integrated sustainability
report.
• Approval of the annual integrated sustainability report for 2020.
• Approval of the 2021 meetings/work plan of the ESG committee.
• Review of latest sustainability trends, the Group’s ESG activities,
and investor feedback during the H1 2021 non-deal roadshow.
• Review of the Group’s ESG plan, key activities and ESG performance
in H1 2021.
• Review and approval of the ESG work plan for H2 2021.
The ESG Committee meetings in 2021
Elia Nicolaou
John Carroll Colley
Eligible
2
2
Attended
2
2
126
127
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Corporate Governance Report
Shareholder engagement
The Board places great importance on its relationships with the Company’s
shareholders. It continually strives to provide high levels of transparency
and build trust, recognising that engaging with shareholders is key
to creating long-term, sustainable shareholder value. The Board engages
with shareholders in a variety of ways. The CEO and CFO meet regularly
with the Group’s institutional investors to hear their views and provide
updates on the Group’s strategy and business performance. The Group
has a dedicated Investor Relations team that acts as the primary point
of contact with the investor community.
INTERNAL CONTROL
AND AUDIT
The Board is primarily responsible for
establishing a framework of prudent
and effective internal controls and risk
management in relation to the financial
reporting process for the undertakings
included in the Group consolidation
that enables risks to be assessed and
managed and financial reports to be
prepared.
The Audit committee reviews and
assesses the Group’s internal control
and risk management processes.
The system of controls is designed to
manage rather than eliminate the risks
relevant to the Group’s operations and,
therefore, can only provide reasonable,
and not absolute, assurance against
material errors, losses, fraud or
breaches of laws and regulations.
At Globaltrans, the body responsible
for internal audit is the Internal Audit
Service (IAS).
Management undertakes a regular
schedule of meetings, presentations,
conference calls and webcasts with
institutional investors and sell-side
analysts. The Group’s commitment to
open and constructive communication
has been particularly important in the
last year in light of the coronavirus
pandemic. The management, along
with Investor Relations team, worked
hard to maintain open channels
of communications, using remote
communications tools to interact
with investors. In connection with
the Group’s secondary listing on the
Moscow Exchange, the Company
focused on events and seminars for
Russian retail investors to introduce
them to the Company and set out
the investment case. Over 2,000
local investors took part in these
events during 2021 contributing to
the significant increase in the stock
liquidity. The Group’s new website was
also launched in 2020, providing easy-
to-navigate access and an enhanced
investor relations experience.
Corporate information, including
annual reports, Company
announcements and presentations is
available on the corporate website at
www.globaltrans.com/investors.
>2,000
local investors took part
in dedicated seminars in 2021
It tests the Group’s systems of risk
management, internal control and
corporate governance to obtain
reasonable assurance that:
• the risk management system
functions efficiently;
• material financial, management and
operating information is accurate,
reliable and up-to-date;
• the actions of employees and
management bodies comply with
the Group’s policies, standards and
procedures and applicable laws;
• resources are procured reasonably
and used efficiently and their
safekeeping is fully guaranteed; and
• Group companies conduct their
business in compliance with
applicable laws.
Every year the Audit committee
approves an internal audit plan, which
is developed by identifying the audit
universe, performing a risk analysis
and obtaining input from management
relative to risks, controls and governance
processes. The internal auditor regularly
reports to the Audit committee on
the progress of planned audits. If any
material internal control deficiencies
are identified, they are immediately
communicated to the Audit committee
and consequently to the Board.
EXTERNAL AUDITOR
The Audit committee manages the
relationship with the external auditor
on behalf of the Board. Each year it
considers the reappointment of the
external auditor, reviews requirements
on the rotation of the audit partner
and the audit firm when applicable,
as well as its remuneration and other
terms of engagement, and makes
a recommendation to the Board.
Shareholders are then asked to approve
the appointment at the Annual General
Meeting.
The Group has a formal policy on
assessing the independence and
objectivity of the external auditor.
It regulates the terms of appointment
of the external auditor and the nature of
audit and permitted non-audit services
provided to the Group.
External auditors periodically (at
least annually) provide written
confirmation to the Committee that,
in their professional judgement,
they are independent of the Group.
The Committee is satisfied that the
independence and objectivity of the
external auditors is not impaired and
that the external audit process remains
effective.
The Audit committee recommended
the reappointment of Pricewaterhouse-
Coopers as the Group’s external auditor
for 2021 and 2022. The appointment
for 2021 was approved by the Group’s
shareholders at the Annual General
Meeting on 29 April 2021.
128
129
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Share Capital
Corporate Structure
Globaltrans was formed in 2004
when a group of like-minded
entrepreneurs brought their freight
rail businesses together to form
the Company, giving it the scale,
governance and focus to become
one of the leading players in the
region.
These founders remain shareholders
with a total stake of about
43% between them, and their
entrepreneurial December 2021, news
surrounding spirit remains at the heart
of our culture and approach today.
In addition, other directors and officers
of Globaltrans are shareholders of the
Company representing approximately
0.2% of the issued share capital.
In 2008, Globaltrans’ founders
recognised the benefits of an
international listing and undertook an
Initial Public Offering on the London
Stock Exchange (LSE), becoming
the first freight rail company serving
Russian cargo flows to be listed
internationally. In 2020, Globaltrans'
GDRs were admitted to trading on the
Moscow Exchange (MOEX). Today,
the majority of the Company’s shares
are in public hands with Globaltrans’
free float amounting to approximately
56.8% of the issued share capital.
The issued share capital of Globaltrans
consists of 178,740,916 ordinary shares
with a nominal value of USD 0.10 each,
a certain portion of which is held in the
form of Global Depositary Receipts
("GDRs"). The GDRs represent one
ordinary share each and have been
traded on the Main Market of the
LSE (ticker symbol: GLTR) since May
20081 and on the Level One quotation
list of MOEX (ticker symbol: GLTR)
since October 2020. Citibank N.A.
is the depositary bank for the GDR
programme of Globaltrans.
As of 4 March 2022 the total
number of the GRDs held in treasury
represented 0.24% of the Company’s
share capital.
Globaltrans provides freight rail
transportation, railcar leasing
and other ancillary services to
clients through its subsidiaries:
New Forwarding Company,
BaltTransServis, GTI Management,
Spacecom and Ukrainian New
Forwarding Company.
The Group’s corporate structure
ensures effective asset management
and operational control while creating
logical business segments.
Globaltrans Investment PLC
as of 1 March 2022
New Forwarding Company,
AO (Russia)
BaltTransServis,
OOO (Russia)
BTS-Locomotive solutions,
OOO (Russia)
100%
100%
100%
REmTransServus,
OOO (Russia)
100%
AS Spacecom Trans,
(Estonia)
100%
AS Spacecom,
(Estonia)
65.25%
Ownership structure as of 4 March 2022
5 founders
11.5% Marigold Investments Ltd2
11.5% Onyx Investments Ltd2
10.8% Maple Valley Investments Ltd2
5.1%
3.1%
0.9%
Litten Investments Ltd3
Goldriver Resources Ltd4
Transportation Investments
Management Ltd5
0.2%
Directors and management
0.24% Treasury shares
56.8% Free float6
1
Imposed suspension of GDRs trading on the London Stock Exchange on 3 March 2022 continued
as of the date of publication.
2 Andrey Filatov, Nikita Mishin and Konstantin Nikolaev are co-founders of Globaltrans and are
beneficiaries with regard to 11.5% and 11.5% and 10.8% respectively of Globaltrans’ ordinary share
capital each through their respective SPVs (Marigold Investments Ltd, Onyx Investments Ltd and
Maple Valley Investments Ltd).
3 Beneficially owned by Alexander Eliseev, Non-executive Director and co-founder of Globaltrans.
4 Beneficially owned by Sergey Maltsev, Chairman of the Board of Directors, Chief Strategy Officer and
co-founder of Globaltrans.
5 Beneficially owned by Andrey Filatov, Nikita Mishin and Konstantin Nikolaev, co-founders of
Globaltrans.
GTI Management,
OOO (Russia)
100%
Ural Wagonrepair Company,
AO (Russia)
100%
Ukrainian New Forwarding
Company, LLC (Ukraine)
100%
130
131
6 For these purposes, the free float consists of the ordinary shares and GDRs held by investors not
Source: Globaltrans
affiliated or associated with Globaltrans.
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Financial
Statements
" Globaltrans’ long-term service contracts offer key clients
tailored freight rail solutions that improve the speed and
reliability of cargo offtake and reduce costs for the customer.
Globaltrans pioneered the concept of long-term partnerships
and today has such agreements with six leading businesses.
We successfully extended key service contracts with long-
standing clients Rosneft and Metalloinvest in 2021.
Kirill Prokofiev
CEO of BaltTransServis
132
133
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated Management
Report and Consolidated
Financial Statements
for the Year Ended
31 December 2021
Board of Directors and other officers..................................................................................................................................135
Consolidated Management Report .....................................................................................................................................136
Directors’ responsibility .......................................................................................................................................................156
Independent Auditor’s Report ............................................................................................................................................158
Consolidated income statement ........................................................................................................................................164
Consolidated statement of comprehensive income ..........................................................................................................165
Consolidated balance sheet................................................................................................................................................166
Consolidated statement of changes in equity ...................................................................................................................168
Consolidated statement of changes in equity ...................................................................................................................170
Consolidated cash flow statement ..................................................................................................................................... 172
25. Cash and cash equivalents ..................................... 243
26. Share capital, share premium and treasury shares 244
27. Dividends ............................................................... 245
28. Borrowings .............................................................. 246
29. Other lease liabilities ............................................. 250
30. Deferred income tax ............................................... 251
31. Trade and other payables ....................................... 253
32. Earnings per share .................................................. 253
33. Contingencies ........................................................ 254
34. Commitments ..........................................................257
35. Related party transactions ..................................... 258
36. Events after the balance sheet date ........................ 261
1. General information ................................................. 174
2. Basis of preparation ................................................ 174
3. Adoption of new or revised standards
and interpretations ................................................. 175
4. Summary of significant accounting policies ......... 175
5. New accounting pronouncements .........................195
6. Financial risk management ......................................196
7. Critical accounting estimates and judgements ..... 206
8. Segmental information ........................................... 208
9. Non-IFRS financial information ................................ 213
10. Revenue.................................................................... 218
11. Expenses by nature ................................................. 220
12. Other gains — net ...................................................223
13. Employee benefit expense ......................................223
14. Finance income and costs .......................................224
15. Income tax expense .................................................225
16. Net foreign exchange gains ................................... 226
17. Property, plant and equipment ...............................227
18. Right-of-use assets .................................................. 231
19. Intangible assets ..................................................... 233
20. Principal subsidiaries .............................................. 234
21. Share-based payments ........................................... 238
22. Financial assets ...................................................... 239
23. Other assets ............................................................ 241
24. Inventories ..............................................................242
Board of Directors
and other officers
Mr. Sergey Maltsev
Chairman of the Board of Directors
Executive Director
Alternate director: Mr. Yuri Isaev
Mr. Sergey Tolmachev
Executive Director
Mr. Alexander Storozhev
Executive Director
Alternate Director: Ms. Elia Nicolaou
Mr. Konstantin Shirokov
Executive Director
Mr. Alexander Eliseev
Non-executive Director
Alternate Director: Ms Ekaterina
Golubeva
Board support
The Company Secretary is
available to advise all Directors to
ensure compliance with the Board
procedures. Also a procedure is
in place to enable Directors, if
they so wish, to seek independent
professional advice at the
Company’s expense.
Company Secretary
Ms. Elia Nicolaou
Dimitriou Karatasou, 15
Anastasio Building, 6th floor, Office
601
Strovolos, 2024, Nicosia, Cyprus
Mr. Andrey Gomon
Non-executive Director
Alternate Director: Ms. Melina Pyrgou
Assistant secretary: Mr. Marios
Tofaros
Mr. Alexander Tarasov
Non-executive Director
Registered office
20 Omirou Street
Agios Nicolaos, CY-3095 Limassol,
Cyprus
Board of Directors
Mr. Johann Franz Durrer
Senior Independent Non-Executive
Director
Chairman of the Remuneration Com-
mittee
Chairman of the Nomination Com-
mittee
Mr. Vasilis Hadjivassiliou
Independent Non-Executive Director
Member of the Audit Committee
(since January 2021)
Mr. John Carroll Colley
Independent Non-Executive Director
Chairman of the Audit Committee
Member of Remuneration Committee
Member of Nomination Committee
Member of ESG Committee (since
January 2021)
Mr. George Papaioannou
Independent Non-Executive Director
Member of the Audit Committee
Ms. Elia Nicolaou
Non-executive Director
Chairwoman of the ESG Committee
(since January 2021)
Member of the Audit Committee
(until January 2021)
Company Secretary
Secretary of the Board
Alternate Director: Mr. Marios Tofaros
Mr. Michalakis Thomaides
Non-Executive Director
Ms. Melina Pyrgou
Non-executive Director
Mr. Marios Tofaros
Non-executive Director
134
135
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
The Board of Directors presents its report together with the audited consolidated financial statements for the year
ended 31 December 2021. 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 activities of the Group, which are unchanged from last year, are the provision of railway transportation
services, using own and leased rolling stock and fleet engaged from third party rail operators, as well as the operating
lease of rolling stock.
Review of developments, position and performance of the Group’s business
The first half of 2021 saw weak gondola pricing conditions. However, continued momentum in the bulk cargo market
supported an improvement in gondola rates toward the end of the second quarter that has carried through the second
half of the year. The significant market recovery seen in the second half of 2021 was converted into a strong business
performance for the full year. The Group has improved the financial results, reduced the leverage and renewed key
long-term contracts during 2021. Group’s Free Cash Flow remained robust despite the moderate increase in expansion
CAPEX, reflecting mainly purchases of additional tank cars.
IFRS financial information
Management considers amongst others the following IFRS measures in analysing the performance of the Group.
The Group’s Total revenue increased 7% year on year to RUB 73,151,013 thousand in 2021 (2020: RUB 68,367,404 thousand).
Operating profit increased 15% year on year to RUB 21,627,259 thousand in 2021 (2020: RUB 18,811,071 thousand).
The Profit for the year ended 31 December 2021 increased 24% year on year to RUB 15,099,559 thousand (2020: RUB
12,186,847 thousand).
Non-IFRS financial information
Amongst others, management analyses the following key non-IFRS measures. These non-IFRS measures are marked with
capital letters and their definitions are provided at the end of this section in alphabetical order.
Adjusted Revenue increased 6% year on year to RUB 58,492,364 thousand (2020: RUB 54,933,713 thousand) supported
by substantial recovery in gondola rates in second half of 2021 coupled with continued robust pricing in the tank car
segment. Total Operating Cash Costs were up 2.16% year on year to RUB 29,750,883 thousand (2020: RUB 29,121,210
thousand).
Adjusted EBITDA increased 8% year on year to RUB 29,044,127 thousand (2020: RUB 26,807,224 thousand) with the
Adjusted EBITDA Margin rose to 50% (2020: 49%), mainly impacted by growing Adjusted revenue and costs remaining
stable.
The Group had a strong balance sheet with Net Debt to Adjusted EBITDA decreasing to 0.64x (2020 end: 1.01x). Net Debt
reduced by 32% to RUB 18,463,763 thousand (2020 end: RUB 27,036,917 thousand). As at 31 December 2021 and 31
December 2020 100% of the Group’s debt was denominated in Russian roubles.
Free Cash Flow of RUB 16,130,930 thousand increased 7% year on year (RUB 15,103,243 thousand for 2020) despite
a 22% increase in Total CAPEX year on year to RUB 8,439,159 thousand (2020: RUB 6,941,159 thousand) following
purchases of additional tank cars, and increased maintenance CAPEX.
Operational information
In 2021, Freight Rail Turnover (excluding Engaged Fleet) decreased by 2.3% year on year and the Group’s Transportation
Volume (excluding Engaged Fleet) decreased by 4.3%. The Freight Rail Turnover amounted to 146.8 billion tonnes-km
(2020: 150.3 billion tonnes-km) and the Group’s Transportation Volume was 85.1 million tones in 2021 (2020: 88.9 million
tones).
The Average Number of Loaded Trips per Railcar decreased by 3.2% year on year and the Average Distance of Loaded
Trips increased by 2.1% year on year, mainly reflecting changed logistics.
On 31 December 2021 the total assets of the Group were RUB 108,284,996 thousand (2020: RUB 98,327,207 thousand)
and net assets were RUB 56,505,223 thousand (2020: RUB 52,773,813 thousand).
Average Price per Trip increased by 11% year on year to RUB 41,075 (2020: RUB 36,909), with solid pricing in the gondola
segment.
On 31 December 2021 the total debt of the Group was RUB 31,318,470 thousand and decreased by 2% as compared
to end of 2020 which amounted to RUB 32,015,239 thousand. Total cash and cash equivalents on 31 December 2021
increased by 158% and amounted to RUB 12,854,707 thousand (31 December 2020: 4,978,322 thousand).
The decrease in the Empty Run Ratio for gondola cars to 44% (2020: 45%) due to continued adjustments to cargo and
client mix due to the impact of the COVID-19 pandemic whereas the Total Empty Run Ratio remains stable on the level
51% (2020: 51%).
Total Fleet decreased by 4% to 69,106 units (2020 end: 71,688 units) primarily reflecting the sale of Syntezrail LLC, which
more than offset the additions of units in the year and increase in leased-in fleet.
The financial position, development and performance of the Group as presented in the financial statements is
considered satisfactory.
136
137
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
Definitions to Non-IFRS financial measures
Adjusted EBITDA represents EBITDA excluding “Net foreign exchange transaction (losses)/gains from financing
activities”, “Share of loss of associate”, “Other gains — net”, “Net (gain)/loss on sale of property, plant and equipment”,
“Reversal of impairment/(impairment) of property, plant and equipment”, “Loss on derecognition arising on capital
repairs” and “Reversal of impairment of intangible assets”.
Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Adjusted Revenue.
Adjusted Revenue is calculated as “Total revenue” less the following “pass through” items “Infrastructure and
locomotive tariffs: loaded trips” and “Services provided by other transportation organisations”.
Free Cash Flow is calculated as “Cash generated from operations” (after “Changes in working capital”) less “Tax
paid”, “Purchases of property, plant and equipment”, “Purchases of intangible assets”, “Acquisition of subsidiary
undertakings — net of cash acquired”, “Acquisition of non-controlling interest”, “Interest paid on lease liabilities”,
“Interest paid on bank borrowings and non-convertible unsecured bonds” “Interest paid on leases with financial
institutions”, “Principal elements of lease payments for other lease liabilities” plus “Cash inflow from disposal of
subsidiary undertakings — net of cash disposed of”.
Freight Rail Turnover is a measure of freight carriage activity over a particular period calculated as the sum of tonnage of
each loaded trip multiplied by the distance of each loaded trip, expressed in tonnes-km. It includes volumes transported
by the engaged fleet and excludes performance of petrochemical tank container segment.
Average Distance of Loaded Trip is calculated as the sum of the distances of all loaded trips for a period divided by the
number of loaded trips for the same period.
Net Debt is defined as the sum of total borrowings (including interest accrued) less “Cash and cash equivalents”.
Average Number of Loaded Trips per Railcar is calculated as total number of loaded trips in the relevant period divided
by Average Rolling Stock Operated.
Average Price per Trip is calculated as Net Revenue from Operation of Rolling Stock divided by the total number
of loaded trips during the relevant period in the respective currency. Net Revenue from Operation of Rolling Stock
is defined as the sum of “Revenue from railway transportation — operators services (tariff borne by the Group)”
and “Revenue from railway transportation — operators services (tariff borne by the client)” less “Infrastructure and
locomotive tariffs: loaded trips”, “Services provided by other transportation organisation” and net revenue from
engaged fleet.
Net revenue from engaged fleet represents the net sum of the price charged for transportation to clients by the Group
utilising Engaged Fleet less the loaded railway tariff charged by OAO “Russian Railways” (included in “Infrastructure
and locomotive tariffs: loaded trips”) less the cost of attracting fleet from third-party operators (included in “Services
provided by other transportation organisations”).
Owned Fleet is defined as the fleet owned and leased in under finance lease as at the end of the reporting period. It
includes railcars, locomotives and containers, unless otherwise stated, and excludes Engaged Fleet.
Total CAPEX calculated on a cash basis as the sum of “Purchases of property, plant and equipment”, “Purchases of
intangible assets”, “Acquisition of subsidiary undertakings — net of cash acquired”.
Average Rolling Stock Operated is calculated as the average weighted (by days) number of rolling stock available for
operator services (not including rolling stock in maintenance, purchased rolling stock in transition to its first place of
commercial utilisation, rolling stock leased out, Engaged Fleet, flat cars and tank containers used in petrochemical
business).
Total Empty Run Ratio is calculated as total kilometres travelled empty divided by the total kilometres travelled loaded
by the rolling stock fleet operated by Globaltrans (not including the relocation of rolling stock to and from maintenance,
purchased rolling stock in transition to its first place of commercial utilisation, or rolling stock leased out, Engaged Fleet,
platforms and tank containers used in petrochemical business) in the relevant period.
EBITDA represents “Profit for the year” before “Income tax expense”, “Finance costs — net” (excluding “Net foreign
exchange transaction (losses)/gains on financing activities”), “Depreciation of property, plant and equipment”,
“Amortisation of intangible assets” and “Depreciation of right-of-use assets”.
Total Fleet is defined as the fleet owned and leased in under finance and operating leases as at the end of reporting
period. It includes railcars, locomotives and petrochemical tank containers, unless otherwise stated, and excludes
engaged fleet.
Empty Run Ratio is calculated as the total of empty trips in kilometres by respective rolling stock type divided by total
loaded trips in kilometres of such rolling stock type. Empty trips are only applicable to rolling stock operated (not
including rolling stock in maintenance, purchased rolling stock in transition to its first place of commercial utilisation,
rolling stock leased out, engaged fleet, platforms and tank containers used in petrochemical business).
Engaged Fleet is defined as rolling stock subcontracted or otherwise engaged from a third-party rail operator for a
loaded trip from the point of origination to the cargo’s destination, at which point the railcar is then released to such
third-party.
Total Operating Cash Costs represent operating cost items payable in cash and calculated as “Total cost of sales,
selling and marketing costs and administrative expenses” less the “pass through” items: “Infrastructure and locomotive
tariffs: loaded trips” and “Services provided by other transportation organisations” and non-cash items: “Depreciation
of property, plant and equipment”, “Amortisation of intangible assets”, “Depreciation of right-of-use assets”, “Loss
on derecognition arising on capital repairs”, “Net impairment losses on trade and other receivables”, “Reversal of
impairment/(impairment) of property, plant and equipment” and “Net gain/(loss) on sale of property, plant and
equipment”.
Transportation Volume is a measure of freight carriage activity over a particular period, measuring weight of cargo
carried in million tonnes. It excludes volumes transported by Engaged Fleet and the performance of petrochemical tank
container segment.
138
139
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
Changes in group structure
There were no changes in the Group structure of the Company during the year ended 31 December 2021, apart from
the sale of 60% in Syntezrail Ltd and Syntezrail LLC. Furthermore, in February 2022 the Company acquired 40% non-
controlling interest in BaltTransServis, OOO (Note 36). For the principal subsidiaries of the Company, refer to Note 20 of
the consolidated financial statements.
Environmental matters
Rail is one of the most environmentally friendly modes of transport. Nonetheless, any commercial activity has an
environmental impact and Globaltrans strives to minimise those from its operations where possible. To this end, the
Group ensures that its activities fully comply with local environmental regulations. It also aims to help business and
nature co-exist by focusing on applying modern technology in its operations and using natural resources rationally.
In January 2021, the Board established the ESG Committee to analyse and oversee risks related to the environmental,
social and governance issues.
Human resources
Globaltrans considers the wellbeing of employees central to its success and strives to maintain exemplary working
standards, ensure job satisfaction and create opportunities for professional growth. The Group’s personnel policy
focuses on creating a positive atmosphere at all offices and facilities to maximise productivity. As part of this, it offers
medical insurance, support for education, opportunities to obtain additional qualifications and training, and financial aid
in particularly difficult times.
The Group’s future success will partly depend on its ability to continue to attract, retain and motivate key employees
and qualified personnel, in particular an experienced management team. Competition in Russia for such personnel with
relevant expertise is intense due to the small number of qualified individuals with suitable practical experience in the rail
industry.
Adequate remuneration packages, which are in line with or in excess of market levels, are offered to all employees
and key managers and remuneration is linked to the Group’s financial results. The Human Resource function regularly
monitors salary levels and other benefits offered by competitors to ensure that the Group’s remuneration packages are
adequate.
Principal risks and uncertainties
The Group faces a number of diverse potential and actual risks to its business. The Board has adopted a formal process
to identify, evaluate and manage principal risks and uncertainties faced by the Group.
To identify, evaluate and mitigate these, the Group has established an in-house system to monitor and control
uncertainties and threats throughout its activities. This is overseen by a dedicated Risk Management function, which
works directly with the Board of Directors in this area.
The escalation of the conflict in Ukraine and the associated sanctions imposed by the US, European Union and a number
of other countries on some of the biggest Russian industrial groups, as described in Note 36 to the consolidated
financial statements, may adversely affect the business environment and prospects of the Company and its subsidiaries
and create significant new risks, which did not exist as at the balance sheet date.
The Group has grouped the risks that it considers to be significant into key categories — strategic, operational,
compliance and financial — and they are presented below.
Strategic risks
The strategic risks faced by the Group that pose risks that influence the Group’s ability to achieve its strategy include
the general economic situation and operating environment in Russia, Kazakhstan, Ukraine, CIS and Baltic countries in
which the Group operates; the regulatory risk relating to the operation of the Russian railway transportation market,
including railway tariff regulation and technical requirements for fleet maintenance; the highly competitive Russian rail
transportation market with unregulated operator’s services tariffs; the significant concentration of the Group’s customer
base with the top 10 customers (including their affiliates and suppliers) accounting for around 68% of the Group’s Net
Revenue from the operation of rolling stock in 2021; cost of borrowing and/or deterioration in market conditions with
potential impacts on the profitability and recoverability of investments; and reliance on RZD for issuing permits allowing
the Group to operate locomotives.
The Group operates mainly in Russia and other emerging markets. Emerging markets, such as Russia, Kazakhstan and
Ukraine, are subject to greater risks than more developed markets, including significant economic, political, social,
legal and legislative uncertainties. Moreover, the Group’s business depends on the demand in the Russian freight
rail transportation market, which in turn depends on certain key commodity sectors and, accordingly, on economic
conditions in Russia, Europe and elsewhere. A decrease in production and demand for key commodities in Russia,
or in adjacent countries where the commodities of the Group’s key customers are shipped by rail, as a result of a
technological shift, economic downturn, political crisis or other event in Russia or another relevant country, negatively
impacts the Group’s business and growth prospects.
140
141
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
The management of the Group constantly monitors the developments in the operating environment and regulatory
regime of the railway transportation market in the countries in which the Group operates. The Group’s business model is
to maintain a balanced fleet between universal gondola cars, adaptable to the demand for transportation of various bulk
cargoes and rail tank cars, which are used for the transportation of oil products and oil. Further, the Group has long-
term, established relationships with its key customers and their affiliates and suppliers and in some cases, the Group
becomes an integrated part of its customers’ operations. Around 59% of the Group’s Net Revenue from the Operation
of Rolling Stock in 2021 was covered by long-term service contracts with several large clients. Such contracts provide
additional stability and greater certainty regarding transport volumes for the Group. In addition, the Group’s marketing
function regularly monitors competitors’ strategies, their use of technology, their price strategies and industry trends.
The sanctions imposed on the Russian Central Bank, its restrictions for capital movements outside Russian Federation,
the sanctions imposed by US, European Union and number of other countries on the biggest Russian industrial groups
adversely affect the business environment and prospects of the Group and create significant new risks, which didn’t
exist as at the reporting date. The restrictions on the export of certain types of Russian commodities or changes in
directions of supply for Russian commodities may have a negative impact on the freight rail transportation market and
the Group’s business.
The situation is still evolving and further sanctions and limitations on business activity of companies operating in the
region, as well as consequences on the Russian economy in general, may arise but the full nature and possible effects
of these are unknown. It is not possible for management to predict with any degree of certainty the impact of this
uncertainty on the future operations of the Group and estimate the financial effect on the Group. Management is closely
monitoring the situation and is ready to act depending on the developments.
In addition to the human impact, the spread of Coronavirus (COVID-19) continues to affect global businesses and cause
uncertainty. The freight rail market may experience reduced demand stemming from the effects of COVID-19. The
Group cannot predict the full impact of COVID-19 on its markets, business or prospects although they may be materially
adversely impacted by the evolving situation. In addition, the appearance of new pandemics or other dangerous
illnesses could seriously affect the global and local business environment and lead to negative consequences for
Group’s business. Significant levels of COVID-19 illness in the Group or its key clients could interfere with stability of
Group’s operations.
Management is closely monitoring the implications of the global outbreak of COVID-19 and acts depending on the
development of the situation. The Group constantly evaluates and implements options for distant work for its workforce
to mitigate risks of spreading and catching COVID-19 illness.
Operational risks
The operational risks faced by the Group that could influence the Group’s operational efficiency include the physical
state of the Russian, Ukrainian, CIS and Baltic countries railway infrastructure which may negatively impact the condition
of the Group’s rolling stock, ability of relocation of rolling stock between different countries and the performance of the
Group; the impact of inflation in Russia on the Group’s costs with limited opportunities to increase tariffs to customers;
the competition for personnel with relevant expertise and experience in Russia and the impact on the Group’s ability
to continue to attract, retain and motivate key employees and qualified personnel; reliance on RZD for locomotive
traction and infrastructure usage and the impact of this on the quality of the Group’s freight transportation services and
therefore customer satisfaction; IT availability and continuity considerations due to reliance on specialised trail transport
and logistics software for ensuring efficient and effective logistics, dispatching and rolling stock tracking services; and
risks of terrorist attacks, natural disasters or other catastrophic events beyond the Group’s control.
The Group is managing operational risk by ensuring that practically all of the Group’s rolling stock is insured against
damage. Further, the Group monitors its rolling stock through the Group’s dispatch centre on a 24/7 basis and plans
routes accordingly to minimise the risks of disruption. The Group monitors FAS initiatives with the aim of detecting
possible changes in tariff-setting methodology and tries to reflect respective changes in contracts with customers.
Among the Group’s key objectives are to increase operational efficiency and to focus on control and reduction of costs.
The Group continuously monitors its costs to maintain efficiency. The Human Resource function regularly monitors
salary levels and other benefits offered by competitors to ensure that the Group’s remuneration packages are adequate.
Customer satisfaction is one of the key metrics that the Group’s management monitors, with customer feedback being
analysed and appropriate follow-up actions being taken. Due to recent sanctions imposed by US, European Union and
number of other countries a number of IT solutions will no longer be maintained by US and European Union suppliers.
Local IT specialists have introduced alternative solutions to maintain the availability of IT services, the continuity of
business processes and ensure their recovery in case of disruption. The IT function and Internal Audit function monitor
all IT-related activities and performance for compliance with IT policies and procedures. Further the Group permanently
monitors any disruptive events and applies a Business Continuity Policy to ensure the safety of employees and human
life; maintain continuity of time-critical services; minimise disruptions to clients and partners; and minimise operational,
financial and reputational impact.
142
143
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
Compliance risks
The Group is also subject to compliance risk, being the risks that influence the Group’s adherence to relevant laws and
regulations, including the regulations of the London Stock Exchange (“LSE”) and the Moscow Exchange (“MOEX”),
where Company’s GDR are admitted to trading. The Group is involved in legal actions from time to time. Some of it
may have an adverse effect on the Group. The ambiguity of the law in Russia and CIS countries creates regulatory
uncertainty and might result in claims from different government authorities. Local tax, currency, sanctions and
customs legislation, especially in Russia, other emerging markets and Cyprus, may be subject to varying interpretations,
inconsistencies between federal laws, regional and local laws, rules and regulations, frequent changes and a lack of
judicial and administrative guidance on interpreting legislation.
The Group runs its operations in compliance with tax, currency, labour, sanctions, customs, antimonopoly and other
applicable legislation and constantly monitors any changes in the regulatory environment as well as compliance with
the terms of its agreements. Standard forms of agreements are used for transportation services, and various controls
are in place to ensure that the terms of agreements are adhered to. All contracts are subject to rigorous review by all
of the Group functions concerned and a formal approval process prior to execution. The Group has controls in place,
including highly qualified and experienced personnel, to monitor changes in legislation and determine the appropriate
action needed to minimise the risk of a challenge to such treatments by the authorities. For complex matters, the Group
retains external consultants.
Financial risks
The Group’s activities exposed it to a variety of financial risks: market risk (including foreign exchange risk, cash flow
and fair value interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial results.
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in
the currency different from the functional currency of each of the entities of the Group.
The Group is exposed to the effects of currency fluctuations between (i) the Russian Rouble and the US Dollars in
relation to US Dollar denominated balances held in the Company and the Cypriot and Russian subsidiaries of the
Group having the Russian Rouble as their functional currency; (ii) the Euro and the US Dollar for US Dollar denominated
balances held in the Estonian subsidiaries of the Group which have the Euro as their functional currency and (iii) the
Ukrainian Hryvnia and the US Dollar for the US Dollar denominated balances held in the Ukrainian subsidiary of the
Group which has the Ukrainian Hryvnia as its functional currency.
The Group does not have formal arrangements for hedging foreign exchange risk, with the exception of application of
hedge accounting to hedge foreign currency risk associated with highly probable dividend payments and associated
dividend payable until their settlement, as set out in the accounting policy for hedging activities in Note 4 to these
financial statements.
Cash flow and fair value interest rate risk
The Group’s income and operating cash flows are exposed to changes in market interest rates. The Group obtains
borrowings at current market interest rates and does not use any hedging instruments to manage interest rate risk.
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to
meet an obligation. Credit risk arises from cash and cash equivalents, trade receivables, loans and other receivables as
well as finance lease receivables.
Liquidity risk
The Group has an excess of current liabilities over current assets of RUB 233,557 thousand as at 31 December 2021. Due
to availability of undrawn borrowing facilities, together with long-term borrowings (Note 28), the Group has the ability to
meet its liabilities as they fall due and mitigate risks of adverse changes in the financial markets environment.
Management controls current liquidity based on expected cash flows and expected revenue receipts. In the long-term
perspective, the liquidity risk is determined by forecasting future cash flows at the moment of signing new credit, loan
or lease agreements and by budgeting procedures.
Further details on the Group’s exposure to financial risks are presented in Note 6 to the consolidated financial
statements.
Contingencies
The Group’s contingencies are disclosed in Note 33 to the consolidated financial statements.
Future developments
The Group’s strategic objective is to strengthen its position as a leading private freight rail group in Russia. The future
development of the Group may be affected by the escalation of the conflict in Ukraine in the period after the balance
sheet date, as described in Note 36. It is not possible for the Board of Directors to predict with any degree of certainty
the impact of this uncertainty on the future operations of the Group and estimate the financial effect on the Group.
Results
The Group’s results for the year are set out on pages 164 and 165. On the date of this report, the Board of Directors,
having considered the profitability and liquidity position of the Group as well as all the risks and recent developments,
does not recommend the payment of a final dividend and the net profit for the year is retained.
144
145
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
Dividends
Pursuant to its Articles of Association, the Company may pay dividends out of its profits. To the extent that the Company
declares and pays dividends, owners of Global Depositary Receipts (GDRs) on the relevant record date will be entitled
to receive dividends payable in respect of Ordinary Shares underlying the GDRs, subject to the terms of the Deposit
Agreement. The Company expects to declare dividends in Russian Roubles and pay such dividends in US Dollars. If
dividends are not paid in US Dollars and if the conversion from the currency of payment to US Dollars is possible for
the Depositary, except as otherwise described under “Terms and Conditions of the Global Depositary Receipts —
Conversion of Foreign Currency”, they will be converted into US Dollars by the Depositary and paid to holders of GDRs
net of currency conversion expenses.
The Company is a holding company and thus its ability to pay dividends depends on the ability of its subsidiaries to pay
dividends to the Company in accordance with relevant legislation and contractual restrictions. The payment of such
dividends by its subsidiaries is contingent upon the sufficiency of their earnings, cash flows and distributable reserves
and limitations on capital movement, if applicable. The maximum dividend payable by the Company’s subsidiaries is
restricted to the total accumulated retained earnings of the relevant subsidiary, determined according to the law.
In April 2021, the shareholders of the Company approved the payment of a dividend for the financial year ended 31
December 2020 in the amount of 28.00 Russian Roubles per ordinary share/GDR, amounting to a total dividend of
RUB 5,004,746 thousand, including final dividend for 2020 in the amount of RUB 2,931,351 thousand or RUB 16.40 per
ordinary share/GDR and a special final dividend in the amount of RUB 2,073,395 thousand or RUB 11.60 per ordinary
share/GDR (US Dollar equivalent of US$ 66,190 thousand).
On 27 August 2021, the Board of Directors of the Company approved payment of total dividend in the amount of 22.50
Russian Roubles per ordinary share, amounting to a total dividend of RUB 4,021,671 thousand, including interim dividend
in the amount of RUB 1,635,480 thousand or RUB 9.15 per ordinary share/GDR and a special interim dividend in the
amount of RUB 2,386,191 thousand or RUB 13.35 per ordinary share/GDR (US Dollar equivalent of US$ 54,457 thousand).
On the date of this report, the Board of Directors of the Company, having considered the profitability and liquidity
position of the Group as well as all the risks and recent developments, does not recommend a payment of final
dividends.
Share capital
As at 31 December 2021 the issued share capital of the Company which remains unchanged from the prior year,
comprised 178,740,916 ordinary shares with a par value of US$0.10 per share.
Treasury shares
In accordance with the decision of the Extraordinary General Meeting which took place on 12 May 2020, the Company
started a GDRs buyback program. The buyback programme is for the Company’s GDRs, each representing one ordinary
share of the Company with a par value of US$0.10 per share, and will run till the earlier of the close of the Annual General
Meeting of the Company to be held in 2020 and May 2020. The total number of purchased GDRs shall not exceed
5% of the Company’s share capital (equivalent to 8,937,046 shares, with each GDR representing one ordinary share).
The buyback programme allows the Company to take advantage of opportunities, if any, when its return criteria are
better met by way of a GDR buyback than through investment in fleet expansion. The shareholders of the Company at
the Annual General Meeting which took place on 29 April 2021 approved the prolongation of the term of the buyback
program until the earlier of the close of the Annual General Meeting of the Company to be held in 2022 or 12 months
from the date of the approval.
During the year 2020, the Company has purchased a total of 76,877 GDRs, which are held in treasury for a total
consideration of 422 thousand US Dollars (equivalent to RUB 31,496 thousand). No further acquisitions took place within
the year 2021. For details of acquisitions of treasury shares in 2022 refer to the Note 36.
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury for up to two years.
Research and development activities
The Group has not undertaken any research and development activities during the year ended 31 December 2021.
Events after the balance sheet date
The events after the balance sheet date are disclosed in Note 36 to the consolidated financial statements.
Branches
The Group operates through branches and representative offices, maintaining eight branches and eight representative
offices during 2021 (eight branches and eight representative offices during 2020).
Going concern
The Directors have access to all information necessary to exercise their duties. The Directors continue to adopt the
going concern basis in preparing the consolidated financial statements based on the fact that, after making enquiries
and following a review of the Group’s budget for 2022, including cash flows and borrowing facilities, and taking into
account the developments after the reporting date impacting the economic and business environment in which the
Group operates, as set out in Note 36 to the consolidated financial statements, the Directors consider that the Group has
adequate resources to continue in operation for the foreseeable future.
146
147
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
Auditors
The Independent Auditor, PricewaterhouseCoopers Limited, has 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
Meeting.
Corporate governance
Globaltrans’ Board of Directors adopted the Company’s Code of Corporate Governance (the “Code”), guaranteeing that
the interests of all shareholders are given due consideration. Although the Code is based on principles recommended
by the UK Corporate Governance Code (formerly the Combined Code), this does not constitute voluntary compliance
with such governance code.
Globaltrans’ corporate governance policies and practices are designed to ensure that the Group upholds its
responsibilities to shareholders. As such, all employees are required to comply with these guidelines and the Group’s
management team takes responsibility for ensuring that all departments adhere to these standards. These key principles
are promoted and applied across all levels of the Group in order to establish effective and transparent corporate
governance. In January 2010, the Board supplemented its Code of Corporate Governance with a corporate policy on
the treatment of the rights of its non-controlling shareholders; this aims to ensure fair treatment of the rights of non-
controlling shareholders of the Company.
Members of the Board of Directors
As at 31 December 2021 and at the date of this report, the Board comprises 15 members (2020: 15 members),11 (2020:
11 members) of whom are non-executive directors. Four (2020: four) of the non-executive directors are independent,
they have no relationship with the Company, its related companies or their officers that could interfere, or be reasonably
perceived to interfere, with the exercise of the director’s independent business judgment with a view to the best
interests of the Company, and they are able to exercise objective judgment on corporate affairs independently from
management.
The members of the Board of Directors at 31 December 2021 and at the date of this report are shown on page 135. All of
them were members of the Board throughout the year 2021.
There were no significant changes in the assignment of responsibilities of the Board of Directors, with the exception of
Mr. Hadjivassiliou who replaced Ms. Nicolaou as a member of the Audit Committee in January 2021 and Ms. Nicolaou
and Mr. Colley who were appointed to the ESG Committee in January 2021.
There is no provision in the Company’s Articles of Association for retirement of Directors by rotation; however, in
accordance with the Terms of reference of the Board of Directors all board members are required to submit for re-
election at least once every three years. Should a non-executive Director serve any term beyond six years, his/her re-
election would be subject to particularly rigorous review. In practice, all current appointments are for one year and all
directors will stand for re-election at the forthcoming Annual General Meeting of shareholders of the Company.
Full details of our governance policies can be found at https://globaltrans.com/governance/corporate-documents.
The total gross remuneration of the members of the Board of Directors incurred by the Group in 2021 amounted to RUB
604,062 thousand (2020: RUB 433,063 thousand).
The role of the Board of Directors
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. One of the Board’s key responsibilities is to ensure that
there is in place a system of prudent and effective risk controls that enable risks to be identified, assessed and managed
appropriately.
148
149
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
Board performance
The Board held 17 meetings in 2021. The Directors’ attendance is presented in the table below.
Johann Franz Durrer
John Carroll Colley
George Papaioannou
Alexander Eliseev
Melina Pyrgou
Konstantin Shirokov
Alexander Storozhev
Marios Tofaros
Elia Nicolaou
Sergey Tolmachev
Sergey Maltsev (Chairman)
Andrey Gomon
Alexander Tarasov
Vasilis Hadjivassiliou
Michalakis Thomaides
Eligible
Attended
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
The Board Committees
During 2021 the Board had four committees: the Audit Committee, the Nomination Committee, the Remuneration
Committee and the ESG Committee, which was established by the Board of Directors in January 2021. A brief description
of the terms of reference of the committees is set out below.
Audit Committee
The Audit Committee comprises of three Directors and meets at least four times each year. As of 31 December 2021 the
members Audit Committee were independent and the Audit Committee was chaired by Mr. Colley and was also
attended by Mr. Papaioannou and Mr. Hadjivassiliou. In January 2021 Mr. Hadjivassiliou became a member of the
Audit Committee and Ms. Nicolaou resigned from the Audit Committee and was appointed to the ESG Committee.
The Audit Committee is responsible for considering, among other matters: the integrity of the Company’s financial
statements, including its annual and interim accounts, and the effectiveness of the Company’s internal controls and risk
management systems; auditors’ reports and the terms of appointment and remuneration of the auditor.
The Committee supervises, monitors and advises the Board on risk management and control systems and the
implementation of codes of conduct. In addition, the Audit Committee supervises the submission by the Company of
financial information and a number of other audit-related issues. The Audit Committee is also responsible for assessing
the efficiency of the performance of the Chairman of the Board.
The Audit Committee manages the relationship with the external auditor on behalf of the Board. It considers the
reappointment of the external auditor each year, as well as remuneration and other terms of engagement, and makes
a recommendation to the Board. Shareholders are asked to approve the reappointment of the auditor each year at the
Annual General Meeting.
The Internal Audit function is carried out internally by the Group’s Internal Audit Service (“IAS”). IAS is responsible for
testing the systems of risk management, internal control and corporate governance of the Group.
Nomination Committee
The Nomination Committee comprises of two Independent Directors and meets at least once a year. The Nomination
Committee is chaired by Dr. Durrer and Mr. Colley is the other member. The Committee’s remit is to prepare selection
criteria and appointment procedures for members of the Board and to review on a regular basis the structure, size
and composition of the Board. In undertaking this role, the Committee refers to the skills, knowledge and experience
required of the Board, given the Company’s stage of development, and makes recommendations to the Board as to
any changes. The Committee also considers future appointments in respect of the Board’s composition and makes
recommendations regarding the membership of the Audit and Remuneration Committees.
Remuneration Committee
The Remuneration Committee comprises of two Independent Directors and meets at least once a year. The
Remuneration Committee is chaired by Dr. Durrer and Mr. Colley is the other member. The Committee’s responsibility is
the determination and review of, among other matters, the remuneration of Executive Directors, and the review of the
Company’s remuneration policies. The remuneration of Independent Directors is a matter for the Chairman of the Board
and the Executive Directors. No Director or manager may be involved in any decisions as to his/her own remuneration.
150
151
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
ESG Committee
In January 2021 the Board of Directors established an ESG Committee to lead its thinking on ESG matters and
ensure that ESG issues are integrated into the Group’s long-term strategy. The ESG Committee will also monitor the
development of the Group’s sustainability strategy, review and recommend ESG disclosures for Board approval and
approve the Group’s sustainability reports. The ESG Committee is comprised of two Board members: Ms. Nicolaou, Non-
executive Director, who serves as the Chair, and Mr. Colley, Independent Non-executive Director. The ESG Committee
meets at least two times a year.
Board and Management Remuneration
Non-executive directors serve on the Board pursuant to the letters of appointment which are subject to approval by the
shareholders at the Annual General Meeting. Such letters of appointment specify the terms of appointment and the
remuneration of non-executive directors. Appointments are for one year.
Levels of remuneration for Non-Executive Directors reflect the time commitment, responsibilities of the role and
membership of the respective committees of the Board. Directors are also reimbursed for expenses associated with
discharge of their duties.
Regulations with regards to the amendment of the article of association
The Articles of Association of the Company may be amended from time to time by special resolution at the General
Meeting of the Shareholders.
Company’s internal control and risk management systems in relation to the
financial reporting process
The Board of Directors is responsible for the preparation of the 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.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
The shareholders of the Company approved the remuneration of the members of the Board of Directors at the Annual
General Meeting of shareholders held on 29 April 2021.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Refer to Note 35 of the consolidated financial statements for details of remuneration of directors and other key
management personnel.
The Board is primarily responsible for establishing a framework of prudent and effective controls that enables risks to be
assessed and managed.
Diversity policy
The Company does not have a formal Board diversity policy to aspects such as age, gender or educational and
professional backgrounds, but, following best practice, while making the new appointments and considering the current
composition of the Board of Directors, these aspects are taken into account.
As of the date of publication of these financial statements the Board has 2 females representing approximately 13.3%
from the total number of directors. The age of the members of the Board of Directors starts from over 40 years, with
the average age of directors being 53.5 years. The Board members have the following educational backgrounds:
transportation and ports industry, accounting, economics and financial, banking sector and legal, engineering and
mechanics, biophysics and mathematics, history, international affairs and risk management. The Board has a necessary
balance of skills and expertise to run the Company and the Group.
The Audit Committee assists the Board in this task by reviewing and assessing the Group’s internal control and risk
management processes in relation to Group’s financial reporting process.
The system of controls is designed to manage rather than eliminate the risks relevant to the Group’s operations and,
therefore, can only provide reasonable, and not absolute, assurance against material errors, losses, fraud or breaches of
laws and regulations.
At Globaltrans, the body responsible for internal audit is the Internal Audit Service (IAS). It tests the Group’s systems of
risk management, internal control and corporate governance to obtain a reasonable assurance that:
• The risk management system functions efficiently;
• Material financial, management and operating information is accurate, reliable and up-to-date;
• The actions of employees and management bodies are in compliance with the Group’s policies, standards and
procedures and the applicable laws;
Further details of the corporate governance regime of the Company can be found on the website:
https://globaltrans.com/governance/corporate-documents
• Resources are procured reasonably and used efficiently and their safekeeping is fully guaranteed; and
• Group companies conduct their business in compliance with applicable laws.
152
153
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
Management Report
Each year, the Audit Committee approves an internal audit plan, which is developed by identifying the audit universe,
performing a risk analysis and obtaining input from management relative to risks, controls and governance processes.
The internal auditor regularly reports to the Audit Committee on the progress of planned audits. If any material internal
control deficiencies are identified, they are communicated to the Audit Committee, and consequently to the Board,
at once.
Significant direct or indirect holdings
(including indirect shareholding though structures or cross shareholdings)
The issued share capital of the Company consists of 178,740,916 ordinary shares with a nominal value of USD 0.10 each,
a certain portion of which is held in the form of Global Depositary Receipts (GDRs). The GDRs represent one ordinary
share each and are listed and traded on the Main Market of the London Stock Exchange and in the Moscow Exchange,
under the ticker GLTR. The free float of Globaltrans amounts to approximately 56.9%1 of the issued share capital. The
Company’s depositary bank for the GDR programme is Citibank N.A.
The shareholder structure of the Company as at 31 December 2021 was as follows:
Onyx Investments Ltd2
Marigold Investments Ltd2
Maple Valley Investments Ltd2
Litten Investments Ltd3
Goldriver Resources Ltd4
Transportation Investments Management Ltd5
Treasury shares
Controlled by Directors and management of Globaltrans
Free float1
11.5%
11.5%
10.8%
5.1%
3.1%
0.9%
0.04%
0.2%
56.9%
(1) For these purposes, the free float consists of the ordinary shares and GDRs held by investors not affiliated or associated with the Company.
(2) Nikita Mishin, Andrey Filatov and Konstantin Nikolaev are co-founders of the Company and beneficiaries with regard to 11.5%, 11.5% and 10.8% respectively of
Globaltrans’ ordinary share capital each through their respective SPVs (Onyx Investments Ltd, Marigold Investments Ltd and Maple Valley Investments Ltd).
(3) Beneficially owned by Alexander Eliseev, Non-Executive Director and co-founder of the Company.
(4) Beneficially owned by Sergey Maltsev, Chairman of the Board, Executive Director, Chief strategy officer and co-founder of the Company.
(5) Beneficially owned by Andrey Filatov, Nikita Mishin and Konstantin Nikolaev, co-founders of Globaltrans.
Directors’ interests
The interests in the share capital of Globaltrans Investment PLC and its Group companies, both direct and indirect, of
those who were Directors of the Company as at 31 December 2021 and 31 December 2020 are shown below:
Name
Type of holding
2021
2020
Alexander Eliseev
Indirect holding of ordinary shares and GDRs
9,065,790
9,065,790
Sergey Maltsev
Indirect holding of GDRs
Johann Franz Durrer
Holding of GDRs
5,490,149
7,099,725
160,606
160,606
The holders of special titles that provide special control rights and
description of such rights
The Company does not have any titles with special rights.
Any restrictions in exercising of voting rights of shares
There are no restrictions in the exercising of voting rights of shares issued by the Company.
By Order of the Board
..................................................
Sergey Tolmachev
Director
Limassol, 25 March 2022
154
155
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Directors’ responsibility
The Company’s 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.
This responsibility includes selecting appropriate accounting policies and applying them consistently; and making
accounting estimates and judgements that are reasonable in the circumstances.
In preparing the consolidated financial statements, the Board of Directors is also responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
Further, each of the Directors confirms that, to the best of their knowledge:
(i) adequate accounting records have been maintained which disclose with reasonable accuracy the financial position
of the Group and explain its transactions;
(ii) all information of which they are aware that is relevant to the preparation of the consolidated financial statements,
such as accounting records and all other relevant records and documentation, has been made available to the
Company’s auditors;
(iii) the consolidated financial statements disclose the information required by the Cyprus Companies Law, Cap.113 in
the manner so required; and
(iv) the Consolidated Management Report has been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap.113, and the information given therein is consistent with the consolidated financial statements.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
By order of the Board
Directors’ confirmations
Each of the directors, whose names and functions are listed in page 135 confirms that, to the best of his or her
knowledge:
(a) the consolidated financial statements, which are presented on pages 164 to 262, which have been prepared
in accordance with International Financial Reporting Standards as adopted by the European Union and the
requirements of the Cyprus Companies Law, Cap.113, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings included in the consolidation take as a whole; and
(b) the Consolidated Management Report includes a fair review of the development and performance of the business
and the position of the Company and the undertakings included in the consolidation taken as a whole, together with
a description of the principal risks and uncertainties that it faces/they face.
..............................................
Sergey Tolmachev
Director
Limassol, 25 March 2022
156
157
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report
To the Members of Globaltrans Investment PLC
Report on the Audit of the Consolidated Financial Statements
Our opinion
In our opinion, the accompanying consolidated financial statements of Globaltrans Investment PLC (the “Company”)
and its subsidiaries (together the “Group”) give a true and fair view of the consolidated financial position of the Group
as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and
the requirements of the Cyprus Companies Law, Cap. 113.
What we have audited
We have audited the consolidated financial statements which are presented in pages 164 to 262 and comprise:
• the consolidated balance sheet as at 31 December 2021;
• the consolidated income statement for the year then ended;
• the consolidated statement of comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated cash flow statement for the year then ended; and
• the notes to the consolidated financial statements, which include a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the consolidated financial statements
is International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus
Companies Law, Cap. 113.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code)
together with the ethical requirements that are relevant to our audit of the consolidated financial statements in Cyprus,
and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.
Emphasis of matter: events after the balance sheet date
We draw attention to Note 36 to the consolidated financial statements, which describes the events after the balance
sheet date impacting the Group’s operating environment and activities. Our opinion is not modified in respect of this
matter.
Our audit approach
Overview
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
consolidated financial statements. In particular, we considered where the Board of Directors made subjective
judgements; for example, in respect of significant accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management
override of internal controls, including among other matters, consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud.
Overall group materiality: RUB 934,000 thousand, which represents 5% of profit before tax as adjusted for
non—recurring items (rounded).
We conducted full scope audit for the parent entity, all the significant components and the group consolidation.
For the non—significant components, we performed a full scope audit or analytical procedures.
We have determined that there are no Key Audit Matters to communicate in our report.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable
assurance whether the consolidated financial statements are free from material misstatement. Misstatements may arise
due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the
overall group materiality for the consolidated financial statements as a whole as set out in the table below. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the
consolidated financial statements as a whole.
158
159
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report
Overall group materiality
RUB 934,000 thousand
How we determined it
5% of profit before tax as adjusted for non—recurring items (rounded)
Rationale for the materiality
benchmark applied
We chose the adjusted profit before tax as the benchmark, because in our view, it is the bench-
mark against which the performance of the Group is most commonly measured by the users
of the consolidated financial statements and is a generally accepted benchmark. We chose 5%
which is within the range of acceptable quantitative materiality thresholds in auditing stand-
ards.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
RUB 46,700 thousand as well as misstatements below that amount that, in our view, warranted reporting for qualitative
reasons.
Key audit matters
We have determined that there are no Key Audit Matters to communicate in our report.
Reporting on other information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the Consolidated Management Report, including the Directors’ responsibility, which we obtained prior to
the date of this auditor’s report, and the Company’s complete Annual Report, which is expected to be made available
to us after that date. Other information does not include the consolidated financial statements and our auditor’s report
thereon.
Responsibilities of the Board of Directors and those charged with governance for the Consolidated
Financial Statements
The Board of Directors is responsible for the preparation of the 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.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
Our opinion on the consolidated financial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
When we read the Company’s complete Annual Report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to those charged with governance and if not corrected, we will bring the matter
to the attention of the members of the Company at the Company’s Annual General Meeting and we will take such other
action as may be required.
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Group’s
internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
160
161
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance
with Section 69 of the Auditors Law of 2017 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.
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these consolidated
financial statements form part of the European Single Electronic Format (ESEF)-prepared annual financial report filed on
the National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Technical
Standard (ESEF RTS). This independent auditor’s report provides no assurance over whether the annual financial report
has been prepared using the single electronic format specified in the ESEF RTS.
The engagement partner on the audit resulting in this independent auditor’s report is Tasos Nolas.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Tasos Nolas
Certified Public Accountant and Registered Auditor
for and on behalf of
PricewaterhouseCoopers Limited
Certified Public Accountants and Registered Auditors
Report on Other Legal Requirements
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
•
•
In our opinion, the consolidated management report has been prepared in accordance with the requirements of the
Cyprus Companies Law, Cap. 113, and the information given is consistent with the consolidated financial statements.
In our opinion, and in the light of the knowledge and understanding of the Group and its environment obtained in the
course of the audit, we have not identified material misstatements in the consolidated management report.
City House, 6 Karaiskakis Street,
CY-3032 Limassol, Cyprus
25 March 2022
Other Matter
162
163
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated
income statement
Consolidated statement of
comprehensive income
for the year ended 31 December 2021
for the year ended 31 December 2021
Revenue
Cost of sales
Gross profit
Selling and marketing costs
Administrative expenses
Other income
Other gains — net
Operating profit
Finance income
Finance costs
Net foreign exchange transaction (losses)/gains on financing activities
Finance costs — net
Profit before income tax
Income tax expense
Profit for the year
Profit attributable to:
Owners of the Company
Non-controlling interest
Weighted average number of ordinary shares in issue (thousand)
Basic and diluted earnings per share for profit attributable to the equity holders of
the Company during the year (expressed in RUB per share)(1)
Note
2021
RUB’000
2020
RUB’000
10
11
11
11
12
14
14
14
14
15
32
32
73,151,013
68,367,404
(48,334,442)
(47,065,999)
24,816,571
21,301,405
(249,390)
(204,666)
(4,046,220)
(3,393,665)
310,381
795,917
21,627,259
326,962
1,000,232
107,765
18,811,071
263,968
(2,506,627)
(2,510,495)
(9,559)
147,008
(2,189,224)
(2,099,519)
19,438,035
16,711,552
(4,338,476)
(4,524,705)
15,099,559
12,186,847
12,987,020
10,586,535
2,112,539
15,099,559
1,600,312
12,186,847
178,664
178,705
72.69
59.24
(1) Basic and diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of
ordinary shares in issue during the year.
Profit for the year
15,099,559
12,186,847
2021
RUB’000
2020
RUB’000
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Currency translation differences
Losses on cash flow hedge reserve
Reclassification to the income statement
Items that will not be reclassified to profit or loss
(564,312)
(86,158)
86,158
2,050,512
(475,042)
475,042
Currency translation differences attributable to non-controlling interest
(311,762)
1,066,715
Other comprehensive income for the year, net of tax
(876,074)
3,117,227
Total comprehensive income for the year
14,223,485
15,304,074
Total comprehensive income for the year attributable to:
— owners of the Company
— non-controlling interest
12,422,708
12,637,047
1,800,777
2,667,027
14,223,485
15,304,074
Items in the statement above are disclosed net of tax. There is no income tax relating to the components of other
comprehensive income above.
The notes on pages 174 to 262 these consolidated financial statements are an integral part of these consolidated financial statements.
The notes on pages 174 to 262 these consolidated financial statements are an integral part of these consolidated financial statements.
164
165
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated balance sheet
at 31 December 2021
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Other assets
Trade receivables
Loans and other receivables
Total non-current assets
Current assets
Inventories
Other assets
Loans and other receivables
Trade receivables
Current income tax assets
Cash and cash equivalents
Assets classified as held for sale
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to the owners of the Company
Share capital
Share premium
Treasury shares
Common control transaction reserve
Translation reserve
Capital contribution
Retained earnings
Total equity attributable to the owners of the Company
Non-controlling interest
Total equity
166
Note
31 December
2021
31 December
2020
RUB’000
RUB’000
28
29
31
10
30
28
29
31
10
17,650,210
21,084,067
3,928,163
720,487
9,225
14,019
—
8,710
9,752,314
8,862,587
31,353,931
30,675,851
13,668,260
10,931,172
1,913,410
2,721,027
1,371,024
752,121
684,109
2,197,994
964,042
100,226
20,425,842
14,877,543
51,779,773
45,553,394
108,284,996
98,327,207
Note
31 December
2021
31 December
2020
RUB’000
RUB’000
81,101,184
84,420,941
Borrowings
5,606,845
1,080,415
Other lease liabilities
Non-current liabilities
85
1,146,917
—
237,680
1,460
549,493
236,165
3,887
88,092,711
86,292,361
Trade and other payables
Contract liabilities
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Borrowings
680,363
691,033
Other lease liabilities
2,681,218
2,586,593
Trade and other payables
30,358
47,483
3,638,450
3,465,381
307,189
266,024
12,854,707
4,978,322
Contract liabilities
Current tax liabilities
Total current liabilities
TOTAL LIABILITIES
20,192,285
12,034,836
TOTAL EQUITY AND LIABILITIES
17
18
19
23
22
22
24
23
22
22
25
26
26
—
10
20,192,285
12,034,846
108,284,996
98,327,207
516,957
516,957
27,929,478
27,929,478
(31,496)
(31,496)
(10,429,876)
(10,429,876)
4,878,875
5,443,187
2,694,851
2,694,851
24,688,577
20,724,107
50,247,366
46,847,208
6,257,857
5,926,605
56,505,223
52,773,813
On 25 March 2022, the Board of Directors of Globaltrans Investment PLC authorised these financial statements for issue.
By order of the Board
............................................
.............................................
Sergey Tolmachev
Director
Konstantin Shirokov
Director
The notes on pages 174 to 262 these consolidated financial statements are an integral part of these consolidated financial statements.
167
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated statement of
changes in equity
for the year ended 31 December 2021
Note
Share capital
Share premium
Treasury shares
Common control
transaction
reserve
Cash flow
hedge reserve
Translation
reserve
Capital
contribution
Retained earnings
Total
Non-controlling
interest
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
Attributable to the owners of the Company
Balance at 1 January 2020
Comprehensive income
Profit for the year
Other comprehensive income
Currency translation differences
Losses on cash flow hedge reserve
Reclassification to the income
statement
Total comprehensive income for 2020
Transactions with owners
Dividends to owners of the Company
Dividends to non-controlling interest
Purchase of treasury shares
Total transactions with owners
27
27
26
516,957
27,929,478
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Balance at 31 December 2020
516,957
27,929,478
—
—
—
—
—
—
—
—
(31,496)
(31,496)
(31,496)
(10,429,876)
—
—
—
—
—
—
—
—
—
(10,429,876)
—
—
—
(475,042)
475,042
—
—
—
—
—
—
3,392,675
2,694,851
26,774,750
50,878,835
5,647,230
56,526,065
—
2,050,512
—
—
2,050,512
—
—
—
—
—
—
—
—
—
—
—
—
—
10,586,535
10,586,535
1,600,312
12,186,847
—
—
—
2,050,512
(475,042)
475,042
1,066,715
—
—
3,117,227
(475,042)
475,042
10,586,535
12,637,047
2,667,027
15,304,074
(16,637,178)
(16,637,178)
—
(16,637,178)
—
—
(2,387,652)
(2,387,652)
(31,496)
—
(31,496)
(16,637,178)
(16,668,674)
(2,387,652)
(19,056,326)
5,443,187
2,694,851
20,724,107
46,847,208
5,926,605
52,773,813
168
169
The notes on pages 174 to 262 are an integral part of these financial statements.
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated statement of
changes in equity
for the year ended 31 December 2021
Note
Share capital
Share premium
Treasury shares
Common control
transaction
reserve
Cash flow hedge reserve
Translation
reserve
Capital
contribution
Retained earnings
Total
Non-controlling
interest
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
Attributable to the owners of the Company
Balance at 1 January 2021
Comprehensive income
Profit for the year
Other comprehensive income
Currency translation differences
Losses on cash flow hedge reserve
Reclassification to the income
statement
Total comprehensive income for 2021
Disposed through disposals of subsidi-
aries
Transactions with owners
Dividends to owners of the Company
Dividends to non-controlling interest
Total transactions with owners
20
27
27
516,957
27,929,478
(31,496)
(10,429,876)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Balance at 31 December 2021
516,957
27,929,478
(31,496)
(10,429,876)
—
—
—
(86,158)
86,158
—
—
—
—
—
—
5,443,187
2,694,851
20,724,107
46,847,208
5,926,605
52,773,813
—
(564,312)
—
—
(564,312)
—
—
—
—
—
—
—
—
—
—
—
—
—
12,987,020
12,987,020
2,112,539
15,099,559
—
—
—
(564,312)
(86,158)
86,158
(311,762)
(876,074)
—
—
(86,158)
86,158
12,987,020
12,422,708
1,800,777
14,223,485
—
—
(251,009)
(251,009)
(9,022,550)
(9,022,550)
—
(9,022,550)
—
—
(1,218,516)
(1,218,516)
(9,022,550)
(9,022,550)
(1,218,516)
(10,241,066)
4,878,875
2,694,851
24,688,577
50,247,366
6,257,857
56,505,223
170
171
The notes on pages 174 to 262 these consolidated financial statements are an integral part of these consolidated financial statements
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated cash flow
statement
2021
RUB’000
2020
RUB’000
19,438,035
16,711,552
Proceeds from bank borrowings
Cash flows from financing activities
for the year ended 31 December 2021
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Net (gain)/loss on sale of property, plant and equipment
Loss on derecognition arising on capital repairs
Profit on sale of subsidiaries
Net impairment losses on trade and other receivables
Interest income
Interest expense and other finance costs
Net foreign exchange transaction losses/(gains) on financing activities
Other losses
Changes in working capital:
Inventories
Trade receivables
Other assets
Other receivables
Trade and other payables
Contract liabilities
Cash generated from operations
Tax paid
Net cash from operating activities
Cash flows from investing activities
Cash inflow from disposal of subsidiary undertakings — net of cash dis-
posed of
Loans granted to third parties
Loans repayments received from third parties
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Interest received
Receipts from finance lease receivable
Other
Net cash used in investing activities
172
17
18
19
17
17
12
11
14
14
14
20
17
6,642,505
1,127,459
675
(41,501)
483,647
(751,487)
7,735
(326,140)
2,506,627
9,559
6,731
6,968,694
655,070
59,856
316
419,982
—
5,511
(263,968)
2,510,495
(147,008)
11,496
29,103,845
26,931,996
619,532
(139,090)
(487,942)
23,294
523,879
414,084
30,057,602
(2,807,806)
27,249,796
1,110,051
(75,000)
78,803
816,127
(427,317)
1,438,733
9,979
(208,134)
(283,141)
28,278,243
(3,051,888)
25,226,355
—
—
4,301
(8,439,159)
(6,941,159)
77,932
326,140
108,327
(41,418)
66,765
263,968
77,870
—
(6,854,324)
(6,528,255)
Repayments of borrowings
Repayments of Non-convertible unsecured bonds
Principal elements of lease payments for leases with financial institutions
Principal elements of lease payments for other lease liabilities
Interest paid on bank borrowings and non-convertible unsecured bonds
Interest paid on leases with financial institutions
Interest paid on other lease liabilities
Dividends paid to the owners of the Company
Dividends paid to non-controlling interests in subsidiaries
Purchase of treasury shares
Prepayment for acquisition of non-controlling interest
Payments to non-controlling interest
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Exchange (losses)/gains on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2021
RUB’000
2020
RUB’000
18,058,000
23,265,000
(15,286,973)
(19,603,415)
(1,250,000)
—
(1,067,922)
(2,238,779)
—
(183,057)
(9,022,550)
(1,225,275)
—
(300,000)
—
(1,715,794)
(672,432)
(2,314,937)
(80,813)
(113,771)
(16,637,178)
(2,271,815)
(31,496)
—
—
(180,281)
(12,516,556)
(20,356,932)
7,878,916
(2,531)
4,978,322
12,854,707
(1,658,832)
115,611
6,521,543
4,978,322
28
28
28
28
28
28
28
28
27
27
26
23
20
25
25
Principal non-cash investing and financing transactions
The principal non-cash investing and financing transactions consist of finance leases with the Group acting as a lessor
(Note 23) and leases with the Group acting as the lessee (Notes 28 and 29).
The notes on pages 174 to 262 these consolidated financial statements are an integral part of these consolidated financial statements.
173
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
1. General information
Country of incorporation
Globaltrans Investment Plc (“the Company”) is incorporated and domiciled in Cyprus as a limited liability company in
accordance with the provisions of the Cyprus Companies Law, Cap. 113 and converted into a public company on 15
April 2008. The address of its registered office is 20 Omirou Street, CY-3095 Limassol, Cyprus. The Group’s principal
place of business is at Nizhnyayа Krasnoselskaya st. 39, bld. 1, Moscow, Russia.
Approval of the consolidated financial statements
These consolidated financial statements were authorised for issue by the Board of Directors on 25 March 2022.
Global Depositary Receipts
Global Depositary Receipts, each representing one ordinary share of the Company, are listed on the London Stock
Exchange International Main Market and on the Moscow Exchange. Furthermore, Russian Rouble denominated bonds,
issued by the Company’s subsidiary New Forwarding Company, АО, for a total amount of RUB 10 billion, out of a RUB 100
billion registered program, are listed on the Moscow Exchange.
Principal activities
The principal activities of the Group, which are unchanged from last year, are the provision of railway transportation
services, using own and leased rolling stock and fleet engaged from third party rail operators, as well as the operating
lease of rolling stock.
2. Basis of preparation
The consolidated financial statements of Globaltrans Investment PLC have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the
Cyprus Companies Law Cap. 113.
As of the date of the authorization of these financial statements, all International Financial Reporting Standards issued
by the International Accounting Standards Board (IASB) that are relevant to the Group’s operations and are effective
as at 1 January 2021 have been adopted by the EU through the endorsement procedure established by the European
Commission.
The financial statements have been prepared under the historical cost convention.
3. Adoption of new or revised standards and interpretations
During the current year the Group adopted all the new and amended standards that are relevant to its operations and are
effective for accounting periods beginning on 1 January 2021. None of these had a significant impact on these financial
statements.
4. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of consolidation
(a) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has the rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
Business combinations involving entities under common control (ultimately controlled by the same party, before
and after the business combination, and that control is not transitory) are accounted using the predecessor basis of
accounting. Under this method, the financial statements of the acquiree are included in the consolidated financial
statements using pre-acquisition IFRS carrying amounts using uniform accounting policies, on the assumption that the
Group was in existence for all periods presented. The excess of the cost of acquisition over the carrying amount of the
Group’s share of identifiable net assets is recorded in equity, as “common control transaction reserve”.
The acquisition method of accounting is used for the acquisitions of subsidiaries that do not involve entities or
businesses under common control by the Group. The consideration transferred for the acquisition of a subsidiary is the
fair value of the assets transferred, equity instruments issued by the Group and liabilities incurred to the former owners
of the acquiree. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates
and requires management to exercise its judgement in the process of applying the Group’s accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements are disclosed in Note 7.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-
controlling interest or the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets over the
net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets
of the subsidiary acquired, the difference is recognised in the income statement.
174
175
Indemnification assets recognised at the acquisition date continue to be measured on the same basis as the related
indemnified item subject to collectability and contractual terms until they are collected, sold, cancelled or expire in the
post-combination period. The entity measures the indemnification asset on the same basis as the related item, subject
to any restrictions in the contractual terms such as a ceiling on the amount payable and any adjustment for the seller
creditworthiness. Measurement on the same basis includes recognising any gains or losses appropriately.
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
On an acquisition by acquisition basis, the Group recognises any non-controlling interest in the acquiree either at the
fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is
recognised in accordance with IFRS 9 in the income statement. Contingent consideration that is classified as equity is
not re-measured, and its subsequent settlement is accounted for within equity.
The Group recognises revenue when the parties have approved the contract (in writing, orally or in accordance with
other customary business practices) and are committed to perform their respective obligations, the Group can identify
each party’s rights and the payment terms for the goods or services to be transferred, the contract has commercial
substance (i.e. the risk, timing or amount of the Group’s future cash flows is expected to change as a result of the
contract), it is probable that the Group will collect the consideration to which it will be entitled in exchange for the
goods or services that will be transferred to the customer and when specific criteria have been met for each of the
Group’s contracts with customers, as described below.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
into compliance with those used by the Group.
All inter-company transactions, balances, income, expenses and unrealised gains and losses are eliminated on
consolidation. Profits and losses from intra-group transactions that are recognised in assets are also eliminated.
Unrealised losses are also eliminated but considered as an impairment indicator of the asset transferred.
(b) Transactions with non-controlling interests
The Group treats transactions with non-controlling interests that do not result in loss of control as transactions with
equity owners in their capacity as equity owners of the Group. For purchases from non-controlling interests, the
difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity attributable to owners of the Company. Gains or losses on disposals to
non-controlling interests are also recorded in equity attributable to the owners of the Company.
(c) Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date
when control is lost, with the change in carrying amount recognised in the income statement. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or
financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity
are accounted for as if the Group had directly disposed of the related assets and liabilities. This may mean that amounts
previously recognised in other comprehensive income are reclassified to profit or loss.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of the Company that makes
strategic decisions.
Revenue recognition
Recognition and measurement. Revenue represents the amount of consideration to which the Group expects to be
entitled in exchange for transferring the promised goods or services to the customer, excluding amounts collected on
behalf of third parties (for example, value-added taxes); the transaction price. Revenue is recognised net off discounts
and estimates for rebates that are in accordance with the contracts entered into with the customers. The Group
includes in the transaction price an amount of variable consideration only to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with
the variable consideration is subsequently resolved. Estimations for rebates and discounts are based on the Group’s
experience with similar contracts and forecasted sales to the customer.
The Group bases its estimates on historical results, taking into consideration the type of customer, the type of
transaction and the specifics of each arrangement. In evaluating whether collectability of an amount of consideration is
probable, the Group considers only the customer’s ability and intention to pay that amount of consideration when it is
due.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting
increases or decreases in estimates are reflected in the income statement in the period in which the circumstances that
give rise to the revision become known by management.
Revenues earned by the Group are recognised on the following bases:
Revenue from railway transportation services — using own, leased or engaged rolling stock
(i) Operator’s services
The Group organises transportation services for clients using its own, leased or engaged rolling stock. There are four
types of operator’s services contracts:
• The Group has a contractual relationship with the client and sets the terms of the transactions, such as selling and
payment terms, bears credit risk and controls the flow of receipts and payments. The OAO “Russian Railways” tariff is
borne by the Group. Total proceeds from clients are included in the Group’s revenue.
• The Group has a contractual relationship with the client and sets the terms of the transactions, such as selling and
payment terms, bears credit risk and controls the flow of receipts and payments. The OAO “Russian Railways” tariff is
borne by the Group and recharged to the customer as a reimbursement but the Group bears the variability in tariffs.
Total proceeds from clients are included in the Group’s revenue.
• The Group has a contractual relationship with the client and sets the terms of the transaction, excluding the OAO
“Russian Railways” tariff, such as selling and payment terms, bears credit risk and controls the flow of receipts and
payments. The OAO “Russian Railways” tariff is paid by the Group and recharged to the customer as a reimbursement.
Under these arrangements the Group recognises revenue net of OAO “Russian Railways” tariff.
• The Group has a contractual relationship with the customer and sets the terms of the transaction, excluding the OAO
“Russian Railways” tariff, such as selling and payment terms, bears credit risk and controls the flow of receipts and
payments. The tariff is paid directly by the customer to OAO “Russian Railways”. Under these arrangements the Group
recognises revenue net of OAO “Russian railways” tariff.
176
177
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
(ii) Freight rail transportation services using specialised tank containers
The Group provides freight rail transportation services using specialised tank containers for clients using its own, leased
or engaged rolling stock (platforms).
Revenue for all of the above types of contracts is recognised over time while the Group satisfies its performance
obligation by transferring control over the promised services to the customer in the accounting period in which
the services are rendered. In particular, revenue is recognised in accordance with the stage of completion of the
transaction, determined based on the actual trip days lapsed against the total estimated number of trip days for the
entire trip, since the customer receives and consumes the benefits from the services simultaneously.
Customers are invoiced on a regular basis and in accordance with pre-agreed payment terms with credit periods
not exceeding one year. If the services rendered by the Group exceed the payment and the Group does not have the
unconditional right to consideration for the services rendered, a contract asset is recognised. If the payments exceed
the services rendered, a contract liability is recognised.
Identification of performance obligations. The Group assesses whether contracts that involve the provision of a range
of goods and/or services contain one or more performance obligations (that is, distinct promises to provide a good or
service) and allocates the transaction price to each performance obligation identified on the basis of its stand-alone
selling price. A good or service that is promised to a customer is distinct if the customer can benefit from the good or
service, either on its own or together with other resources that are readily available to the customer (that is, the good
or service is capable of being distinct) and the Group’s promise to transfer the good or service to the customer is
separately identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct
within the context of the contract).
In assessing whether two or more promises to transfer goods and/or services to a customer are separate performance
obligations, the Group considers, amongst others, whether it provides a significant service of integrating the good or
services with other goods or services promised in the contract into a bundle of goods or services that represent the
combined output or outputs for which the customer has contracted (that is, the Group is using the goods or services
as inputs to produce or deliver the combined output or outputs specified by the customer), whether one or more of the
goods and/or services significantly modifies or customises, or is significantly modified or customised by, one or more
of the other goods or services promised in the contract or whether the good or services are highly interdependent or
highly interrelated. The Group considers that all of the above operator’s services contracts contain a single performance
obligation.
Financing component. In determining the transaction price, the Group adjusts the promised amount of consideration
for the effects of the time value of money if the timing of payments agreed to (either explicitly or implicitly) provides the
customer or the Group with a significant benefit of financing. In these circumstances, the contract contains a significant
financing element.
The Group does not have any material contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. Consequently, the Group elected to use the
practical expedient provided by IFRS 15 and does not adjust any of the transaction prices for the effect of the financing
component for the time value of money.
Contract assets and contract liabilities. In case the goods transferred or services rendered by the Group as of
the reporting date exceed the payments made by the customer as of that date and the Group does not have the
unconditional right to charge the client for the goods transferred or services rendered, a contract asset is recognised.
If the payments made by a customer exceed the goods transferred or services rendered under the relevant contract, a
contract liability is recognised. The Group recognises any unconditional rights to consideration separately from contract
assets as a trade receivable because only the passage of time is required before the payment is due.
The Group assesses a contract asset for impairment in accordance with IFRS 9 using the simplified approach permitted
by IFRS 9 which requires lifetime expected credit losses to be recognised from initial recognition of the contract asset.
Impairments of contract assets are measured, presented and disclosed on the same basis as as for trade receivables.
Contract assets are written off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with
the Group and a failure to make contractual payments for a period of greater than 180 days past due.
Costs to obtain or fulfil contracts with customers. To the extent that these are recoverable, incremental costs incurred
by the Group to obtain a contract and incremental costs incurred to fulfil a contract are capitalised and amortised on a
straight-line basis over the term of the specific contract — consistent with the pattern of the transfer of the goods and/
or services to which they relate to — and assessed for impairment. Incremental costs of obtaining contracts are those
costs that the Group incurs to obtain a contract with a customer that would not have been incurred if the contract had
not been obtained.
The Group does not have any contracts where the period of transfer of the goods and/or provision of the services (that
is, the period between the start and completion of a trip) exceeds one year. Accordingly, the Group recognises the
incremental costs of obtaining a contract as an expense when incurred since the amortization period of the asset that it
would otherwise have recognised is less than one year.
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each entity of the Group are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The functional currency of the Company
and of the majority of its subsidiaries is the Russian Rouble (RUB). The consolidated financial statements are presented
in Russian Roubles (RUB) (“the presentation currency”) because this is the currency better understood by the principal
users of the financial statements.
178
179
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions or valuations where items are re-measured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income statement, with the exception of foreign
exchange differences that relate to qualifying cash flow hedges which are deferred in equity.
Net foreign exchange differences arising from borrowings and other liabilities and from cash and cash equivalents and
other monetary assets are presented on the face of the income statement in the line “net foreign transaction (losses)/
gains on financing activities”, with the appropriate disclosure of the split between the two in the note “Finance income
and costs”.
All other foreign exchange gains and losses are presented in the income statement within “Other gains — net”.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
• Assets and liabilities are translated at the closing rate existing at the date of the balance sheet presented;
•
Income and expense items at the average yearly rate (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated
at the rate on the dates of the transactions); and
• Share capital, share premium and all other reserves are translated using the historic rate.
All exchange differences resulting from the above translation are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations,
including foreign exchange differences on long term loans receivable designated as part of the net investment in
foreign operations, are recognised in other comprehensive income. When a foreign operation is disposed of or sold and
control or significant influence is lost, exchange differences that were recorded in equity are recognised in the income
statement as part of the gain or loss on disposal. On a partial disposal of a foreign operation, the proportionate share of
the cumulative amount of the exchange differences recorded in equity relating to the amount disposed is reclassified in
the income statement. The Group assesses whether there is a partial disposal of a foreign operation on the basis of the
change in the Group’s proportionate ownership interest in the foreign operation.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities
of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other
comprehensive income.
Hedging activities
The Group is exposed to foreign exchange risk arising from dividends declared in Russian Roubles and paid in US Dollar
at the rate set at the date of the declaration. The Group uses foreign currency cash deposits denominated in US Dollars
to hedge this foreign exchange risk exposure.
In particular, the US Dollar denominated cash deposits are designated by the Group as hedging instruments in hedging
the foreign exchange risk associated with the highly probable dividend payment and the resulting payable. At inception
of the hedge relationship, the Group documents, amongst others, the economic relationship between the hedging
instrument and hedged item, including whether changes in the cash flows of the hedging instrument are expected to
offset changes in the cash flows of the hedged item. The Group documents its risk management objective and strategy
for undertaking its hedge transactions.
As a result of the application of hedge accounting, the foreign exchange difference on the hedging instrument is
recognised in other comprehensive income in the “Cash flow hedge reserve” within equity. Amounts recognised in
equity are reclassified to the income statement, within “Finance income and costs”, in the same period or periods during
which the hedged item impacts the income statement, being once foreign exchange differences are recognised on the
hedged item.
Accordingly, in the cash flow statement “Dividends paid to the owners of the Company” are disclosed net-off foreign
exchange differences on the relevant cash deposits (i.e. at the amounts declared) and the “Exchange (losses)/gains on
cash and cash equivalents” do not include the impact from the relevant cash deposits used for hedging. In the income
statement the amounts included in “Finance income and costs” (Note 14) within “Net foreign exchange transaction
(losses)/gains on cash and cash equivalents and other monetary assets” and “Net foreign exchange transaction gains/
(losses) on borrowings and other liabilities” are disclosed after application of hedge accounting (i.e. excluding the
foreign currency gains/losses arising for the hedging).
180
181
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Property, plant and equipment
Property, plant and equipment are recorded at purchase or construction cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition or construction of the items.
Land is not depreciated.
Depreciation on property, plant and equipment begins when it is available for use and is calculated using the straight-
line method to allocate their cost, less residual value, over their estimated useful lives, as follows:
Buildings
Rolling stock: (except locomotives)
Gondola cars
Rail tank cars
Rail tank cars (specialised types)
Hoppers
Flat cars
Tank containers
Locomotives
Mounted wheels
Motor vehicles and other property, plant and equipment
Number of years, range
30
22
32
30—40
15—26
20—32
20
9—45
7
3 to 10
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Assets under construction are not depreciated until they are completed and brought into use, at which time they are
reclassified in the relevant class of property, plant and equipment and depreciated accordingly.
Borrowing costs to finance the construction of property, plant and equipment are capitalised, during the period of time
that is required to complete and prepare the asset for its intended use. All other borrowing costs are expensed.
Expenditure for repairs and maintenance of property, plant and equipment is charged to the income statement of the
year in which they are incurred. The cost of major renovations and other subsequent expenditure are included in the
carrying amount of the asset or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced cost is derecognised.
Gains and losses on disposal of property, plant and equipment are determined by comparing the proceeds with carrying
amount and these are included within operating profit as part of operating expenses.
Rolling stock repair and maintenance costs
Repair and maintenance costs relating to periodical capital repairs of locomotives and other rolling stock and periodical
middle repairs of locomotives constitute major repairs that result in enhancement of the economic benefits of the rolling
stock and as such are capitalised by the Group.
In particular, the cost of each major periodic capital repair is recognised in the carrying amount of the relevant item of
rolling stock repaired and separately depreciated over the expected period until the next periodic capital repair or until
the end of the useful economic life of the item of rolling stock, if earlier. Significant components replaced as part of
periodic major capital repairs are capitalised and depreciated separately over their useful economic life. Simultaneously
with the capitalisation of the costs of the new periodic major capital repair, the carrying amount of the repaired rolling
stock that is attributable to the previous periodic capital repair and/or significant component replaced, if any, is
derecognised and debited in ‘cost of sales’ in the income statement as ‘loss on derecognition arising on capital repairs’.
If it is not practicable for the Group to determine the carrying amount of the repaired rolling stock that is attributable to
the previous periodic capital repair and/or significant component replaced to be derecognised, the Group uses the cost
of the current periodic major capital repair or replaced part as an indication of what the cost of the replaced part was at
the time the rolling stock was acquired.
Other types of repairs of rolling stock, such as current repairs and depot repairs, are viewed by the Group as routine
repairs and maintenance and thus their cost is charged in the Group’s income statement as and when incurred.
Upon initial recognition of rolling stock, the Group’s accounting policy is not to separately identify and depreciate the
element of its cost that is reflecting the maintenance element of the periodic major capital repair of the rolling stock
on initial recognition. The cost attributed to significant components, such as wheel pairs, is separately identified and
depreciated over their useful economic life.
Intangible assets
(a) Customer relationships
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date.
Customer relationships have a finite useful life and are carried at cost less accumulated amortisation. Customer
relationships are being amortised using the straight-line method over their estimated useful life. The useful lives of the
customer relationships are reviewed, and adjusted if appropriate, at the end of each reporting period.
(b) Computer software
The costs of acquiring computer software for internal use are capitalised as intangible assets where the software
supports a significant business system and the expenditure leads to the creation of a durable asset. Computer software
is capitalised at cost and amortised over three years, which reflects its estimated useful life, using straight-line method
commencing when the asset is available for its intended use. Costs associated with maintaining computer software
programmes are recognised as an expense as incurred.
182
183
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Impairment of non-financial assets
Assets that have indefinite useful life and goodwill are not subject to amortisation and are tested annually for
impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial
assets, other than goodwill, that have suffered impairment are reviewed for possible reversal of impairment whenever
there is an indication that an impairment recognised in prior periods may no longer exist or may have decreased.
Leases
(a) The Group is the lessee
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group, with limited exceptions as set out below. Each lease payment is allocated between the
liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payments that are based on an index or a rate;
• amounts expected to be payable by the Group under residual value guarantees;
• the exercise price of a purchase option, if the Group is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Contracts may contain both lease and non-lease components. The Group accounts for each lease component within
such contracts as a lease separately from the non-lease components. The consideration in the contract is allocated
to each lease component on the basis of the relative standalone price of the lease component and the aggregate
standalone price of the non-lease components. The consideration for non-lease components relating to services is
recognised as an expense in the income statement.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the Group’s incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds
necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar
terms and conditions. To determine the incremental borrowing rate, the Group, where possible, uses recent third-party
financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since
third party financing was received.
The Group is exposed to potential future increases in variable lease payments based on an index or a rate, which are not
included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take
effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• restoration costs.
Any remeasurement of the lease liability arising if the cash flows change based on the original terms and conditions of
the lease results in a corresponding adjustment to the right-of-use asset. The adjustment can be positive or negative.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-
line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the
underlying asset’s useful life.
In determining the lease term, the Group considers all facts and circumstances that create an economic incentive
to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination
options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
Right-of-use assets are reviewed for impairment in accordance with the Group’s accounting policy for impairment of
non-financial assets.
As an exception to the above, the Group accounts for short-term leases and leases of low value assets by recognising
the lease payments as an expense on a straight-line basis in the income statement. Short-term leases are leases with a
lease term of 12 months or less.
Right-of-use assets and associated lease liabilities are presented as separate lines on the face of the balance sheet,
except for right-of-use assets and associated lease liabilities arising from leases with financial institutions that include
purchase options that are reasonably certain to be exercised due to the exercise price being a nominal amount
compared to the fair value of the leased asset on the exercise date. The latter are presented within the same line item
as the corresponding underlying assets would be presented if they were owned and within borrowings, respectively.
Management believes that this presentation best reflects the substance of the leases with financial institutions, being
similar to that of purchases via collateralised borrowings.
Security deposits paid by the Group at the commencement of a lease contract that are held by the lessor throughout
the term of the lease and are refunded to the Group at the end of the lease term if the Group has fully performed and
observed all of the conditions set out in the contract are accounted for as financial assets.
Sale and leaseback
A sale and leaseback transaction involves the sale of an asset and the leasing back of the same asset.
The accounting of a sale and leaseback transaction depends on whether the transfer of the asset qualifies as a sale.
In making this assessment, the Group assesses whether the buyer-lessor obtained control of the underlying asset.
184
185
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
If the transfer qualifies as a sale of the asset, the Group measures the right-of-use asset arising from the leaseback
at the proportion of the previous carrying amount of the asset that relates to the right-of-use retained by the Group.
Accordingly, the Group recognises only the amount of any gain or loss that relates to the rights transferred to the
buyer-lessor. If the fair value of the consideration for the sale of the asset does not equal the fair value of the asset, or if
the payments for the lease are not at market rates, the Group accounts for any below-market terms as a prepayment of
lease payments; and any above-market terms as additional financing provided by the buyer-lessor to the Group. This is
measured on the basis of the more readily determinable of the difference between the fair value of the consideration for
the sale and the fair value of the asset; and the difference between the present value of the contractual payments for the
lease and the present value of payments for the lease at market rates.
If the transfer does not qualify as a sale, the Group continues to recognise the transferred asset and recognises a
financial liability equal to the transfer proceeds.
(b) The Group is the lessor
Finance leases
Where the Group is a lessor in a lease which transfers substantially all the risks and rewards incidental to ownership
to the lessee, the assets leased out are presented as a finance lease receivable and carried at the present value of
the future lease payments. Finance lease receivables are initially recognised at commencement (when the lease term
begins) using a discount rate determined at inception (the earlier of the date of the lease agreement and the date of
commitment by the parties to the principal provisions of the lease).
The difference between the gross receivable and the present value represents unearned finance income. The income
is recognised over the term of the lease using the net investment method (before income tax and other taxes) which
reflects a constant periodic rate of return. Incremental costs directly attributable to negotiating and arranging the lease
are included in the initial measurement of the finance lease receivable and reduce the amount of income recognised
over the lease term. Finance income from leases is recorded within interest income in the income statement.
Impairment of lease receivables
The Group recognises credit loss allowance on lease receivables in accordance with IFRS 9 using the simplified
approach permitted by the standard, which requires expected credit losses to be recognised from initial recognition of
the lease receivable at an amount equal to lifetime ECL. The ECL is determined in the same way as for trade receivables
and is recognised through an allowance account to write down the lease receivables’ net carrying amount to the present
value of expected cash flows discounted at the interest rates implicit in the leases. The estimated future cash flows
reflect the cash flows that may result from obtaining and selling the assets subject to the lease.
Operating leases
Assets leased out under operating leases are included in property, plant and equipment in the balance sheet based on
the nature of the asset. They are depreciated over their expected useful lives on a basis consistent with similar owned
property, plant and equipment.
Revenues from operating leasing
Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.
Financial instruments
(a) Financial assets
Recognition and derecognition. All purchases and sales of financial assets that require delivery within the time frame
established by regulation or market convention (“regular way” purchases and sales) are recorded at trade-date; being
the date on which the Group commits to purchase or sell the asset. All other purchases and sales are recognised when
the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have
been transferred and the Group has transferred substantially all the risks and rewards of ownership. Any gain or loss
arising upon their derecognition is recognised directly in the income statement.
Classification. The classification depends on the Group’s business model for managing the financial assets and the
contractual cash flow characteristics of the assets. Management determines the classification of financial assets at initial
recognition.
The Group classifies its financial assets at amortised cost. Financial assets at amortised cost are held for collection
of contractual cash flows and their cash flows represent solely payments of principal and interest. They are included
in current assets, except for maturities greater than twelve months after the balance sheet date. These are classified
as non-current assets. The Group’s financial assets at amortised cost comprise of trade receivables, loans and other
receivables and cash and cash equivalents on the balance sheet.
Reclassification. Financial instruments are reclassified only when the business model for managing those assets
changes. The reclassification has a prospective effect and takes place from the start of the first reporting period
following the change.
Measurement. At initial recognition, the Group measures financial assets classified at amortised cost at their fair value
plus incremental transaction costs that are directly attributable to the acquisition of the financial assets. Subsequently,
these are measured at amortised cost.
Interest income. Interest income on financial assets at amortised cost is recognised using the effective interest rate
method and is included within “finance income” in the income statement. In particular, interest income is calculated
by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that
subsequently become credit-impaired. For credit-impaired financial assets, the effective interest rate is applied to the
net carrying amount of the financial asset; that is after deduction of the loss allowance. The Group’s definition of credit-
impaired assets is explained in Note 6, Credit risk section.
Impairment. The Group assesses on each reporting date and on a forward looking basis the expected credit losses
(“ECL”) associated with its debt financial assets carried at amortised cost. The measurement of ECL reflects: (i) an
unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value
of money, and (iii) all reasonable and supportable information that is available without undue cost and effort at the end
of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of the
loss is recognised in the income statement within “selling and marketing costs”. Subsequent recoveries of amounts for
which loss allowance was previously recognised are credited against the same line item.
186
187
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The impairment methodology applied by the Group for calculating expected credit losses depends on the type of
financial asset assessed for impairment. Specifically:
• For trade receivables the Group applies the simplified approach permitted by IFRS 9 for calculating expected credit
losses, which requires lifetime expected losses to be recognised from initial recognition of the financial assets. The
assessment is done on an individual basis.
• For all its other debt financial assets carried at amortised cost, the Group applies the general approach. In particular,
the Group applies the three stage model for calculating impairment, which is based on changes in the credit quality
of the financial asset since initial recognition. A financial instrument that is not credit -impaired on initial recognition
is classified in Stage 1. The ECL of financial assets in Stage 1 is measured at an amount equal to the portion of lifetime
ECL that results from default events possible within the next 12 months or until contractual maturity, if shorter. If the
Group identifies a significant increase in credit risk (“SICR”) since initial recognition, the asset is transferred to Stage
2 and its ECL is measured based on ECL on a lifetime basis, that is, up until its contractual maturity but considering
expected prepayments, if any. Refer to Note 6, Credit risk section for a description of how the Group determines
when a SICR has occurred. If the Group determines that a financial asset is credit-impaired, the asset is transferred to
Stage 3 and its ECL is measured as a Lifetime ECL. The Group’s definition of credit impaired assets and definition of
default is explained in Note 6, Credit risk section.
Write-off. Financial assets are written-off, in whole or in part, when the Group has concluded that there is no reasonable
expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the
failure of a debtor to engage in a repayment plan with the Group and a failure to make contractual payments for a period
of greater than 180 days past due. The Group may write-off financial assets that are still subject to enforcement activity
when the Group seeks to recover amounts that are contractually due, however, there is no reasonable expectation of
recovery. Subsequent recoveries of amounts previously written off are credited against ‘selling and marketing costs’ in
the income statement.
Classification as trade receivables. Trade receivables are amounts due from customers for services performed in the
ordinary course of business. If collection is expected in one year or less (or in a normal operating cycle of the business,
if longer than one year) they are classified as current assets, if not, they are presented as non-current assets. Trade
receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant
financing components, in which case they are recognised at fair value. The Group holds its trade receivables with the
objective to collect the contractual cash flows and their contractual cash flows represent solely payments of principal
and interest and therefore measures them subsequently at amortised cost using the effective interest method, less
provision for impairment.
Classification as loans and other receivables. These amounts generally arise from transactions outside the usual
operating activities of the Group. These are held with the objective to collect their contractual cash flows and their
contractual cash flows represent solely payments of principal and interest. Accordingly, these are measured at
amortised cost using the effective interest method, less provision for impairment. Loans and other receivables are
classified as current assets if they are due within one year or less (or in the normal operating cycle of the business if
longer). If not, they are presented as non-current assets.
Classification as cash and cash equivalents. In the cash flow statement, cash and cash equivalents include cash in hand
and deposits held at call with banks with original maturity of three months or less, less bank overdrafts, if any. Cash and
cash equivalents are carried at amortised cost using the effective interest method, less provision for impairment. Bank
overdrafts are shown within borrowings in the current liabilities on the balance sheet.
(b) Financial liabilities
Classification. The Group’s financial liabilities are initially recognised at fair value and classified as subsequently
measured at amortised cost.
Derecognition of financial liabilities. A financial liability is derecognised when the obligation under the liability is
discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in income statement as other income or finance costs. 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 a derecognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts, including costs or fees incurred
for the modification, is recognised in profit or loss within finance costs. When the terms of the existing financial liability
are not substantially modified, the existing liability is not derecognised and the gain/loss arising on the modification,
including costs or fees incurred for the modification, is recognised in the income statement within finance costs.
Modifications. An exchange between the Group and its original lenders of debt instruments with substantially different
terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted
for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are
substantially different if the discounted present value of the cash flows under the new terms, including any fees paid
net of any fees received and discounted using the original effective interest rate, is at least 10% different from the
discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative
factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion
features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or
fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not
accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are
amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a
cumulative catch up method, with any gain or loss recognised in profit or loss, unless the economic substance of the
difference in carrying values is attributed to a capital transaction with owners.
Borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption value is recognised over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until draw down occurs. To
the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least twelve months after the balance sheet date.
188
189
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. when
the obligation specified in the contract is discharged, cancelled or expires). The difference between the carrying
amount of a financial liability that has been extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognised in the income statement as other income
or finance costs.
Borrowing costs. Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period
of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed in
the period in which they are incurred.
Trade and other payables. Trade payables are obligations to pay for goods or services that have been acquired in the
ordinary course of business from suppliers. Trade and other payable are classified as current liabilities if payment is due
within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-
current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method.
Inventories
Group entities usually maintain a store of spare parts and servicing equipment. These are carried as inventory and
recognised in the income statement as consumed, unless they meet the definition of property, plant and equipment
in which case they are classified as such. Major spare parts are also recognised within property, plant and equipment
when they meet the definition of property, plant and equipment. Spare parts in inventory as well as other inventories
are stated at the lower of cost and net realisable value. Cost is determined using the weighted average cost method.
Net realisable value is the estimated selling price in the ordinary course of business less the cost of completion and
applicable variable selling expenses and takes into account, amongst others, evidence of damage or obsolescence.
Cash flow statement
Cash flow statement is prepared under the indirect method. Purchases of property, plant and equipment, including
prepayments for property, plant and equipment, are included within cash flows from investing activities and finance
lease payments are included within cash flows from financing activities and are shown net of VAT. Related input VAT is
included in movement in changes of working capital, within trade and other receivables.
When the Group enters into a sale and lease back arrangement which constitutes collateralised borrowing, the proceeds
received are included within cash flows from financing activities. Receipts from finance lease receivables are included
within cash flows from investing activities.
Share capital, share premium and treasury shares
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the
proceeds.
Any excess of the fair value of consideration received over the par value of shares issued is recognised as share
premium. Share premium is the difference between the fair value of the consideration receivable for the issue of shares
and the nominal value of the shares. Share premium account can only be resorted to for limited purposes, which do
not include the distribution of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law on
reduction of share capital.
Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid,
including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the
Company’s equity holders within a separate reserve ‘treasury shares’ until the shares are cancelled or re-issued. Where
such ordinary shares are subsequently re-issued, any consideration received, net of any directly attributable incremental
transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders
within retained earnings. The consideration initially paid for treasury shares which are subsequently re-issued is
transferred from “treasury shares” to retained earnings.
Capital contribution
Capital contribution constitutes contributions made by the Company’s shareholders other than for the issue of shares by
the Company in their capacity as equity owners of the Company for which the Company has no contractual obligation
to repay them. Such contributions are recognised directly in equity as they constitute transactions with equity owners in
their capacity as equity owners of the Company.
Provisions and contingent liabilities
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it
is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
The increase in the provision due to passage of time is recognised as interest expense.
Provisions are only used to cover those expenses which they had been set up for. Other possible or present obligations
that arise from past events but it is not probable that an outflow of resources embodying economic benefit will be
required to settle the obligations, or the amount cannot be measured with sufficient reliability, are disclosed in the notes
to the financial statements as contingent liabilities.
Current and deferred income tax
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the income statement, except
to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in equity respectively.
Current income tax liabilities and assets for the current and prior periods are measured at the amount expected to be
paid to or recovered from the taxation authorities using the tax rates and laws that have been enacted or substantively
enacted by the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulations are subject to interpretations and establishes provisions where appropriate
on the basis of amounts expected to be paid to tax authorities.
190
191
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at
the time of the transaction affects neither accounting nor taxable profit or loss. In accounting for the tax effects of on-
balance sheet leases, the Group considers the right-of-use asset and lease liability separately and recognises deferred
tax on the net temporary difference.
Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance
sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is
settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates except
where the Group can control the timing of the reversal and it is probable that the temporary difference will not reverse in
the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities, when the income tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the taxable entity or different taxable entities when there is an intention to settle the
balances on a net basis.
Uncertain tax positions
The Group’s uncertain tax positions are reassessed by management at the end of each reporting period. Liabilities are
recorded for income tax positions that are determined by management as more likely than not to result in additional
taxes being levied if the positions were to be challenged by the tax authorities. The assessment is based on the
interpretation of tax laws that have been enacted or substantively enacted by the end of the reporting period, and
any known court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are
recognised based on management’s best estimate of the expenditure required to settle the obligations at the end of the
reporting period. Adjustments for uncertain income tax positions, other than interest and fines, are recorded within the
income tax charge. Adjustments for uncertain income tax positions in respect of interest and fines are recorded within
finance costs and other gains/(losses), net, respectively.
Russian Value Added Tax (VAT)
Russian output value added tax related to sales is payable to tax authorities on the earlier of (a) collection of receivables
from customers or (b) delivery of goods or services to customers. Input VAT is generally recoverable against output VAT
upon receipt of the VAT invoice. The tax authorities permit the settlement of VAT on a net basis. VAT related to sales and
purchases is recognised in the balance sheet on a gross basis and disclosed separately as an asset and liability. Where
provision has been made for the impairment of receivables, the impairment loss is recorded for the gross amount of the
debtor, including VAT.
Employee benefits
Wages, salaries, contributions to the state pension and social insurance funds, paid annual leave and sick leave, bonuses
and other benefits (such as health services) are accrued in the year in which the associated services are rendered
by the employees of the Group. These are included in staff costs and the Group has no further obligations once the
contributions have been paid.
The Group recognises a liability and an expense for bonuses where contractually obliged or where there is a past
practice that has created a constructive obligation.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or
when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination
benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and
(b) when the Group recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of
terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are
measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months
after the end of the reporting period are discounted to present value.
Share based payment transactions
The Group operates a cash-settled share-based compensation plan. In accordance with compensation plan, key
management personnel and selected employees of the Group are entitled to receive cash compensations based on the
weighted average market quotations of the fixed number of global depository receipts (“GDR”) of the Company. The fair
value of the employee services received in exchange for the grant of the equivalent GDR instruments is recognised as an
expense over the vesting period.
At each balance sheet date, if required by the terms of the compensation plan, the Group revises its estimates of the
monetary equivalent of GDRs that are expected to vest. It recognises the impact of the revision of original estimates,
including number of instruments expected to vest and fair values, in profit or loss, with a corresponding adjustment to
share-based payment liability.
Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in
the period in which the dividends are approved and are no longer at the discretion of the Company. More specifically,
interim dividends are recognised when approved by the Board of Directors whereas in case of final dividends, these are
recognised at the time when they are approved by the Company’s shareholders.
192
193
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Prepayments
Prepayments are carried at cost less provision for impairment. A prepayment is classified as non-current when the
goods or services relating to the prepayment are expected to be obtained after one year, or when the prepayment
relates to an asset which will itself be classified as non-current upon initial recognition. Prepayments to acquire assets
are transferred to the carrying amount of the asset once the Group has obtained control of the asset and it is probable
that future economic benefits associated with the asset will flow to the Group. Other prepayments are written off to
profit or loss when the goods or services relating to the prepayments are received. If there is an indication that the
assets, goods or services relating to a prepayment will not be received, the carrying value of the prepayment is written
down accordingly and a corresponding impairment loss is recognised in the income statement.
Other income
Other income generally represents amounts received from transactions that are outside the Group’s principal activities.
This is recognised in the income statement over the period it relates to, based on the terms of the arrangement. Other
income that it is not linked to the Group’s future performance and/or satisfaction of any future obligations is recognised
in the period in which the Group is entitled to receive it.
5. New accounting pronouncements
Certain new standards, amendments to existing standards and interpretations have been issued that are mandatory for
annual periods beginning after 1 January 2021. Items marked with * have not been endorsed by the European Union (EU).
The Group will only be able to apply the new standards, amendments to existing standards or interpretations when these
are endorsed by the EU.
• Classification of liabilities as current or non-current — Amendments to IAS 1 (issued on 23 January 2020 and effective
for annual periods beginning on or after 1 January 2022)*. These narrow scope amendments clarify that liabilities are
classified as either current or non-current, depending on the rights that exist at the end of the reporting period. In
addition, the amendments clarify the classification requirements for debt a company might settle by converting it into
equity.
• Classification of liabilities as current or non-current, deferral of effective date — Amendments to IAS 1 (issued
on 15 July 2020 and effective for annual periods beginning on or after 1 January 2023)*. The effective date of the
amendment to IAS 1 on classification of liabilities as current or non-current that was issued in January 2021 with an
original effective date 1 January 2022 was deferred by one year.
• Proceeds before intended use, Onerous contracts — cost of fulfilling a contract, Reference to the Conceptual
Framework — narrow scope amendments to IAS 16, IAS 37 and IFRS 3, and Annual Improvements to IFRSs 2018–
2020 — amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 (issued on 14 May 2021 and effective for annual periods
beginning on or after 1 January 2022). The amendment to IAS 16 prohibits an entity from deducting from the cost
of an item of PPE any proceeds received from selling items produced while the entity is preparing the asset for its
intended use. The amendment to IAS 37 clarifies the meaning of “costs to fulfil a contract”. IFRS 3 was amended to
refer to the 2018 Conceptual Framework for Financial Reporting, in order to determine what constitutes an asset or a
liability in a business combination. The amendment to IFRS 9 addresses which fees should be included in the 10% test
for derecognition of financial liabilities. Example 13 that accompanies IFRS 16 was amended to remove the illustration
of payments from the lessor relating to leasehold improvements.
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
policies (issued on 12 February 2020 and effective for annual periods beginning on or after 1 January 2023). IAS 1 was
amended to require companies to disclose their material accounting policy information rather than their significant
accounting policies.
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (issued on 12 February 2020 and effective for annual periods beginning on or after 1 January 2023). The
amendment to IAS 8 clarified how companies should distinguish changes in accounting policies from changes in
accounting estimates.
• Deferred tax related to assets and liabilities arising from a single transaction — Amendments to IAS 12 (issued on 7
May 2021 and effective for annual periods beginning on or after 1 January 2023).* The amendments to IAS 12 specify
how to account for deferred tax on transactions such as leases and decommissioning obligations. The amendments
clarify that entities are required to recognise deferred tax on such transactions. The amendments require companies
to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and
deductible temporary differences.
None of the new standards, amendments to existing standards or interpretations is expected to have a significant effect
on the consolidated financial statements.
194
195
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
6. Financial risk management
Financial risks factors
The Group’s activities exposed it to a variety of financial risks: market risk (including foreign exchange risk, cash flow
and fair value interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial results.
Market risk
(a) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in
the currency different from the functional currency of each of the entities of the Group.
As of 31 December 2021, 100% of the Group’s long-term borrowings are denominated in Russian Rouble. Further, a
large proportion of the Group’s expenses and revenues are denominated and settled in Russian Roubles. Risks related
to liabilities denominated in foreign currency are partly compensated by assets and income denominated in foreign
currency.
As of the end of December 2021 the Russian Rouble has decreased against the US Dollar from 73.8757 as of
31 December 2020 to 74.2926 Russian Roubles (0.6% decrease) and against the Euro from 90.6824 as of 31
December 2020 to 84.0695 Russia Roubles (7.3% increase).
The Group is exposed to the effects of currency fluctuations between (i) the Russian Rouble and the US Dollars in
relation to US Dollar denominated balances held in the Company and the Cypriot and Russian subsidiaries of the
Group having the Russian Rouble as their functional currency; (ii) the Euro and the US Dollar for US Dollar denominated
balances held in the Estonian subsidiaries of the Group which have the Euro as their functional currency and (iii) the
Ukrainian Hryvnia and the US Dollar for the US Dollar denominated balances held in the Ukrainian subsidiary of the
Group which has the Ukrainian Hryvnia as its functional currency.
The carrying amounts of monetary assets and liabilities denominated in US Dollars as at 31 December 2021 and
31 December 2020 are as follows:
Assets
Liabilities
2021
2020
RUB’000
RUB’000
410,316
198,078
922,145
142,777
Had US Dollar exchange rate strengthened/weakened by 20% against the Russian Rouble and all other variables
remained unchanged, the post-tax profit of the Group for the year ended 31 December 2021, would have increased/
decreased by RUB 32,074 thousand (2020: 20% change, effect RUB 84,057 thousand) and equity would have increased/
decreased by RUB 491,067 thousand (2020: 20% change, effect RUB 503,185 thousand). This is mainly due to foreign
exchange gains and losses arising upon retranslation of cash and cash equivalents and accounts payable denominated
in US Dollars for the Group entities with Russian Rouble being their functional currency. The impact on equity is mainly
due to foreign exchange gains and losses arising upon retranslation of intercompany loans being recognised as part of
net investment in the foreign operation denominated in US Dollars for the Ukrainian subsidiary of the Group.
Had Euro exchange rate strengthened/weakened by 30% against the US Dollar and all other variables remained
unchanged, the post-tax profit of the Group for the year ended 31 December 2021, would have increased /decreased
by RUB 13,143 thousand (2020: 30% change, effect RUB 86,122 thousand). This is mainly due to foreign exchange gains
and losses arising upon retranslation of payable balances and cash and cash equivalents and accounts receivable
denominated in US Dollars for the Estonian subsidiaries of the Group.
Had US Dollar exchange rate strengthened/weakened by 20% against the Ukrainian Hryvnia and all other variables
remained unchanged, the post-tax profit of the Group would have remained unchanged (2020: 20% change, no effect
on post-tax profit) and the equity of the Group for the year ended 31 December 2021, would have decreased/increased
by RUB 491,067 thousand (2020: 20% change, effect RUB 503,185 thousand). This is mainly due to foreign exchange
gains and losses arising upon retranslation of intercompany loans being recognised as part of net investment in the
foreign operation denominated in US Dollars for the Ukrainian subsidiary of the Group.
The Group does not have formal arrangements for hedging foreign exchange risk, with the exception of application of
hedge accounting to hedge foreign currency risk associated with highly probable dividend payments and associated
dividend payable until their settlement, as set out in the accounting policy for hedging activities in Note 4 to these
financial statements.
The impact of application of hedge accounting has been to disclose in the cash flow statement “Dividends paid to the
owners of the Company” net-off RUB 86,158 thousand (2020: RUB 475,042 thousand) foreign exchange losses and the
“Exchange (losses)/gains on cash and cash equivalents” does not include the equivalent impact from the relevant cash
deposits used for hedging. Furthermore, in the income statement the amounts included in “Finance income and costs”
within “Net foreign exchange transaction (losses)/gains on cash and cash equivalents and other monetary assets” and
“Net foreign exchange transaction gains/(losses) on borrowings and other liabilities” are disclosed after application
of hedge accounting (i.e. excluding the foreign currency gains/losses arising for the hedging of RUB 86,158 thousand
(2020: RUB 475,042 thousand)).
(b) Cash flow and fair value interest rate risk
The Group’s income and operating cash flows are exposed to changes in market interest rates arising mainly from
floating rate borrowings. In addition, the Group is exposed to fair value interest rate risk through market value
fluctuations of borrowings and bank deposits with fixed interest rates. However, any potential change in the market
rates of interest will not have an impact on the carrying amount of the fixed rate financial instruments and hence on the
Group’s post tax profit or equity as these instruments are carried at amortised cost.
Long-term borrowing contracts of the Group are concluded to finance the purchase of rolling stock. While analysing
new investment projects and concluding credit facility agreements, loan agreements and lease contracts, issues of
bonds and various scenarios are developed taking into account terms of refinancing and alternative financing sources.
Based on these scenarios the Group measures the impact of a definite change in interest rate on profit or loss and
selects the financing model that allows maximizing the estimated future profit.
As at 31 December 2021 and 31 December 2020, the Group did not have any credit facilities at floating interest rates,
therefore any reasonably possible change in market interest rates would not have any significant impact on the post-tax
profit or equity of the Group.
196
197
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The Group obtains borrowings at current market interest rates and does not use any hedging instruments to manage
interest rate risk. Management monitors changes in interest rates and takes steps to mitigate these risks as far as
practicable.
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to
meet an obligation. Credit risk arises from cash and cash equivalents, trade receivables, loans and other receivables as
well as finance lease receivables.
(i) Risk management
The Group has policies in place to ensure that sales of goods and services are made to customers with an appropriate
credit history. Management assesses the credit quality of the Group’s customers, taking into account their financial
position, past experience and other factors. These policies allow the Group to reduce its credit risk. However, the
Group’s business is heavily dependent on a few large key customers, with the top ten customers accounting for 75.74%
of the Group’s trade receivables as at 31 December 2021 (2020: 70.95%).
For banks and financial institutions, the Group has established policies whereby the majority of bank balances are held
with independently rated parties with a minimum rating of ‘Ba2’. These policies enable the Group to reduce its credit risk
significantly.
(ii) Impairment of financial assets
The Group has four types of assets that are subject to the expected credit loss model:
• trade receivables;
• finance lease receivables;
•
• cash and cash equivalents.
loans and other receivables; and
The impairment methodology applied by the Group for calculating expected credit losses depends on the type of assets
assessed for impairment. All assets are assessed for impairment on an individual basis. Specifically:
• For trade receivables and finance lease receivables the Group applies the simplified approach permitted by IFRS 9
for calculating expected credit losses, which requires lifetime expected credit losses to be recognised from initial
recognition of the financial assets.
• For loans and other receivables and cash and cash equivalents, the Group applies the general approach. In particular,
the Group applies the three-stage model for calculating impairment, which is based on changes in the credit quality
of the financial asset since initial recognition. A financial instrument that is not credit-impaired on initial recognition
is classified in Stage 1. The ECL of financial assets in Stage 1 is measured at an amount equal to the portion of lifetime
ECL that results from default events possible within the next 12 months or until contractual maturity, if shorter. If the
Group identifies a significant increase in credit risk since initial recognition, the asset is transferred to Stage 2 and its
ECL is measured based on ECL on a lifetime basis, that is, up until its contractual maturity but considering expected
prepayments, if any. If the Group determines that a financial asset is credit-impaired, the asset is transferred to Stage
3 and its ECL is measured as a Lifetime ECL.
Significant increase in credit risk. The Group considers the probability of default upon initial recognition of an asset and
whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To
assess whether there is a significant increase in credit risk the Group compares the risk of a default occurring on the
asset as at the reporting date with the risk of default as at the date of initial recognition. In making this assessment, the
Group considers available reasonable and supportive forwarding-looking information.
Especially the following indicators are incorporated:
internal credit rating
•
• external credit rating (as far as available)
• actual or expected significant adverse changes in business, financial or economic conditions that are expected to
cause a significant change to the borrower’s/counterparty’s ability to meet its obligations
• actual or expected significant changes in the operating results of the borrower/counterparty
• significant increases in credit risk on other financial instruments of the same borrower/counterparty
• significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees
or credit enhancements
• significant changes in the expected performance and behaviour of the borrower/counterparty, including changes in
the payment status of counterparty in the group and changes in the operating results of the borrower.
Macroeconomic information (such as market interest rates or growth rates) is incorporated as part of the internal rating
model. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivable balances. Regardless of the analysis above, a
significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment.
Default and credit-impaired. A default on a financial asset is when the financial asset meets one or more of the following
criteria: (i) the borrower is more than 90 days past due on its contractual payments, (ii) the borrower is assessed as
unlikely to pay its credit obligations in full without realisation of collateral, regardless of the existence of any past-due
amount or of the number of days past due, (iii) the Group, for economic or contractual reasons relating to the borrower’s
financial difficulty, granted to the borrower a concession(s) that it would not otherwise consider. The Group considers
defaulted assets to be credit-impaired so that Stage 3 represents all debt financial assets which are considered
defaulted.
Write-off. Assets are written-off, in whole or in part, when the Group has concluded that there is no reasonable
expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the
failure of a debtor to engage in a repayment plan with the Group and a failure to make contractual payments for a period
of greater than 180 days past due. The Group may write-off financial assets that are still subject to enforcement activity
when the Group seeks to recover amounts that are contractually due, however, there is no reasonable expectation of
recovery. Subsequent recoveries of amounts previously written off are credited against ‘selling and marketing costs’ in
the income statement.
The Group does not have any material debt financial assets that are subject to the impairment requirements of IFRS 9
and their contractual cash flows have been modified.
198
199
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The Group’s exposure to credit risk for each class of asset subject to the expected credit loss model is set out below:
The movement in the credit loss allowance for trade receivables during the years 2021 and 2020 is presented in the
table below:
Trade receivables and finance lease receivables
The Group assesses, on an individual basis, its exposure to credit risk arising from trade receivables and finance lease
receivables. This assessment is based on the credit history of the customers with the Group as well as the period the
trade receivable or finance lease receivable is past due (in days).
The following table contains an analysis of the gross carrying amount of the Group’s trade receivables and finance lease
receivables by reference to the days past due. This basis is aligned with the Group’s internal credit risk grades for these
assets.
As at 31 December 2021
Current (not past due)
1-30 days past due
31-90 days past due
more than 90 days past due
Total
As at 31 December 2020
Current (not past due)
1-30 days past due
31-90 days past due
more than 90 days past due
Total
Trade receivables
Finance lease receivables
RUB’000
RUB’000
2,786,170
782,791
67,298
101,146
3,737,405
196,557
—
—
—
196,557
Trade receivables
Finance lease receivables
RUB’000
RUB’000
2,444,086
693,461
304,793
394,330
3,836,670
422,972
—
—
—
422,972
The gross carrying amounts, as per above, represent the Group’s maximum exposure to credit risk on these assets as
at 31 December 2021 and as at 31 December 2020 without taking into account any collateral held. The Group does not
hold any collateral as security for any trade receivable balances. Finance lease receivables are effectively secured as the
rights to the leased asset revert to the Group in the event of default.
Opening balance as at 1 January
New assets originated or purchased
Net loss allowance of financial assets at the start of the year
Receivables modified during the year
Assets written off during the year as uncollectible
Recoveries
Other
Trade receivables
2021
RUB’000
(135,124)
(603)
(1,277)
—
37,310
—
739
2020
RUB’000
(138,915)
(11,643)
(4,739)
(1,625)
18,583
9,510
(6,295)
Closing balance as at 31 December
(98,955)
(135,124)
The estimated expected credit loss allowance on finance lease receivables as at 31 December 2021 and as at 31
December 2020 was immaterial. This assessment takes into consideration the presence of the leased asset, which acts
as a collateral for the finance lease receivable.
Loans and other receivables
The Group assesses, on an individual basis, its exposure to credit risk arising from loans and other receivables.
This assessment takes into account, amongst others, the period the loan receivable or other receivable balance is past
due (in days) and history of defaults in the past, adjusted for forward looking information.
The following table contains an analysis of the credit risk exposure other receivables on the basis of the Group’s internal
credit risk rating grades. The gross carrying amounts below represent the Group’s maximum exposure to credit risk on
these assets as at 31 December 2021 and 2020:
Internal credit risk
rating grade
Performing
Under-performing
Company definition of category
2021
RUB’000
2020
RUB’000
Stage 1 — Counterparties have a low risk of default and a strong capac-
ity to meet contractual cash flows
260,896
32,612
Stage 2 — Customers for which there is a significant increase in credit
risk; as significant increase in credit risk is presumed if interest and/or
principal repayments are 30 days past due
Non-performing or
Credit-impaired
Stage 3 — Interest and/or principal repayments are more than 90 days
past due
7,122
14,872
14,868
20,194
200
201
The gross carrying amounts, as per above, represent the Group’s maximum exposure to credit risk on these assets as at
31 December 2021 and as at 31 December 2020 without taking into account any collateral held. The Group does not hold
any collateral as security for any loans receivable or other receivable balances.
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The movement in the credit loss allowance for other receivables during the years 2021 and 2020 is presented in the
table below:
Opening balance as at 1 January
Assets written off during the year as uncollectible
Other
Closing balance as at 31 December
Non-performing
2021
RUB’000
(20,195)
58
5,269
(14,868)
2020
RUB’000
(29,341)
6,195
2,951
(20,195)
The estimated expected credit loss allowance on loans receivable as at 31 December 2020 was immaterial.
Liquidity risk
The Group has an excess of current liabilites over current assets of RUB 233,557 thousand as at 31 December 2021
(2020: excess of current liabilities over current assets RUB 2,842,697 thousand).
The Group has predictable cash flows which allow the Group to repay its liabilities when they fall due. The Group also
has successful credit and refinancing history and maintains enough flexibility ensuring the ability to attract necessary
funds through committed credit facilities. Due to availability of undrawn borrowing facilities amounting to RUB
42,888,000 thousand as of 31 December 2021 (2020: RUB 29,449,091 thousand), together with long-term borrowings
(Note 28) the Group has the ability to meet its liabilities as they fall due and mitigate risks of adverse changes in the
financial markets environment.
Management controls current liquidity based on expected cash flows and expected revenue receipts. In the long-term
perspective, the liquidity risk is determined by forecasting future cash flows at the moment of signing new credit, loan
or lease agreements and by budgeting procedures.
Cash and cash equivalents
The Group assesses, on an individual basis, its exposure to credit risk arising from cash at bank based on ratings from
external credit rating institutions and internal ratings if external are not available.
The table below summarises the analysis of financial liabilities of the Group by maturity as of 31 December 2021 and
31 December 2020. The amounts in the table are contractual undiscounted cash flows. Trade and other payables
balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
The following table contains an analysis of the gross carrying amount of the Group’s cash at bank by reference to the
credit risk ratings assigned by external credit rating agencies. The gross carrying amounts below represent the Group’s
maximum exposure to credit risk on these assets as at 31 December 2021 and 2020:
Moody’s (1)
Moody’s (1)
Moody’s (1)
Moody’s (1)
Standard & Poor’s (2)
Fitch (3)
Other external non-rated banks — satisfactory credit quality (performing)
Rating
A3 — Aa2
Baa3 — Baa1
Ba3 — Ba1
B1 — B2
BB+ — BBB—
BBB—
2021
RUB’000
1,975,283
10,677,131
121
84,865
43,378
40,565
33,144
2020
RUB’000
1,225,758
2.595,738
1,109,085
16,204
30,831
37
295
Total cash at bank and bank deposits (4)
12,854,487
4,977,948
(1) International rating agency Moody’s Investors Service
(2) International rating agency Standard & Poor’s
(3) International rating agency Fitch Rating
(4) The rest of the balance sheet item ‘cash and cash equivalents’ is cash on hand.
Less than
one month
Between
one month
and three
months
Between
three and six
months
Between
6 months
and less than
one year
Between
1 and 2 years
Between
2 and 5 years
Over
five years
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
31 December 2021
Borrowings
814,665
2,833,542
2,993,360
8,590,841
12,192,783
6,772,325
— 34,197,516
Trade and other
payables
Other lease
liabilities
31 December 2020
567,310
52,789
81,137
—
—
—
—
701,236
208,682
407,189
626,712
1,255,483
2,385,022
2,172,370
24,427
7,079,885
1,590,657
3,293,520
3,701,209
9,846,324
14,577,805
8,944,695
24,427
41,978,637
Borrowings
628,404
2,197,010
2,831,036
6,836,340
12,720,064
10,163,762
— 35,376,616
Trade and other
payables
Other lease
liabilities
989,317
41,546
78,802
—
—
—
71,618
116,864
186,957
376,826
508,047
248,577
—
—
1,109,665
1,508,889
1,689,339
2,355,420
3,096,795
7,213,166
13,228,111
10,412,339
— 37,995,170
The Group does not hold any collateral as security for any of the above balances.
Note: statutory liabilities are excluded as the analysis is provided for financial liabilities only.
The estimated expected credit loss allowance on cash and cash equivalents as at 31 December 2021 and as at 31
December 2020 based on the general approach of IFRS 9, was immaterial. All cash and cash equivalents were
performing (Stage 1) as at 31 December 2021 and as at 31 December 2020.
202
203
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
(a) Capital risk management
The Group’s main objective when managing capital is to maintain the ability to continue as a going concern in order to
ensure the required profitability of the Group, maintain optimum equity structure and reduce its cost of capital.
Defining capital, the Group uses the amount of net assets attributable to the Company’s equity owners and the Group’s
borrowings.
The Group manages the capital based on borrowings to total capitalisation ratio. Borrowings include loan liabilities.
To maintain or change its equity structure, the Company may vary the amount of dividend paid or sell assets in order to
reduce debts.
Total capitalisation is calculated as the sum of the total Group borrowings and total equity attributable to the equity
owners of the Company. The management does not currently have any specific target for the rate of borrowings to total
capitalisation.
The rate of borrowings to total capitalisation as at 31 December 2021 and 31 December 2020 are as follows:
Total borrowings
Total capitalisation
Total borrowings to total capitalisation ratio (percentage)
2021
RUB’000
2020
RUB’000
31,318,470
32,015,239
81,565,836
78,862,447
38.40%
40.60%
External requirements are imposed on the capital of the Group as defined by management in relation to long-
term loans provided by financial institutions to the Company and certain subsidiaries of the Company. The Group
analyses compliance with external requirements to the capital at each reporting date and when entering into new
loan agreements and lease contracts. There were no instances of non-compliance with externally imposed capital
requirements during 2021 and 2020. Management believes that the Group will be able to comply with its external
requirements to the capital during the whole term of agreements.
Fair value estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The best evidence of fair value is price in an active market.
An active market is one in which transactions for the asset or liability take place with sufficient frequency and volume to
provide pricing information on an ongoing basis.
The estimated fair values of financial instruments have been determined by the Group, using available market
information, where it exists, appropriate valuation methodologies and assistance of experts. However, judgement is
necessarily required to interpret market data to determine the estimated fair value. The Russian Federation continues
to display some characteristics of an emerging market and economic conditions continue to limit the volume of activity
in the financial markets. Market quotations may be outdated or reflect distress sale transactions and therefore do
not always represent the fair values of financial instruments. The Group has used all available market information in
estimating the fair value of financial instruments.
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at
quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations
techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data
(that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value
hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a
Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
The fair values in level 2 and level 3 of fair value hierarchy were estimated using discounted cash flows valuation
techniques. The fair value of unquoted fixed and floating interest rate instruments which are not quoted in an active
market was estimated based on estimated future cash flows expected to be received discounted at current interest rates
for new instruments with similar credit risk and remaining maturity.
Financial assets at amortised cost. The fair value of floating rate instruments is normally their carrying amount. The
estimated fair value of fixed interest rate instruments is based on estimated future cash flows expected to be received,
discounted at current interest rates for new instruments with similar credit risk and remaining maturity. Discount rates
used depend on credit risk of the counterparty.
The fair values of financial assets do not materially differ from their carrying amounts as the impact of discounting is not
significant.
Financial liabilities carried at amortised cost. Fair values of borrowings and other liabilities were determined using
valuation techniques.
As at 31 December 2021 and 31 December 2020 there were no fixed or floating interest rate instruments with stated
maturity denominated in a currency other than the Russian Rouble.
The fair value as at 31 December 2021 and 31 December 2020 of fixed interest rate instruments with stated maturity
denominated in Russian Rouble was estimated based on expected cash flows discounted using the rate of similar
Russian Rouble denominated instruments entered into by the Group close to 31 December 2021 and 31 December 2020,
respectively. The discount rate used was 10.5% p.a. (2020: 6.3% p.a.) (Note 28). The fair value as at 31 December 2021
and 31 December 2020 of the fixed interest rate non-convertible bonds was equal to their quoted price and the resulting
fair value measurement is within level 1.
The fair value of liabilities repayable on demand or after a notice period (“demandable liabilities”) is estimated as the
amount payable on demand, discounted from the first date on which the amount could be required to be paid.
204
205
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
7. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
The assessment of the accounting treatment of certain of the Group’s revenue contracts requires management to make
certain critical judgments. The judgments that had the most significant effect on management’s conclusion are the
following:
(a) Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions 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:
i) Tax legislation
Russian tax, currency and customs legislation is subject to varying interpretations (Note 33).
(b) Critical judgements in applying in Group’s accounting policies
The Group also makes certain judgements, apart from those involving estimations, in the process of applying the
accounting policies. Judgements that have the most significant effect on the amounts recognised in the financial
statements and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within
the next financial year are discussed below:
•
Identification of performance obligations
Operator’s services contracts involve the provision by the Group of a wide range of services. Management believes
that, although some of these services can be obtained by the clients from the market separately and different
combinations of services can be provided to different customers, in the context of each individual contract with a
customer, the services provided by the Group are highly dependent and interrelated with each other and, therefore,
are not distinct. In making this assessment, management noted that, despite the fact that the Group’s contracts
contain a promise to deliver multiple services, the nature of the promise within the context of the contracts and the
economic substance of the transaction is that the customers are purchasing integrated operator’s services to which
the individual services promised are inputs rather than separate services and consequently this is considered to
constitute a single performance obligation.
• Assessment as to whether the Group is acting as an agent or principal for certain operator’s services contracts
Operator’s services are rendered using own or leased rolling stock. In those cases when the Group’s customers
do not interact with OAO “Russian Railways”, a full service is charged by the Group to its customers and the OAO
“Russian Railways” tariff is borne by the Group with or without further recharge to its customers. There are certain
characteristics indicating that the Group is acting as an agent in these arrangements, particularly the fact that OAO
“Russian Railways” tariffs are available to the public and therefore are known to the customer. However, the services
are rendered with the use of own or leased rolling stock and the Group bears the OAO “Russian Railways” tariff to
bring the rolling stock back or to the next destination. The Group is independent in its pricing policy and considers its
potential loss for empty run tariff.
Management’s position is that the Group acts as a principal in these arrangements and the Group accounts for full
receipts from customers as sales revenue and the OAO “Russian Railways” tariff is also included in cost of sales.
Management believes that the Group is acting as a principal in these arrangements as it is the party that controls the
services prior these are transferred to the customers and, through separate arrangements with OAO “Russian Railways”,
obtains the right to direct them to provide services on its behalf.
Had OAO “Russian Railways” tariff directly attributable to such services been excluded from revenues and cost of sales
for the year ended 31 December 2021 both would have decreased by RUB 12,963,846 thousand (2020: RUB 10,957,305
thousand).
206
207
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
8. Segmental information
The chief operating decision-maker has been identified as the Board of Directors of the Company. The Board reviews
the Group’s internal reporting in order to assess performance and allocate resources. Management has determined the
operating segments based on these reports.
The Board considers the business from two perspectives: by type of activity and by type of rolling stock used. From a
type of activity perspective, the Board reviews revenues with no further analysis of the underlying cost components.
From the type of rolling stock used perspective, the Board assesses the performance of each type of rolling stock at the
level of adjusted revenue. In particular, the Board reviews discrete financial information for gondola cars and rail tank
cars, whereas all other types of rolling stock (such as hopper cars and platforms) are reviewed together.
Adjusted revenue for reportable segments is the measure of profit looked at by the chief operating decision-maker
and this includes the revenues derived from the relating type of rolling stock used less infrastructure tariff paid for the
loaded trips of the relevant rolling stock and services provided by other transportation organisations. Further, the Board
receives information in respect of depreciation charges for rolling stock and right-of-use assets relating to rolling stock,
amortisation charges for customer relationships, impairment charges/reversals of impairment in respect of rolling
stock, right-of-use assets relating to rolling stock and customer relationships and loss on derecognition arising on
capital repairs. All other information provided to the Board is measured in a manner consistent with that in the financial
statements.
The Board also reviews additions to segment assets. Segment assets consist of rolling stock, right-of-assets relating
to rolling stock and customer relationships. Unallocated assets comprise all the assets of the Group except for rolling
stock, right-of-assets relating to rolling stock and customer relationships, as included within segment assets. Liabilities
are not segmented since they are not reviewed from that perspective by the chief operating decision maker. Capital
expenditure comprises additions of rolling stock to property, plant and equipment and additions of right-of-use assets
relating to rolling stock.
The Group does not have transactions between different business segments.
Gondola cars
Rail tank cars
Other railcars
Total
RUB’000
RUB’000
RUB’000
RUB’000
Year ended 31 December 2021
Total revenue — operator’s services
41,441,242
26,830,806
709,027
68,981,075
Total revenue — operating lease
Inter-segment revenue
25,435
1,348,619
457,630
1,831,684
—
—
—
—
Revenue (from external customers)
41,466,677
28,179,425
1,166,657
70,812,759
less Infrastructure and locomotive tariffs — loaded trips
(6,857,931)
(5,762,331)
(162,883)
(12,783,145)
less Services provided by other transportation organisations
(1,580,314)
(114,489)
—
(1,694,803)
Adjusted revenue for reportable segments
33,028,432
22,302,605
1,003,774
56,334,811
Depreciation and amortisation
(5,161,394)
(1,682,803)
(417,525)
(7,261,722)
Loss on derecognition arising on capital repairs
(199,187)
(284,460)
—
(483,647)
Additions to non-current assets (included in reportable segment
assets)
7,945,692
3,860,288
174,063
11,980,043
Reportable segment assets
56,346,167
25,650,477
3,569,334
85,565,978
Year ended 31 December 2020
Total revenue — operator’s services
Total revenue — operating lease
Inter-segment revenue
Gondola cars
Rail tank cars
Other railcars
RUB’000
RUB’000
RUB’000
Total
RUB’000
39,043,539
24,050,218
28,857
1,747,274
—
—
774,017
156,136
—
63,867,774
1,932,267
—
Revenue (from external customers)
39,072,396
25,797,492
930,153
65,800,041
less Infrastructure and locomotive tariffs — loaded trips
(5,757,613)
(4,789,170)
(177,087)
(10,723,870)
less Services provided by other transportation organisations
(2,460,601)
(4,373)
—
(2,464,974)
Adjusted revenue for reportable segments
30,854,182
21,003,949
753,066
52,611,197
Depreciation and amortisation
(5,114,046)
(1,644,343)
(421,989)
(7,180,378)
Loss on derecognition arising on capital repairs
(135,742)
(284,224)
(16)
(419,982)
Additions to non-current assets (included in reportable segment
assets)
6,177,481
1,676,870
835,829
8,690,180
Reportable segment assets
53,059,276
24,740,326
4,072,741
81,872,343
208
209
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
A reconciliation of total adjusted revenue to total profit before income tax is provided as follows:
Segment assets and liabilities are reconciled to the Group assets and liabilities as follows:
Adjusted revenue for reportable segments
Other adjusted revenues
Total adjusted revenue
Cost of sales (excl. Infrastructure and locomotive tariffs — loaded trips, services provided
by other transportation organisations, reversal of impairment of property, plant and equip-
ment, depreciation of property, plant and equipment and right-of-use assets, amortisation
of intangible assets and loss on derecognition arising on capital repairs)
Selling, marketing and administrative expenses (excl. depreciation, amortisation and impair-
ments)
Depreciation and amortisation
Net impairment losses on trade and other receivables
Loss on derecognition arising on capital repairs
Other income
Other gains — net
Finance income
Finance costs
Net foreign exchange transaction (losses)/gains on financing activities
Profit before income tax
2021
RUB’000
56,334,811
2,157,553
2020
RUB’000
52,611,197
2,322,516
58,492,364
54,933,713
(25,659,527)
(25,756,357)
(4,049,855)
(3,365,169)
(7,770,639)
(7,683,620)
(7,735)
(483,647)
310,381
795,917
21,627,259
326,962
(5,511)
(419,982)
1,000,232
107,765
18,811,071
263,968
(2,506,627)
(2,510,495)
(9,559)
19,438,035
147,008
16,711,552
Segment assets/ liabilities
Unallocated:
Deferred tax liabilities
Current income tax assets/liabilities
Property, plant and equipment
Right-of-use assets
Intangible assets
Assets classified as held for sale
Other assets
Trade receivables
Loans and other receivables
Inventories
Cash and cash equivalents
Borrowings
Other lease liabilities
Trade and other payables
Contract liabilities
2021
2020
Assets
RUB’000
Liabilities
RUB’000
Assets
RUB’000
Liabilities
RUB’000
85,565,978
—
81,872,343
—
—
9,752,314
—
8,862,587
307,189
821,924
320,127
85
—
3,828,135
3,638,450
268,038
680,363
12,854,707
752,121
266,024
100,226
—
—
—
—
—
—
—
—
—
3,078,585
550,428
1,460
10
3,136,086
3,701,546
51,370
691,033
4,978,322
—
—
—
—
—
—
—
—
—
—
—
—
—
31,318,470
5,841,573
2,730,252
1,385,043
—
—
—
—
32,015,239
1,404,596
2,197,994
972,752
Total
108,284,996
51,779,773
98,327,207
45,553,394
210
211
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Geographic information
Revenues from external customers
Revenue
Russia
Estonia
Ukraine
2021
RUB’000
2020
RUB’000
71,666,818
66,460,662
1,231,965
1,732,640
252,230
174,102
73,151,013
68,367,404
The revenue information above is based on the location where the sale has originated, i.e. on the location of the
respective subsidiary of the Group.
In the periods set out below, certain customers, included within the revenue generated in Russia, accounted for greater
than 10% of the Group’s total revenues:
Revenue
Customer A — rail tank cars segment
Customer B — gondola cars segment
Customer C — gondola cars segment (1)
2021
2020
RUB’000
% revenue
RUB’000
% revenue
18,134,091
14,040,336
—
25
19
—
15,073,614
12,582,629
8,730,718
22
18
13
(1) During the year 2021, only two customers contributed by more than 10% to the Group’s total revenues.
The table below presents the Group’s non-current assets, other than financial instruments, deferred tax assets, post-
employment benefit assets, and rights arising under insurance contracts:
Non-current assets
Russia
Estonia
Ukraine
Cyprus
212
2021
RUB’000
2020
RUB’000
75,463,257
72,389,098
11,398,063
12,822,936
527,404
530,449
316,724
13,311
87,705,448
85,755,794
9. Non-IFRS financial information
In addition to financial information under IFRS, the Group also use certain measures not recognised by EU IFRS or IFRS
(referred to as “non-IFRS measures”) as supplemental measures of the Group’s operating and financial performance. The
management believes that these non-IFRS measures provide valuable information to readers, because they enable them
to focus more directly on the underlying day-to-day performance of the Group’s business. These might not be consistent
with measures (of similar description) used by other entities.
Adjusted Revenue
Adjusted Revenue is defined as “Total revenue” adjusted for “pass through” items: “Infrastructure and locomotive tariffs:
loaded trips” and “Services provided by other transportation organisations”. “Infrastructure and locomotive tariffs:
loaded trips” comprises revenue resulting from tariffs that customers pay to the Group and the Group pays on to OAO
“Russian Railways”, which are reflected in equal amounts in both the Group’s Total revenue and Cost of sales. “Services
provided by other transportation organisations” is revenue resulting from the tariffs that customers pay to the Group
and the Group pays on to third-party rail operators for subcontracting their rolling stock, which are reflected in equal
amounts in both the Group’s Total revenue and Cost of sales.
The following table provides details of Adjusted revenue for 2021 and 2020 and its reconciliation to Total revenue.
Total revenue
Minus “pass through” items
Infrastructure and locomotive tariffs: loaded trips
Services provided by other transportation organisations
Adjusted Revenue
2021
RUB’000
2020
RUB’000
73,151,013
68,367,404
(12,963,846)
(10,957,305)
(1,694,803)
(2,476,386)
58,492,364
54,933,713
Total Operating Cash Costs and Non-cash Costs
In order to show the dynamics and nature of the Group’s cost base, individual items of Total cost of sales, selling and
marketing costs and administrative expenses have been regrouped into Operating cash costs and Operating non-cash
costs.
Total Operating Cash Costs represent operating cost items payable in cash and calculated as “Total cost of sales,
selling and marketing costs and administrative expenses” less the “pass through” items: “Infrastructure and locomotive
tariffs: loaded trips” and “Services provided by other transportation organisations” and non-cash items: “Depreciation
of property, plant and equipment”, “Depreciation of right-of-use assets”, “Amortisation of intangible assets”, “Net
impairment losses on trade and other receivables”, “Reversal of impairment/(impairment) of property, plant and
equipment”, “Net gain/(loss) on sale of property, plant and equipment” and “Loss on derecognition arising on capital
repairs”.
Total Operating Non-cash Costs include cost items such as “Depreciation of property, plant and equipment”,
“Depreciation of right-of-use assets”, “Amortisation of intangible assets”, “Loss on derecognition arising on capital
repairs”, “Net impairment losses on trade and other receivables” “Reversal of impairment/(impairment) of property, plant
and equipment” and “Net gain/(loss) on sale of property, plant and equipment”.
213
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Other Operating Cash Costs include cost items such as “Advertising and promotion”, “Auditors’ remuneration”,
“Communication costs”, “Information services”, “Legal, consulting and other professional fees”, “Expense relating to
short-term leases — office”, “Expense relating to short-term leases — tank containers”, “Taxes (other than income tax
and value added taxes)” and “Other expenses”.
“Pass through” cost items
Infrastructure and locomotive tariffs: loaded trips
Services provided by other transportation organisations
Total cost of sales, selling and marketing costs and administrative expenses
(adjusted for “pass through” cost items)
Total Operating Cash Costs
Infrastructure and locomotive tariffs — empty runs and other tariffs
Repairs and maintenance
Employee benefit expense
Expense relating to short-term leases — rolling stock
Fuel and spare parts — locomotives
Engagement of locomotive crews
Other Operating Cash Costs
Advertising and promotion
Auditors’ remuneration
Communication costs
Information services
Legal, consulting and other professional fees
Expense relating to short-term leases — tank containers
Expense relating to short-term leases — office
Taxes (other than on income and value added taxes)
Other expenses
Total Operating Non-Cash Costs
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Loss on derecognition arising on capital repairs
Net impairment losses on trade and other receivables
Net gain/(loss) on sale of property, plant and equipment
2021
RUB’000
2020
RUB’000
(14,658,649)
(13,433,691)
(12,963,846)
(10,957,305)
(1,694,803)
(2,476,386)
(37,971,403)
(37,230,639)
(29,750,883)
(29,121,210)
(16,647,787)
(16,797,608)
(3,968,788)
(4,261,067)
(5,491,140)
(4,153,507)
(274,177)
(824,487)
(1,972,429)
(1,629,874)
(293,924)
(420,905)
(1,102,638)
(1,033,762)
(45,849)
(56,908)
(25,371)
(16,357)
(74,192)
(23,271)
(98,619)
(27,420)
(734,651)
(34,814)
(55,262)
(26,375)
(15,506)
(69,055)
(23,572)
(109,482)
(24,687)
(675,009)
(8,220,520)
(8,109,429)
(6,642,505)
(6,968,694)
(1,127,459)
(675)
(483,647)
(7,735)
41,501
(655,070)
(59,856)
(419,982)
(5,511)
(316)
Total cost of sales, selling and marketing costs and administrative expenses
(52,630,052)
(50,664,330)
Adjusted EBITDA
Adjusted EBITDA represents EBITDA excluding “Net foreign exchange transaction (losses)/gains from financing
activities”, “Share of loss of associate”, “Other gains — net”, “Net (gain)/loss on sale of property, plant and equipment”,
“Reversal of impairment/(impairment) of property, plant and equipment”, “Loss on derecognition arising on capital
repairs” and “Reversal of impairment of intangible assets”.
EBITDA represents “Profit for the period” before “Income tax expense”, “Finance costs — net” (excluding “Net
foreign exchange transaction (losses)/gains on financing activities), “Depreciation of property, plant and equipment”,
“Depreciation of right-of-use assets” and “Amortisation of intangible assets”.
The following table provides details on Adjusted EBITDA for 2021 and 2020 and its reconciliation to EBITDA and Profit for
the year:
Profit for the year
Plus (Minus)
Income tax expense
Finance costs — net
Net foreign exchange transaction (losses)/gains on financing activities
Amortisation of intangible assets
Depreciation of right-of-use assets
Depreciation of property, plant and equipment
EBITDA
Plus (Minus)
Loss on derecognition arising on capital repairs
Net foreign exchange transaction (losses)/gains on financing activities
Other gains — net
Net (gain)/loss on sale of property, plant and equipment
Adjusted EBITDA
2021
RUB‘000
2020
RUB‘000
15,099,559
12,186,847
4,338,476
4,524,705
2,189,224
2,099,519
(9,559)
675
1,127,459
147,008
59,856
655,070
6,642,505
6,968,694
29,388,339
26,641,699
483,647
9,559
(795,917)
(41,501)
419,982
(147,008)
(107,765)
316
29,044,127
26,807,224
214
215
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Free Cash Flow
Free Cash Flow is calculated as “Cash generated from operations” (after “Changes in working capital”) less “Tax paid”,
“Interest paid on bank borrowings and non-convertible unsecured bonds”, “Interest paid on leases with financial
institutions”, “Interest paid on other lease liabilities”, “Purchases of property, plant and equipment”, “Purchases of
intangible assets”, “Acquisition of subsidiary undertakings — net of cash acquired”, “Acquisition of non-controlling
interest”, “Principal elements of lease payments for other lease liabilities” plus “Cash inflow from disposal of subsidiary
undertakings — net of cash disposed of”.
Total CAPEX calculated on a cash basis as the sum of “Purchases of property, plant and equipment”, “Purchases of
intangible assets” and “Acquisition of subsidiary undertakings — net of cash acquired”.
The Attributable Free Cash Flow means Free Cash Flow less Adjusted profit attributable to non-controlling interests.
Adjusted Profit Attributable to Non-controlling Interests is calculated as “Profit attributable to non-controlling interests”
less share of “Impairment of property, plant and equipment” and “Impairment of intangible assets” attributable to non-
controlling interests.
The following table sets out details on Free Cash Flow and Attributable Free Cash Flow for 2021 and 2020, and its
reconciliation to Cash generated from operations.
Cash generated from operations
Tax paid
Interest paid on bank borrowings and non-convertible unsecured bonds
Interest paid on leases with financial institutions
Interest paid on other lease liabilities
Purchases of property, plant and equipment
Principal elements of other lease payments
Cash inflow from disposal of subsidiary undertakings — net of cash disposed of
Prepayment for acquisition of non-controlling interest
Total CAPEX
Free Cash Flow
Attributable Free Cash Flow
2021
RUB’000
2020
RUB’000
30,057,602
28,278,243
(2,807,806)
(3,051,888)
(2,238,779)
(2,314,937)
—
(183,057)
(80,813)
(113,771)
(8,439,159)
(6,941,159)
(1,067,922)
(672,432)
1,110,051
(300,000)
—
—
(8,439,159)
6,941,159
16,130,930
15,103,243
14,018,391
13,502,931
Net Debt and Net Debt to Adjusted EBITDA
Net Debt is defined as the sum of total borrowings (including interest accrued) less “Cash and cash equivalents”.
Total Debt is defined as total borrowings (including interest accrued)
The following table sets out the details on the Group’s Net Debt and Net Debt to Adjusted EBITDA at 31 December 2021
and 2020, and reconciliation of Net Debt to Total Debt.
Total debt
Minus
Cash and cash equivalents
Net Debt
Net Debt to Adjusted EBITDA
2021
RUB’000
2020
RUB’000
31,318,470
32,015,239
12,854,707
4,978,322
18,463,763
27,036,917
0.64x
1.01x
216
217
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
10. Revenue
(a) Disaggregation of revenue
Railway transportation — operator’s services (tariff borne by the Group)
Railway transportation — operator’s services (tariff borne by the client)
Revenue from specialised container transportation
Other
Total revenue from contracts with customers recognised over time
Operating lease of rolling stock
Total revenue
2021
RUB’000
2020
RUB’000
31,743,569
27,197,234
37,237,506
36,670,540
1,824,121
514,133
2,167,613
399,750
71,319,329
66,435,137
1,831,684
1,932,267
73,151,013
68,367,404
Note: Revenue from railway transportation — operators services (tariff borne by the Group) includes infrastructure and
locomotive tariffs for loaded trips for the year ended 31 December 2021 amounting to RUB 12,963,846 thousand (for
the year ended 31 December 2020: RUB 10,957,305 thousand) and the cost of engaging the fleet from third parties
recharged to clients of the Group amounting to RUB 1,694,803 thousand (2020: RUB 2,476,386 thousand).
(b) Liabilities related to contracts with customers
The Group has recognised the following liabilities related to contracts with customers as of 31 December 2020 and 31
December 2021:
Current
Contract liabilities relating to railway transportation contracts — Third
parties
Contract liabilities relating to railway transportation contracts — Relat-
ed parties (Note 35)
Non-current
Contract liabilities relating to railway transportation contracts — Third
parties
Contract liabilities relating to railway transportation contracts — Relat-
ed parties (Note 35)
31 December 2021
31 December 2020
1 January 2020
RUB’000
RUB’000
RUB’000
1,369,599
964,042
1,244,702
1,425
1,371,024
—
—
964,042
1,244,702
9,140
4,879
14,019
8,710
—
8,710
11,191
—
11,191
Total contract liabilities
1,385,043
972,752
1,255,893
Contract liabilities represent advances from customers for transportation services.
(c) Revenue recognised in relation to contract liabilities
The Group’s revenue for the year ended 31 December 2021 includes RUB 945,900 thousand that were included
in the balance of the contract liability as of 1 January 2021 (year ended 31 December 2020: RUB 1,230,616 as of 1
January 2020).
The Group does not have any contracts where the period of provision of the services (that is, the period between
the start and completion of a trip) exceeds one year. As permitted under IFRS 15, the transaction price allocated to
unsatisfied (or partially unsatisfied) performance obligations as of the balance sheet date is not disclosed.
218
219
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
11. Expenses by nature
Cost of sales
Infrastructure and locomotive tariffs: loaded trips
12,963,846
10,957,305
2021
RUB’000
2020
RUB’000
Infrastructure and locomotive tariffs: empty run trips and other tariffs
Services provided by other transportation organisations
Expense relating to short-term leases (rolling stock)
Expense relating to short-term leases — tank containers
Employee benefit expense
Repairs and maintenance
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Loss on derecognition arising on capital repairs
Amortisation of intangible assets
Fuel and spare parts — locomotives
Engagement of locomotive crews
(Gain)/loss on sale of property, plant and equipment
Other expenses
Total cost of sales
16,647,787
1,694,803
274,177
23,271
2,186,776
3,968,788
6,555,041
976,920
483,647
658
1,972,429
293,924
(38,173)
330,548
16,797,608
2,476,386
824,487
23,572
1,517,573
4,261,067
6,888,459
507,671
419,982
59,839
1,629,874
420,905
6,585
274,686
48,334,442
47,065,999
Selling, marketing and administrative expenses
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Gain on sale of property, plant and equipment
Employee benefit expense
Net impairment losses on trade and other receivables
Expense relating to short-term leases (office)
Auditors’ remuneration
Legal, consulting and other professional fees
Advertising and promotion
Communication costs
Information services
Taxes (other than income tax and value added taxes)
Other expenses
Total selling, marketing and administrative expenses
2021
RUB’000
87,464
150,539
17
(3,328)
2020
RUB’000
80,235
147,399
17
(6,269)
3,304,364
2,635,934
7,735
98,619
56,908
74,192
45,849
25,371
16,357
27,420
5,511
109,482
55,262
69,055
34,814
26,375
15,506
24,687
404,103
400,323
4,295,610
3,598,331
220
221
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Total expenses
Depreciation of property, plant and equipment (Note 17)
6,642,505
6,968,694
2021
RUB’000
2020
RUB’000
12. Other gains — net
Depreciation of right-of-use assets (Note 18)
Loss on derecognition arising on capital repairs (Note 17)
Amortisation of intangible assets (Note 19)
Net (gain)/loss on sale of property, plant and equipment (Note 17)
Employee benefit expense (Note 13)
Net impairment losses on trade and other receivables
Expense relating to short-term leases (rolling stock)
Expense relating to short-term leases (office)
Repairs and maintenance
Fuel and spare parts — locomotives
Engagement of locomotive crews
Infrastructure and locomotive tariffs: loaded trips
Infrastructure and locomotive tariffs: empty run trips and other tariffs
Services provided by other transportation organisations
Expense relating to short-term leases — tank containers
Auditors’ remuneration
Legal, consulting and other professional fees
Advertising and promotion
Communication costs
Information services
Taxes (other than income tax and value added taxes)
Other expenses
1,127,459
483,647
675
(41,501)
655,070
419,982
59,856
316
5,491,140
4,153,507
7,735
274,177
98,619
3,968,788
1,972,429
293,924
5,511
824,487
109,482
4,261,067
1,629,874
420,905
12,963,846
10,957,305
16,647,787
16,797,608
1,694,803
2,476,386
23,271
56,908
74,192
45,849
25,371
16,357
27,420
23,572
55,262
69,055
34,814
26,375
15,506
24,687
734,651
675,009
Total cost of sales, selling and marketing costs and administrative expenses
52,630,052
50,664,330
(1) Depreciation of property, plant and equipment for the year ended 31 December 2020 includes RUB 90,047 thousand relating to depreciation of right-of-use
assets presented within property, plant and equipment (Note 17). The entire amount is recognised within ‘Cost of sales’.
Note: The auditors’ remuneration stated above includes fees of RUB 17,206 thousand (2020: RUB 18,486 thousand) for
statutory audit services and RUB 5,899 thousand (2020: RUB 5,139 thousand) for other assurance services charged by
the Company’s statutory audit firm. The rest of the auditors’ remuneration relates to fees for audit services charged by
the auditors of the subsidiaries of the Company.
Legal, consulting and other professional fees include RUB 3,811 thousand for the year 2021 (RUB 737 thousand for the
year 2020) in relation to fees paid to the Company’s statutory audit firm for tax consultancy services.
Other gains
Other losses
Net foreign exchange gains (Note 16)
Gain from sale of subsidiaries (Note 20)
Total other gains — net
13. Employee benefit expense
Wages and salaries
Termination benefits
Bonuses
Share based payment expense (Note 21)
Social insurance costs
Total employee benefit expense
2021
RUB’000
2020
RUB’000
429,688
350,475
(407,997)
(323,683)
22,739
751,487
80,973
—
795,917
107,765
2021
RUB’000
2020
RUB’000
2,653,146
2,392,160
2,449
7,238
1,783,574
998,505
123,971
928,000
28,931
726,673
5,491,140
4,153,507
Average number of employees during the year
1,750
1,664
222
223
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
14. Finance income and costs
15. Income tax expense
Interest expense:
Bank borrowings
Non-convertible bonds
Interest expenses on loans
Other interest expense
2021
RUB’000
2020
RUB’000
Current tax:
(1,483,022)
(1,482,228)
Corporation tax
(772,198)
(808,258)
Withholding tax on dividends
—
—
(5,193)
(1,887)
Withholding tax on interest payments
Defence contribution
Total interest expense calculated using the effective interest rate method
(2,255,220)
(2,297,566)
Total current tax
—
(74,468)
Deferred tax (Note 30):
(201,632)
(113,099)
Origination and reversal of temporary differences
Total deferred tax
Income tax expense
Leases with financial institutions
Other lease liabilities
Total interest expense
Other finance costs
Total finance costs
Interest income:
Bank balances
Short term deposits
Loans to third parties
Total interest income calculated using the effective interest rate method
Finance leases — related parties (Note 35)
Finance leases — third parties
Total interest income
Other finance income
Total finance income
Net foreign exchange transaction gains/(losses) on borrowings and other liabilities
Net foreign exchange transaction (losses)/gains on cash and cash equivalents and other monetary
assets
Net foreign exchange transaction (losses)/gains on financing activities (Note 16)
Net finance costs — net
(2,456,852)
(2,485,133)
(49,775)
(25,362)
(2,506,627)
(2,510,495)
208,700
72,172
3,173
189,505
27,083
120
284,045
216,708
357
41,738
—
47,260
326,140
263,968
822
—
326,962
263,968
2,642
(5,509)
(12,201)
(9,559)
152,517
147,008
(2,189,224)
(2,099,519)
2021
RUB’000
2020
RUB’000
3,293,525
2,185,948
125,700
1,073,231
1,301
2,043
—
2
3,422,569
3,259,181
915,907
915,907
1,265,524
1,265,524
4,338,476
4,524,705
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the applicable tax
rates as follows:
Profit before tax
Tax calculated at domestic tax rates applicable to profits in the respective countries
Tax effects of:
Expenses not deductible for tax purposes
Allowances and income not subject to tax
Tax effect of tax losses for which no deferred tax asset was recognised
Defence contribution
Withholding taxes:
Estonian income tax arising on distribution(1)
Dividend tax provision in relation to intended dividend distribution of subsidiaries
Withholding tax on interest payments
Over provision of current and deferred tax in prior years
Tax charge
2021
RUB’000
19,438,035
4,656,083
102,088
(127,081)
(6,091)
2,043
213,377
(308,614)
1,301
(194,630)
2020
RUB’000
16,711,552
3,599,477
63,554
(120,269)
(84,724)
2
260,929
805,736
—
—
4,338,476
4,524,705
(1) Estonian tax law calls for profits to be taxed at the time of distribution and not during the year in which they arise. During the years 2021 and 2020, the Group
incurred taxes on distributions from Estonian subsidiaries.
224
225
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The Company is subject to income tax on taxable profits at the rate 12.5%. Brought forward losses of the Company
of only five years may be utilised.
17. Property, plant and equipment
Under certain conditions, interest may be exempt from income tax and be subject only to special contribution
for defence at the rate of 30%. In certain cases dividends received from abroad may be subject to special contribution
for defence at the rate of 17%. Further, in certain cases dividends received by the Company from other Cyprus tax
resident companies may also be subject to special contribution for defence. Gains on disposal of qualifying titles
(including shares, bonds, debentures, rights thereon etc.) are exempt from Cyprus income tax.
At 1 January 2020
Cost
Rolling stock
RUB’000
Land and
buildings
RUB’000
Motor
vehicles
RUB’000
Other
Total
RUB’000
RUB’000
113,371,461
349,562
218,066
3,491,879
117,430,968
For Russian subsidiaries, the annual profit is taxed at 20%. Withholding tax is applied to dividends distributed to the
Company by its Russian subsidiaries at the rate of 5% on gross dividends declared; such tax is withheld at source by
the respective subsidiary and is paid to the Russian tax authorities at the same time when the payment of dividend is
effected. Dividend withholding tax provision is recognised in the respective periods for the withholding taxes that will
be payable by Russian subsidiaries where there is an intention that earnings will be distributed to the Company in the
form of dividends.
For subsidiaries in Estonia, the annual profit earned by enterprises is not taxed and thus no income tax arises. Instead
of taxing the net profit, the distribution of statutory retained earnings is subject to a tax rate of 20% of net dividend paid
which, under certain conditions, can decrease to 14%. Provision for taxes is recognised in the respective periods for
the income tax that will be payable by the Estonian subsidiaries where there is an intention that the net profits will be
distributed in the form of dividends.
For the subsidiary in Ukraine the annual profit was taxed at a tax rate of 18%.
The Group has not recognised any tax in relation to other comprehensive income as all elements of other
comprehensive income are not subject to tax.
16. Net foreign exchange gains
The exchange differences credited to the income statement are included as follows:
Finance income and costs (Note 14)
Other gains — net (Note 12)
2021
RUB’000
(9,559)
22,739
13,180
2020
RUB’000
147,008
80,973
227,981
Accumulated depreciation
(36,026,434)
(102,484)
(102,153)
(667,252)
(36,898,323)
Net book amount
77,345,027
247,078
115,913
2,824,627
80,532,645
Year ended 31 December 2020
Opening net book amount
77,345,027
247,078
115,913
2,824,627
80,532,645
Additions
Disposals
Assets classified as held for sale
8,389,050
19,375
53,531
163,834
8,625,790
(63,288)
40,214
—
—
(18,927)
—
(916)
—
(83,131)
40,214
Depreciation charge (Note 11)
(6,652,230)
(14,683)
(37,204)
(264,577)
(6,968,694)
Transfers
Transfer to inventories
Derecognition arising on capital repairs
Currency translation differences
Closing net book amount
At 31 December 2020
Cost
10,391
(381,070)
(419,982)
3,074,244
—
—
—
3,484
—
(10,391)
—
(5,150)
—
2,070
(96)
—
617
(386,316)
(419,982)
3,080,415
81,342,356
255,254
110,233
2,713,098
84,420,941
123,222,340
374,471
207,796
3,642,951
127,447,558
Accumulated depreciation
(41,879,984)
(119,217)
(97,563)
(929,853)
(43,026,617)
Net book amount
81,342,356
255,254
110,233
2,713,098
84,420,941
226
227
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
At 1 January 2021
Cost
Rolling stock
RUB’000
Land and
buildings
RUB’000
Motor
vehicles
RUB’000
Other
Total
RUB’000
RUB’000
123,222,340
374,471
207,796
3,642,951
127,447,558
Accumulated depreciation
(41,879,984)
(119,217)
(97,563)
(929,853)
(43,026,617)
Net book amount
81,342,356
255,254
110,233
2,713,098
84,420,941
Year ended 31 December 2021
Opening net book amount
81,342,356
255,254
110,233
2,713,098
84,420,941
Additions
Disposals
Disposed through disposals of subsidiaries
7,282,381
(46,617)
—
37,944
—
—
43,360
(2,564)
629,882
(1,099)
7,993,567
(50,280)
—
(2,615,146)
(2,615,146)
Depreciation charge (Note 11)
(6,316,907)
(15,990)
(36,067)
(273,541)
(6,642,505)
Transfers
Transfer to inventories
Derecognition arising on capital repairs
Currency translation differences
Closing net book amount
At 31 December 2021
Cost
17,720
(627,562)
(483,647)
(888,464)
80,279,260
—
—
—
(1,080)
276,128
—
(2,313)
—
(1,000)
111,649
(17,720)
(1,183)
—
(144)
—
(631,058)
(483,647)
(890,688)
434,147
81,101,184
125,742,564
410,314
231,770
962,979
127,347,627
Accumulated depreciation
(45,463,304)
(134,186)
(120,121)
(528,832)
(46,246,443)
Net book amount
80,279,260
276,128
111,649
434,147
81,101,184
Borrowing costs amounting to RUB 5,202 thousand were capitalised within rolling stock during the year 2021.
The net carrying amount of rolling stock as at 1 January 2020 and for the year ended 31 December 2020 includes right-
of-use assets relating to rolling stock held under leases with financial institutions that include purchase options that are
reasonably certain to be exercised, in accordance with the Group’s accounting policy for leases, as disclosed in Note 4.
The table below shows the movement in the said right-of-use assets within the year 2020:
Opening net book amount
Transfer to owned rolling stock
Depreciation charge (Note 11)
Closing net book amount
228
2020
RUB’000
3,198,262
(3,108,215)
(90,047)
—
Useful lives of rolling stock
The estimation of the useful lives of items of rolling stock is a matter of judgment based on the experience with similar
assets. The future economic benefits embodied in the assets are consumed principally through use. However, other
factors, such as technical or commercial obsolescence and wear and tear, often result in the diminution of the economic
benefits embodied in the assets. The Group assesses the remaining useful lives of its rolling stock as of each balance
sheet date taking into account the current technical conditions of the assets and estimated period during which the
assets are expected to earn benefits for the Group. The following primary factors are considered: (a) the expected
usage of the assets; (b) the expected physical wear and tear, which depends on operational factors and maintenance
programme; and (c) the technical or commercial obsolescence arising from changes in market conditions.
Based on management’s assessment, the useful economic life of the Group’s rolling stock as of 31 December 2021 is
considered appropriate.
Residual values of rolling stock
The Group reviews and adjusts the residual values of its rolling stock and wheel pairs as of each balance sheet date,
taking into account, among others, the price of scrap metal as of the assessment date. Management has revised the
residual value of the Group’s rolling stock and wheel pairs as of 1 January 2021, following a significant increase in market
prices of scrap metal. In making this assessment, management took into account actual scrap prices achieved by the
Group near the assessment date and available market information on the level of scrap metal as at that date.
As a result of the revision of the residual values of the Group’s rolling stock and wheel pairs, the depreciation charged
in the income statement for the year ended 31 December 2021 is RUB 1,031,740 thousand lower than the one that would
have been charged for the same period if there was no revision in residual values. A reasonable change in the inputs
used by management would not result in material differences.
Based on management’s assessment, the residual values of the Group’s rolling stock as of 31 December 2021 are
considered appropriate.
Impairment assessment of rolling stock
The Group assesses at each balance sheet date whether there are indications for impairment of the Group’s property,
plant and equipment, in accordance with its accounting policy for impairment of non-financial assets, as set out in
Note 4.
As of 31 December 2020, the management considered the deterioration of the economic environment, the weak
prevailing industry conditions and the COVID-19 pandemic related uncertainties as indications of impairment of the
Group’s cash generating units (“CGUs”) and proceeded to perform impairment assessments to determine if there is an
impairment loss.
As a result of the impairment assessment, no impairment losses were noted. The impairment testing for all the CGUs,
other than the Estonian rail tank cars/operating leasing CGU, indicated a significant headroom in the recoverable
amount over the carrying amount of these CGUs.
229
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Estonian rail tank cars/operating leasing CGU
The recoverable amount of the Estonian rail tank cars/operating leasing CGU amounting to RUB 12,786,087 thousand
was determined based on market approach using level 2 inputs.
The fair value less cost to sell was determined based on the prices quoted in RUB by major retailers of rail cars dealing
in the second hand market of the specific rolling stock held by the CGU in the Russian Federation (being the primary
market for these assets), adjusted to take into account the age of each specific asset in the possession of the CGU
and expenses necessary to bring the assets to the location and condition that enables their current use, assessed by
management as being their highest and best use.
If the selling price of the rolling stock had been 10% lower the recoverable amount would decrease resulting into an
impairment loss of RUB 259 million to be recognised in respect of the rolling stock of this CGU.
Rolling stock
Other (tank-containers)
2021
RUB’000
2020
RUB’000
17,997,866
8,084,292
—
1,387,955
17,997,866
9,472,247
Depreciation expense of RUB 6,555,041 thousand in 2021 (2020: RUB 6,888,459 thousand) has been charged to “cost
of sales” and RUB 87,464 thousand in 2021 (2020: RUB 80,235 thousand) has been charged to “selling, marketing and
administrative expenses”.
If the year end exchange rate between RUB and EUR had devalued by 20%, the recoverable amount would decrease
resulting into an impairment loss of RUB 1,175 million to be recognised in respect of the rolling stock of this CGU.
18. Right-of-use assets
Based on assessment performed by management as of 31 December 2021, no indicators of impairment of any of the
Group’s CGUs were identified.
In the cash flow statement, proceeds from sale of property, plant and equipment comprise:
Net book amount
Gains/(loss) on sale of property, plant and equipment (Note 11)
Consideration from sale of property, plant and equipment
The consideration from sale of property, plant and equipment is further analysed as follows:
Cash consideration received within year
Amount receivable
Movement in advances received for sales of property, plant and equipment
2021
RUB’000
50,280
41,501
91,781
2021
RUB’000
77,932
—
13,849
91,781
2020
RUB’000
83,131
(316)
82,815
2020
RUB’000
66,765
1,300
14,750
82,815
The total net book value of pledged property, plant and equipment (included above) which are held as collateral for the
borrowings and loans are as follows (Note 28):
Year ended 31 December 2020
Opening net book amount
Additions
Disposals
Disposals through subleases
Change of terms of leases
Depreciation charge (Note 11)
Currency translation differences
As at 31 December 2020
Year ended 31 December 2021
Opening net book amount
Additions
Change of terms of leases
Depreciation charge (Note 11)
Currency translation differences
Disposed through disposals of subsidiaries
As at 31 December 2021
Rolling stock
Land and buildings
RUB’000
RUB’000
Other
RUB’000
Total
RUB’000
826,685
301,130
(30,996)
—
(96,587)
(470,245)
—
529,987
517,257
99,050
—
—
66,506
303,152
—
1,410,448
703,332
(30,996)
(255,447)
(255,447)
9,195
(7,737)
(95,129)
(148,473)
(36,352)
(655,070)
3,277
480,306
—
3,277
70,122
1,080,415
Rolling stock
Land and buildings
Other
Total
RUB’000
RUB’000
RUB’000
RUB’000
529,987
4,697,662
1,275,580
(944,815)
—
(271,696)
5,286,718
480,306
40,888
(29,743)
(151,613)
(946)
(18,765)
320,127
70,122
45,172
(6,830)
(31,031)
—
1,080,415
4,783,722
1,239,007
(1,127,459)
(946)
(77,433)
(367,894)
—
5,606,845
230
231
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Summarised information for the Group’s right-of-use assets
In accordance with the Group’s accounting policy for leases as disclosed in Note 4, right-of-use assets and associated
lease liabilities are presented as separate lines on the face of the balance sheet, except for right-of-use assets and
associated lease liabilities arising from leases with financial institutions that include purchase options that are
reasonably certain to be exercised due to the exercise price being a nominal amount compared to the fair value of the
leased asset on the exercise date. The latter are presented within the same line item as the corresponding underlying
assets would be presented if they were owned and within borrowings, respectively. Management believes that this
presentation best reflects the substance of the leases with financial institutions, being similar to that of purchases via
collateralised borrowings.
As at 31 December 2020 and 31 December 2021, there were no right-of-use assets and associated lease liabilities
arising from leases with financial institutions that were presented within property, plant and equipment and borrowings,
respectively.
During the year 2020, depreciation charge of RUB 90,047 thousand on rolling stock within property, plant and
equipment (Note 17) related to right-of-use assets for rolling stock in place as at 1 January 2020 that arose from leases
with financial institutions that included purchase options that were reasonably certain to be exercised due to the
exercise price being a nominal amount compared to the fair value of the leased asset on the exercise date.
The total cash outflow for leases in 2021 was RUB 1,501,860 thousand (2020: RUB 2,897,814 thousand).
19. Intangible assets
At 1 January 2020
Cost
Accumulated amortisation
Net book amount
Year ended 31 December 2020
Opening net book amount
Amortisation charge (Note 11)
Closing net book amount
At 31 December 2020
Cost
Accumulated amortisation
Net book amount
Year ended 31 December 2021
Opening net book amount
Amortisation charge (Note 11)
Disposed through disposals of subsidiaries
Closing net book amount
At 31 December 2021
Cost
Accumulated amortisation
Net book amount
Computer software
Customer
relationships
Total
RUB’000
RUB’000
RUB’000
11,766
(8,353)
3,413
3,413
(1,953)
1,460
11,766
(10,306)
1,460
1,460
(675)
(700)
85
10,934
(10,849)
85
4,863,734
4,875,500
(4,805,831)
(4,814,184)
57,903
61,316
57,903
(57,903)
—
—
—
—
—
—
—
—
—
—
—
61,316
(59,856)
1,460
11,766
(10,306)
1,460
1,460
(675)
(700)
85
10,934
(10,849)
85
Amortisation of RUB 658 thousand (2020: RUB 59,839 thousand) has been charged to “cost of sales” in the income
statement and RUB 17 thousand (2020: RUB 17 thousand) to “selling, marketing and administrative expenses”.
232
233
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
20. Principal subsidiaries
The Company had the following subsidiaries at 31 December 2021 and 31 December 2020:
Name
Place of
business/
country of
incorporation
Principal activities
Proportion of ordinary
shares held by
the Company (%)
Proportion of ordinary
shares held by
the Group (%)
Proportion of
ordinary shares held
by non- controlling
interest (%)
New Forwarding
Company, АО
Russia
Railway transportation
GTI Management, OOO Russia
Railway transportation
Ural Wagonrepair
Company, AO
Russia
Repair and mainte-
nance of rolling stock
Ukrainian New
Forwarding Company
OOO
Ukraine
Railway transportation
BaltTransServis, OOO
Russia
Railway transportation
BTS-Locomotive
Solutions OOO1
Russia
RemTransServis, OOO2 Russia
Support activities for
locomotive traction
Repair and mainte-
nance of rolling stock
SyntezRail LLC3
Russia
Railway transportation
SyntezRail Ltd
Cyprus
Spacecom AS
Estonia
Ekolinja Oy4
Finland
Spacecom Trans AS4
Estonia
Intermediary holding
company
Operating lease of
rolling stock
Operating sub—lease
of rolling stock
Operating lease of
rolling stock
2021
2020
2021
2020
2021
2020
100
100
100
100
60
—
—
—
—
100
100
100
100
100
100
100
60
—
—
—
60
100
60
60
60
—
—
100
100
100
100
60
60
60
60
60
—
—
—
—
40
40
40
—
—
—
—
—
—
40
40
40
40
40
65.25
65.25
65.25
65.25
34.75
34.75
—
—
—
—
—
65.25
—
34.75
65.25
65.25
34.75
34.75
1 BTS-Locomotive Solutions, OOO is a 100% subsidiary of BaltTransServis.
2 RemTransServis, OOO is a 100% subsidiary of BaltTransServis, OOO.
3 SyntezRail LLC was a 100% subsidiary of SyntezRail Ltd until the disposal in October 2021.
4 Ekolinja Oy and Spacecom Trans AS are 100% subsidiaries of Spacecom AS. Ekolinja Oy was dissolved within June 2021.
All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary
undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.
The accumulated non-controlling interest as of 31 December 2021 and 31 December 2020 comprised the following:
BaltTransServis, OOO (including RemTransservis, OOO and BTS-Locomotive Solutions, OOO)
Spacecom AS (including Spacecom Trans AS and Ekolinja Oy)
SyntezRail, LLC; SyntezRail Limited
Total
2021
RUB’000
2,417,810
3,840,047
—
2020
RUB’000
1,289,933
4,422,878
213,794
6,257,857
5,926,605
Disposal of Spacecom Trans AS during the year 2018
During the year 2018, Spacecom AS acquired 100% of the shares of Spacecom Trans AS from the Company and the non-
controlling shareholders, for a total consideration of Eur 30,100 thousand (equivalent to RUB 2,391,761 thousand), out
of which RUB 837,116 thousand were attributed to the non-controlling interest. Within the year 2020, an amount of RUB
180,281 thousand was paid, which included interest accrued on the balance payable, resulting in the full settlement of
the amount due.
Disposal of the 60% holding SyntezRail Limited and SyntezRail LLC during the year 2021
During the year 2021, the Company disposed its 60% shareholding in SyntezRail Ltd, which in turn owned 100% of
SyntezRail LLC, for a total consideration of RUB 1,128,000 thousand realising a gain of RUB 751,477 thousand (Note 12).
One of the three purchasers is an entity controlled by a director of the Company (Note 35). The cash inflow from the
disposal of subsidiary undertakings, net of cash disposed of for the purposes of the consolidated cash flow statement
was RUB 1,110,051 thousand.
Acquisition of the 40% non-controlling interest in BaltTransServis, OOO
On 21 December 2021, the Company entered into an agreement with the non-controlling shareholder of BaltTransServis,
OOO to acquire the 40% non-controlling shareholding in the subsidiary for a total consideration of RUB 9,100,100
thousand. As of 31 December 2021, the transaction was subject to satisfaction of a number of pre-conditions, including
approval by the Federal Antimonopoly Service of the Russian Federation and, as a result, the acquisition was not
reflected in the financial statements for the year 2021.
By 31 December 2021, and in line with terms of the relevant agreement, the Company made a prepayment to the seller
amounting to RUB 300,000 thousand classified within non-current prepayments (Note 23).
In February 2022 the Company acquired 40% non-controlling interest in BaltTransServis, OOO following receipt
by the Company of the approval from the Federal Antimonopoly Service of the Russian Federation and satisfaction
of the remaining pre-conditions, including settlement of the remaining RUB 8,800,000 thousand of the purchase
consideration (Note 36).
Significant restrictions
There are no significant restrictions, statutory, contractual, regulatory, or arising from protective rights of non-
controlling interests, on the ability of the Group to access or use the assets and settle the liabilities of the Group.
234
235
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Summarised financial information of subsidiaries with material non-controlling interests
Set out below are the summarised financial information for each subsidiary that has non-controlling interests that are
material to the Group. The financial information of Spacecom AS includes Spacecom Trans AS and Ekolinja Oy and the
financial information of BaltTransServis, OOO includes RemTransServis, OOO. No summarised financial information is
presented for SyntezRail, OOO and SyntezRail Limited as their operations and financial position are not material to the
Group.
SUMMARISED CASH FLOW STATEMENTS
Cash flows from operating activities
Cash generated from operations
Income tax paid
BaltTransServis OOO
Spacecom AS
2021
RUB’000
2020
RUB’000
2021
RUB’000
2020
RUB’000
7,003,173
(1,135,617)
5,867,556
6,119,365
(830,980)
5,288,385
1,235,883
(213,715)
1,022,168
1,594,194
(174,215)
1,419,979
SUMMARISED BALANCE SHEET
Current
Assets
Liabilities
BaltTransServis OOO
Spacecom AS
Net cash generated from operating activities
2021
RUB’000
3,919,016
4,057,738
2020
RUB’000
2,619,117
5,187,101
2021
RUB’000
190,983
491,136
2020
RUB’000
282,965
557,944
Net cash generated from/(used in) investing activities
(2,512,085)
(1,085,015)
(30,889)
(539,000)
Net cash used in financing activities
(2,660,088)
(5,256,854)
(1,011,676)
(837,055)
Total current net assets
(138,722)
(2,567,984)
(300,153)
(274,979)
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
SUMMARISED INCOME STATEMENT
11,738,961
8,682,673
11,345,889
13,006,551
5,555,714
6,183,247
2,889,856
47,414
60,302
5,792,817
11,298,475
12,946,249
6,044,525
3,224,833
10,998,322
12,671,270
Revenue
Profit before income tax
Income tax expense
Post-tax profit from continuing operations
Other comprehensive income
Total comprehensive income
Total comprehensive income allocated to non-con-
trolling interests
BaltTransServis OOO
Spacecom AS
2021
RUB’000
2020
RUB’000
26,932,363
23,841,123
6,024,506
(1,014,814)
5,009,692
—
4,169,195
(832,568)
3,336,627
—
5,009,692
3,336,627
2021
RUB’000
1,231,965
408,092
(198,224)
209,868
(621,865)
(411,997)
2,003,877
1,334,651
72,929
Dividends paid to non-controlling interest
(876,000)
(1,976,000)
(342,516)
2020
RUB’000
1,732,640
959,753
(312,459)
647,294
3,099,987
3,747,281
224,935
(411,652)
236
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange differences on cash and cash equivalents
695,383
837,867
—
1,891,351
—
(1,053,484)
(20,397)
94,868
(3,402)
71,069
Cash and cash equivalents at end of year
1,533,250
837,867
The information above includes the amounts before inter-company eliminations.
43,924
38,288
12,656
94,868
237
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
21. Share-based payments
The Group maintains a remuneration program for some of the members of management, including members of key
management of the Group. This includes, amongst other things, a three-year compensation scheme in accordance
to which, members of management receive a yearly cash compensation calculated based on the weighted average
market quotations of the GDRs of the Company. This compensation is set for a three-year period and is divided on three
instalments to be paid after the end of each assessment period which equals to one year. The award is conditional on
the performance of the participants and on meeting certain key performance indicators (“KPIs”) each year during the
three years vesting period. The scheme matured by 31 December 2020 and was renewed on 1 January 2021 for another
three-year period.
The scheme falls within the scope of IFRS 2 “Share-based payment” and has therefore been classified as a cash-settled
share-based payment arrangement.
In accordance with the terms of the remuneration program, the compensation is calculated based on the weighted
average fair value of the Company’s GDRs, quoted in US Dollar multiplied by the weighted average RUB/USD exchange
rate for each period.
The Group recognised an employee benefit expense of RUB 123,971 thousand in this respect for the year ended 31
December 2021 (2020: RUB 28,931 thousand) and the Group’s liability in respect of this amounted to RUB 123,971
thousand as of 31 December 2021 (2020: RUB 104,366 thousand).
The share-based payment liability as of 31 December 2021 was determined based on the assumption that all participants
will remain with the Group and all KPIs will be met and that there will be no significant fluctuation in the value of the
Company’s GDRs during the vesting period. The significant inputs into the valuation were the weighted average fair
value of the Company’s GDRs and the weighted average USD/RUB exchange.
22. Financial assets
(a) Trade receivables
Trade receivables — third parties
Trade receivables — related parties (Note 35)
Less: Provision for impairment of trade receivables
Trade receivables — net
Less non-current portion:
Trade receivables — third parties
Less: Provision for impairment of trade receivables
Total non-current portion
Current portion
2021
RUB’000
2020
RUB’000
3,736,801
3,836,670
604
(98,955)
3,638,450
—
(135,124)
3,701,546
—
—
—
261,437
(25,272)
236,165
3,638,450
3,465,381
Non-current trade receivables amounting to RUB 261,437 thousand as of 31 December 2020 related to a receivable from
Georgian Railways for services rendered by the Group prior to 1 April 2015. The amount receivable was under dispute
and the Group initiated a claim to the Georgian Court demanding the repayment of the entire balance due. Based
on assessment performed as at 31 December 2020, the Group recognised a provision for impairment of RUB 25,272
thousand in order to account for the expected time until receipt of the amount due.
In July 2021, the Group assigned its rights, obligations and demands in the Georgian law case to a party related to the
non-controlling interests of Spacecom AS, being the entity involved in the claim, under an assignment agreement for
consideration which substantially settled the recognised receivable and is irrevocable independently whether the result
of future Court decision is negative or positive (Note 33).
The carrying amounts of the Group’s trade receivables are denominated in the following currencies:
Currency:
US Dollar
Russian Roubles
Euro
Ukrainian Hryvnia
2021
RUB’000
2020
RUB’000
9,709
248,633
3,531,548
3,306,199
96,068
1,125
138,184
8,530
3,638,450
3,701,546
According to the management’s estimates, the fair values of trade receivables do not materially differ from their carrying
amounts as the impact of discounting is not significant.
238
239
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
(b) Loans and other receivables
Loans receivables — third parties
Other receivables — third parties
Other receivables — related parties (Note 35)
Less: Provision for impairment of other receivables
Loans and other receivables — net
Less non-current portion:
Loans receivables — third parties
Other receivables — third parties
Total non-current portion
Current portion
2021
RUB’000
—
282,886
18
(14,866)
268,038
—
237,680
237,680
30,358
2020
RUB’000
3,887
67,678
—
(20,195)
51,370
3,887
—
3,887
47,483
The carrying amounts of the Group’s loans and other receivables are denominated in the following currencies:
Currency:
US Dollar
Russian Roubles
Ukrainian Hryvnia
Euro
Other
2021
RUB’000
2020
RUB’000
—
267,105
922
11
—
268,038
440
46,451
591
1
3,887
51,370
According to the management’s estimates, the fair values of loans and other receivables do not materially differ from
their carrying amounts as the impact of discounting is not significant.
23. Other assets
Prepayments — third parties
Finance leases to third parties
Finance leases to related parties
VAT recoverable
Other assets
Less non-current portion:
Finance leases to third parties
Finance leases to related parties (Note 35)
Prepayments for property, plant and equipment
Total non-current portion
Current portion
2021
RUB’000
2020
RUB’000
3,151,716
1,760,966
175,400
422,972
21,157
—
479,862
952,148
3,828,135
3,136,086
137,835
11,748
997,334
1,146,917
296,525
—
252,968
549,493
2,681,218
2,586,593
The Group’s finance leases as at 31 December 2021 and 31 December 2020 are denominated in Russian Roubles. The
finance lease receivables are scheduled as follows:
Less than one
year
Between 1 to
5 years
Over 5 years
Total
RUB’000
RUB’000
RUB’000
RUB’000
At 31 December 2021
Minimum lease receivable
Less: Unearned finance income
64,952
(17,978)
164,382
(14,799)
Present value of minimum lease receivables
46,974
149,583
At 31 December 2020
Minimum lease receivable
Less: Unearned finance income
146,532
(20,085)
327,222
(30,697)
Present value of minimum lease receivables
126,447
296,525
—
—
—
—
—
—
229,334
(32,777)
196,557
473,754
(50,782)
422,972
According to the management’s estimates, the fair values of finance lease receivables do not materially differ from their
carrying amounts as the impact of discounting is not significant.
240
241
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The effective interest rates on finance lease receivables at the balance sheet were as follows:
Finance leases to third parties
24. Inventories
Raw materials, spare parts and consumables
All inventories are stated at cost.
2021
%
10.42
2020
%
12.61
2021
2020
RUB’000
RUB’000
680,363
680,363
691,033
691,033
25. Cash and cash equivalents
Cash at bank and in hand
Short term bank deposits
Total cash and cash equivalents
2021
2020
RUB’000
RUB’000
5,634,742
4,898,862
7,219,965
79,460
12,854,707
4,978,322
The weighted average effective interest rate on short-term deposits was 6.74-7.25% in 2021 (2020: 2.27-4.85%) and these
deposits have a maturity of 1 to 21 days (2020: 1 to 21 days).
Cash and cash equivalents include the following for the purposes of the cash flow statement:
Cash and cash equivalents
Total cash and cash equivalents
Cash and cash equivalents are denominated in the following currencies:
Russian Rouble
US Dollar
Euro
Ukrainian Hryvnia
Total cash and cash equivalents
The carrying value of cash and cash equivalents approximates their fair value.
2021
2020
RUB’000
RUB’000
12,854,707
4,978,322
12,854,707
4,978,322
2021
2020
RUB’000
RUB’000
12,246,089
3,615,107
422,914
673,073
121,006
650,786
64,698
39,356
12,854,707
4,978,322
242
243
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
26. Share capital, share premium and treasury shares
At 1 January 2020 /31 December 2020 /
1 January 2021 / 31 December 2021
178,740,916
17,875
949,471
967,346
Number of shares
Share capital
Share premium
USD’000
USD’000
Total
USD’000
Number of shares
Share capital
Share premium
RUB’000
RUB’000
Total
RUB’000
At 1 January 2020 /31 December 2020 /
1 January 2021 / 31 December 2021
178,740,916
516,957
27,929,478
28,446,435
The total authorised number of ordinary shares at 31 December 2021 was 233,918,128 shares with a par value of US$0.10
per share (31 December 2020: 233,918,128 shares with a par value of US$0.10 per share). All issued shares are fully paid.
In accordance with the decision of the Extraordinary General Meeting which took place on 12 May 2020, the Company
started a GDRs buyback program. The buyback programme is for the Company’s Global Depositary Receipts (“GDRs)
and will run till the earlier of the close of the Annual General Meeting of the Company to be held in 2021 and May 2021.
The total number of purchased GDRs shall not exceed 5% of the Company’s share capital (equivalent to 8,937,046
shares, with each GDR representing one ordinary share). The shareholders of the Company at the Annual General
Meeting which took place on 29 April 2021 approved the prolongation of the term of the buyback program until the
earlier of the close of the Annual General Meeting of the Company to be held in 2022 or 12 months from the date of the
approval.
During the year 2020, the Company purchased a total of 76,877 GDRs, which are held in treasury for a total
consideration of 422 thousand US Dollars (equivalent to RUB 31,496 thousand). No further acquisitions took place within
the year 2021.
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury for up to two years.
27. Dividends
In April 2020, the shareholders of the Company approved the payment of a dividend for the financial year ended 31
December 2019 in the amount of 46.55 Russian Roubles per ordinary share/GDR, amounting to a total dividend of
RUB 8,320,390 thousand, including final dividend for 2019 in the amount of RUB 1,903,591 thousand or RUB 10.65 per
ordinary share/GDR and a special final dividend in the amount of RUB 6,416,799 thousand or RUB 35.90 per ordinary
share/GDR (US Dollar equivalent of US$ 110,787 thousand).
In August 2020, the Board of Directors of the Company approved payment of total dividend in the amount of 46.55
Russian Roubles per ordinary share/GDR, amounting to a total dividend of RUB 8,320,390 thousand, including interim
dividend in the amount of RUB 3,083,281 thousand or RUB 17.25 per ordinary share/GDR and a special interim dividend
in the amount of RUB 5,327,109 thousand or RUB 29.30 per ordinary share/GDR (US Dollar equivalent US$ 111,293
thousand).
In April 2021, the shareholders of the Company approved the payment of a dividend for the financial year ended 31
December 2020 in the amount of 28.00 Russian Roubles per ordinary share/GDR, amounting to a total dividend of
RUB 5,004,746 thousand, including final dividend for 2020 in the amount of RUB 2,931,351 thousand or RUB 16.40 per
ordinary share/GDR and a special final dividend in the amount of RUB 2,073,395 thousand or RUB 11.60 per ordinary
share/GDR (US Dollar equivalent of US$ 66,190 thousand).
On 27 August 2021, the Board of Directors of the Company approved payment of total dividend in the amount of 22.50
Russian Roubles per ordinary share, amounting to a total dividend of RUB 4,021,671 thousand, including interim dividend
in the amount of RUB 1,635,480 thousand or RUB 9.15 per ordinary share/GDR and a special interim dividend in the
amount of RUB 2,386,191 thousand or RUB 13.35 per ordinary share/GDR (US Dollar equivalent of US$ 54,457 thousand).
During the years ended 31 December 2021 and 2020, the Group declared and paid dividends in favour of the equity
holders of the Company and the non-controlling interests as detailed in the table below.
Dividends declared to equity holders of the Company (1)
Dividends paid to equity holders of the Company (1)
Dividends declared to non-controlling interest
Dividends paid to non-controlling interest
2021
RUB’000
2020
RUB’000
9,022,550
16,637,178
9,022,550
16,637,178
1,218,516
2,387,652
1,225,275
2,271,815
(1) Dividends declared and paid to the equity holders of the Company within the year 2021 as per the table above exclude RUB 3,867 thousand (2020: RUB 3,601
thousand) relating to dividend declared and paid on the treasury shares.
244
245
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
28. Borrowings
Current
Bank borrowings
Non-convertible unsecured bonds
Total current borrowings
Non-current
Bank borrowings
Non-convertible unsecured bonds
Total non-current borrowings
Total borrowings
Maturity of non-current borrowings
Between 1 and 2 years
Between 2 and 5 years
2021
RUB’000
2020
RUB’000
9,658,062
9,388,591
4,010,198
1,542,581
13,668,260
10,931,172
12,651,536
12,339,674
4,998,674
8,744,393
17,650,210
21,084,067
31,318,470
32,015,239
11,188,564
11,554,709
6,461,646
9,529,358
17,650,210
21,084,067
Non-convertible bonds
New Forwarding Company AO issued non-convertible Russian Rouble denominated bonds for amount of RUB 5 billion in
2018, priced at a coupon rate of 7.25% p.a. and with maturity in 2023 and for amount of RUB 5 billion in 2020, priced at a
coupon rate of 8.8% p.a. and with maturity in 2024 out of a total RUB 100 billion registered program.
The Company acts as the guarantor for the bond issue.
The exposure of the Group’s borrowings to interest rate changes and the contractual re-pricing dates at the balance
sheet dates are as follows:
6 months or less
6 to 12 months
1 to 5 years
2021
RUB’000
2020
RUB’000
5,951,833
4,983,084
7,716,428
5,948,087
17,650,209
21,084,068
31,318,470
32,015,239
Note: The amounts above are based on the earliest of their contractual re-pricing dates and maturity dates
Bank borrowings
Bank borrowings mature by 2025 (2020: by 2025) and bear average interest of 7.2% per annum (2020: 6.25% per
annum).
There were no defaults or breaches of loan terms during the years ended 31 December 2021 and 31 December 2020.
The current and non-current bank borrowings amounting to RUB 8,099,674 thousand and RUB 11,304,448 thousand
respectively (2020: RUB 4,522,381 thousand and RUB 4,916,838 thousand respectively) are secured by pledge of
rolling stock and tank-containers with a total carrying net book value of RUB 17,997,866 thousand (2020: RUB 9,472,247
thousand) (Note 17).
246
247
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Movements in borrowings are analysed as follows:
The carrying amount and fair value of current and non-current borrowings are as follows:
Bank
borrowings
and loans (excl.
overdrafts)
Lease liabilities
with financial
institutions
Other lease
liabilities
Non-convertible
unsecured
bonds
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
Year ended 31 December 2020
Opening amount as at 1 January 2020
18,094,062
1,722,139
1,530,883
10,279,017
31,626,101
Cash flows:
Amounts advanced
23,265,000
—
—
Repayments of borrowings
(19,603,415)
(1,715,794)
(672,432)
—
—
23,265,000
(21,991,641)
Interest paid
Non-cash changes:
Interest charged
Net foreign exchange
Other lease liability
Other
(1,514,636)
(80,813)
(113,771)
(800,301)
(2,509,521)
1,487,421
74,468
113,099
808,258
2,483,246
—
—
(167)
—
—
—
—
9,716
668,622
(131,521)
—
—
—
9,716
668,622
(131,688)
1,404,596
10,286,974
33,419,835
Closing amount as at 31 December 2020
21,728,265
Carrying amount
Fair value
2021
RUB’000
2020
RUB’000
2021
RUB’000
Bank borrowings
22,309,598
21,728,265
21,424,779
Non-convertible unsecured bonds
9,008,872
10,286,974
31,318,470
32,015,239
8,705,000
30,129,779
2020
RUB’000
21,784,011
10,440,500
32,224,511
The fair value as at 31 December 2021 and 31 December 2020 of fixed interest rate instruments with stated maturity
denominated in Russian Rouble was estimated based on expected cash flows discounted using the rate of similar
Russian Rouble denominated instruments entered into by the Group close to 31 December 2021 and 31 December 2020.
The discount rate was 10.5% p.a. (2020: 6.3% p.a.). The fair value measurements are within level 2 of the fair value
hierarchy (2020: level 2). The fair value as at 31 December 2021 and 31 December 2020 of the fixed interest rate non-
convertible bonds was equal to their quoted price and the resulting fair value measurement is within level 1.
The fair value of liabilities repayable on demand or after a notice period (“demandable liabilities”) is estimated as the
amount payable on demand, discounted from the first date on which the amount could be required to be paid.
The carrying amounts of the Group’s borrowings are denominated in the following currencies:
Bank
borrowings
and loans (excl.
overdrafts)
Lease
liabilities
with financial
institutions
Other lease
liabilities
Non-convertible
unsecured
bonds
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
Russian Rouble
Year ended 31 December 2021
Opening amount as at 1 January 2021
21,728,265
Cash flows:
Amounts advanced
Repayments of borrowings
Interest paid
Non-cash changes:
Interest charged
Net foreign exchange
Other lease liability
18,058,000
(15,286,973)
(1,438,479)
1,488,224
—
—
Disposed through disposals of subsidiaries
(2,241,636)
Change of terms of leases
Other
—
2,197
Closing amount as at 31 December 2021
22,309,598
—
—
—
—
—
—
—
—
—
—
—
201,632
(3,622)
4,747,388
(495,043)
1,239,869
(2,268)
772,198
2,462,054
—
—
—
—
—
(3,622)
4,747,388
(2,736,679)
1,239,869
(71)
5,841,573
9,008,872
37,160,043
1,404,596
10,286,974
33,419,835
The Group has the following undrawn borrowing facilities:
—
—
18,058,000
(1,067,922)
(1,250,000)
(17,604,895)
(183,057)
(800,300)
(2,421,836)
Fixed rate:
Expiring within one year
Expiring beyond one year
2021
RUB’000
31,318,470
31,318,470
2020
RUB’000
32,015,239
32,015,239
2021
RUB’000
2020
RUB’000
7,788,000
7,609,091
35,100,000
21,840,000
42,888,000
29,449,091
Drawdowns under certain of the above credit facilities are subject to successful conclusion of additional agreements
with the lenders, which, amongst others, will specify the terms of each disbursement.
248
249
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The weighted average effective interest rates at the balance sheet were as follows:
Bank borrowings
Non-convertible unsecured bonds
29. Other lease liabilities
Other lease liabilities
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
Maturity of other lease liabilities
Between 1 and 2 years
Between 2 and 5 years
Over 5 years
2021
%
7.2
8.2
2020
%
6.3
8.1
2021
2020
RUB’000
RUB’000
1,913,410
3,928,163
684,109
720,487
5,841,573
1,404,596
2021
2020
RUB’000
RUB’000
2,002,349
1,898,921
26,893
3,928,163
475,112
239,943
5,432
720,487
30. Deferred income tax
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred taxes relate to the same taxable entity and fiscal authority.
The gross movement on the deferred income tax account is as follows:
Beginning of year
Income statement charge (Note 15)
Disposed through disposals of subsidiaries
Exchange differences
End of year
2021
RUB’000
8,862,587
915,907
(22,592)
(3,588)
2020
RUB’000
7,592,182
1,265,524
—
4,881
9,876,557
8,862,587
The movement on the deferred tax assets and liabilities during the year, without taking into consideration the offsetting
of balances within the same tax jurisdiction, is as follows:
Deferred tax liabilities
At 1 January 2020
Charged/(credited) to:
Property, plant and
equipment
Withholding tax
provision
RUB’000
RUB’000
Intangible
assets
RUB’000
Right-of-use
assets
Total
RUB’000
RUB’000
8,021,161
515,444
11,368
213,387
8,761,360
Income statement (Note 15)
445,194
153,433
(11,578)
(66,332)
520,717
Translation differences
At 31 December 2020
Charged/(credited) to:
—
8,466,355
4,881
673,758
Income statement (Note 15)
702,541
453,254
Disposed through disposals of subsidiar-
ies
Translation differences
At 31 December 2021
(86,158)
—
—
(3,588)
9,082,738
1,123,424
—
(210)
56
154
—
—
—
4,881
147,055
9,286,958
724,589
1,880,440
(73,579)
(159,583)
—
(3,588)
798,065
11,004,227
250
251
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Deferred tax assets
At 1 January 2020
Charged/(credited) to:
Income statement (Note 15)
At 31 December 2020
Charged/(credited) to:
Tax losses
Trade and other
payables
Other lease
liabilities and
Borrowings
Other assets/
liabilities
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
(59,002)
(171,099)
(849,443)
(89,634)
(1,169,178)
5,586
(53,416)
78,609
(92,490)
625,487
35,125
744,807
(223,956)
(54,509)
(424,371)
Income statement (Note 15)
1,334
(133,715)
(728,150)
(104,002)
(964,533)
31. Trade and other payables
Current
Trade payables to third parties
Other payables to third parties
VAT payable and other taxes
Accrued expenses
Disposed through disposals of subsidiaries
At 31 December 2021
52,082
—
(1,435)
103,517
(17,173)
136,991
(227,640)
(848,589)
(175,684)
(1,251,913)
Non-current
Other payables to third parties
Accrued key management compensation, including share-based payment (Note 35)
1,042,989
Deferred tax assets are recognised for tax losses carried forward to the extent that the realization of the related tax
benefit through future taxable profits is probable. The Group has not recognised deferred tax assets in the amount of
RUB 267,717 thousand (2020: RUB 272,614 thousand) for tax losses amounting to RUB 1,487,319 thousand (2020: RUB
1,543,418 thousand) available to be carried forward as it is not probable that future taxable profits will be available
against which these tax losses can be utilised.
Withholding tax at the rate of 5% is applied to the dividends distributed by the Russian subsidiaries of the Group to the
Company. In case the dividends are distributed by the Estonian subsidiaries the tax of 20% or, under certain conditions,
14% will be applied to gross amount of such distributions. The Group recognises provisions for such taxes based on
management’s estimates and intention for future dividend distribution by each respective subsidiary out of profits of
subsidiaries as of 31 December 2021.
Deferred income tax liabilities of RUB 1,215,876 thousand (2020: RUB 1,446,802 thousand) have not been recognised for
the withholding taxes that would be payable in case unremitted earnings of certain subsidiaries are distributed to the
Company in the form of dividends as it is the current intention of the management of the Group that such amounts are
reinvested. Unremitted earnings on which no deferred tax liability was recognised totalled to RUB 11,155,035 thousand
as at 31 December 2021 (2020: RUB 13,093,858 thousand).
The fair value of trade and other payables approximates their carrying amount at the balance sheet date.
32. Earnings per share
Basic and diluted
Basic and diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Company by
the weighted average number of ordinary shares in issue during the year, excluding treasury shares.
Profit attributable to equity holders of the company (RUB thousand)
Weighted average number of ordinary shares in issue (thousand)
2021
2020
12,987,020
10,586,535
178,664
178,705
Basic and diluted earnings per share (expressed in RUB per share) attributable to the equity holders
of the Company during the year
72.69
59.24
2021
RUB’000
2020
RUB’000
529,454
437,960
614,664
95,960
843,703
380,438
534,738
79,680
359,435
2,721,027
2,197,994
9,225
9,225
—
—
252
253
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
33. Contingencies
Operating environment
The year 2021 was marked by the continuous effects of the COVID-19 pandemic, the emergence of new variants and
the associated measures implemented by various governments globally with a view to delay the spread of the disease,
safeguard public health and ensure the economic survival of working people, businesses, vulnerable groups and the
economy at large.
In 2021 the Russian economy demonstrated positive dynamics in recovery from the pandemic. This trend was also
supported by the global economic recovery and higher prices on global commodity markets. However, higher prices on
certain markets in Russia and globally also contribute to the inflation in Russia.
The future effects of the COVID-19 pandemic and of the measures taken by various governments to contain the virus on
the Group’s future financial performance, cash flows and financial position are difficult to predict and management’s
current expectations and estimates could differ from actual results. The Group’s management has taken and continues
to take necessary measures to ensure minimum disruption to and sustainability of the Group’s operations and support
the Group’s employees, customers and suppliers.
The Group and its subsidiaries mainly operate in the Russian Federation, Estonia and Ukraine.
Russian Federation. The Russian Federation displays certain characteristics of an emerging market. Its economy is
particularly sensitive to oil and gas prices. The legal, tax and regulatory frameworks continue to develop and are subject
to frequent changes and varying interpretations. Ongoing political tension in the region and sanctions against certain
Russian companies and individuals have an additional negative impact on the Russian economy.
The Russian economic environment was further negatively impacted by the escalation of the conflict between Russia
and Ukraine from late February 2022, as further described in Note 36.
This economic environment has a significant impact on the Group’s operations and financial position. The management
is taking necessary measures to ensure sustainability of the Group’s operations. However, the future effects of the
current economic situation are difficult to predict and management’s current expectations and estimates could differ
from actual results. The Group continues to monitor the situation and implement a set of measures to minimize the
impact of possible risks on the Group’s operations and financial position.
Tax contingencies. Russian tax and customs legislation which was enacted or substantively enacted at the end of the
reporting period, is subject to varying interpretations when being applied to the transactions and activities of the Group.
Consequently, tax positions taken by management and the formal documentation supporting the tax positions may be
challenged tax authorities. Russian tax administration is gradually strengthening, including the fact that there is a higher
risk of review of tax transactions without a clear business purpose or with tax incompliant counterparties. Fiscal periods
remain open to review by the authorities in respect of taxes for three calendar years preceding the year when decisions
about the review was made. Under certain circumstances reviews may cover longer periods.
The Russian transfer pricing legislation is generally aligned with the international transfer pricing principles developed
by the Organisation for Economic Cooperation and Development (OECD) but has specific characteristics. This legislation
provides the possibility for tax authorities to make transfer pricing adjustments and impose additional tax liabilities
in respect of controlled transactions (transactions with related parties and some types of transactions with unrelated
parties), provided that the transaction price is not arm’s length. Management has implemented internal controls to be in
compliance with this transfer pricing legislation. Management believes that its pricing policy used in 2021 and 2020 and
preceding years is arm’s length and it has implemented internal controls to be in compliance with this transfer pricing
legislation.
Tax liabilities arising from transactions between companies within the Group are determined using actual transaction
prices. It is possible, with the evolution of the interpretation of the transfer pricing rules, that such transfer prices could
be challenged. The impact of any such challenge cannot be reliably estimated; however, it may be significant to the
financial position and/or the overall operations of the Group.
The Group includes companies incorporated in Cyprus, Russia, Ukraine, Estonia. The tax liabilities of the Group are
determined on the assumption that these companies are tax residents in the countries where they are incorporated
and are not subject to profits tax of other tax jurisdictions, because they do not have permanent establishments in
other jurisdictions. The Company and the non-controlling shareholding companies holding interests in the Company’s
Russian subsidiaries are the only and full beneficial owners of the equity interests held directly and indirectly in these
subsidiaries. This interpretation of relevant legislation may be challenged but the impact of any such challenge cannot
be reliably estimated currently; however, it may be significant to the financial position and/or the overall operations of
the Group.
As Russian tax legislation does not provide definitive guidance in certain areas, the Group adopts, from time to time,
interpretations of such uncertain areas that reduce the overall tax rate of the Group. While management currently
estimates that the tax positions and interpretations that it has taken can probably be sustained, there is a possible
risk that an outflow of resources will be required should such tax positions and interpretations be challenged by the
tax authorities. Management will vigorously defend the positions and interpretations applied in determining taxes
recognised in these financial statements if these are challenged by the authorities. The impact of any such challenge
cannot be reliably estimated; however, it may be significant to the financial position and/or the overall operations of the
Group.
Estonia. Estonia represents well-developed market and economy with stable political systems and developed legislation
based on EU requirements and regulations.
Ukraine. Starting in 2013, the political situation in Ukraine has experienced instability with numerous protests and
continued political uncertainty that has led to deterioration of the state’s finances, volatility of financial markets and
sharp depreciation of the national currency against major foreign currencies. The ratings of Ukrainian sovereign debt
were downgraded by international rating agencies with negative outlooks for the future. The Central Bank of Ukraine,
among other measures, imposed certain restrictions on processing of client payments by banks and on the purchase of
foreign currency on the inter-bank market.
Since December 2021, news surrounding potential escalation of the conflict emerged and since February 2022
the circumstances have been deteriorating and the situation remains highly unstable. Depending on how the situation
evolves, it could have significant effects on the Group’s operations, as further described in Note 36.
254
255
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
Compliance with covenants
The Group is subject to certain covenants related primarily to its borrowings. Non-compliance with such covenants may
result in negative consequences for the Group including claims for early repayment. The Group is in compliance with
covenants as of 31 December 2021 and 31 December 2020 (Note 28).
Insurance policies
The Group holds insurance policies in relation to all vehicles (rolling stock and motor vehicles) and in respect of public
third-party liability. The Group does not have full insurance for business interruption or third-party liability in respect of
environmental damage.
Environmental matters
The enforcement of environmental regulation in the countries in which the Group operates is evolving and the
enforcement posture of government authorities is continually being reconsidered. The Group periodically evaluates
its obligations under environmental regulations. As obligations are determined, they are recognised immediately.
Potential liabilities, which might arise as a result of changes in existing regulations, civil litigation or legislation, cannot
be estimated but could be material. In the current enforcement climate under existing legislation, management believes
that there are no significant liabilities for environmental damage.
Legal proceedings
During the years ended 31 December 2021 and 31 December 2020, the Company’s subsidiaries were involved as a
claimants and defendants in a number of court proceedings.
Georgian Railways case
In March 2016, Georgian Railways initiated a claim of approximately GEL 16,122 thousand against a subsidiary of the
Company claiming compensation for storage costs incurred for wagons leased out to Georgian Railways that remained
in Georgia for a period after 1 April 2015.
In July 2021, the Group assigned its rights, obligations and demands in the Georgian law case to a party related to the
non-controlling interests of Spacecom AS, being the entity involved in the claim, under an assignment agreement for
consideration which fully settled the recognised receivable as at the 31 December 2021.
In the opinion of management, there are no other legal proceedings or other claims outstanding, as of 31
December 2021 and 2020 which could have a material effect on the results of operations or financial position of the
Group and which have not been accrued or disclosed in these financial statements.
34. Commitments
(a) Capital commitments
Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:
Property, plant and equipment
2021
RUB’000
2020
RUB’000
373,492
308,173
(b) Operating lease commitments — Group as lessor
The Group leases out rolling stock and locomotives under cancellable and non-cancellable operating lease agreements.
The future aggregate minimum lease payments receivable under non-cancellable operating leases in which the Group is
acting as the lessor are as follows:
As explained in Note 22, as at 31 December 2020 the Group has an outstanding receivable amounting to EUR 2,883
thousand/RUB 261,437 thousand from Georgian Railways relating to invoices issued for services rendered prior to 1 April
2015. The Group also issued invoices of EUR 1,555 thousand to Georgian Railways; the revenue of which has not been
recognised as it was not assessed as probable at that time that future economic benefits would flow to the Group.
Not later than 1 year
Later than 1 year not later than 5 years
The Georgian Railways dispute the tariffs applied in computing the outstanding balance and thus have not proceeded
with the repayment of the amount which remains outstanding.
There were no contingent-based rents to be recognised in the income statement for the year ended 31 December 2021
and 31 December 2020.
The Group initiated a claim to the Georgian Court demanding the repayment of the entire balance. Based on assessment
performed as at 31 December 2020, management recognised a loss allowance of EUR 279 thousand/ RUB 25,272
thousand.
In March 2018, the Georgian Court ruled in favour of the Group an amount of US$10 million. Both parties appealed this
decision. The Group did not recognise a receivable for the amount awarded as this might not constitute a final decision
on the matter.
256
257
2021
RUB’000
2,612,600
1,692,999
4,305,599
2020
RUB’000
402,676
156,395
559,071
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
35. Related party transactions
Litten Investments Ltd, controlled by a Director of the Company, has a shareholding in the Company of 5.1% as at 31
December 2021 (31 December 2020: 5.1%).
Goldriver Resources Ltd, controlled by a Director of the Company, has a shareholding in the Company of 3.1% as at 31
December 2021 (31 December 2020: 4.0%).
As at 31 December 2021, another 0.2% (2020: 0.2%) of the shares of the Company is controlled by Directors and key
management of the Company.
For the purposes of these financial statements, parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in making financial and operational decisions
as defined by IAS 24 “Related Party Disclosures”. In considering each possible related party relationship, attention is
directed to the substance of the relationship, not merely the legal form. Related parties may enter into transactions,
which unrelated parties might not, and transactions between related parties may not be effected on the same terms,
conditions and amounts as transactions between unrelated parties.
The following transactions were carried out with related parties:
(a) Key management compensation
Key management salaries and other short-term employee benefits
Share based compensation (Note 21)
2021
RUB’000
2020
RUB’000
1,887,429
1,139,297
123,971
28,931
2,011,400
1,168,228
The key management compensation above includes directors’ remuneration paid to the directors of the Company both
by the Company and by subsidiaries of the Company in respect of services provided to such subsidiaries amounting to
RUB 604,062 thousand (2020: RUB 433,063 thousand) and analysed as follows:
Non-executive directors’ fees
Emoluments in their executive capacity
Share based compensation in their executive capacity
258
2021
RUB’000
25,881
561,000
17,181
604,062
2020
RUB’000
25,535
406,144
1,384
433,063
(b) Sale of goods and services
Revenue from entity under control of member of key management:
Operating lease of rolling stock
Other
(c) Other gains
Other gains from entity under control of member of key management:
Other gains
(d) Year-end balances arising from sales/purchases of goods or services
Trade receivables from related parties — current (Note 22):
Entity under control of member of key management
Other receivables from related parties — current (Note 22):
Entity under control of member of key management
Key management remuneration — current (Note 31):
Accrued salaries and other short-term employee benefits
Share based payment liability (Note 21)
(e) Interest income
Finance leases (Note 23):
Entity under control of members of key management
2021
RUB’000
2020
RUB’000
134,312
125
134,437
—
—
—
—
2021
RUB’000
2020
RUB’000
525
525
—
—
—
2021
RUB’000
2020
RUB’000
604
604
18
18
—
—
—
—
919,018
123,971
1,042,989
255,069
104,366
359,435
2021
RUB’000
2020
RUB’000
357
357
—
—
259
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
(f) Contract liabilities
Contract liabilities relating to railway transportation contracts — current (Note 10):
Entity under control of member of key management
Contract liabilities relating to railway transportation contracts — non-current (Note 10):
Entity under control of member of key management
(g) Finance leases
Finance leases to related parties — current (Note 23):
Entity under control of member of key management
Finance leases to related parties — non-current (Note 23):
Entity under control of member of key management
2021
RUB’000
2020
RUB’000
1,425
1,425
4,879
4,879
—
—
—
—
2021
RUB’000
2020
RUB’000
9,409
9,409
11,748
11,748
—
—
—
—
(h) Disposal of investment in subsidiary to member of key management
During the year 2021, the Company disposed its 60% shareholding in SyntezRail Ltd (Note 20). Out of this, 20% was sold
to an entity controlled by a director of the Company for a consideration of RUB 376,000 thousand.
(i) Operating lease commitments — Group as lessor
Entity under control of member of key management
Not later than 1 year
Later than 1 year not later than 5 years
2021
RUB’000
2020
RUB’000
820,549
1,692,999
2,513,547
—
—
—
36. Events after the balance sheet date
Impact of the conflict in Ukraine
Since late February 2022, the Russian economy and the Group’s operating environment have been negatively impacted
by the escalated military and political conflict between Russia and Ukraine and the associated international sanctions
against a number of Russian institutions, companies, banks and individuals. The international sanctions imposed as
a response to the conflict restrict certain Russian entities from having access to foreign financial markets, including
removing access of several Russian banks to the international SWIFT system. The US, European Union, UK and a number
of other countries have also imposed sanctions against the Russian Central Bank, restricting the access of the Russian
state to foreign currency reserves, and introduced further asset freezes against designated individuals and entities as
well as sectoral sanctions. These measures have negatively impacted the Russian economy and business activity in
Russia and resulted in substantial volatility in the financial and commodity markets.
During the period from 24 February 2022 to 25 March 2022 oil prices increased to over US$123 per barrel and the
Russian Rouble exchange rate reached RUB 120.37 per USD and RUB 132.96 per EUR. On 3 March 2022, the London
Stock Exchange suspended trading of the Company’s GDRs and since 25 February 2022 the Moscow Exchange
suspended trading. It is not possible to determine how long this increased volatility will last or at what level the above
financial indicators will eventually level out.
The sanctions imposed by the US, European Union and a number of other countries on some of the biggest Russian
industrial groups may adversely affect the business environment and prospects of the Group and create significant
new risks, which did not exist as at the balance sheet date. In addition, the restrictions on the export of certain types of
Russian commodities and changes in directions of supply for Russian commodities may have a negative impact on the
Group’s clients, the Russian freight rail transportation industry and, in turn, the Group’s business.
The Group’s ability to transport cargo from Russia to the territory or through the territory of Ukraine is currently
suspended, however part of this cargo may be redirected to other routes. At the date of approval of these financial
statements, approximately 5% of the Group’s total fleet in numbers is located in Ukraine and the Group cannot
temporarily access it. The conflict has also severely impacted the Company’s subsidiary Ukrainian New Forwarding
Company OOO, which does not have a material impact on the Group’s revenue and profitability.
The restrictions on capital movements outside the Russian Federation impact and may further impact the ability of
the Company’s subsidiaries to make payments to the Company or to make payments between bank accounts of the
Company in Russia and abroad. Further, the weakening of Russian Rouble against the US dollar and Euro and the rising
oil prices may have a negative impact on the Group’s operating costs and costs of repairs.
The situation is still evolving and further sanctions, restrictions and limitations on business activity of companies
operating in the freight rail transportation industry, as well as consequences on the Russian economy in general, may
arise but the full nature and possible effects of these are unknown. It is not possible for management to predict with any
degree of certainty the impact of this uncertainty on the future operations of the Group and estimate the financial effect
on the Group.
260
261
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the consolidated
financial statements
The Management continues to adopt the going concern basis in preparing these consolidated financial statements
because the majority of the Group’s revenue is derived from routes within the Russian Federation and the Group has a
successful history of redirecting routes, switching between different types of cargos and efficiently managing logistics.
Further, the Group has sufficient liquidity to meet its short-term obligations and insignificant exposure to foreign
currency as the majority of its revenue and expenses are denominated and settled in Russian Roubles and the majority
of its financial assets and liabilities are denominated in Russian Roubles. All borrowings of the Group are at fixed rates.
Management is closely monitoring the situation and is ready to act depending on the developments.
Acquisition of non-controlling interest in BaltTransServis, OOO
In February 2022 the Company acquired 40% non-controlling interest in BaltTransServis, OOO (Note 20) following
receipt by the Company of the approval from the Federal Antimonopoly Service of the Russian Federation and
satisfaction of the remaining pre-conditions, including payment of the remaining RUB 8,800,000 thousand of the
purchase consideration. As a result, the Company became the sole owner of BaltTransServis, OOO.
Buy-back of the Company’s GDRs
In July 2020 the Company started a GDRs buyback program. The buyback programme is for the Company’s Global
Depositary Receipts (“GDRs”) listed on the Main Market of the London Stock Exchange with the total number of
purchased GDRs not to exceed 5% of the Company’s share capital (equivalent to 8,937,046 shares, with each GDR
representing one ordinary share). During 2020, the Company purchased a total number of 76,877 GDRs, which are held
in treasury.
In April 2021 the shareholders of Company approved the extension of buyback programme of GDRs listed on London
Stock Exchange and Moscow Exchange until April 2022. In 2022 the Company purchased an additional amount of
345,780 GDRs, thus as the date of signing the financial statements the total number of purchased GDRs is 422,657.
There were no other material post balance sheet events which have a bearing on the understanding of these
consolidated financial statements.
Independent Auditor’s Report on pages 158 to 163.
262
263
Consolidated Management Report and Consolidated Financial Statements for the Year Ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management report
and parent company
financial statements
for the year ended
31 December 2021
Board of Directors and other officers................................................................................................................................. 265
Management Report ........................................................................................................................................................... 266
Directors’ responsibility ...................................................................................................................................................... 284
Independent Auditor’s Report ........................................................................................................................................... 286
Income statement .............................................................................................................................................................. 292
Statement of comprehensive income ............................................................................................................................... 293
Balance sheet...................................................................................................................................................................... 294
Statement of changes in equity .........................................................................................................................................296
Cash flow statement ........................................................................................................................................................... 298
1. General information ................................................300
2. Basis of preparation ...............................................300
3. Adoption of new or revised standards
and interpretations .................................................301
4. Summary of significant accounting policies .........301
5. New accounting pronouncements .........................313
6. Financial risk management ......................................314
7. Critical accounting estimate and judgements ...... 326
8. Revenue .................................................................. 326
9. Other gains — net ....................................................327
10. Expenses by nature ..................................................327
11. Employee benefit expense ..................................... 328
12. Finance income and costs ...................................... 328
13. Income tax expense ................................................ 329
14. Net foreign exchange gains/(losses) ......................330
15. Dividends ................................................................330
16. Property, plant and equipment ...............................331
17. Right-of-use assets ................................................. 332
18. Investments in subsidiary undertakings ................ 333
19. Loans and other receivables .................................. 335
20. Other assets ............................................................337
21. Cash and cash equivalents ..................................... 338
22. Share capital, share premium and treasury shares 339
23. Borrowings ..............................................................340
24. Other lease liabilities .............................................. 343
25. Payables and accrued expenses ............................ 343
26. Related party transactions ..................................... 344
27. Contingencies ......................................................... 349
28. Events after the balance sheet date ........................ 351
Board of Directors
and other officers
Board of Directors
Dr. Johann Franz Durrer
Senior Independent Non-Executive
Director
Chairman of the Remuneration
Committee
Chairman of the Nomination
Committee
Mr. Sergey Maltsev
Chairman of the Board of Directors
Executive Director
Alternate director: Mr. Yuri Isaev
Mr. Sergey Tolmachev
Executive Director
Mr. Vasilis Hadjivassiliou
Independent Non-Executive Director
Member of the Audit Committee
(since January 2021)
Mr. Alexander Storozhev
Executive Director
Alternate Director: Ms. Elia Nicolaou
Board support
The Company Secretary is
available to advise all Directors to
ensure compliance with the Board
procedures. Also a procedure is
in place to enable Directors, if
they so wish, to seek independent
professional advice at the
Company’s expense.
Mr. Konstantin Shirokov
Executive Director
Mr. Alexander Eliseev
Non-executive Director
Alternate Director: Ms Ekaterina
Golubeva
Company Secretary
Ms. Elia Nicolaou
Dimitriou Karatasou, 15
Anastasio Building, 6th floor, Office
601
Strovolos, 2024, Nicosia, Cyprus
Mr. Andrey Gomon
Non-executive Director
Alternate Director: Ms. Melina Pyrgou
Assistant secretary: Mr. Marios
Tofaros
Mr. Alexander Tarasov
Non-executive Director
Registered office
20 Omirou Street
Agios Nicolaos, CY-3095 Limassol,
Cyprus
Mr. John Carroll Colley
Independent Non-Executive Director
Chairman of the Audit Committee
Member of Remuneration Committee
Member of Nomination Committee
Member of ESG Committee (since
January 2021)
Mr. George Papaioannou
Independent Non-Executive Director
Member of the Audit Committee
Ms. Elia Nicolaou
Non-executive Director
Chairwoman of the ESG Committee
(since January 2021)
Member of the Audit Committee
(until January 2021)
Company Secretary
Secretary of the Board
Alternate Director: Mr. Marios Tofaros
Mr. Michalakis Thomaides
Non-Executive Director
Ms. Melina Pyrgou
Non-executive Director
Mr. Marios Tofaros
Non-executive Director
264
265
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
The Board of Directors presents its report together with the audited parent company financial statements for the
year ended 31 December 2021. The parent company’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 activities of the Company, which are unchanged from last year, are the holding of investments and
provision of financing to other Group companies.
Review of developments, position and performance
of the Company’s business
The Company’s profit for the year decreased to RUB 3,509,530 thousand compared to RUB 21,883,710 thousand for
the year ended 31 December 2020. This was mainly the result of the decrease in the dividend income earned from the
subsidiaries from RUB 22,283,992 thousand during the year ended 31 December 2020 to RUB 3,154,405 thousand in the
current year.
Human resources
Globaltrans considers the wellbeing of employees central to its success and strives to maintain exemplary working
standards, ensure job satisfaction and create opportunities for professional growth. The Group’s personnel policy
focuses on creating a positive atmosphere at all offices and facilities to maximise productivity. As part of this, it offers
medical insurance, support for education, opportunities to obtain additional qualifications and training, and financial aid
in particularly difficult times.
The Group’s future success will partly depend on its ability to continue to attract, retain and motivate key employees
and qualified personnel, in particular an experienced management team. Competition in Russia for such personnel with
relevant expertise is intense due to the small number of qualified individuals with suitable practical experience in the rail
industry.
Adequate remuneration packages, which are in line with or in excess of market levels, are offered to all employees
and key managers and remuneration is linked to the Group’s financial results. The Human Resource function regularly
monitors salary levels and other benefits offered by competitors to ensure that the Group’s remuneration packages are
adequate.
The net asset position of the Company has decreased as of 31 December 2021 compared to 31 December 2020, with net
assets as of 31 December 2021 amounting to RUB 42,681,353 thousand compared to RUB 48,194,373 thousand as of 31
December 2020.
Principal risks and uncertainties
The Company faces a number of diverse potential and actual risks to its business. The Board has adopted a formal
process to identify, evaluate and manage principal risks and uncertainties faced by the Company and its subsidiaries.
The financial position, development and performance of the Company as presented in the financial statements is
considered satisfactory.
Changes in group structure
There were no changes in the group structure of the Company during the year ended 31 December 2021, apart from
the sale of 60% in Syntezrail Ltd and Syntezrail LLC. Furthermore, in February 2022 the Company acquired 40% non-
controlling interest in BaltTransServis, OOO (Note 28). For the principal subsidiaries of the Company, refer to Note 18 of
the financial statements.
To identify, evaluate and mitigate these, the Company has established an in-house system to monitor and control
uncertainties and threats throughout its activities. This is overseen by a dedicated Risk Management function, which
works directly with the Board of Directors in this area.
The escalation of the conflict in Ukraine and the associated sanctions imposed by the US, European Union and a number
of other countries on some of the biggest Russian industrial groups, as described in Note 28 to the financial statements,
may adversely affect the business environment and prospects of the Company and its subsidiaries and create significant
new risks, which did not exist as at the balance sheet date.
The Company has grouped the risks that it considers to be significant into key categories — strategic, operational,
compliance and financial — and they are presented below.
Environmental matters
Rail is one of the most environmentally friendly modes of transport. Nonetheless, any commercial activity has an
environmental impact and Globaltrans strives to minimise those from its operations where possible. To this end, the
Group ensures that its activities fully comply with local environmental regulations. It also aims to help business and
nature co-exist by focusing on applying modern technology in its operations and using natural resources rationally.
In January 2021, the Board established the ESG Committee to analyse and oversee risks related to the environmental,
social and governance issues.
266
267
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Strategic risks
The strategic risks faced by the Company and its subsidiaries, together referred to as “Group”, that pose risks that
influence the Group’s ability to achieve its strategy include the general economic situation and operating environment
in Russia, Kazakhstan, Ukraine, CIS and Baltic countries in which the Group operates; the regulatory risk relating to the
operation of the Russian railway transportation market including railway tariff regulation and technical requirements
for fleet maintenance; the highly competitive Russian rail transportation market with unregulated operators’ services
tariffs; the significant concentration of the Group’s customer base with the top 10 customers (including their affiliates
and suppliers) accounting for around 68% of the Group’s Net Revenue from the operation of rolling stock in 2021; cost
of borrowing and/or deterioration in market conditions with potential impacts on the profitability and recoverability of
investments; and reliance on RZD for issuing permits allowing the Group to operate locomotives.
The Group operates mainly in Russia, other emerging markets and Estonia. Emerging markets, such as Russia,
Kazakhstan and Ukraine, are subject to greater risks than more developed markets, including significant economic,
political, social, legal and legislative uncertainties. Moreover, the Group’s business depends on the demand in the
Russian freight rail transportation market, which in turn depends on certain key commodity sectors and, accordingly,
on economic conditions in Russia, Europe and elsewhere. A decrease in production and demand for key commodities in
Russia, or in adjacent countries where the commodities of the Group’s key customers are shipped by rail, as a result of a
technological shift, economic downturn, political crisis or other event in Russia or another relevant country, negatively
impacts the Group’s business and growth prospects.
The management of the Group constantly monitors the developments in the operating environment and regulatory
regime of the railway transportation market in the countries in which the Group operates. The Group’s business model is
to maintain a balanced fleet between universal gondola cars, adaptable to the demand for transportation of various bulk
cargoes and rail tank cars, which are used for the transportation of oil products and oil. Further, the Group has long-
term, established relationships with its key customers and their affiliates and suppliers and in some cases, the Group
becomes an integrated part of its customers’ operations. Around 59% of the Group’s Net Revenue from the Operation
of Rolling Stock in 2021 was covered by long-term service contracts with several large clients. Such contracts provide
additional stability and greater certainty regarding transport volumes for the Group. In addition, the Group’s marketing
function regularly monitors competitors’ strategies, their use of technology, their price strategies and industry trends.
The sanctions imposed on the Russian Central Bank, its restrictions for capital movements outside Russian Federation,
the sanctions imposed by US, European Union and number of other countries on the biggest Russian industrial groups
adversely affects the business environment and prospects of the Group and create significant new risks, which didn’t
exist as at the reporting date. The restrictions on the export of certain types of Russian commodities or change in
directions of supply for Russian commodities may have a negative impact on the freight rail transportation market and
the Group’s business.
The situation is still evolving and further sanctions and limitations on business activity of companies operating in the
region, as well as consequences on the Russian economy in general, may arise but the full nature and possible effects
of these are unknown. It is not possible for management to predict with any degree of certainty the impact of this
uncertainty on the future operations of the Group and estimate the financial effect on the Group. Management is closely
monitoring the situation and is ready to act depending on the developments.
In addition to the human impact, the spread of Coronavirus (COVID-19) continues to affect global businesses and
cause uncertainty. The freight rail market may experience reduced demand stemming from the effects of COVID-19.
The Company cannot predict the full impact of COVID-19 on its markets, business or prospects although they
may be materially adversely impacted by the evolving situation. In addition, the appearance of new pandemics or
other dangerous illnesses could seriously affect the global and local business environment and lead to negative
consequences for Group’s business. Significant levels of COVID-19 illness in the Group or its key clients could interfere
with stability of Group’s operations.
Management is closely monitoring the implications of the global outbreak of COVID-19 and acts depending on the
development of the situation. The Group constantly evaluates and implements options for distant work for its workforce
to mitigate risks of spreading and catching COVID-19 illness.
Operational risks
The operational risks faced by the Group that could influence the Group’s operational efficiency include the physical
state of the Russian, Ukrainian, CIS and Baltic countries railway infrastructure which may negatively impact the condition
of the Group’s rolling stock, ability of relocation of rolling stock between different countries and the performance of the
Group; the impact of inflation in Russia on the Group’s costs with limited opportunities to increase tariffs to customers;
the competition for personnel with relevant expertise and experience in Russia and the impact on the Group’s ability
to continue to attract, retain and motivate key employees and qualified personnel; reliance on RZD for locomotive
traction and infrastructure usage and the impact of this on the quality of the Group’s freight transportation services and
therefore customer satisfaction; IT availability and continuity considerations due to reliance on specialised trail transport
and logistics software for ensuring efficient and effective logistics, dispatching and rolling stock tracking services; and
risks of terrorist attacks, natural disasters or other catastrophic events beyond the Group’s control.
The Group is managing operational risk by ensuring that practically all of the Group’s rolling stock is insured against
damage. Further, the Group monitors its rolling stock through the Group’s dispatch centre on a 24/7 basis and plans
routes accordingly to minimise the risks of disruption. The Group monitors FAS initiatives with the aim of detecting
possible changes in tariff-setting methodology and tries to reflect respective changes in contracts with customers.
Among the Group’s key objectives are to increase operational efficiency and to focus on control and reduction of costs.
The Group continuously monitors its costs to maintain efficiency.
The Human Resource function regularly monitors salary levels and other benefits offered by competitors to ensure
that the Group’s remuneration packages are adequate. Customer satisfaction is one of the key metrics that the Group’s
management monitors, with customer feedback being analysed and appropriate follow-up actions being taken. Due to
recent sanctions imposed by US, European Union and number of other countries number of IT solutions will no longer be
maintained by US and European Union suppliers. Local IT specialists have introduced alternative solutions to maintain
the availability of IT services, continuity of business processes and ensure their recovery in case of disruption. The IT
function and Internal Audit function monitor all IT-related activities and performance for compliance with IT policies and
procedures.
Further the Group permanently monitors any disruptive events and applies a Business Continuity Policy to ensure the
safety of employees and human life; maintain continuity of time-critical services; minimise disruptions to clients and
partners; and minimise operational, financial and reputational impact.
268
269
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Compliance risks
The Group is also subject to compliance risk, being the risks that influence the Group’s adherence to relevant laws and
regulations, including the regulations of the London Stock Exchange (“LSE”) and the Moscow Exchange (“MOEX”),
where Company’s GDR are admitted to trading. The Group is involved in legal actions from time to time. Some of it
may have an adverse effect on the Group. The ambiguity of the law in Russia and CIS countries creates regulatory
uncertainty and might result in claims from different government authorities. Local tax, currency, sanctions and
customs legislation, especially in Russia, other emerging markets and Cyprus, may be subject to varying interpretations,
inconsistencies between federal laws, regional and local laws, rules and regulations, frequent changes and a lack of
judicial and administrative guidance on interpreting legislation.
The Group runs its operations in compliance with tax, currency, labour, sanctions, customs, antimonopoly and other
applicable legislation and constantly monitors any changes in the regulatory environment as well as compliance with
the terms of its agreements. Standard forms of agreements are used for transportation services, and various controls
are in place to ensure that the terms of agreements are adhered to. All contracts are subject to rigorous review by all
of the Group functions concerned and a formal approval process prior to execution. The Group has controls in place,
including highly qualified and experienced personnel, to monitor changes in legislation and determine the appropriate
action needed to minimise the risk of a challenge to such treatments by the authorities. For complex matters, the Group
retains external consultants.
Financial risks
The Company’s activities exposed it to a variety of financial risks: market risk (including foreign exchange risk, cash
flow and fair value interest rate risk), credit risk and liquidity risk. The Company’s overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s
financial results.
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated
in a currency different from the functional currency of the Company. The fluctuations in the exchange rate between
(i) US Dollar and Russian Rouble and (ii) Euro and Russian Rouble expose the Company to foreign exchange risk. The
Company’s current policy is not to hedge foreign exchange risk, with the exception of application of hedge accounting
to hedge foreign currency risk associated with highly probable dividend payments and associated dividend payable
until their settlement, as set out in the accounting policy for hedging activities in Note 4 to these financial statements.
Cash flow and fair value interest rate risk
The Company holds interest bearing financial instruments at fixed interest rates. Financial assets and liabilities issued at
fixed rates expose the Company to fair value interest rate risk. The Company’s current policy is not to hedge interest rate
risk.
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing
to meet an obligation. Credit risk arises from cash and cash equivalents, loans and other receivables and financial
guarantees issued by the Company for borrowings of subsidiaries.
Liquidity risk
As at 31 December 2021, the Company has an excess of current assets over current liabilities of RUB 378,300 thousand.
Management believes that the Company will be able to meet its obligations as they fall due.
Management controls current liquidity based on expected cash flows, expected dividend and interest income receipts,
expected dividend payments and advancements under borrowings from subsidiaries. In the long-term perspective,
the liquidity risk is determined by forecasting future cash flows at the moment of signing new loans and by budgeting
procedures.
Further details on the Company’s exposure to financial risks are presented in Note 6 to the financial statements.
Contingencies
The Company’s contingencies are disclosed in Note 27 to the financial statements.
Future developments
The Company’s strategic objective is to strengthen the Group’s position as a leading private freight rail group in Russia.
The future development of the Group may be affected by the escalation of the conflict in Ukraine in the period after the
balance sheet date, as described in Note 28. It is not possible for the Board of Directors to predict with any degree of
certainty the impact of this uncertainty on the future operations of the Group and estimate the financial effect on the
Company and its subsidiaries.
Results
The Company’s results for the year are set out on pages 292 and 293. On the date of this report, the Board of Directors,
having considered the profitability and liquidity position of the Group as well as all the risks and recent developments,
does not recommend the payment of a final dividend and the net profit for the year is retained.
270
271
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Dividends
Pursuant to its Articles of Association the Company may pay dividends out of its profits. To the extent that the Company
declares and pays dividends, owners of Global Depositary Receipts (GDRs) on the relevant record date will be entitled
to receive dividends payable in respect of Ordinary Shares underlying the GDRs, subject to the terms of the Deposit
Agreement. The Company expects to declare dividends in Russian Roubles and pay such dividends in US Dollars. If
dividends are not paid in US Dollars and if the conversion from the currency of payment to US Dollars is possible for
the Depositary, except as otherwise described under “Terms and Conditions of the Global Depositary Receipts —
Conversion of Foreign Currency”, they will be converted into US Dollars by the Depositary and paid to holders of GDRs
net of currency conversion expenses.
The Company is a holding company and thus its ability to pay dividends depends on the ability of its subsidiaries to pay
dividends to the Company in accordance with relevant legislation and contractual restrictions. The payment of such
dividends by its subsidiaries is contingent upon the sufficiency of their earnings, cash flows and distributable reserves
and limitations on capital movement, if applicable. The maximum dividend payable by the Company’s subsidiaries is
restricted to the total accumulated retained earnings of the relevant subsidiary, determined according to the law.
In April 2021, the shareholders of the Company approved the payment of a dividend for the financial year ended 31
December 2020 in the amount of 28.00 Russian Roubles per ordinary share/GDR, amounting to a total dividend of
RUB 5,004,746 thousand, including final dividend for 2020 in the amount of RUB 2,931,351 thousand or RUB 16.40 per
ordinary share/GDR and a special final dividend in the amount of RUB 2,073,395 thousand or RUB 11.60 per ordinary
share/GDR (US Dollar equivalent of US$ 66,190 thousand).
On 27 August 2021, the Board of Directors of the Company approved payment of total dividend in the amount of 22.50
Russian Roubles per ordinary share, amounting to a total dividend of RUB 4,021,671 thousand, including interim dividend
in the amount of RUB 1,635,480 thousand or RUB 9.15 per ordinary share/GDR and a special interim dividend in the
amount of RUB 2,386,191 thousand or RUB 13.35 per ordinary share/GDR (US Dollar equivalent of US$ 54,457 thousand).
On the date of this report, the Board of Directors of the Company, having considered the profitability and liquidity
position of the Group as well as all the risks and recent developments, does not recommend the payment of a final
dividends.
Share capital
As at 31 December 2021 the issued share capital of the Company, which remains unchanged from the prior year,
comprised 178,740,916 ordinary shares with a par value of US$0.10 per share.
Treasury shares
In accordance with the decision of the Extraordinary General Meeting which took place on 12 May 2020, the Company
started a GDRs buyback program. The buyback programme is for the Company’s GDRs, each representing one ordinary
share of the Company with a par value of US$0.10 per share, and will run till the earlier of the close of the Annual General
Meeting of the Company to be held in 2021 and May 2021. The total number of purchased GDRs shall not exceed 5%
of the Company’s share capital (equivalent to 8,937,046 shares, with each GDR representing one ordinary share).
The buyback programme allows the Company to take advantage of opportunities, if any, when its return criteria are
better met by way of a GDR buyback than through investment in fleet expansion. The shareholders of the Company at
the Annual General Meeting which took place on 29 April 2021 approved the prolongation of the term of the buyback
program until the earlier of the close of the Annual General Meeting of the Company to be held in 2022 or 12 months
from the date of the approval.
During the year 2020, the Company has purchased a total of 76,877 GDRs, which are held in treasury for a total
consideration of 422 thousand US Dollars (equivalent to RUB 31,496 thousand). No further acquisitions took place within
the year 2021. For details of acquisitions of treasury shares in 2022 refer to the Note 28.
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury for up to two years.
Research and development activities
The Company has not undertaken any research and development activities during the year ended 31 December 2021.
Events after the balance sheet date
The events after the balance sheet date are disclosed in Note 28 to the financial statements.
Branches
The Company does not operate through any branches.
Going concern
The Directors have access to all information necessary to exercise their duties. The Directors continue to adopt the
going concern basis in preparing the financial statements based on the fact that, after making enquiries and following
a review of the Group’s budget for 2022, including cash flows and borrowing facilities, and taking into account the
developments after the reporting date impacting the economic and business environment in which the Group operates,
as set out in Note 28 to the financial statements, the Directors consider that the Company has adequate resources to
continue in operation for the foreseeable future.
272
273
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Auditors
The Independent Auditor, PricewaterhouseCoopers Limited, has 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
Meeting.
Corporate governance
Globaltrans’ Board of Directors adopted the Company’s Code of Corporate Governance (the “Code”), guaranteeing that
the interests of all shareholders are given due consideration. Although the Code is based on principles recommended
by the UK Corporate Governance Code (formerly the Combined Code), this does not constitute voluntary compliance
with such governance code.
Globaltrans’ corporate governance policies and practices are designed to ensure that the Group upholds its
responsibilities to shareholders. As such, all employees are required to comply with these guidelines and the Group’s
management team takes responsibility for ensuring that all departments adhere to these standards. These key principles
are promoted and applied across all levels of the Group in order to establish effective and transparent corporate
governance. In January 2010, the Board supplemented its Code of Corporate Governance with a corporate policy on
the treatment of the rights of its non-controlling shareholders; this aims to ensure fair treatment of the rights of non-
controlling shareholders of the Company.
Members of the Board of Directors
As at 31 December 2021 and at the date of this report, the Board comprises 15 members (2020: 15 members), 11 (2020:
11 members) of whom are non-executive directors. Four (2020: four) of the non-executive directors are independent,
they have no relationship with the Company, its related companies or their officers that could interfere, or be reasonably
perceived to interfere, with the exercise of the director’s independent business judgment with a view to the best
interests of the Company, and they are able to exercise objective judgment on corporate affairs independently from
management.
The members of the Board of Directors at 31 December 2021 and at the date of this report are shown on page 265. All of
them were members of the Board throughout the year 2021.
There were no significant changes in the assignment of responsibilities of the Board of Directors during the year 2021,
with the exception of Mr. Hadjivassiliou who replaced Ms. Nicolaou as a member of the Audit Committee in January 2021
and Ms. Nicolaou and Mr. Colley who were appointed to the ESG Committee in January 2021.
There is no provision in the Company’s Articles of Association for retirement of Directors by rotation; however, in
accordance with the Terms of reference of the Board of Directors all board members are required to submit for re-
election at least once every three years. Should a non-executive Director serve any term beyond six years, his/her re-
election would be subject to particularly rigorous review. In practice, all current appointments are for one year and all
directors will stand for re-election at the forthcoming Annual General Meeting of shareholders of the Company.
Full details of our governance policies can be found at https://globaltrans.com/governance/corporate-documents.
The total gross remuneration of the members of the Board of Directors incurred by the Company in 2021 amounted to
RUB 312,985 thousand (2020: RUB 310,758 thousand).
The role of the Board of Directors
The Company 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. One of the Board’s key responsibilities is
to ensure that there is in place a system of prudent and effective risk controls that enable risks to be identified, assessed
and managed appropriately.
274
275
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Board performance
The Board held 17 meetings in 2021. The Directors’ attendance is presented in the table below.
Johann Franz Durrer
John Carroll Colley
George Papaioannou
Alexander Eliseev
Melina Pyrgou
Konstantin Shirokov
Alexander Storozhev
Marios Tofaros
Elia Nicolaou
Sergey Tolmachev
Sergey Maltsev (Chairman)
Andrey Gomon
Alexander Tarasov
Vasilis Hadjivassiliou
Michalakis Thomaides
Eligible
Attended
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
17
The Board Committees
During 2021 the Board had four committees: the Audit Committee, the Nomination Committee, the Remuneration
Committee and the ESG Committee, which was established by the Board of Directors in January 2021. A brief description
of the terms of reference of the committees is set out below.
Audit Committee
The Audit Committee comprises of three Directors and meets at least four times each year. As of 31 December 2021 all
the members Audit Committee were independent and the Audit Committee was chaired by Mr. Colley and was also
attended by Mr. Papaioannou and Mr. Hadjivassiliou. In January 2021 Mr. Hadjivassiliou became a member of the
Audit Committee and Ms. Nicolaou resigned from the Audit Committee and was appointed to the ESG Committee.
The Audit Committee is responsible for considering, among other matters: the integrity of the Company’s financial
statements, including its annual and interim accounts, and the effectiveness of the Company’s internal controls and risk
management systems; auditors’ reports and the terms of appointment and remuneration of the auditor.
The Committee supervises, monitors and advises the Board on risk management and control systems and the
implementation of codes of conduct. In addition, the Audit Committee supervises the submission by the Company of
financial information and a number of other audit-related issues. The Audit Committee is also responsible for assessing
the efficiency of the performance of the Chairman of the Board.
The Audit Committee manages the relationship with the external auditor on behalf of the Board. It considers the
reappointment of the external auditor each year, as well as remuneration and other terms of engagement, and makes
a recommendation to the Board. Shareholders are asked to approve the reappointment of the auditor each year at the
Annual General Meeting.
The Internal Audit function is carried out internally by the Group’s Internal Audit Service (“IAS”). IAS is responsible for
testing the systems of risk management, internal control and corporate governance of the Group.
Nomination Committee
The Nomination Committee comprises of two Independent Directors and meets at least once a year. The Nomination
Committee is chaired by Dr. Durrer and Mr. Colley is the other member. The Committee’s remit is to prepare selection
criteria and appointment procedures for members of the Board and to review on a regular basis the structure, size
and composition of the Board. In undertaking this role, the Committee refers to the skills, knowledge and experience
required of the Board, given the Company’s stage of development, and makes recommendations to the Board as to
any changes. The Committee also considers future appointments in respect of the Board’s composition and makes
recommendations regarding the membership of the Audit and Remuneration Committees.
276
277
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Remuneration Committee
The Remuneration Committee comprises of two Independent Directors and meets at least once a year. The
Remuneration Committee is chaired by Dr. Durrer and Mr. Colley is the other member. The Committee’s responsibility is
the determination and review of, among other matters, the remuneration of Executive Directors, and the review of the
Company’s remuneration policies. The remuneration of Independent Directors is a matter for the Chairman of the Board
and the Executive Directors. No Director or manager may be involved in any decisions as to his/her own remuneration.
ESG Committee
In January 2021 the Board of Directors established an ESG Committee to lead its thinking on ESG matters and ensure
that ESG issues are integrated into the Group’s long-term strategy. The ESG Committee monitors the development of the
Group’s sustainability strategy, reviews and recommends ESG disclosures for Board approval and approves the Group’s
sustainability reports. The ESG Committee is comprised of two Board members: Ms. Nicolaou, Non-executive Director,
who serves as the Chair, and Mr. Colley, Independent Non-executive Director. The ESG Committee meets at least two
times a year.
Board and Management Remuneration
Non-executive directors serve on the Board pursuant to the letters of appointment which are subject to approval by the
shareholders at the Annual General Meeting. Such letters of appointment specify the terms of appointment and the
remuneration of non-executive directors. Appointments are for one year.
Levels of remuneration for Non-Executive Directors reflect the time commitment, responsibilities of the role and
membership of the respective committees of the Board. Directors are also reimbursed for expenses associated with
discharge of their duties.
The shareholders of the Company approved the remuneration of the members of the Board of Directors at the Annual
General Meeting of shareholders held on 29 April 2021.
Refer to Note 26 of the financial statements for details of remuneration of directors and other key management
personnel.
Diversity policy
The Company does not have a formal Board diversity policy to aspects such as age, gender or educational and
professional backgrounds, but following best practice, while making the new appointments and considering the current
composition of the Board of Directors, these aspects are taken into account.
As of the date of publication of these financial statements the Board has 2 females representing approximately 13% from
the total number of directors. The age of the members of the Board of Directors starts from over 40 with the average
age of directors being 53.5 years. The Board members have the following educational backgrounds: transportation and
ports industry, accounting, economics and financial, banking sector and legal, engineering and mechanics, biophysics
and mathematics, history, international affairs and risk management. The Board has a necessary balance of skills and
expertise to run the Company and the Group.
Further details of the corporate governance regime of the Company can be found on the website:
https://globaltrans.com/governance/corporate-documents
Regulations with regards to the amendment of the article of association
The Articles of Association of the Company may be amended from time to time by special resolution at the General
Meeting of the Shareholders.
278
279
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Company’s internal control and risk management systems in relation to the
financial reporting process
The Board of Directors is responsible for the preparation of the 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 financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
The Board is primarily responsible for establishing a framework of prudent and effective controls that enables risks to be
assessed and managed.
The Audit Committee assists the Board in this task by reviewing and assessing the Group’s internal control and risk
management processes in relation to Group’s financial reporting process.
The system of controls is designed to manage rather than eliminate the risks relevant to the Group’s operations and,
therefore, can only provide reasonable, and not absolute, assurance against material errors, losses, fraud or breaches of
laws and regulations.
At Globaltrans, the body responsible for internal audit is the Internal Audit Service (IAS). It tests the Group’s systems of
risk management, internal control and corporate governance to obtain a reasonable assurance that:
• The risk management system functions efficiently;
• Material financial, management and operating information is accurate, reliable and up-to-date;
• The actions of employees and management bodies are in compliance with the Group’s policies, standards and
procedures and the applicable laws;
• Resources are procured reasonably and used efficiently and their safekeeping is fully guaranteed; and
• Group companies conduct their business in compliance with applicable laws.
Each year, the Audit Committee approves an internal audit plan, which is developed by identifying the audit universe,
performing a risk analysis and obtaining input from management relative to risks, controls and governance processes.
The internal auditor regularly reports to the Audit Committee on the progress of planned audits. If any material internal
control deficiencies are identified, they are communicated to the Audit Committee, and consequently to the Board, at
once.
Significant direct or indirect holdings (including indirect shareholding though
structures or cross shareholdings)
The issued share capital of the Company consists of 178,740,916 ordinary shares with a nominal value of USD 0.10 each,
a certain portion of which is held in the form of Global Depositary Receipts (GDRs). The GDRs represent one ordinary
share each and are listed and traded on the Main Market of the London Stock Exchange and in the Moscow Exchange,
under the ticker GLTR. The free float of Globaltrans amounts to approximately 56.9%1 of the issued share capital. The
Company’s depositary bank for the GDR programme is Citibank N.A.
The shareholder structure of the Company as at 31 December 2021 was follows:
Onyx Investments Ltd2
Marigold Investments Ltd2
Maple Valley Investments Ltd2
Litten Investments Ltd3
Goldriver Resources Ltd4
Transportation Investments Management Ltd5
Treasury shares
Controlled by Directors and management of Globaltrans
Free float1
11.5%
11.5%
10.8%
5.1%
3.1%
0.9%
0.04%
0.2%
56.9%
(1) For these purposes, the free float consists of the ordinary shares and GDRs held by investors not affiliated or associated with the Company.
(2) Nikita Mishin, Andrey Filatov and Konstantin Nikolaev are co-founders of the Company and beneficiaries with regard to 11.5%, 11.5% and 10.8% respectively of
Globaltrans’ ordinary share capital each through their respective SPVs (Onyx Investments Ltd, Marigold Investments Ltd and Maple Valley Investments Ltd).
(3) Beneficially owned by Alexander Eliseev, Non-executive Director and co-founder of the Company.
(4) Beneficially owned by Sergey Maltsev, Chairman of the Board, Executive Director, Chief strategy officer and co-founder of the Company.
(5) Beneficially owned by Andrey Filatov, Nikita Mishin and Konstantin Nikolaev, co-founders of Globaltrans.
280
281
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Management Report
Directors’ interests
The interests in the share capital of Globaltrans Investment PLC, both direct and indirect, of those who were Directors of
the Company as at 31 December 2021 and 31 December 2020 are shown below:
The holders of special titles that provide special control rights and
description of such rights
The Company does not have any titles with special rights.
Name
Type of holding
2021
2020
Alexander Eliseev
Indirect holding of ordinary shares and GDRs
Sergey Maltsev
Indirect holding of GDRs
Johann Franz Durrer
Holding of GDRs
9,065,790
5,490,149
160,606
9,065,790
7,099,725
160,606
Any restrictions in exercising of voting rights of shares
There are no restrictions in the exercising of voting rights of shares issued by the Company.
By Order of the Board
..................................................
Sergey Tolmachev
Director
Limassol, 25 March 2022
282
283
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Directors’ responsibility
The Company’s Board of Directors is responsible for the preparation of 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 financial statements that are free from material misstatement, whether due to fraud or error.
This responsibility includes selecting appropriate accounting policies and applying them consistently; and making
accounting estimates and judgements that are reasonable in the circumstances.
In preparing the financial statements, the Board of Directors is also responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Directors’ confirmations
Each of the directors, whose names and functions are listed in page 265 confirms that, to the best of his or her
knowledge:
(a) the financial statements, which are presented on pages 292 to 352, which have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus
Companies Law, Cap.113, give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Company; and
(b) the Management Report includes a fair review of the development and performance of the business and the
position of the Company, together with a description of the principal risks and uncertainties that it faces.
Further, each of the Directors confirms that, to the best of their knowledge:
(i) adequate accounting records have been maintained which disclose with reasonable accuracy the financial position
of the Company and explain its transactions;
(ii) all information of which they are aware that is relevant to the preparation of the financial statements, such as
accounting records and all other relevant records and documentation, has been made available to the Company’s
auditors;
(iii) the financial statements disclose the information required by the Cyprus Companies Law, Cap.113 in the manner so
required; and
(iv) the Management Report has been prepared in accordance with the requirements of the Cyprus Companies Law,
Cap.113, and the information given therein is consistent with the financial statements.
By order of the Board
..............................................
Sergey Tolmachev
Director
Limassol, 25 March 2022
284
285
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report
To the Members of Globaltrans Investment PLC
Report on the Audit of the Parent Company Financial Statements
Our opinion
In our opinion, the accompanying parent company financial statements give a true and fair view of the financial
position of parent company Globaltrans Investment PLC (the “Company”) as at 31 December 2021, and of its financial
performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.
What we have audited
We have audited the parent company financial statements which are presented in pages 292 to 352 and comprise:
• the balance sheet as at 31 December 2021;
• the income statement for the year then ended;
• the statement of comprehensive income for the year then ended;
• the statement of changes in equity for the year then ended;
• the cash flow statement for the year then ended; and
• the notes to the parent company financial statements, which include a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the parent company financial statements
is International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus
Companies Law, Cap. 113.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Financial
Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code)
together with the ethical requirements that are relevant to our audit of the parent company financial statements in
Cyprus, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA
Code.
Emphasis of matter: events after the balance sheet date
We draw attention to Note 28 to the parent company financial statements, which describes the events after the balance
sheet date impacting the operating environment and activities of the Company and its subsidiaries. Our opinion is not
modified in respect of this matter.
Our audit approach
Overview
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the parent
company financial statements. In particular, we considered where the Board of Directors made subjective judgements;
for example, in respect of significant accounting estimates that involved making assumptions and considering future
events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of
internal controls, including among other matters, consideration of whether there was evidence of bias that represented
a risk of material misstatement due to fraud.
Materiality
Overall materiality: RUB 478,867 thousand, which represents 1% of total assets of
the Company as at 31 December 2021 (rounded).
Key audit matters
We have determined that there are no Key Audit Matters to communicate in our report.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable
assurance whether the parent company financial statements are free from material misstatement. Misstatements
may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the parent company financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the
overall materiality for the parent company financial statements as a whole as set out in the table below. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the parent company
financial statements as a whole.
Overall materiality
How we determined it
Rationale for the materiality benchmark
applied
RUB 478,867 thousand
1% of total assets of the Company as at 31 December 2021 (rounded).
We chose total assets as the benchmark, because in our view, it is the benchmark
against which the performance of the Company is most commonly measured by the us-
ers of the parent company financial statements and is a generally accepted benchmark.
We chose 1% which is within the range of acceptable quantitative materiality thresholds
in auditing standards.
286
287
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
RUB 23,943 thousand as well as misstatements below that amount that, in our view, warranted reporting for qualitative
reasons.
Key audit matters
We have determined that there are no Key Audit Matters to communicate in our report.
Reporting on other information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the Management Report, including the Directors’ responsibility, which we obtained prior to the date of this
auditor’s report, and the Company’s complete Annual Report, which is expected to be made available to us after that
date. Other information does not include the parent company financial statements and our auditor’s report thereon.
Our opinion on the parent company financial statements does not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the parent company financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially inconsistent with
the parent company financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
When we read the Company’s complete Annual Report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to those charged with governance and if not corrected, we will bring the matter
to the attention of the members of the Company at the Company’s Annual General Meeting and we will take such other
action as may be required.
Responsibilities of the Board of Directors and those charged with governance for the Parent Company
Financial Statements
The Board of Directors is responsible for the preparation of the parent company 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 parent company financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Parent Company Financial Statements
Our objectives are to obtain reasonable assurance about whether the parent company financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these parent company financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the parent company financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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
Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the parent company financial statements, including the
disclosures, and whether the parent company financial statements represent the underlying transactions and events
in a manner that achieves a true and fair view.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
In preparing the parent company financial statements, the Board of Directors is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
288
289
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the parent company financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Report on Other Legal Requirements
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
•
•
In our opinion, the management report has been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap. 113, and the information given is consistent with the parent company financial statements.
In our opinion, and in the light of the knowledge and understanding of the Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the management report.
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 69 of the Auditors Law of 2017 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.
We have reported separately on the consolidated financial statements of the Company and its subsidiaries for the year
ended 31 December 2021. That report is modified with the inclusion of an emphasis of matter.
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these parent
company financial statements form part of the European Single Electronic Format (ESEF)-prepared annual financial
report filed on the National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF
Regulatory Technical Standard (ESEF RTS). This independent auditor’s report provides no assurance over whether the
annual financial report has been prepared using the single electronic format specified in the ESEF RTS.
The engagement partner on the audit resulting in this independent auditor’s report is Tasos Nolas.
Tasos Nolas
Certified Public Accountant and Registered Auditor
for and on behalf of
PricewaterhouseCoopers Limited
Certified Public Accountants and Registered Auditors
City House, 6 Karaiskakis Street,
CY-3032 Limassol, Cyprus
25 March 2022
290
291
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Income statement
Statement of
comprehensive income
for the year ended 31 December 2021
for the year ended 31 December 2021
Revenue
Marketing costs
Administrative expenses
Reversal of impairment losses on loans receivable
Other income
Other gains — net
Operating profit
Finance income
Finance costs
Net foreign exchange transaction (losses)/gains on financing activities
Finance costs — net
Profit before tax
Income tax expense
Profit for the year
Note
8
26
9
12
12
12
12
13
2021
RUB’000
3,174,507
(2,633)
(603,758)
133,727
310,381
825,602
2020
RUB’000
22,327,855
(2,144)
(565,127)
51,713
1,000,232
49,734
Profit for the year
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Losses on cash flow hedging instrument
Reclassification adjustment to the income statement
3,837,826
22,862,263
Total items that may be reclassified subsequently to profit or loss
51,038
(239,086)
(11,204)
(199,252)
3,638,574
(129,044)
3,509,530
42,311
(216,510)
268,879
94,680
22,956,943
(1,073,233)
21,883,710
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
2021
RUB’000
2020
RUB’000
3,509,530
21,883,710
(86,158)
86,158
(475,042)
475,042
—
—
—
—
3,509,530
21,883,710
The notes on pages 300 to 352 are an integral part of these financial statements.
The notes on pages 300 to 352 are an integral part of these financial statements.
292
293
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Balance sheet
at 31 December 2021
ASSETS
Non-current assets
Investments in subsidiary undertakings
Property, plant and equipment
Right-of-use assets
Other assets
Loans and other receivables
Total non-current assets
Current assets
Loans and other receivables
Other assets
Cash and cash equivalents
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Share premium
Capital contribution
Treasury shares
Retained earnings
Total equity
Note
31 December 2021
RUB’000
31 December 2020
RUB’000
Note
31 December 2021
RUB’000
31 December 2020
RUB’000
18
16
17
20
19
19
20
21
22
22
44,851,099
45,151,248
8,039
8,685
300,000
259,875
45,427,698
481,110
713
1,977,191
2,459,014
10,678
2,633
—
544,362
45,708,921
380,674
6,588
2,225,518
2,612,780
47,886,712
48,321,701
516,957
27,929,478
2,694,851
(31,496)
11,571,563
42,681,353
516,957
27,929,478
2,694,851
(31,496)
17,084,583
48,194,373
Non-current liabilities
Borrowings
Lease liabilities
Total non-current liabilities
Current liabilities
Borrowings
Lease liabilities
Payables and accrued expenses
Total current liabilities
23
24
23
24
25
3,118,740
5,905
3,124,645
1,920,346
2,780
157,588
2,080,714
—
—
—
—
3,220
124,108
127,328
Total liabilities
5,205,359
127,328
TOTAL EQUITY AND LIABILITIES
47,886,712
48,321,701
On 25 March 2022 the Board of Directors of Globaltrans Investment PLC authorised these financial statements for issue.
____________________
_____________________
Sergey Tolmachev
Konstantin Shirokov
Director
Director
294
295
The notes on pages 300 to 352 are an integral part of these financial statements.
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Statement of changes in equity
for the year ended 31 December 2021
Balance at 1 January 2020
Comprehensive income
Profit for the year
Other comprehensive income
Losses on cash flow hedging instrument
Reclassification adjustment to the income statement
Total comprehensive income for 2021
Transactions with owners
Dividend to owners of the Company
Total distributions to owners of the Company
Purchase of treasury shares
Total transactions with owners
Balance at 31 December 2021
Comprehensive income
Profit for the year
Other comprehensive income
Losses on cash flow hedging instrument
Reclassification adjustment to the income statement
Total comprehensive income for 2021
Transactions with owners
Dividend to owners of the Company
Total distributions to owners of the Company
Total transactions with owners
Balance at 31 December 2021
Share capital
Share premium
Capital contribution
Treasury
shares
RUB’000
Cash flow hedge reserve
Retained earnings
RUB’000
RUB’000
Total
RUB’000
Note
RUB’000
RUB’000
516,957
27,929,478
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
RUB’000
2,694,851
—
—
—
—
—
—
—
—
516,957
27,929,478
2,694,851
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
516,957
27,929,478
2,694,851
(31,496)
—
—
—
—
—
—
—
(31,496)
(31,496)
(31,496)
—
—
—
—
—
—
—
—
—
(475,042)
475,042
—
—
—
—
—
—
—
(86,158)
86,158
—
—
—
—
—
11,838,051
42,979,337
21,883,710
21,883,710
—
—
21,883,710
(16,637,178)
(16,637,178)
—
(16,637,178)
17,084,583
(475,042)
475,042
21,883,710
(16,637,178)
(16,637,178)
(31,496)
(16,668,674)
48,194,373
3,509,530
3,509,530
—
—
(86,158)
86,158
3,509,530
3,509,530
(9,022,550)
(9,022,550)
(9,022,550)
11,571,563
(9,022,550)
(9,022,550)
(9,022,550)
42,681,353
15
22
15
296
297
The notes on pages 300 to 352 are an integral part of these financial statements.
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Cash flow statement
for the year ended 31 December 2021
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Interest on loans to related parties
Bank interest income
Interest income on other receivables from related parties
Interest expense
Reversal of impairment losses on loans receivable
Profit from sale of property, plant and equipment
Gain from sale of subsidiaries
Net foreign exchange transaction losses/(gains) on financing activities
Operating cash flows before working capital changes
Changes in working capital:
Dividend income not received
Other assets
Payables and accrued expenses
Net cash generated from operations
Interest received from loans from related parties
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Proceeds from sale of subsidiary
Prepayment for acquisition of non-controlling interest
Purchases of property, plant and equipment
Proceeds from sale of property plant and equipment
Loan repayments received from related parties
Bank interest received
Net cash generated from investing activities
Note
2021
RUB’000
2020
RUB’000
Note
2021
RUB’000
2020
RUB’000
3,638,574
22,956,943
Cash flows from financing activities
Proceeds from borrowings
Repayments of bank borrowings
Principal elements of lease payments
Interest paid on bank borrowings
Interest paid on lease liabilities
Purchase of treasury shares
Dividends paid to the Company’s shareholders
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Exchange gains on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
23
23
23
23
23
22
15
21
6,000,000
—
(1,000,000)
(4,242,424)
(3,209)
(199,680)
(320)
—
(2,358)
(235,720)
(308)
(31,496)
(9,022,550)
(16,637,178)
(4,225,759)
(21,149,484)
(251,980)
1,093,697
3,653
2,225,518
1,977,191
149,024
982,797
2,225,518
16
17
8
12
12
12
26
10
9
12
18
20
16
26
2,639
2,633
(20,102)
(51,038)
—
239,086
(133,727)
—
(827,850)
1,768
2,431
(43,863)
(39,048)
(3,263)
216,510
(51,713)
(1,029)
—
11,204
(268,879)
2,861,419
22,769,857
15,072
5,875
34,033
(251,377)
(5,740)
18,749
2,916,399
22,531,489
8,675
(127,001)
2,798,073
34,374
(1,073,231)
21,492,632
1,128,000
(300,000)
—
—
296,668
51,038
1,175,706
315,967
—
(6,528)
1,763
400,299
39,048
750,549
298
299
The notes on pages 300 to 352 are an integral part of these financial statements.
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
1. General information
Country of incorporation
Globaltrans Investment Plc (“the Company”) is incorporated and domiciled in Cyprus as a limited liability company in
accordance with the provisions of the Cyprus Companies Law, Cap. 113 and converted into a public company on 15
April 2008. The address of its registered office is 20 Omirou Street, Limassol, Cyprus.
Approval of the parent company financial statements
These consolidated financial statements were authorised for issue by the Board of Directors on 25 March 2022.
Global Depositary Receipts
Global Depositary Receipts, each representing one ordinary share of the Company, are listed on the London Stock
Exchange International Main Market and on the Moscow Exchange.
Principal activities
The principal activities of the Company, which are unchanged from last year, are the holding of investments and
provision of financing to other Group companies. The Company is the parent of a group of companies involved in the
provision of railway transportation services, using own and leased rolling stock and fleet engaged from third party rail
operators, as well as the operating lease of rolling stock.
Consolidated financial statements
The Company has also prepared consolidated financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap. 113 for
the Company and its subsidiaries (“the Group”). These consolidated financial statements can be obtained from the
Company’s website at www.globaltrans.com.
2. Basis of preparation
The parent company financial statements of Globaltrans Investment PLC have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the
Cyprus Companies Law, Cap. 113.
As of the date of the authorization of the financial statements, all International Financial Reporting Standards issued
by International Accounting Standards Board (IASB) that are relevant to the Company’s operations and are effective
as at 1 January 2021 have been adopted by the EU through the endorsement procedure established by the European
Commission.
The financial statements have been prepared under the historical cost convention.
The Company has prepared these parent company financial statements for compliance with the requirements of
the Cyprus Companies Law, Cap. 113 and disclosure rules as issued by the Financial Conduct Authority of the United
Kingdom.
Users of these parent company financial statements should read them together with the Company’s consolidated
financial statements as at and for the year ended 31 December 2021 in order to obtain a proper understanding of the
financial position, the financial performance and cash flows of the Company and the Group.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates
and requires management to exercise its judgement in the process of applying the Company’s accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements are disclosed in Note 7.
3. Adoption of new or revised standards and interpretations
During the current year the Company adopted all the new and amended International Financial Reporting Standards
(IFRS) that are relevant to its operations and are effective for accounting periods beginning on 1 January 2021. None of
these had a significant impact on these financial statements.
4. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
Foreign currency translation
(a) Functional and presentation currency
Items included in the Company’s financial statements are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The Company’s functional currency is the
Russian Rouble. The financial statements are also presented in Russian Roubles (“the presentation currency”)
because this is the currency better understood by the principal users of the financial statements.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates prevailing at
the dates of the transactions or valuations where items are re-measured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income statement, with the exception of foreign
exchange differences that relate to qualifying cash flow hedges which are deferred in equity.
Net foreign exchange differences arising from borrowings and other liabilities and from cash and cash equivalents
and other monetary assets are presented on the face of the income statement in the line “net foreign transaction
gains/(losses) on financing activities”, with the appropriate disclosure of the split between the two in the note
“Finance costs — net”.
All other foreign exchange gains and losses are presented in the income statement within “Other gains — net”.
300
301
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Hedging activities
The Company is exposed to foreign exchange risk arising from dividends declared in Russian Roubles and paid in
US Dollar at the rate set at the date of the declaration. The Company uses foreign currency cash deposits denominated
in US Dollars to hedge this foreign exchange risk exposure.
In particular, the US Dollar denominated cash deposits are designated by the Company as hedging instruments in
hedging the foreign exchange risk associated with the highly probable dividend payment and the resulting payable.
At inception of the hedge relationship, the Company documents, amongst others, the economic relationship between
the hedging instrument and hedged item, including whether changes in the cash flows of the hedging instrument
are expected to offset changes in the cash flows of the hedged item. The Company documents its risk management
objective and strategy for undertaking its hedge transactions.
As a result of the application of hedge accounting the foreign exchange difference on the hedging instrument is
recognised in other comprehensive income in the “Cash flow hedge reserve” within equity. Amounts recognised in
equity are reclassified to the income statement, within “Finance income and costs”, in the same period or periods
during which the hedged item impacts the income statement, being once foreign exchange differences are recognised
on the hedged item.
Accordingly, in the cash flow statement “Dividends paid to the Company’s shareholders” are disclosed net-off foreign
exchange differences on the relevant cash deposits (i.e. at the amounts declared) and the “Exchange gains on cash and
cash equivalents” do not include the impact from the relevant cash deposits used for hedging. In the income statement
the amounts included in “Finance income and costs” (Note 12) within “Net foreign exchange transaction gains/(losses)
on cash and cash equivalents, loans and other receivables and dividends receivable” are disclosed after application of
hedge accounting (i.e. excluding the foreign currency gains/losses arising for the hedging).
Dividend income
Dividend income is recognised when the right to receive payment is established.
Employee benefits
Wages, salaries, contributions to the state pension, the national health system and social insurance funds, paid
annual leave and sick leave, bonuses and other benefits (such as health services) are accrued in the year in which the
associated services are rendered by the employees of the Company. These are included in staff costs and the Company
has no further obligations once the contributions have been paid.
The Company recognises a liability and an expense for bonuses where contractually obliged or where there is a past
practice that has created a constructive obligation.
Share based payment transactions
The Company operates a cash-settled share-based compensation plan. In accordance with compensation plan, key
management personnel of the Company are entitled to receive cash compensations based on the weighted average
market quotations of the fixed number of global depository receipts (“GDR”) of the Company. The fair value of the
employee services received in exchange for the grant of the equivalent GDR instruments is recognised as an expense
over the vesting period.
At each balance sheet date, if required by the terms of the compensation plan, the Company revises its estimates of the
monetary equivalent of GDRs that are expected to vest. It recognises the impact of the revision of original estimates,
including number of instruments expected to vest and fair value in the income statement with a corresponding
adjustment to share-based payment liability.
Current and deferred income tax
The tax expense for the period comprises of current and deferred tax. Tax is recognised in the income statement, except
to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in equity respectively.
Current income tax liabilities and assets for the current and prior periods are measured at the amount expected to be
paid to or recovered from the taxation authorities using the tax rates and laws that have been enacted or substantively
enacted by the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulations is subject to interpretations and establishes provisions where appropriate
on the basis of amounts expected to be paid to tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using
tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply
when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries except where the
Company can control the timing of the reversal and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities, when the income tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the taxable entity or different taxable entities when there is an intention to settle the
balances on a net basis.
302
303
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Uncertain tax positions
The Company’s uncertain tax positions are reassessed by management at the end of each reporting period. Liabilities
are recorded for income tax positions that are determined by management as more likely than not to result in additional
taxes being levied if the positions were to be challenged by the tax authorities. The assessment is based on the
interpretation of tax laws that have been enacted or substantively enacted by the end of the reporting period, and
any known court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are
recognised based on management’s best estimate of the expenditure required to settle the obligations at the end of the
reporting period. Adjustments for uncertain income tax positions, other than interest and fines, are recorded within the
income tax charge. Adjustments for uncertain income tax positions in respect of interest and fines are recorded within
finance costs and other gains/(losses), net, respectively.
Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements
in the period in which the dividends are approved and are no longer at the discretion of the Company. More specifically,
interim dividends are recognised when approved by the Board of Directors whereas in case of final dividends, these are
recognised at the time when they are approved by the Company’s shareholders.
Leases
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Company, with limited exceptions as set out below. Assets and liabilities arising from a lease
are initially measured on a present value basis. The lease payments are discounted using the interest rate implicit in
the lease. If that rate cannot be determined, the Company’s incremental borrowing rate is used, being the rate that the
Company would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Right-of-use assets are measured at cost. Any remeasurement of the lease liability arising if the cash flows change
based on the original terms and conditions of the lease results in a corresponding adjustment to the right-of-use asset.
The adjustment can be positive or negative. Right-of-use assets are reviewed for impairment in accordance with the
Company’s accounting policy for impairment of non-financial assets.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-
line basis. In determining the lease term, the Company considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after
termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not
terminated).
As an exception to the above, the Company accounts for short-term leases and leases of low value assets by recognising
the lease payments as an expense on a straight-line basis in the interim income statement. Short-term leases are leases
with a lease term of 12 months or less.
Right-of-use assets and associated lease liabilities are presented as separate lines on the face of the balance sheet.
Property, plant and equipment
Property, plant and equipment are recorded at purchase cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items. Depreciation on property, plant and equipment is calculated using
the straight-line method to allocate their cost, less residual value, over their estimated useful lives, as follows:
Motor vehicles
Number of years
3—5
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Expenditure for repairs and maintenance of property, plant and equipment is charged to the income statement of the
year in which they are incurred. The cost of major renovations and other subsequent expenditure are included in the
carrying amount of the asset or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
Gains and losses on disposal of property, plant and equipment are determined by comparing the proceeds with carrying
amount and these are included within operating profit as part of administrative expenses.
Investments in subsidiary undertakings
Subsidiaries are all entities (including structured entities) over which the Company has control. The Company controls
an entity when the Company is exposed to, or has rights to variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity.
The Company carries the investments in subsidiaries at cost less any impairment in its separate financial statements.
Investments in subsidiaries are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised through income statement for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs to sell and value in use. An impairment loss recognised in prior years is reversed where appropriate
if there has been a change in the estimates used to determine the recoverable amount.
The cost of investments in subsidiaries includes the fair value of any asset or liability arising from a contingent
consideration arrangement. The subsequent remeasurement of any asset/liability arising from a contingent
consideration arrangement is adjusted against the cost of the investment in subsidiary.
In cases of acquisitions of subsidiaries from entities under common control or subsidiaries of the Company, the cost
of acquisition is determined to be the fair value of the investment acquired as opposed to the transaction price. Any
differences between the transaction price and the fair value of the investment acquired reflect notional contributions/
distributions from entities under common control or subsidiaries and are recognised as such, i.e. directly in equity
in cases of transactions with common control entities and as an additional contribution to or distribution from the
subsidiary transferring the investment to the Company.
304
305
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Group reorganisations resulting into an exchange of non-financial assets and where the future cash inflows before and
after the reorganisation do not change as a result of the reorganisation are considered to lack commercial substance
and no gains or losses are recognised relating to such restructurings.
Reclassification. Financial instruments are reclassified only when the business model for managing those assets
changes. The reclassification has a prospective effect and takes place from the start of the first reporting period
following the change.
Indemnification assets received for contingent liabilities of the investments in subsidiaries that existed at the time of
acquisition of such subsidiaries are recognised against the cost of the relevant investment.
Deferred consideration
Deferred consideration arises when settlement of all or any part of the cost of an acquisition is deferred. Deferred
consideration is stated at fair value at the date of acquisition, which is determined by discounting the amounts due
to present value using market interest rates at the date of initial recognition. Interest is accrued on the fair value of
deferred consideration at the original effective interest rate and is recognised in finance costs.
Impairment of non-financial assets
Assets that have indefinite useful life and goodwill are not subject to amortisation and are tested annually for
impairment.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets,
other than goodwill, that have suffered impairment are reviewed for possible reversal of impairment whenever there is
an indication that an impairment recognised in prior periods may no longer exist or may have decreased.
Financial assets
Recognition and derecognition. All purchases and sales of financial assets that require delivery within the time frame
established by regulation or market convention (“regular way” purchases and sales) are recorded at trade-date; being
the date on which the Company commits to purchase or sell the asset. All other purchases and sales are recognised
when the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have
been transferred and the Company has transferred substantially all the risks and rewards of ownership. Any gain or loss
arising upon their derecognition is recognised directly in the income statement.
Classification. The Company classifies its financial assets at amortised cost. The classification depends on the
Company’s business model for managing the financial assets and the contractual cash flow characteristics of the assets.
Management determines the classification of financial assets at initial recognition.
Financial assets at amortised cost are held for collection of contractual cash flows and their cash flows represent solely
payments of principal and interest. They are included in current assets, except for maturities greater than twelve months
after the balance sheet date. These are classified as non-current assets. The Company’s financial assets at amortised
cost comprise of loans and other receivables and cash and cash equivalents on the balance sheet.
Measurement. At initial recognition, the Company measures financial assets classified at amortised cost at their
fair value plus incremental transaction costs that are directly attributable to the acquisition of the financial assets.
Subsequently, these are measured at amortised cost.
Interest income. Interest income on financial assets at amortised cost is recognised using the effective interest rate
method. Interest income on loans granted to related parties is recognised within “Revenue” in the income statement.
All other interest income recognised on debt financial assets carried at amortised cost is included within “finance
income” in the income statement. Interest income is calculated by applying the effective interest rate to the gross
carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-
impaired financial assets, the effective interest rate is applied to the net carrying amount of the financial asset; that is
after deduction of the loss allowance. The Company’s definition of credit-impaired assets is explained in Note 6, Credit
risk section.
Impairment. The Company assesses on each reporting date, and on a forward-looking basis, the expected credit losses
(“ECL”) associated with its debt financial assets carried at amortised cost. The measurement of ECL reflects: (i) an
unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value
of money, and (iii) all reasonable and supportable information that is available without undue cost and effort at the end
of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of the
loss is recognised on the face of the income statement. Subsequent recoveries of amounts for which loss allowance was
previously recognised are credited against the same line item.
For all its debt financial assets carried at amortised cost, the Company applies the general approach. In particular, the
Company applies the three stage model for calculating impairment, which is based on changes in the credit quality
of the financial asset since initial recognition. A financial instrument that is not credit-impaired on initial recognition
is classified in Stage 1. The ECL of financial assets in Stage 1 is measured at an amount equal to the portion of lifetime
ECL that results from default events possible within the next 12 months or until contractual maturity, if shorter. If the
Company identifies a significant increase in credit risk since initial recognition (“SICR”), the asset is transferred to Stage
2 and its ECL is measured based on ECL on a lifetime basis, that is, up until its contractual maturity but considering
expected prepayments, if any. Refer to Note 6, Credit risk section for a description of how the Company determines
when a SICR has occurred. If the Company determines that a financial asset is credit-impaired, the asset is transferred to
Stage 3 and its ECL is measured as a Lifetime ECL. The Company’s definition of credit impaired assets and definition of
default is explained in Note 6, Credit risk section.
Write-off. Financial assets are written-off, in whole or in part, when the Company has concluded that there is no
reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst
others, the failure of a debtor to engage in a repayment plan with the Company and a failure to make contractual
payments for a period of greater than 180 days past due. The Company may write-off financial assets that are still subject
to enforcement activity when the Company seeks to recover amounts that are contractually due, however, there is no
reasonable expectation of recovery. Subsequent recoveries of amounts previously written off are recognised directly on
the face of the income statement.
306
307
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Modification. The Company sometimes renegotiates or otherwise modifies the contractual terms of its financial assets,
The Company assesses whether the modification of the contractual cash flows is substantial considering, among other,
the following factors: any new contractual terms that substantially affect the risk profile of the asset (e.g. profit share or
equity-based return), significant change in interest rate, change in the currency denomination, new collateral or credit
enhancement that significantly affects the credit risk associated with the asset or a significant extension of a loan when
the borrower is not in financial difficulties.
If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Company
derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is
considered to be the date of initial recognition for subsequent impairment calculation purposes, including determining
whether a SICR has occurred. The Company also assesses whether the new loan or debt instrument meets the SPPI
criterion.
Any difference between the carrying amount of the original asset derecognised and fair value of the new substantially
modified asset is recognised in the income statement, unless the substance of the difference is attributed to a capital
transaction with owners.
In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make the
originally agreed payments, the Company compares the original and revised expected cash flows to assess whether the
risks and rewards of the asset are substantially different because of the contractual modification. If the risks and rewards
do not change, the modified asset is not substantially different from the original asset and the modification does not
result in derecognition. The Company recalculates the gross carrying amount by discounting the modified contractual
cash flows by the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated
credit-impaired financial assets) and recognises a modification gain or loss in the income statement.
Following a renegotiation or otherwise modification of the contractual cash flows of a financial asset, the Company
assesses whether the financial asset ceased to meet the definition of credit-impaired and, in such case, should be
transferred out of Stage 3. In a situation where the modification involved only the deferral of the contractual payments
(rather than waiver) and interest accrues on the unpaid deferred amounts, with the result that there is not a detrimental
impact on the estimated future cash flows of the loan, the borrower has demonstrated consistently good payment
behaviour over a period of time and there are no significant concerns regarding the repayment of the exposure, the
Company considers that the financial asset is not credit-impaired.
At the time the financial asset exits Stage 3, the Company compares the risk of default occurring on the asset to that
at origination. If the risk of default is lower than or equal to the risk of default as at the date of initial recognition it is
transferred to Stage 1, otherwise it is transferred to Stage 2.
Classification as loans and other receivables. These amounts are held with the objective to collect their contractual
cash flows and their contractual cash flows represent solely payments of principal and interest. Accordingly, these
are measured at amortised cost using the effective interest method, less provision for impairment. Loans and other
receivables are classified as current assets if they are due within one year or less (or in the normal operating cycle of the
business if longer). If not, they are presented as non-current assets.
Classification as cash and cash equivalents. In the cash flow statement, cash and cash equivalents include cash in hand
and deposits held at call with banks or with original maturity of three months or less, less bank overdrafts, if any. Cash
and cash equivalents are carried at amortised cost using the effective interest method, less provision for impairment.
Bank overdrafts are shown within borrowings in the current liabilities on the balance sheet.
Financial liabilities
Classification. The Company’s financial liabilities are initially recognised at fair value and classified as subsequently
measured at amortised cost.
Derecognition of financial liabilities. A financial liability is derecognised when the obligation under the liability is
discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in income statement as other income or finance costs. 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 a derecognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts, including costs or fees incurred
for the modification, is recognised in profit or loss within finance costs. When the terms of the existing financial liability
are not substantially modified, the existing liability is not derecognised and the gain/loss arising on the modification,
including costs or fees incurred for the modification, is recognised in the income statement within finance costs.
Modifications of financial liabilities. An exchange between the Company and its original lenders of debt instruments
with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial
liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial
liability. The terms are substantially different if the discounted present value of the cash flows under the new terms,
including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10%
different from the discounted present value of the remaining cash flows of the original financial liability. In addition,
other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate,
new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or
fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not
accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are
amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a
cumulative catch up method, with any gain or loss recognised in the income statement, unless the economic substance
of the difference in carrying values is attributed to a capital transaction with owners and is recognised directly to equity.
Borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption value is recognised over the period of the borrowings using the effective interest method.
308
309
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until draw down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is
capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. when
the obligation specified in the contract is discharged, cancelled or expires). The difference between the carrying
amount of a financial liability that has been extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognised in the income statement within “finance
costs-net”.
Other payables. Other payables are classified as current liabilities if payment is due within one year or less (or in the
normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Other payables are
recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Financial guarantees. Financial guarantee contracts are contracts that require the Company to make specified payments
to reimburse the holder of the guarantee for a loss it incurs because a specified debtor fails to make payment when due
in accordance with the terms of debt instrument. Financial guarantees are recognised, when material, as a financial
liability at the time the guarantee is issued. Financial guarantees are initially recognised at their fair value, which is
normally evidenced by the amount of fees received. This amount is amortised on a straight line basis over the life of the
guarantee in “other gains — net” in the income statement.
At the end of each reporting period, the guarantee is measured at the higher of (i) the amount of the loss allowance
determined in accordance with the expected credit loss model under IFRS 9 and (ii) the amount initially recognised less,
where appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15 “Revenue
from Contracts with Customers”.
The fair values of financial guarantees issued in relation to obligations of subsidiaries, where such guarantees are
provided for no compensation, are accounted for as contributions and are recognised as part of the cost of the
investment in the respective subsidiary in the financial statements of the Company.
Share capital, share premium and treasury shares
Ordinary shares are classified as equity.
Incremental costs directly related to the issue of new shares are shown as a deduction, net of tax, from the proceeds.
Any excess of the fair value of consideration received over the par value of shares issued is recognised as share
premium. Share premium is the difference between the fair value of the consideration receivable for the issue of shares
and the nominal value of the shares. Share premium account can only be resorted to for limited purposes, which do
not include the distribution of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law on
reduction of share capital.
Where the Company purchases its own equity share capital (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of income taxes) is deducted from equity within a separate reserve “treasury
shares” until the shares are cancelled or re-issued. Where such ordinary shares are subsequently re-issued, any
consideration received, net of any directly attributable incremental transaction costs and the related income tax effects,
is included in equity within retained earnings. The consideration initially paid for treasury shares which are subsequently
re-issued is transferred from “treasury shares” to retained earnings.
Capital contribution
Capital contribution constitutes contributions made by the Company’s shareholders other than for the issue of shares by
the Company in their capacity as equity owners of the Company for which the Company has no contractual obligation
to repay them. Such contributions are recognised directly in equity as they constitute transactions with equity owners in
their capacity as equity owners of the Company.
Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events,
it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
Where there are number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligation as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The
increase in the provision due to passage of time is recognised as interest expense.
Provisions are only used to cover those expenses which they had been set up for. Other possible or present obligations
that arise from past events but it is not probable that an outflow of resources embodying economic benefit will be
required to settle the obligations; or the amount cannot be measured with sufficient reliability are disclosed in the notes
to the financial statements as contingent liabilities.
310
311
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Transactions with equity owners/subsidiaries
The Company enters into transactions with its shareholders and subsidiaries. When consistent with the nature of
the transaction, the Company’s accounting policy is to recognise (a) any gains or losses with equity holders, directly
through equity and consider these transactions as the receipt of additional capital contribution or the payment of
dividends; and (b) any losses with subsidiaries as cost of investment in subsidiaries. Similar transactions with non-
equity holders, or subsidiaries, are recognised through the income statement in accordance with IFRS 9 “Financial
Instruments”.
Prepayments
Prepayments are carried at cost less provision for impairment. A prepayment is classified as non-current when the
goods or services relating to the prepayment are expected to be obtained after one year, or when the prepayment
relates to an asset which will itself be classified as non-current upon initial recognition. Prepayments to acquire assets
are transferred to the carrying amount of the asset once the Company has obtained control of the asset and it is
probable that future economic benefits associated with the asset will flow to the Company. Other prepayments are
written off to the income statement when the goods or services relating to the prepayments are received. If there is
an indication that the assets, goods or services relating to a prepayment will not be received, the carrying value of the
prepayment is written down accordingly and a corresponding impairment loss is recognised in the income statement.
Other income
Other income generally represents amounts received from transactions that are outside the Company’s principal
activities. This is recognised in the income statement over the period it relates to, based on the terms of the
arrangement. Other income that it is not linked to the Company’s future performance and/or satisfaction of any future
obligations is recognised in the period in which the Company is entitled to receive it.
Cash flow statement
Cash flows arising from dividend income and interest income on loans granted to related parties, which form part of
the revenue of the Company, are reported as part of operating activities in the cash flow statement. Interest income
received on other balances, which forms part of the Company’s finance income, is reported within cash flows from
investing activities in the cash flow statement. Interest expense arising from deferred consideration for acquisition of
subsidiaries is recognised within financing activities. Transactions with non-controlling interests that do not result in a
change of control are classified as investment activities. Furthermore, principal payments of deferred consideration are
recognised as acquisition of subsidiaries within cash flows from investing activities.
5. New accounting pronouncements
Certain new standards, amendments to existing standards and interpretations have been issued that are mandatory for
annual periods beginning on or after 1 January 2021. Items marked with * have not been endorsed by the European Union
(EU). The Company will only be able to apply the new standards, amendments to existing standards or interpretations
when these are endorsed by the EU.
• Classification of liabilities as current or non-current — Amendments to IAS 1 (issued on 23 January 2020 and effective
for annual periods beginning on or after 1 January 2022)*. These narrow scope amendments clarify that liabilities are
classified as either current or non-current, depending on the rights that exist at the end of the reporting period. In
addition, the amendments clarify the classification requirements for debt a company might settle by converting it into
equity.
• Classification of liabilities as current or non-current, deferral of effective date — Amendments to IAS 1 (issued
on 15 July 2020 and effective for annual periods beginning on or after 1 January 2023)*. The effective date of the
amendment to IAS 1 on classification of liabilities as current or non-current that was issued in January 2021 with an
original effective date 1 January 2022 was deferred by one year.
• Proceeds before intended use, Onerous contracts — cost of fulfilling a contract, Reference to the Conceptual
Framework — narrow scope amendments to IAS 16, IAS 37 and IFRS 3, and Annual Improvements to IFRSs 2018-
2020 — amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 (issued on 14 May 2020 and effective for annual periods
beginning on or after 1 January 2022). The amendment to IAS 16 prohibits an entity from deducting from the cost
of an item of PPE any proceeds received from selling items produced while the entity is preparing the asset for its
intended use. The amendment to IAS 37 clarifies the meaning of “costs to fulfil a contract”. IFRS 3 was amended to
refer to the 2018 Conceptual Framework for Financial Reporting, in order to determine what constitutes an asset or a
liability in a business combination. The amendment to IFRS 9 addresses which fees should be included in the 10% test
for derecognition of financial liabilities. Illustrative Example 13 that accompanies IFRS 16 was amended to remove the
illustration of payments from the lessor relating to leasehold improvements.
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
policies (issued on 12 February 2021 and effective for annual periods beginning on or after 1 January 2023). IAS 1 was
amended to require companies to disclose their material accounting policy information rather than their significant
accounting policies.
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (issued on 12 February 2021 and effective for annual periods beginning on or after 1 January 2023).
The amendment to IAS 8 clarified how companies should distinguish changes in accounting policies from changes in
accounting estimates.
• Deferred tax related to assets and liabilities arising from a single transaction — Amendments to IAS 12 (issued on
7 May 2021 and effective for annual periods beginning on or after 1 January 2023).* The amendments to IAS 12 specify
how to account for deferred tax on transactions such as leases and decommissioning obligations. The amendments
clarify that entities are required to recognise deferred tax on such transactions. The amendments require companies
to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and
deductible temporary differences.
None of the new standards, amendments to existing standards or interpretations is expected to have a significant effect
on the parent company financial statements.
312
313
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
6. Financial risk management
Financial risk factors
The Company’s activities exposed it to a variety of financial risks: market risk (including foreign exchange risk, cash
flow and fair value interest rate risk), credit risk and liquidity risk. The Company’s overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s
financial results.
Market risk
(a) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in
a currency different from the functional currency of the Company.
As of the end of December 2021 the Russian Rouble has decreased against the US Dollar from 73.8757 as of 31
December 2020 to 74.2926 Russian Roubles (0.6% decrease) and has increased against the Euro from 90.6824 as of 31
December 2020 to 84.0695 Russia Roubles (7.3% increase).
The fluctuations in the exchange rate between (i) US Dollar and Russian Rouble and (ii) between Euro and Russian Rouble
expose the Company to foreign exchange risk.
The carrying amounts of monetary assets denominated in US dollars as at 31 December 2021 and 31 December 2020 are
as follows:
Assets
Liabilities
2021
RUB’000
817,566
15,379
2020
RUB’000
812,110
15,647
The carrying amounts of monetary assets and liabilities denominated in Euro as at 31 December 2021 and 31 December
2020 are as follows:
2021
RUB’000
321,536
97,640
2020
RUB’000
873,485
75,460
Assets
Liabilities
314
Had US Dollar exchange rate strengthened/weakened by 20% (2020: 20% change) against the Russian Rouble and all
other variables remained unchanged, the post-tax profit of the Company for the year ended 31 December 2021 would
have increased/decreased by RUB 140,383 thousand (2020: RUB 139,381 thousand). This is mainly due to foreign
exchange gains and losses arising upon retranslation of US Dollar denominated loans receivable and cash and cash
equivalents as of 31 December 2021 and as of 31 December 2020.
Had Euro exchange rate strengthened/weakened by 30% (2020: 30% change) against the Russian Rouble and all other
variables remained unchanged, the post-tax profit of the Company for the year ended 31 December 2021 would have
increased/decreased by RUB 58,773 thousand (2020: by RUB 209,482 thousand). This is mainly due to foreign exchange
gains and losses arising upon retranslation of Euro denominated other receivables, cash and cash equivalents and
payables as of 31 December 2021 and as of 31 December 2020.
The Company’s current policy is not to hedge foreign exchange risk, with the exception of application of hedge
accounting to hedge foreign currency risk associated with highly probable dividend payments and associated dividend
payable until their settlement, as set out in the accounting policy for hedging activities in Note 4 to these financial
statements.
The impact of application of hedge accounting has been to disclose in the cash flow statement “Dividends paid to the
Company’s shareholders” net-off RUB 86,158 thousand (2020: RUB 475,042 thousand) foreign exchange losses and
the “Exchange gains on cash and cash equivalents” does not include the equivalent impact from the relevant cash
deposits used for hedging. Furthermore, in the income statement the amounts included in “Finance income and costs”
within “Net foreign exchange transaction (losses)/gains on cash and cash equivalents, loans and other receivables and
dividends receivable” are disclosed after application of hedge accounting (i.e. excluding the foreign currency losses/
gains arising for the hedging of RUB 86,158 thousand (2020: RUB 475,042 thousand)).
(b) Cash flow and fair value interest rate risk
The Company holds interest bearing financial instruments at fixed interest rates.
Financial assets and liabilities issued at fixed rates expose the Company to fair value interest rate risk. However, as all of
the Company’s fixed interest rate financial instruments are carried at amortised cost, any reasonably possible change in
the interest rates as of 31 December 2021 and 31 December 2020 would not have any impact on the Company’s post tax
profit or equity.
Financial assets and liabilities issued at floating rate expose the Company to cash flow interest rate risk. As of 31
December 2021 and 31 December 2020 the Company did not have any material floating interest rate financial
instruments, therefore was not exposed to significant cash flow interest rate risk.
The Company’s current policy is not to hedge interest rate risk.
315
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing
to meet an obligation. Credit risk arises from cash and cash equivalents, loans and other receivables and financial
guarantees issued by the Company for borrowings of subsidiaries.
Macroeconomic information (such as market interest rates or growth rates) is incorporated as part of the internal rating
model. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the counterparties to settle the receivables. Regardless of the analysis above, a significant
increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment.
(i) Risk management
For banks and financial institutions, the Company has established policies whereby the majority of bank balances are
held with independently rated parties with a minimum rating of ‘Ba2’. These policies enable the Company to reduce its
credit risk significantly.
(ii) Impairment of financial assets
The Company has three types of financial instruments that are subject to the expected credit loss model:
loans and other receivables;
•
• cash and cash equivalents; and
• financial guarantees.
The Company applies the general approach, prescribed in IFRS 9, for assessing expected credit losses on all its
debt financial assets and financial guarantees issued. In particular, the Company applies the three stage model
for calculating impairment, which is based on changes in the credit quality of the financial instrument since initial
recognition. A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1. The ECL
of financial assets in Stage 1 is measured at an amount equal to the portion of lifetime ECL that results from default
events possible within the next 12 months or until contractual maturity, if shorter. If the Company identifies a significant
increase in credit risk since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on
ECL on a lifetime basis, that is, up until its contractual maturity but considering expected prepayments, if any. If the
Company determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured
as a Lifetime ECL.
Significant increase in credit risk. The Company considers the probability of default upon initial recognition of an asset and
whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To
assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the
asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable
and supportive forwarding-looking information.
Especially the following indicators are incorporated:
internal credit rating
•
• external credit rating (as far as available)
• actual or expected significant adverse changes in business, financial or economic conditions that are expected to
cause a significant change to the borrower’s/counterparty’s ability to meet its obligations
• actual or expected significant changes in the operating results of the borrower/counterparty
• significant increases in credit risk on other financial instruments of the same borrower/counterparty
• significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees
or credit enhancements
• significant changes in the expected performance and behaviour of the borrower/counterparty, including changes in
the payment status of counterparty in the group and changes in the operating results of the borrower.
Default and credit-impaired. A default on a financial asset is when the financial asset meets one or more of the following
criteria: (i) the borrower is more than 90 days past due on its contractual payments, (ii) the borrower is assessed as
unlikely to pay its credit obligations in full without realisation of collateral, regardless of the existence of any past-
due amount or of the number of days past due, (iii) the Company, for economic or contractual reasons relating to
the borrower’s financial difficulty, granted to the borrower a concession(s) that it would not otherwise consider. The
Company considers defaulted assets to be credit-impaired so that Stage 3 represents all debt financial assets which are
considered defaulted.
Write-off. Assets are written-off, in whole or in part, when the Company has concluded that there is no reasonable
expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others,
the failure of a debtor to engage in a repayment plan with the Company and a failure to make contractual payments
for a period of greater than 180 days past due. The Company may write-off financial assets that are still subject to
enforcement activity when the Company seeks to recover amounts that are contractually due, however, there is no
reasonable expectation of recovery. Subsequent recoveries of amounts previously written off are recognised directly on
the face of the income statement.
The Company calculates expected credit losses based on a probability-weighted estimate of the present value of future
cash shortfalls (i.e., the weighted average of credit losses, with the respective risks of default occurring in a given
time period used as weights). An ECL measurement is unbiased and is determined by evaluating a range of possible
outcomes.
The Company calculates ECL using the following three components: exposure at default (EAD), probability of default
(PD) and loss given default (LGD). EAD is an estimate of exposure at a future default date, taking into account expected
changes in the exposure after the reporting period, including repayments of principal and interest, and expected
drawdowns on committed facilities. PD is an estimate of the likelihood of default to occur over a given time period and
LGD is an estimate of the loss arising on default.
The Company’s exposure to credit risk for each class of financial instruments subject to the expected credit loss model
is set out below:
316
317
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Loans receivable and other receivables
The Company assesses, on an individual basis, its exposure to credit risk arising from loans and other receivables. This
assessment takes into account, amongst others, the period the loan receivable or other receivable balance is past due
(in days), expectations around changes in business, financial or economic conditions as well as expectations around the
performance of the counterparty.
The following table contains an analysis of the credit risk exposure for loans receivable and other receivables by
reference to the Company’s internal credit risk rating grades.
The gross carrying amounts below represent the Company’s maximum exposure to credit risk on these assets as at 31
December 2020:
Internal credit risk
rating grade
Company definition of category
Gross carrying amount
Loans
receivable
RUB’000
Other
receivables
RUB’000
Performing
Stage 1 — Counterparties have a low risk of default and a strong capacity
to meet contractual cash flows
—
266,307
Underperforming
Stage 2 — Counterparties for which there is a significant increase in credit
risk; as significant increase in credit risk is presumed if interest and/or
principal repayments are 30 days past due
Non-performing or
Credit-impaired
Stage 3 — Interest and/or principal repayments are 90 days past due
212,185
2,048,016
—
—
The gross carrying amounts below represent the Company’s maximum exposure to credit risk on these assets as at 31
December 2021:
Internal credit risk
rating grade
Company definition of category
Gross carrying amount
Loans
receivable
RUB’000
Other
receivables
RUB’000
Performing
Stage 1 — Counterparties have a low risk of default and a strong capacity
to meet contractual cash flows
—
234,634
Underperforming
Stage 2 — Counterparties for which there is a significant increase in credit
risk; as significant increase in credit risk is presumed if interest and/or
principal repayments are 30 days past due
Non-performing or
Credit-impaired
Stage 3 — Interest and/or principal repayments are 90 days past due
45,886
1,937,248
—
—
The gross carrying amounts, as per above, represent the Company’s maximum exposure to credit risk on these assets as
at 31 December 2021 and 31 December 2020, without taking account of any collateral held. The Company does not hold
any collateral as security for any loans receivable or other receivable balances.
The movement in the credit loss allowance for loans receivable during the years 2021 and 2020 is presented in the table
below:
Opening balance
Reversals
Foreign exchange difference
Closing balance
Loans Receivable
Non-performing
2021
RUB’000
2020
RUB’000
(1,601,472)
(1,385,320)
133,727
(9,038)
51,713
(267,865)
(1,476,783)
(1,601,472)
During the year 2021, the only movement in the gross carrying amount of the credit impaired loans receivable were
reversals and foreign exchange differences. The impact of these on the credit loss allowance is reflected in the table
above.
The estimated credit loss allowance on the performing and underperforming loans receivable and other receivable
balances as at 31 December 2021 and 31 December 2020 was not material.
During the years 2021 and 2020, the contractual cash flows of the Company’s credit-impaired loans receivable
as at 1 January 2021 and 1 January 2020, respectively, were modified so as to extend the maturity of the loans. No
other changes to the terms of the loans were made. As the modifications were driven by financial difficulties of the
counterparty and inability to make the originally agreed payments and the risks and rewards of the loans did not change,
the modifications did not result in derecognition of the said loans. In addition, these modifications did not significantly
impact the ECL on these loans.
During the year 2020, the maturity of underperforming loan receivable with a carrying amount of RUB 212,185 thousand
as at 31 December 2020 was extended and the contractual interest rate was decreased. As the modifications involved
only the deferral of the contractual payments (rather than waiver) and interest accrues on the unpaid deferred amounts,
with the result that there is not a detrimental impact on the estimated future cash flows of the loan and the risk profile
of the loan did not change, the modifications did not result in derecognition of the said loan. In addition, the impact of
these modifications was not material.
318
319
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Cash and cash equivalents
The Company assesses, on an individual basis, its exposure to credit risk arising from cash at bank based on ratings
from external credit rating institutions and internal reviews, if external are not available.
The following table contains an analysis of the exposure to credit risk on financial guarantees by reference to the
Company’s internal credit risk rating grades. The amounts below represent the Company’s maximum exposure to credit
risk on these financial instruments as at 31 December 2021 and 31 December 2020.
The following table contains an analysis of the gross carrying amount of the Company’s cash at bank by reference to
the credit risk ratings assigned by external credit rating agencies. The gross carrying amounts below represent the
Company’s maximum exposure to credit risk on these assets as at 31 December 2021 and 31 December 2020:
Moody’s(1)
Moody’s(1)
Moody’s(1)
Moody’s(1)
Moody’s(1)
Moody’s(1)
Moody’s(1)
Total
Rating
A3
A2
Aa2
B3
B1
Ba1
Baa3
Gross carrying amount
2021
RUB’000
—
1,812,682
161,516
—
705
43
2,245
2020
RUB’000
881,308
—
233,924
8,969
—
1,100,000
1,317
1,977,191
2,225,518
(1) International rating agency Moody’s Investors Service
The Company does not hold any collateral as security for any of the above balances.
The estimated expected credit loss allowance on cash and cash equivalents as at 31 December 2021 and 31
December 2020, based on the general approach of IFRS 9, was immaterial. All cash and cash equivalents were
performing (Stage 1) as at 31 December 2021 and 31 December 2020.
Financial Guarantees
The primary purpose of these instruments is to ensure that funds are available to a borrower, as required. Guarantees,
which represent irrevocable assurances that the Company will make payments in the event that a counterparty cannot
meet its obligations to third parties, carry the same credit risk as loans receivable.
The Company has issued financial guarantees on the borrowings of its subsidiaries and quoted bonds issued by its
subsidiaries (Note 26). As a result, the Company is exposed to credit risk arising from potential risk of default of the
Company’s subsidiaries on their external debt. As of 31 December 2021 and 31 December 2020, none of the Company’s
subsidiaries had defaulted on or breached any covenants on their borrowings/bonds.
— Performing
— Underperforming
— Non-performing
Total unrecognised gross amount
Stage 1
2021
RUB’000
2020
RUB’000
18,884,714
23,584,105
—
—
—
—
18,884,714
23,584,105
The amounts, as per above, represent the Company’s maximum exposure to credit risk on these financial instruments as
at 31 December 2021 and 31 December 2020, without taking account of any collateral held. The Company does not hold
any collateral as security for any guarantees issued to its subsidiaries.
The estimated provision as at 31 December 2021 and 31 December 2020 for free of charge financial guarantees issued
by the Company for obligations of its subsidiaries in accordance with loan agreements with financial institutions where
such obligations are also secured by a pledge of property, plant and equipment and the distressed sale value of such
pledge exceeds the amount of the obligation of the respective subsidiary was estimated at RUB Nil, since, in case of
default, the Company will be able to recover its losses under the issued guarantees from the respective subsidiaries in
full.
The estimated provision as at 31 December 2021 and 31 December 2020 for free of charge financial guarantees issued
by the Company for unsecured or underpledged obligations of its subsidiaries in accordance with loan agreements with
financial institutions and quoted bonds issued by subsidiaries was estimated using a probability adjusted discounted
cash flow analysis, using probability of default, as implied by the market rate of the borrowings obtained by the
subsidiaries, and loss given default, as estimated by considering the distressed value of the net assets of the subsidiaries
which are not pledged at the time of the assessment. This was assessed as RUB Nil, since, in case of default, the
Company will be able to recover its losses under the issued guarantees from the respective subsidiaries in full.
320
321
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Liquidity risk
As at 31 December 2021, the Company has an excess of current assets over current liabilities of RUB 378,300 thousand
(2020: excess of current assets over current liabilities of RUB 2,485,452 thousand). Management believes that the
Company will be able to meet its obligations as they fall due.
Management controls current liquidity based on expected cash flows, expected dividend and interest income receipts,
expected dividend payments and advancements under borrowings from subsidiaries. In the long-term perspective,
the liquidity risk is determined by forecasting future cash flows at the moment of signing new loans and by budgeting
procedures.
The table below summarizes the analysis of financial liabilities of the Company by maturity as of 31 December 2021
and 31 December 2020. The amounts in the table are contractual undiscounted cash flows. Non-interest bearing trade
and other payables balances due within 12 months equal their carrying balances as the impact of discounting is not
significant.
31 December 2021
Payables and accrued
expenses(1)
Borrowings
Other lease liabilities
Financial guarantee
contracts(2)
31 December 2020
Payables and accrued
expenses(1)
Other lease liabilities
Financial guarantee
contracts(2)
Less than
one month
RUB’000
Between one
month and
three months
RUB’000
Between
three and
six months
RUB’000
Between
6 months
to 1 year
RUB’000
Between
1 and 2 years
RUB’000
Between
2 and 5 years
RUB’000
Total
RUB’000
—
72,088
232
8,968
18,823
463
—
—
—
—
8,968
303,469
1,786,901
1,491,096
1,950,082
5,622,459
695
1,390
2,894
3,011
8,685
9,875,841
9,008,873
—
—
—
—
18,884,714
9,948,161
9,037,127
304,164
1,788,291
1,493,990
1,953,093
24,524,826
—
268
20,479
537
11,776,425
11,807,680
11,776,693
11,828,696
—
805
—
805
—
1,610
—
1,610
—
—
—
—
—
—
20,479
3,220
— 23,584,105
— 23,607,804
(1) Payables and accrued expenses exclude statutory liabilities as the analysis is provided for financial liabilities only.
(2) The maximum possible amount of obligation under financial guarantee contracts is disclosed at the earliest time it may be called.
Capital risk management
The Company’s main objective when managing capital is to maintain the ability to continue as a going concern in order
to ensure the required profitability of the Company, maintain optimum equity structure and reduce its cost of capital.
For defining capital, the Company uses the amount of net assets attributable to the Company’s shareholders and the
Company’s borrowings. The Company manages the capital based on borrowings to total capitalization ratio. Borrowings
include loan liabilities.
To maintain or change capital structure the Company may vary the amount of dividend paid in order to reduce debts.
Management believes that the current equity is sufficient to fund current projects and further development of the
Company.
Total capitalisation is calculated as the sum of the total borrowings and net assets at the date of calculation. The
management does not currently have any specific target on the rate of borrowings to total capitalization.
The rate of borrowings to total capitalisation as at 31 December 2021 and 31 December 2020 are as follows:
Total borrowings
Total capitalisation
Total borrowings to total capitalisation ratio (percentage)
2021
RUB’000
2020
RUB’000
5,039,086
—
42,681,353
48,194,373
11.81%
0.00%
External requirements are imposed on the capital of the Company as defined by management in relation to long-term
loans provided by financial institutions to the Company. The Company analyses compliance with external requirements
to the capital at each reporting date and when entering into new loan agreements. There were no instances of non-
compliance with externally imposed capital requirements during 2021 and 2020. Management believes that the
Company will be able to comply with its external requirements to the capital during the whole term of agreements.
322
323
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Fair value estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The best evidence of fair value is price in an active market.
An active market is one in which transactions for the asset or liability take place with sufficient frequency and volume to
provide pricing information on an ongoing basis.
The estimated fair values of financial instruments have been determined by the Company, using available market
information, where it exists, appropriate valuation methodologies and assistance of experts, where relevant. However,
judgement is necessarily required to interpret market data to determine the estimated fair value. The Russian Federation
continues to display some characteristics of an emerging market and economic conditions continue to limit the volume
of activity in the financial markets. Market quotations may be outdated or reflect distress sale transactions and therefore
do not always represent the fair values of financial instruments. The Company has used all available market information
in estimating the fair value of financial instruments.
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one measurements
are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two
measurements are valuations techniques with all material inputs observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based
on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial
instruments using the fair value hierarchy.
If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3
measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
The fair values in level 2 and level 3 of fair value hierarchy were estimated using discounted cash flows valuation
techniques. The fair value of unquoted fixed interest rate instruments was estimated based on estimated future cash
flows expected to be received/paid discounted at current interest rates for new instruments with similar credit risk and
remaining maturity.
Financial assets carried at amortised cost. The estimated fair value of fixed interest rate instruments is based on
estimated future cash flows expected to be received discounted at current interest rates for new instruments with
similar credit risk and remaining maturity. Discount rates used depend on the credit risk of the counterparty. Refer to
Note 19.
The fair value as at 31 December 2021 and 31 December 2020 of fixed interest rate instruments with stated maturity
with subsidiary entities was estimated based on expected cash flows discounted using the rate of similar instruments,
denominated in the same currency, entered into by the subsidiaries of the Company on their bank borrowings close to
the year-end. In the absence of similar instruments entered into by a subsidiary of the Company with non-related parties
close to the year-end the estimated fair value was estimated based on expected cash flows discounted at an estimated
rate that reflects management’s best estimate of the current interest rate of new instruments, denominated in a similar
currency and with similar credit risk and remaining maturity.
The discount rate used for US Dollar denominated loans to related parties as at 31 December 2021 was 8% (31
December 2020: 8%) and for Russian Rouble denominated loans to related parties as at 31 December 2021 was 10.5%
(31 December 2020: 17.7%). The fair value measurements of loans to related parties as at 31 December 2021 and 31
December 2020 are within level 3 of the fair value hierarchy. Refer to Note 19.
The fair value of financial assets receivable on demand approximates their carrying amount. The fair value of current
other receivables from related parties as at 31 December 2021 and 31 December 2020 approximates their carrying
amount.
Liabilities carried at amortised cost. Fair values of borrowings and other liabilities were determined using valuation
techniques.
As at 31 December 2021, the fair value of fixed interest rate instruments with stated maturity denominated in Russian
Rouble was estimated based on expected cash flows discounted using the rate of similar Russian Rouble denominated
instruments entered into by the Company or the subsidiaries of the Company on their bank borrowings close to 31
December 2021.
The discount rate used for Russian Rouble denominated bank borrowings as at 31 December 2021 was 10.5% (Note 23).
There were no US Dollar denominated borrowings as at 31 December 2021 and 31 December 2020. The fair value
measurements of bank borrowings as at 31 December 2021 were within level 2 of the fair value hierarchy.
The fair value of liabilities repayable on demand or after a notice period (“demandable liabilities”) is estimated as the
amount payable on demand, discounted from the first date on which the amount could be required to be paid.
324
325
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
7. Critical accounting estimate and judgements
Estimates and judgements are continually evaluated and are based on management’s experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
9. Other gains — net
Critical accounting estimates
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions 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:
Net foreign exchange transaction (losses)/gains on non-financing activities (Note 14)
Gain from sale of subsidiaries (Note 18)
Other gains — net
•
Income taxes
Significant judgment is required in determining the provision for income taxes. There are transactions and
calculations for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated
tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact the current and
deferred income tax assets and liabilities in the period in which such determination is made. Refer to Note 27.
8. Revenue
Interest on loans to related parties calculated using the effective interest rate method (Note 26)
20,102
43,863
Dividend income (Note 26)
Total
3,154,405
22,283,992
3,174,507
22,327,855
2021
RUB’000
2020
RUB’000
10. Expenses by nature
Statutory auditor’s remuneration for statutory audit services
Statutory auditor’s remuneration for other assurance services
Advertising and marketing expenses
Expenses relating to short-term leases
Depreciation of property, plant and equipment (Note 16)
Depreciation of right-of-use assets (Note 17)
Profit on sale of property, plant and equipment
Employee benefit expense (Note 11)
Legal, consulting and other professional services (1)
Bank charges
Non-executive directors’ fees (Note 26)
Travel expenses
Stock exchange and financial regulator fees
Taxes other than on income
Other expenses
Total marketing costs and administrative expenses
2021
RUB’000
(2,248)
827,850
825,602
2020
RUB’000
49,734
—
49,734
2021
RUB’000
17,206
5,899
2,633
—
2,639
2,633
—
444,682
53,860
4,802
25,881
948
9,159
12,756
23,293
606,391
2020
RUB’000
18,053
5,139
2,144
272
1,768
2,431
(1,029)
408,431
55,349
10,540
25,535
1,043
6,743
10,531
20,321
567,271
(1) Includes RUB 3,683 thousand for the year 2021 (RUB 638 thousand for the year 2020) in fees paid to the Company’s statutory audit firm for tax consultancy
services.
326
327
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
11. Employee benefit expense
13. Income tax expense
Salaries
Bonuses
Share based compensation
Social security costs
Total employee benefit expense
2021
RUB’000
212,936
195,978
22,570
13,198
2020
RUB’000
227,855
149,291
19,309
11,976
444,682
408,431
Current tax:
Withholding tax on dividends receivable
Defence contribution
Total tax expense
2021
RUB’000
2020
RUB’000
127,001
1,073,231
2,043
2
129,044
1,073,233
Average number of staff employed during the year
8
8
The tax on the Company’s results before tax differs from the theoretical amount that would arise using the applicable tax
rates as follows:
12. Finance income and costs
Included in finance costs:
Interest expense on bank borrowings (Note 23)
Total interest expense calculated using the effective interest rate method
Interest expense on other lease liabilities (Note 23)
Total finance costs
Included in finance income:
Interest income on bank balances
Interest income on other receivables from related parties (Note 26)
Total interest income calculated using the effective interest rate method
Total finance income
Net foreign exchange transaction (losses)/gains on cash and cash equivalents, loans and other
receivables and dividends receivable
Net foreign exchange transaction gains on other financial liabilities
Net foreign exchange transactions (losses)/gains from financing activities (Note 14)
Finance costs — net
2021
RUB’000
2020
RUB’000
(238,766)
(216,202)
(238,766)
(216,202)
(320)
(308)
(239,086)
(216,510)
51,038
39,048
—
51,038
51,038
3,263
42,311
42,311
(11,204)
268,879
—
(11,204)
(199,252)
—
268,879
94,680
Profit before tax
Tax calculated at the applicable tax rate
Tax effect of expenses not deductible for tax purposes
Tax effect of allowances and income not subject to tax
Defence contribution
Foreign withholding tax on dividends receivable
Tax charge
2021
RUB’000
2020
RUB’000
3,638,574
22,956,943
454,822
2,869,618
77,480
90,549
(532,302)
(2,960,167)
2,043
2
127,001
1,073,231
129,044
1,073,233
The Company is subject to income tax on taxable profits at the rate of 12.5%.
Brought forward losses of only five years may be utilised.
Under certain conditions, interest may be exempt from income tax and be subject only to special contribution for
defence at the rate of 30%. In certain cases dividends received from abroad may be subject to special contribution for
defence at the rate of 17%. Further, in certain cases dividends received from other Cyprus tax resident companies may
also be subject to special contribution for defence.
Gains on disposal of qualifying titles (including shares, bonds, debentures, rights thereon etc.) are exempt from Cyprus
income tax.
Withholding tax is applied to dividends distributed to the Company by its Russian subsidiaries at the rate of 5% on gross
dividends declared; such tax is withheld at source by the respective subsidiary and is paid to the Russian tax authorities
at the same time when the payment of dividend is effected.
328
329
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
14. Net foreign exchange gains/(losses)
During the years ended 31 December 2021 and 31 December 2020, the Company declared and paid as detailed in the
table below.
Finance income and costs (Note 12)
Other gains — net (Note 9)
Total foreign exchange (losses)/gains
2021
RUB’000
(11,204)
(2,248)
(13,452)
2020
RUB’000
268,879
49,734
318,613
Dividends declared (1)
Dividends paid (1)
2021
RUB’000
2020
RUB’000
9,022,550
16,637,178
9,022,550
16,637,178
15. Dividends
In April 2020, the shareholders of the Company approved the payment of a dividend for the financial year ended 31
December 2019 in the amount of 46.55 Russian Roubles per ordinary share/GDR, amounting to a total dividend of RUB
8,320,390 thousand, including final dividend for 2020 in the amount of RUB 1,903,591 thousand or RUB 10.65 per
ordinary share/GDR and a special final dividend in the amount of RUB 6,416,799 thousand or RUB 35.90 per ordinary
share/GDR (US Dollar equivalent of US$ 110,787 thousand).
In August 2020, the Board of Directors of the Company approved payment of total dividend in the amount of 46.55
Russian Roubles per ordinary share/GDR, amounting to a total dividend of RUB 8,320,390 thousand, including interim
dividend in the amount of RUB 3,083,281 thousand or RUB 17.25 per ordinary share/GDR and a special interim dividend
in the amount of RUB 5,327,109 thousand or RUB 29.30 per ordinary share/GDR (US Dollar equivalent US$ 111,293
thousand).
In April 2021, the shareholders of the Company approved the payment of a dividend for the financial year ended 31
December 2020 in the amount of 28.00 Russian Roubles per ordinary share/GDR, amounting to a total dividend of
RUB 5,004,746 thousand, including final dividend for 2020 in the amount of RUB 2,931,351 thousand or RUB 16.40 per
ordinary share/GDR and a special final dividend in the amount of RUB 2,073,395 thousand or RUB 11.60 per ordinary
share/GDR (US Dollar equivalent of US$ 66,190 thousand).
On 27 August 2021, the Board of Directors of the Company approved payment of total dividend in the amount of 22.50
Russian Roubles per ordinary share, amounting to a total dividend of RUB 4,021,671 thousand, including interim dividend
in the amount of RUB 1,635,480 thousand or RUB 9.15 per ordinary share/GDR and a special interim dividend in the
amount of RUB 2,386,191 thousand or RUB 13.35 per ordinary share/GDR (US Dollar equivalent of US$ 54,457 thousand).
330
(1) Dividends declared and paid within the year 2021 as per the table above excludes RUB 3,867 thousand (2020: RUB 3,601 thousand) relating to dividend declared
and paid on the treasury shares.
16. Property, plant and equipment
At 1 January 2020
Cost
Accumulated depreciation
Net book amount
Year ended 31 December 2020
Additions
Disposals
Depreciation charge (Note 10)
Closing net book amount
At 31 December 2020 / 1 January 2021
Cost
Accumulated depreciation
Net book amount
Year ended 31 December 2021
Depreciation charge (Note 10)
Closing net book amount
At 31 December 2021
Cost
Accumulated depreciation
Net book amount
Motor vehicles
RUB’000
Total
RUB’000
15,475
(8,823)
6,652
6,528
(734)
(1,768)
10,678
13,193
(2,515)
10,678
(2,639)
8,039
13,193
(5,154)
8,039
15,475
(8,823)
6,652
6,528
(734)
(1,768)
10,678
13,193
(2,515)
10,678
(2,639)
8,039
13,193
(5,154)
8,039
331
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
17. Right-of-use assets
18. Investments in subsidiary undertakings
At 1 January 2020
Cost
Accumulated depreciation
Net book amount
Year ended 31 December 2020
Depreciation charge (Note 10)
Closing net book amount
At 31 December 2020 / 1 January 2021
Cost
Accumulated depreciation
Net book amount
Year ended 31 December 2021
Additions
Depreciation charge (Note 10)
Closing net book amount
At 31 December 2021
Cost
Accumulated depreciation
Net book amount
Offices
RUB’000
Total
RUB’000
7,292
(2,228)
5,064
(2,431)
2,633
7,292
(4,659)
2,633
8,685
(2,633)
8,685
15,977
(7,292)
8,685
7,292
(2,228)
5,064
(2,431)
2,633
7,292
(4,659)
2,633
8,685
(2,633)
8,685
15,977
(7,292)
8,685
At beginning of year
Disposals
At end of year
2021
RUB’000
2020
RUB’000
45,151,248
45,151,248
(300,150)
—
44,851,099
45,151,248
Details of the direct and indirect investments in the subsidiary undertakings are as follows:
Name
Country of
incorporation
Principal activities
Proportion of
ordinary shares held
by the Company (%)
Proportion of
ordinary shares held
by the Group (%)
Proportion of ordinary
shares held by non-
controlling interest (%)
2021
2020
2021
2020
2021
2020
New Forwarding
Company, АО
Russia
Railway transportation
GTI Management, OOO Russia
Railway transportation
100
100
100
100
100
100
Ural Wagonrepair
Company, AO
Russia
Repair and maintenance
of rolling stock
100
100
100
Ukrainian New
Forwarding Company
OOO
Ukraine
Railway transportation
BaltTransServis, OOO
Russia
Railway transportation
RemTransServis, OOO1
Russia
BTS-Locomotive
Solutions OOO2
Russia
SyntezRail Ltd
Cyprus
SyntezRail LLC3
Spacecom AS
Russia
Estonia
Ekolinja Oy4
Finland
Spacecom Trans AS4
Estonia
Repair and maintenance
of rolling stock
Support activities for
locomotive traction
Intermediary holding
company
Railway transportation
Operating lease of rolling
stock
Operating sub—lease of
rolling stock
Operating lease of rolling
stock
100
100
100
100
60
60
60
60
60
—
—
—
—
40
40
40
—
—
—
—
—
—
40
40
40
40
40
100
60
—
—
—
—
100
60
—
—
60
—
100
60
60
60
—
—
65.25
65.25
65.25
65.25
34.75
34.75
—
—
—
—
—
65.25
—
34.75
65.25
65.25
34.75
34.75
332
333
1. RemTransServis, OOO is a 100% subsidiary of BaltTransServis, OOO.
2. BTS-Locomotive Solutions, OOO is a 100% subsidiary of BaltTransServis, OOO.
3. SyntezRail LLC was a 100% subsidiary of SyntezRail Ltd.
4. Ekolinja Oy and Spacecom Trans AS are 100% subsidiaries of Spacecom AS. Ekolinja Oy was dissolved within June 2021.
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Disposal of Spacecom Trans AS during the year 2018
During the year 2018, Spacecom AS acquired 100% of the shares of Spacecom Trans AS from the Company and the non-
controlling shareholders. In accordance with the terms of the relevant agreement, the consideration for this transaction
was payable by Spacecom AS in instalments. Within the year 2020, an amount of EUR 4,041 thousand (equivalent to RUB
315,967 thousand) was received from the subsidiary resulting into the full settlement of the receivable balance.
Disposal of SyntezRail Limited during the year 2021
During the year 2021, the Company disposed its 60% shareholding in SyntezRail Ltd, which in turn owned 100% of
SyntezRail LLC, for a total consideration of RUB 1,128,000 thousand realising a gain of RUB 827,850 thousand (Note 9).
One of the three purchasers is an entity controlled by a director of the Company (Note 26).
Acquisition of non-controlling interest in BaltTransServis, OOO
On 21 December 2021, the Company entered into an agreement with the non-controlling shareholder of BaltTransServis,
OOO to acquire the remaining 40% shareholding in the subsidiary for a total consideration of RUB 9,100,100 thousand.
As of 31 December 2021, the transaction was subject to satisfaction of a number of pre-conditions, including approval
by the Federal Antimonopoly Service of the Russian Federation and, as a result, the acquisition was not reflected in the
financial statements for the year 2021.
By 31 December 2021, and in line with terms of the relevant agreement, the Company made a prepayment to the seller
amounting to RUB 300,000 thousand (Note 20).
In February 2022 the Company acquired 40% non-controlling interest in BaltTransServis, OOO following receipt by
the Company of the approval from the Federal Antimonopoly Service of the Russian Federation and satisfaction of the
remaining pre-conditions, including payment of the remaining RUB 8,800,000 thousand of the purchase consideration
(Note 28).
The following amounts are included in the statement of cash flows in relation to acquisitions and disposals of
subsidiaries:
Proceeds from sale of Spacecom Trans AS
Proceeds from sale of SyntezRail Limited
Prepayment for acquisition of non-controlling interest in BaltTransServis, OOO
Total net cash inflow
2021
RUB’000
—
1,128,000
(300,000)
828,000
2020
RUB’000
315,967
—
—
315,967
Assessment of impairment of the investments in the subsidiary undertakings
The Company assesses at each balance sheet date whether there are indicators for impairment of its subsidiary
undertakings in accordance with its accounting policy for impairment of non-financial assets, as set out in Note 4.
As of 31 December 2020, the management considered the deterioration of the economic environment, the weak
prevailing industry conditions and the COVID-19 pandemic related uncertainties as indicators of impairment of the
Company’s investments in subsidiary undertakings and performed impairment assessments to determine if there is an
impairment loss.
As a result of the impairment assessment, no impairment losses were noted. The impairment testing for all the
subsidiary undertakings indicated a significant headroom in the recoverable amount over the carrying amount.
Based on assessment performed by management as of 31 December 2021, no indicators of impairment of the
Company’s investments in subsidiary undertakings were identified.
19. Loans and other receivables
Loans to related parties
Less: Provision for impairment of loans to related parties
Loans to related parties — net (Note 26)
Other receivables — related party (Note 26)
Total loans and other receivables — net
Less non-current portion:
Loans to related parties (Note 26)
Total non-current portion
Current portion
2021
RUB’000
2020
RUB’000
1,983,134
2,260,201
(1,476,783)
(1,601,472)
506,351
234,634
740,985
658,729
266,307
925,036
259,875
259,875
544,362
544,362
481,110
380,674
The weighted average contractual interest rate on loans receivable from related parties was 4.5% at 31 December 2021
(31 December 2020: 5.1%). The weighted average effective interest rate on loans receivables from related parties was
8.9% at the 31 December 2021 (31 December 2020: 11.1%).
The contractual interest rate and effective interest rate on other receivables from related parties at 31 December 2020
was 3%. The other receivables from related parties at 31 December 2021 carry no contractual interest.
334
335
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
20. Other assets
Prepayments — third parties
Total other assets
Less non-current portion:
Prepayments — third parties (Note 18)
Total non-current portion
2021
RUB’000
300,713
300,713
300,000
300,000
2020
RUB’000
6,588
6,588
—
—
Current portion
713
6,588
Notes to the parent company
financial statements
The carrying value of loans and other receivables at the reporting date approximates their fair value. As at 31
December 2021, the fair values of US Dollar denominated loans to related parties are based on cash flows discounted
using a rate of 8% (31 December 2020: 8%). The discount rate used for Russian Rouble denominated loans to related
parties as at 31 December 2021 was 10.5% (31 December 2020: 6.5% and 17.7%). The fair value measurements of loans
to related parties and other receivables from related parties as at 31 December 2021 and 31 December 2020 are within
level 3 of the fair value hierarchy.
The carrying amounts of the Company’s loans and other receivables are denominated in the following currencies:
US Dollars
Russian Roubles
Euro
Total loans and other receivables
2021
RUB’000
2020
RUB’000
460,465
446,544
45,886
234,634
740,985
212,185
266,307
925,036
Assessment of credit losses on loans receivable from subsidiaries
At 31 December 2021 and 31 December 2020, the Company assessed, on a forward-looking basis, the expected
credit losses associated with its loans receivable from subsidiaries carried at amortised cost, in accordance with the
accounting policy stated in Note 4. The assessment performed resulted in the recognition of reversal of impairment
losses of RUB 133,727 thousand as at 31 December 2021 (31 December 2020: RUB 51,713 thousand).
The assessment of expected credit losses on the loans receivable from Ukrainian New Forwarding Company, AO, with
a carrying amount of RUB 460,465 thousand as at 31 December 2021 (31 December 2020: RUB 446,544 thousand),
classified as credit-impaired (Stage 3) as of that date, required management to use estimates and projections of future
cash flows. The expected credit losses were determined based on multiple forward-looking recovery scenarios to
measure the expected cash shortfalls, discounted using the loans’ original effective interest rate, weighted based on the
probability of each scenario occurring.
In making this assessment, the Company considered all reasonable and supportable forward-looking information
available without undue cost and effort. The cash flow projections were determined by reference to management’s
cash flow estimates, which were based on historical financial performance of the subsidiary, as adjusted to take into
consideration the impact of forecasted industry and market conditions.
As with any forecast, the projections and likelihoods of occurrence are subject to a high degree of inherent uncertainty,
and therefore the actual outcomes may be significantly different to those projected. The Company considered these
forecasts to represent its best estimate of the possible outcomes and that the chosen scenarios are appropriately
representative of the range of possible scenarios. The key input in this assessment were the expected future cash
flows and the recovery rates assigned to each scenario. Any reasonable change in these would not result in a material
increase/decrease in the reversal of impairment losses recognised in the income statement for the years ended 31
December 2020 and 31 December 2021.
336
337
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
21. Cash and cash equivalents
22. Share capital, share premium and treasury shares
Cash at bank
Total cash and cash equivalents
Cash and cash equivalents include the following for the purposes of the cash flow statement:
Cash and cash equivalents
Cash and cash equivalents are denominated in the following currencies:
US Dollars
Russian Roubles
Euro
Total cash and cash equivalents
The carrying value of cash and cash equivalents approximates their fair value.
2021
RUB’000
2020
RUB’000
1,977,191
2,225,518
1,977,191
2,225,518
2021
RUB’000
2020
RUB’000
1,977,191
2,225,518
1,977,191
2,225,518
2021
RUB’000
2020
RUB’000
357,101
365,566
1,533,188
1,252,774
86,902
607,178
1,977,191
2,225,518
At 1 January 2020 /31 December 2020 /
1 January 2021 / 31 December 2021
178,740,916
17,875
949,471
967,346
Number of shares
Share capital
Share premium
USD’000
USD’000
Total
USD’000
At 1 January 2020 /31 December 2020 /
1 January 2021 / 31 December 2021
178,740,916
516,957
27,929,478
28,446,435
Number of shares
Share capital
Share premium
RUB’000
RUB’000
Total
RUB’000
The total authorised number of ordinary shares at 31 December 2021 was 233,918,128 shares with a par value of US$0.10
per share (31 December 2020: 233,918,128 shares with a par value of US$0.10 per share). All issued shares are fully paid.
In accordance with the decision of the Extraordinary General Meeting which took place on 12 May 2020, the Company
started a GDRs buyback program. The buyback programme is for the Company’s Global Depositary Receipts (“GDRs)
and will run till the earlier of the close of the Annual General Meeting of the Company to be held in 2021 and May 2021.
The total number of purchased GDRs shall not exceed 5% of the Company’s share capital (equivalent to 8,937,046
shares, with each GDR representing one ordinary share). The shareholders of the Company at the Annual General
Meeting which took place on 29 April 2021 approved the prolongation of the term of the buyback program until the
earlier of the close of the Annual General Meeting of the Company to be held in 2022 or 12 months from the date of the
approval.
During the year 2020, the Company purchased a total of 76,877 GDRs, which are held in treasury for a total
consideration of 422 thousand US Dollars (equivalent to RUB 31,496 thousand). No further acquisitions took place within
the year 2021.
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury for up to two years.
338
339
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
23. Borrowings
Current
Bank borrowings
Total current borrowings
Non-current
Bank borrowings
Total non-current borrowings
Total borrowings
Maturity of non-current borrowings
Between 1 and 2 years
Between 2 and 5 years
The weighted average effective interest rates at the balance sheet are as follows:
2021
RUB’000
2020
RUB’000
Bank borrowings
2021
%
7.38
2020
%
—
1,920,346
1,920,346
3,118,740
3,118,740
5,039,086
—
—
—
—
—
2021
RUB’000
2020
RUB’000
1,293,963
1,824,777
3,118,740
—
—
—
The carrying amount and fair value of current and non-current borrowings are as follows:
Bank borrowings
Carrying amount
Fair value
2021
RUB’000
5,039,086
5,039,086
2020
RUB’000
—
—
2021
RUB’000
4,840,888
4,840,888
2020
RUB’000
—
—
The fair value of borrowings and other liabilities were determined using valuation techniques.
As at 31 December 2021, the fair value of fixed interest rate instruments with stated maturity denominated in Russian
Rouble was estimated based on expected cash flows discounted using the rate of similar Russian Rouble denominated
instruments entered into by the Company or its subsidiaries on their bank borrowings close to 31 December 2021. The
discount rate used was a level 2 discount rate of 10.50% as at 31 December 2021.
The carrying amounts of the borrowings are denominated in the following currencies:
The exposure of the Company’s borrowings to interest rate changes and the contractual re-pricing dates at the balance
sheet dates are as follows:
6 months or less
6 to 12 months
1 to 5 years
2021
RUB’000
273,365
1,646,981
3,118,740
5,039,086
2020
RUB’000
—
—
—
—
Note: The amounts disclosed are based on the earliest of the contractual re-pricing dates and the maturity date.
The Company’s borrowings as of 31 December 2021 are secured by pledge of rolling stock held by the Company’s
subsidiary GTI Management, OOO with a pledged market value RUB 6,439,751 thousand.
Russian Roubles
Total borrowings
The Company has the following undrawn borrowing facilities:
Fixed rate:
Expiring within one year
Expiring beyond one year
2021
RUB’000
5,039,086
5,039,086
2020
RUB’000
—
—
2021
2020
RUB’000
RUB’000
1,000,000
3,000,000
30,000,000
9,000,000
31,000,000
12,000,000
Drawdowns under certain of the above credit facilities are subject to successful conclusion of additional agreements
with the lenders, which, amongst others, will specify the terms of each disbursement.
340
341
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Reconciliation of liabilities arising from financing activities:
Opening balance 1 January 2021
Cash flows:
Amounts advanced
Repayment of principal
Interest paid
Non-cash changes:
Other lease liability
Interest expense
Foreign exchange gains
At end of year
Opening balance 1 January 2020
Cash flows:
Repayment of principal
Interest paid
Non-cash changes:
Interest expense
Foreign exchange losses
At end of year
Bank borrowings
RUB’000
Other lease
liabilities
RUB’000
Total liabilities from
financing activities
RUB’000
—
3,220
3,220
6,000,000
(1,000,000)
(199,680)
—
238,766
—
5,039,086
—
(3,209)
(320)
8,685
320
(11)
8,685
6,000,000
(1,003,209)
(200,000)
8,685
239,086
(11)
5,047,771
Bank borrowings
RUB’000
Total liabilities from
financing activities
RUB’000
Other lease
liabilities
RUB’000
4,261,942
4,413
4,266,355
(4,242,424)
(235,720)
216,202
—
—
(2,358)
(308)
308
1,165
3,220
(4,244,782)
(236,028)
216,510
1,165
3,220
24. Other lease liabilities
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
Maturity of other lease liabilities
Between 1 and 2 years
Between 2 and 5 years
25. Payables and accrued expenses
2021
RUB’000
2,780
5,905
8,685
2020
RUB’000
3,220
—
3,220
2021
RUB’000
2020
RUB’000
2,894
3,011
5,905
—
—
—
2021
RUB’000
2020
RUB’000
Current
Accrued key management personnel compensation, including share based payment (Note 26)
138,296
103,629
Accrued expenses
Other payables to third parties
Total current trade and other payables
10,324
8,968
157,588
10,877
9,602
124,108
The fair value of payables, which are due within one year approximates, their carrying amount at the balance sheet date.
The carrying amounts of the Company’s payables and accrued expenses are denominated in the following currencies:
Euro
Russian Roubles
US dollar
Other
2021
RUB’000
97,640
44,569
15,379
—
2020
RUB’000
75,460
33,000
15,647
1
342
343
Total payables and accrued expenses
157,588
124,108
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
26. Related party transactions
Litten Investments Ltd, controlled by a Director of the Company, has a shareholding in the Company of 5.1% as at 31
December 2021 (31 December 2020: 5.1%).
Goldriver Resources Ltd, which has a shareholding in the Company of 3.1% as at 31 December 2021 (2020: 4.0%), is
controlled by a Director of the Company.
As at 31 December 2021, another 0.2% (2020: 0.2%) of the shares of the Company is controlled by Directors and key
management of the Company.
For the purposes of these financial statements, parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in making financial and operational decisions
as defined by IAS 24 “Related Party Disclosures”. In considering each possible related party relationship, attention is
directed to the substance of the relationship, not merely the legal form. Related parties may enter into transactions,
which unrelated parties might not, and transactions between related parties may not be effected on the same terms,
conditions and amounts as transactions between unrelated parties.
344
The following transactions were carried out with related parties:
(a) Loans to related parties
Loans to subsidiaries:
At beginning of year
Loan advances
Interest charged (Note 8)
Loan repaid during the year
Interest repaid during the year
Reversal of impairment
Net foreign exchange
At end of year
Consists of:
Non-current portion
Current portion
At end of year
Loans to related parties — gross amount
Less: Provision for impairment of loans to related parties
Loans to related parties — net
2021
RUB’000
2020
RUB’000
658,729
927,583
—
20,102
—
43,863
(296,668)
(400,299)
(8,675)
133,727
(864)
506,351
259,875
246,476
506,351
(34,374)
51,713
70,243
658,729
544,362
114,367
658,729
1,983,134
2,260,201
(1,476,783)
(1,601,472)
506,351
658,729
The balances at the 31 December 2021 carry a weighted average contractual interest rate of 4.5% (2020: 5.1%) per
annum. The weighted average effective interest rate at the 31 December 2021 was 8.9% (2020: 11.1%).
(b) Other receivables from related parties
Other receivables (dividends)
Subsidiaries
At end of year
Consists of:
Non-current portion
Current portion
At end of year
2021
RUB’000
2020
RUB’000
234,634
234,634
266,307
266,307
—
234,634
234,634
—
266,307
266,307
345
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
(c) Dividend income from related parties
Dividend income from related parties:
Subsidiaries (Note 8)
Total
(d) Interest income
Interest income:
Interest on loans to subsidiaries (Note 8)
Interest on other receivables from subsidiary (Note 12)
Total interest income calculated using the effective interest rate method
2021
RUB’000
2020
RUB’000
3,154,405
3,154,405
22,283,992
22,283,992
2021
RUB’000
2020
RUB’000
20,102
—
20,102
43,863
3,263
47,126
(e) Guarantees in favour of subsidiaries
Guarantees are irrevocable assurances that the Company will make payments in the event that another party cannot
meet its obligations. The Company has guaranteed the following obligations:
Subsidiaries(1)
Total guaranteed obligations
2021
RUB’000
18,884,714
18,884,714
2020
RUB’000
23,584,105
23,584,105
(1) Represents the maximum amount of obligation under each contract, being the contractual undiscounted cash flows under the loan agreements as at 31
December 2021 and 2020.
During the years ended 31 December 2021 and 31 December 2020 the Company has acted as the guarantor for the
obligations of its subsidiaries for loan agreements entered into with financial institutions and quoted bonds issued by
subsidiaries. The fair values of such guarantees are amortised through the income statement. Management assessed
that as at 31 December 2021 and 31 December 2020 no need for provision arises in relation to any of the guarantees
issued by the Company.
Management estimated the fair value of the free of charge guarantees issued by the Company to secure the liabilities of
its subsidiaries based on the best estimate of expenditure required to settle the obligation. Specifically, the fair values
on initial recognition and the expected credit losses as at 31 December 2021 and 31 December 2020 of guarantees
issued by the Company for obligations of its subsidiaries in accordance with loan agreements with financial institutions
and quoted bonds issued by subsidiaries were estimated using a probability adjusted discounted cash flow analysis,
using probability of default, as implied by the market rate of the borrowings obtained by the subsidiaries and loss given
default.
The loss given default for the financial guarantees issued by the Company for the obligations of its subsidiaries in
accordance with loan agreements with financial institutions where such obligations are also secured by a pledge of
property, plant and equipment and the distressed sale value of such pledge exceeds the amount of the obligation of the
respective subsidiary has been estimated at RUB Nil, since, in case of default, the Company will be able to recover its
losses under the issued guarantees from respective subsidiaries in full.
The loss given default for guarantees issued by the Company for unsecured or underpledged obligations of its
subsidiaries in accordance with loan agreements with financial institutions and quoted bonds issued by subsidiaries was
estimated by considering the distressed value of the net assets of the subsidiaries which were not pledged at the time
of the assessment. The loss given default as estimated at RUB Nil, since, in case of default, the Company will be able to
recover its losses under the issued guarantees from respective subsidiaries in full.
(f) Impairment losses
Reversal of impairment losses of loans to subsidiaries (Note 19)
(g) Key management personnel compensation
Key management salaries and other short-term employee benefits (1)
Share based compensation
2021
RUB’000
133,727
2021
RUB’000
415,585
22,570
438,155
2020
RUB’000
51,713
2020
RUB’000
384,200
19,309
403,509
(1) ‘key management salaries and other short term employee benefits’ include directors’ remuneration amounting to RUB 312,985 thousand (2020: RUB 310,758
thousand), analysed as per below.
346
347
Management report and parent company financial statements for the year ended 31 December 2021
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
(h) Directors’ remuneration
Directors’ fees (Note 10)
Emoluments in their executive capacity
Total directors’ remuneration
(i) Year-end balances arising from payables to key management
Accrued key management remuneration (Note 25):
Accrued salaries and other short-term employee benefits
Share based payment liability
2021
RUB’000
25,881
287,104
312,985
2020
RUB’000
25,535
285,223
310,758
2021
RUB’000
2020
RUB’000
115,726
22,570
84,320
19,309
138,296
103,629
(j) Disposal of investment in subsidiary
During the year 2021, the Company disposed its 60% shareholding in SyntezRail Ltd (Note 18). Out of this, 20% was sold
to an entity controlled by a director of the Company for a consideration of RUB 376,000 thousand.
(k) Loan commitments under borrowings from subsidiaries
As at 31 December 2021, the Company had undrawn facilities amounting to RUB 15,000,000 thousand under
borrowings agreements with subsidiary undertakings. These mature within 2026.
(l) Guarantees from subsidiaries
Borrowings with a carrying amount of RUB 2,013,559 thousand as of 31 December 2021 are secured by pledge of rolling
stock held by the Company’s subsidiary GTI Management, OOO with a pledged market value RUB 6,439,751 thousand.
27. Contingencies
Operating environment of the Company
The year 2021 was marked by the continuous effects of the COVID-19 pandemic, the emergence of new variants and
the associated measures implemented by various governments globally with a view to delay the spread of the disease,
safeguard public health and ensure the economic survival of working people, businesses, vulnerable groups and the
economy at large.
In 2021 the economy of the Russian Federation and the other territories in which the Company’s subsidiaries operate
demonstrated positive dynamics in recovery from the pandemic. This trend was also supported by the global economic
recovery and higher prices on global commodity markets. However, higher prices on certain markets in Russia and
globally also contribute to the inflation in Russia.
The overall positive dynamics impacted the Russian freight rail transportation market which showed signs of
improvement, especially in the second half of the year 2021. Although the operations and financial results of the
Company’s subsidiaries for the year 2021 were improved compared to the year 2020, the Company’s profit for the
year decreased to RUB 3,509,530 thousand compared to RUB 21,883,710 thousand for the year ended 31 December
2020 and the net cash generated from operations decreased to RUB 2,798,073 thousand compared to RUB 21,492,632
thousand for the year ended 31 December 2020. This was mainly the result of the decrease in the dividend income
earned from the subsidiaries from RUB 22,283,992 thousand during the year ended 31 December 2020 to RUB 3,154,405
thousand in the current year as the Company’s subsidiaries made less dividend distributions within the year 2021.
The future effects of the COVID-19 pandemic and of the measures taken by various governments to contain the virus on
the future financial performance, cash flows and financial position of the Company’s subsidiaries are difficult to predict
and management’s current expectations and estimates could differ from actual results. The Company’s management has
taken and continues to take necessary measures to ensure minimum disruption to and sustainability of the operations of
the Company and its subsidiaries and support their employees, customers and suppliers.
The Company’s subsidiaries operate in the Russian Federation, Estonia and Ukraine.
Russian Federation. The Russian Federation displays certain characteristics of an emerging market. Its economy is
particularly sensitive to oil and gas prices. The legal, tax and regulatory frameworks continue to develop and are subject
to frequent changes and varying interpretations. Ongoing political tension in the region and sanctions against certain
Russian companies and individuals have an additional negative impact on the Russian economy.
The Russian economic environment was further negatively impacted by the escalation of the conflict between Russia
and Ukraine from late February 2022, as further described in Note 28.
The operating environment has a significant impact on the operations and financial position of the Company and its
subsidiaries operating in the Russian Federation. Management is taking necessary measures to ensure sustainability of
the operations of the Company and its subsidiaries operating in the Russian Federation. However, the future effects of
the current economic situation are difficult to predict and management’s current expectations and estimates could differ
from actual results. The management continues to monitor the situation and implement a set of measures to minimize
the impact of possible risks on the operations and financial position of the Company and its subsidiaries.
348
349
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
Estonia. Estonia represents a well-developed market and economy with stable political systems and developed
legislation based on EU requirements and regulations.
Ukraine. Starting in 2013, the political situation in Ukraine has experienced instability with numerous protests and
continued political uncertainty that has led to deterioration of the state’s finances, volatility of financial markets and
sharp depreciation of the national currency against major foreign currencies. The ratings of Ukrainian sovereign debt
were downgraded by international rating agencies with negative outlooks for the future. The central bank of Ukraine,
among other measures, imposed certain restrictions on processing of client payments by banks and on the purchase of
foreign currency on the inter-bank market.
Since December 2021, news surrounding potential escalation of the conflict emerged and since February 2022 the
circumstances have been deteriorating and the situation remains highly unstable. Depending on how the situation
evolves, it could have significant effects on the operations of the Company and its subsidiaries, as further described in
Note 28.
The Company’s exposure to Ukraine comprises loans receivable of RUB 460,465 thousand (2020: RUB 446,544
thousand) from Ukrainian New Forwarding Company, AO (Note 19). The final resolution and the ongoing effects of
the political and economic situation are difficult to predict but they may have further severe effects on the Ukrainian
economy and the business of the Company’s subsidiary.
Tax contingencies. Cypriot tax legislation is subject to varying interpretations. There are transactions and calculations
for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax audit issues
based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different
from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets
and liabilities in the period in which such determination is made.
The Company is incorporated outside Russia. Tax liabilities of the Company are determined on the assumption that it is
not subject to Russian profits tax because it does not have a permanent establishment in Russia. The Company is a tax
resident of Cyprus only and full beneficial owner of the equity interest held directly and indirectly in its subsidiaries.
This interpretation of relevant legislation may be challenged but the impact of any such challenge cannot be reliably
estimated currently; however, it may be significant to the financial position and/or the overall operations of the
Company.
28. Events after the balance sheet date
Impact of the conflict in Ukraine
Since late February 2022, the Russian economy and the Company’s subsidiaries operating environment have been
negatively impacted by the escalated military and political conflict between Russia and Ukraine and the associated
international sanctions against a number of Russian institutions, companies, banks and individuals. The international
sanctions imposed as a response to the conflict restrict certain Russian entities from having access to foreign financial
markets, including removing access of several Russian banks to the international SWIFT system. The US, European
Union, UK and a number of other countries have also imposed sanctions against the Russian Central Bank, restricting
the access of the Russian state to foreign currency reserves, and introduced further asset freezes against designated
individuals and entities as well as sectoral sanctions. These measures have negatively impacted the Russian economy
and business activity in Russia and resulted in substantial volatility in the financial and commodity markets.
During the period from 24 February 2022 to 25 March 2022 oil prices increased to over US$123 per barrel and the
Russian Rouble exchange rate reached RUB 120.37 per USD and RUB 132.96 per EUR. On 3 March 2022, the London
Stock Exchange suspended trading of the Company’s GDRs and since 25 February 2022 the Moscow Exchange
suspended trading. It is not possible to determine how long this increased volatility will last or at what level the above
financial indicators will eventually level out.
The sanctions imposed by the US, European Union and a number of other countries on some of the biggest Russian
industrial groups may adversely affect the business environment and prospects of the Company and create significant
new risks, which did not exist as at the balance sheet date. In addition, the restrictions on the export of certain types of
Russian commodities and changes in directions of supply for Russian commodities may have a negative impact on the
Group’s clients, the Russian freight rail transportation industry and, in turn, the Company’s business.
Further, the Company’s subsidiaries ability to transport cargo from Russia to the territory or through the territory of
Ukraine is currently suspended, however part of this cargo may be redirected to other routes. At the date of approval of
these financial statements, approximately 5% of the Group’s total fleet in numbers is located in Ukraine and they cannot
temporarily access it. The conflict has also severely impacted the Company’s subsidiary Ukrainian New Forwarding
Company OOO.
The restrictions on capital movements outside the Russian Federation impact and may further impact the ability of
the Company’s subsidiaries to make payments to the Company or to make payments between bank accounts of the
Company in Russia and abroad. Further, the weakening of Russian Rouble against the US dollar and Euro and the rising
oil prices may have a negative impact on the Company’s subsidiaries operating costs and costs of repairs.
The situation is still evolving and further sanctions, restrictions and limitations on business activity of companies
operating in the freight rail transportation industry, as well as consequences on the Russian economy in general, may
arise but the full nature and possible effects of these are unknown. It is not possible for management to predict with any
degree of certainty the impact of this uncertainty on the future operations of the Company and estimate the financial
effect on the Company.
350
351
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Notes to the parent company
financial statements
The Management continues to adopt the going concern basis in preparing these financial statements because the
majority of the Company’s subsidiaries revenue is derived from routes within the Russian Federation and the Group
has a successful history of redirecting routes, switching between different types of cargos and efficiently managing
logistics. Further, the Company has sufficient liquidity to meet its short-term obligations and insignificant exposure to
foreign currency as the majority of its revenue and expenses are denominated and settled in Russian Roubles and the
majority of its financial assets and liabilities are denominated in Russian Roubles. All borrowings of the Company are at
fixed rates. Management is closely monitoring the situation and is ready to act depending on the developments.
Acquisition of non-controlling interest in BaltTransServis, OOO
In February 2022 the Company acquired 40% non-controlling interest in BaltTransServis, OOO (Note 18) following
receipt by the Company of the approval from the Federal Antimonopoly Service of the Russian Federation and
satisfaction of the remaining pre-conditions, including payment of the remaining RUB 8,800,000 thousand of the
purchase consideration. As a result, the Company became the sole owner of BaltTransServis, OOO.
Buy-back of the Company’s GDRs
In July 2020 the Company started a GDRs buyback program. The buyback programme is for the Company’s Global
Depositary Receipts (“GDRs”) listed on the Main Market of the London Stock Exchange with the total number of
purchased GDRs not to exceed 5% of the Company’s share capital (equivalent to 8,937,046 shares, with each GDR
representing one ordinary share). During 2020, the Company purchased a total number of 76,877 GDRs, which are held
in treasury.
In April 2021 shareholders of Company approved the extension of buyback programme of GDRs listed on London Stock
Exchange and Moscow Exchange until April 2022. In 2022 the Company purchased 345,780 GDRs, thus as the date of
signing the financial statements the total number of purchased GDRs is 422,657.
There were no other material post balance sheet events which have a bearing on the understanding of these financial
statements.
Independent Auditor’s Report on pages 286 to 291.
352
353
Management report and parent company financial statements for the year ended 31 December 2021 Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Additional
Information
" Globaltrans has consistently delivered industry-leading
operational efficiency, with one of the lowest Empty Run
Ratios for gondola cars across the sector. The hub of the
Group’s centralised logistics system is a single dispatching
centre, which works 24 hours a day, seven days a week.
It monitors every aspect of Globaltrans’ fleet, managing
shipments and routes to maintain high levels of fleet
utilisation and maximise efficiency, productivity
and service quality.
Oleg Ivanov
Head of Logistics department
Selected Operational Information
for the Year Ended 31 December 2021 .... 356
Definitions ..........................................................................362
Presentation of Financial
and Other Information ............................................366
GRI Content Index ..................................................... 368
TCFD Index .........................................................................371
Contacts ...............................................................................372
354
355
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Selected Operational
Information for the year ended 31 December 2021
Fleet (incl. rolling stock and tank containers)
Owned Fleet
Gondola cars
Tank cars
Locomotives
Flat cars
Other railcars (incl. hopper cars, etc)
Specialised containers (incl. petrochemical and other)
Total
Owned Fleet as % of Total Fleet
Leased-in Fleet
Gondola cars
Tank cars
Flat cars
Other railcars (incl. hopper cars, etc)
Specialised containers (incl. petrochemical and other)
Total
Leased-in Fleet as % of Total Fleet
Total Fleet (Owned Fleet and Leased-in Fleet)
Gondola cars
Tank cars
Locomotives
Flat cars
Other railcars (incl. hopper cars, etc)
Specialised containers (incl. petrochemical and other)
3,334
(3,334)
Total
69,106
71,688
(2,582)
Total Fleet by type, %
Gondola cars
Tank cars
Locomotives
Flat cars
Other railcars (incl. hopper cars, etc)
Specialised containers (incl. petrochemical and other)
Total
356
69%
28%
0.1%
2%
0.1%
0%
64%
28%
0.1%
3%
0.2%
5%
100%
100%
-
-
-
-
-
-
-
31.12.2021
31.12.2020
Change
Change, %
31.12.2021
31.12.2020
Change
Change, %
45,430
17,894
71
1,582
90
0
45,483
17,697
74
1,604
90
2,814
(53)
197
(3)
(22)
-
0%
1%
-4%
-1%
0%
Average age of Owned Fleet
Gondola cars
Tank cars
Locomotives
Flat cars
Other railcars (incl. hopper cars, etc)
(2,814)
-100%
Specialised containers (incl. petrochemical and other)
65,067
67,762
(2,695)
94%
95%
-
-4%
-
Total
12.9
16.9
14.0
3.6
14.4
0.0
13.8
11.9
15.9
13.2
3.0
13.4
2.9
12.4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,181
1330%
Operation of rolling stock (excl. Engaged Fleet)1
2,345
1,693
0
1
0
164
2,720
443
79
520
4,039
3,926
6%
5%
47,775
19,587
71
1,582
91
0
45,647
20,417
74
2,047
169
(1,027)
(443)
(78)
(520)
113
-
2,128
(830)
(3)
(465)
(78)
-38%
-100%
-99%
-100%
3%
-
5%
-4%
-4%
-23%
-46%
-100%
-4%
-
-
-
-
-
-
-
Freight Rail Turnover, billion tonnes-km
2021
2020
Change
Change, %
Metallurgical cargoes
Ferrous metals
Scrap metal
Iron ore
Oil products and oil
Coal (incl. coke)
Construction materials
Crushed stone
Cement
Other construction materials
Other
Total
Freight Rail Turnover by cargo type, %
Metallurgical cargoes (incl. ferrous metal, scrap metal and iron ore)
Oil products and oil
Coal (incl. coke)
Construction materials (incl. cement)
Other
Total
63.9
30.6
4.1
29.1
19.0
46.2
7.0
5.6
0.2
1.2
10.8
146.8
44%
13%
31%
5%
7%
68.2
29.7
2.9
35.5
19.1
42.2
9.7
7.9
0.3
1.4
11.2
150.3
45%
13%
28%
6%
7%
100%
100%
(4.3)
0.9
1.2
(6.4)
(0.1)
4.0
(2.7)
(2.3)
(0.2)
(0.2)
(0.4)
(3.5)
-
-
-
-
-
-
1 Excluding operational and financial information of the specialised container transportation business.
-6%
3%
42%
-18%
0%
10%
-28%
-29%
-49%
-13%
-4%
-2%
-
-
-
-
-
-
357
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Selected operational information
for the year ended 31 December 2021
Transportation Volume, million tones
Net Revenue from Operation of Rolling Stock by cargo type, RUB million
2021
2020
Change
Change, %
2021
2020
Change
Change, %
Metallurgical cargoes
Ferrous metals
Scrap metal
Iron ore
Oil products and oil
Coal (incl. coke)
Construction materials
Crushed stone
Cement
Other construction materials
Other
Total
Average Rolling Stock Operated, units
Gondola cars
Rail tank cars
Locomotives
Other railcars
Total
Average Number of Loaded Trips per Railcar
Gondola cars
Rail tank cars
Other railcars
Total
Average Distance of Loaded Trip, km
Gondola cars
Rail tank cars
Other railcars
Total
36.5
14.5
3.7
18.2
18.9
15.7
7.6
6.5
0.1
0.9
6.4
85.1
39.0
13.8
3.0
22.2
18.6
14.5
10.2
9.0
0.2
1.0
6.6
88.9
(2.5)
0.7
0.7
(3.9)
0.3
1.3
(2.6)
(2.5)
(0.1)
(0.1)
(0.2)
(3.8)
45,039
12,123
50
136
43,669
13,550
55
210
57,347
57,484
1,369
(1,428)
(5)
(73)
(137)
22.0
25.9
111.2
23.1
1,965
1,006
201
1,716
23.9
22.7
82.3
23.8
1,898
1,025
269
1,681
(1.9)
3.2
28.8
(0.8)
66
(19)
(67)
35
-6%
5%
24%
-18%
1%
9%
-26%
-28%
-40%
-5%
-4%
-4%
3%
-11%
-9%
-35%
0%
-8%
14%
35%
-3%
3%
-2%
-25%
2%
Average Price per Trip, RUB
41,075*
36,909*
4,166
11%
358
Metallurgical cargoes
Ferrous metals
Scrap metal
Iron ore
Oil products and oil
Coal (incl. coke)
Construction materials (incl. cement)
Other
Total
15,678*
8,448*
1,909*
5,321*
17,124*
8,908*
1,398*
6,818*
20,848*
19,257*
11,136*
2,821*
3,836*
8,834*
1,973*
3,338*
(1,446)
(460)
511
(1,497)
1,591
2,302
848
498
54,319*
50,527*
3,792
-8%
-5%
37%
-22%
8%
26%
43%
15%
8%
Net Revenue from Operation of Rolling Stock by cargo type, %
Metallurgical cargoes (incl. ferrous metal, scrap metal and iron ore)
Oil products and oil
Coal (incl. coke)
Construction materials (incl. cement)
Other
Total
29%
38%
21%
5%
7%
34%
38%
17%
4%
7%
100%
100%
-
-
-
-
-
-
Net Revenue from Operation of Rolling Stock by largest clients (incl. their affiliates and suppliers), %
Rosneft
Metalloinvest
MMK
Gazprom Neft
TMK
UGMK-Trans
EVRAZ
NHS
SDS-Ugol
ChelPipe
25%
8%
14%
7%
3%
2%
5%
2%
1%
1%
25%
13%
14%
7%
4%
2%
3%
1%
1%
1%
Other (incl. small and medium enterprises)
32%
28%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
359
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Selected operational information
for the year ended 31 December 2021
Empty Run Ratio, %
Gondola cars
Rail tank cars and other railcars
Total Empty Run Ratio, %
44%
94%
51%
45%
89%
51%
-
-
-
-
-
-
Net Revenue from Specialised Container Segment, RUB million
2021
1,643*
2020
Change
Change, %
1,923*
(279)
-15%
2021
2020
Change
Change, %
Specialised container segment
Empty Run Costs, RUB million
15,429*
15,799*
(370)
-2%
Engaged Fleet
Share of Empty Run Kilometres Paid by Globaltrans, %
99%
99%
-
-
Net Revenue from Engaged Fleet, RUB million
Operation of rolling stock (incl. Engaged Fleet)1
Operating leasing of rolling stock1
Leased-out Fleet
Gondola cars
Tank cars
Locomotives
Other railcars (incl. flat, hopper cars, etc)
Total
Leased-out Fleet as % of Total Fleet
Employees
Total
2021
184*
2020
152*
Change
Change, %
32
21%
31.12.2021
31.12.2020
Change
Change, %
1
6,815
1
1,641
8,458
12%
68
6,597
0
367
7,032
10%
(67)
218
1
1,274
1,426
-
-99%
3%
0%
347%
20%
-
31.12.2021
31.12.2020
Change
Change, %
1,777
1,697
80
5%
Freight Rail Turnover, billion tonnes-km
2021
2020
Change
Change, %
Metallurgical cargoes
Ferrous metals
Scrap metal
Iron ore
Oil products and oil
Coal (incl. coke)
Construction materials
Crushed stone
Cement
Other construction materials
Other
Total
Transportation Volume, million tones
Metallurgical cargoes
Ferrous metals
Scrap metal
Iron ore
Oil products and oil
Coal (incl. coke)
Construction materials
Crushed stone
Cement
Other construction materials
Other
Total
360
69.6
34.0
4.5
31.1
19.2
47.7
7.1
5.7
0.2
1.2
11.0
154.7
38.9
15.7
4.0
19.3
19.1
16.5
7.7
6.6
0.1
0.9
6.5
76.7
32.9
3.3
40.5
19.1
45.2
9.8
8.1
0.3
1.4
11.4
162.1
43.4
15.2
3.3
24.9
18.6
16.1
10.3
9.1
0.2
1.0
6.8
88.8
95.2
(7.1)
1.1
1.2
(9.5)
0.1
2.6
(2.7)
(2.4)
(0.2)
(0.2)
(0.4)
(7.5)
(4.4)
0.5
0.7
(5.7)
0.5
0.3
(2.6)
(2.5)
(0.1)
(0.0)
(0.2)
(6.4)
-9%
3%
38%
-23%
1%
6%
-28%
-29%
-49%
-12%
-3%
-5%
-10%
3%
22%
-23%
3%
2%
-25%
-27%
-39%
-4%
-3%
-7%
1 Excluding operational and financial information of the specialised container transportation business.
361
Globaltrans Investment PLC
Annual Report & Accounts 2021
Definitions
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Terms that require definitions are marked with capital letters in this announcement and their definitions are provided
below in alphabetical order:
Adjusted EBITDA (a non-IFRS financial measure) represents EBITDA excluding “Net foreign exchange transaction (gains)/
losses on financing activities”, “Share of profit/(loss) of associate”, “Other gains/(losses) - net”, “Net gain/(loss) on sale of
property, plant and equipment”, “Impairment/(reversal of impairment) of property, plant and equipment”, “Impairment of
intangible assets”, “Loss on derecognition arising on capital repairs” and “Reversal of impairment of intangible assets”.
Adjusted EBITDA Margin (a non-IFRS financial measure) is calculated as Adjusted EBITDA divided by Adjusted Revenue.
Adjusted Profit Attributable to Non-controlling Interests (a non-IFRS financial measure) is calculated as “Profit attributable
to non-controlling interests” less share of “Impairment of property, plant and equipment” and “Impairment of intangible
assets” attributable to non-controlling interests.
Adjusted Revenue (a non-IFRS financial measure) is calculated as “Total revenue” less the following “pass through” items
“Infrastructure and locomotive tariffs: loaded trips” and “Services provided by other transportation organisations”.
Attributable Free Cash Flow (a non-IFRS financial measure) means Free Cash Flow less Adjusted Profit Attributable to
Non-controlling Interests.
Average Distance of Loaded Trip is calculated as the sum of the distances of all loaded trips for a period divided by the
number of loaded trips for the same period.
Average Number of Loaded Trips per Railcar is calculated as total number of loaded trips in the relevant period divided by
Average Rolling Stock Operated.
Empty Run Ratio is calculated as the total of empty trips in kilometres by respective rolling stock type divided by total
loaded trips in kilometres of such rolling stock type. Empty trips are only applicable to rolling stock operated (not including
rolling stock in maintenance, purchased rolling stock in transition to its first place of commercial utilisation, rolling stock
leased out, Engaged Fleet, flat cars and containers used in specialised container transportation).
Engaged Fleet is defined as rolling stock subcontracted or otherwise engaged from a third-party rail operator for a loaded
trip from the point of origination to the cargo’s destination, at which point the railcar is then released to such third-party.
Free Cash Flow (a non-IFRS financial measure) is calculated as “Cash generated from operations” (after “Changes
in working capital”) less “Tax paid”, “Purchases of property, plant and equipment” (including maintenance CAPEX),
“Purchases of intangible assets”, “Acquisition of subsidiary undertakings - net of cash acquired”, “Principal elements of
lease payments for leases with financial institutions”, “Principal elements of lease payments for other lease liabilities”,
“Interest paid on other lease liabilities”, “Interest paid on bank borrowings and non-convertible unsecured bonds”, “Interest
paid on leases with financial institutions” and “Acquisition of non-controlling interest” plus “Cash inflow from disposal of
subsidiary undertakings - net of cash disposed of”.
Freight Rail Turnover is a measure of freight carriage activity over a particular period calculated as the sum of tonnage of
each loaded trip multiplied by the distance of each loaded trip, expressed in tonnes-km. It excludes volumes transported
by Engaged Fleet (unless otherwise stated) and the performance of the specialised container transportation business.
Infrastructure and Locomotive Tariffs - Other Tariffs (a non-IFRS financial measure, derived from management accounts)
is presented as part of the ‘‘Infrastructure and locomotive tariffs: empty run trips and other tariffs’’ component of “Cost of
sales” reported under EU IFRS. This cost item includes the costs of relocation of rolling stock to and from maintenance,
transition of purchased rolling stock to its first place of commercial utilisation, and relocation of rolling stock in and from
lease operations, as well as other expenses.
Average Price per Trip is calculated as Net Revenue from Operation of Rolling Stock divided by the total number of loaded
trips during the relevant period in the respective currency.
Leased-in Fleet is defined as fleet leased in under operating leases, including railcars, locomotives and specialised
containers.
Average Rolling Stock Operated is calculated as the average weighted (by days) number of rolling stock available for
operator services (not including rolling stock in maintenance, purchased rolling stock in transition to its first place of
commercial utilisation, rolling stock leased out, Engaged Fleet, flat cars and containers used in specialised container
transportation).
EBITDA (a non-IFRS financial measure) represents “Profit for the period” before “Income tax expense”, “Finance costs - net”
(excluding “Net foreign exchange transaction (gains)/losses on financing activities”), “Depreciation of property, plant and
equipment”, “Amortisation of intangible assets” and “Depreciation of right- of-use assets”.
Empty Run or Empty Runs means the movement of railcars without cargo for the whole or a substantial part of the journey.
Empty Run Costs (a non-IFRS financial measure meaning costs payable to RZD for forwarding empty railcars) is derived
from management accounts and presented as part of the “Infrastructure and locomotive tariffs: empty run trips and other
tariffs” component of “Cost of sales” reported under EU IFRS. Empty Run Costs do not include costs of relocation of rolling
stock to and from maintenance, purchased rolling stock in transition to its first place of commercial utilisation, rolling stock
leased in or leased out, Engaged Fleet, flat cars and containers used in specialised container transportation.
Leased-out Fleet is defined as fleet leased out to third parties under operating leases (excluding flat cars and containers
used in specialised container transportation).
Leverage Ratio or Net Debt to Adjusted EBITDA (a non-IFRS financial measure) is the ratio of Net Debt on the last day of a
particular financial period to Adjusted EBITDA in respect of the twelve months to the end of that same period.
Market Share is calculated using the Group’s own information as the numerator and information published by the Federal
State Statistics Service of Russia (Rosstat) as the denominator. It is defined as a percentage of the overall Russian freight
rail transportation volume or freight rail turnover and includes volumes transported by Engaged Fleet, unless otherwise
stated.
Net Debt (a non-IFRS financial measure) is defined as the sum of total borrowings (including interest accrued) less “Cash
and cash equivalents”.
362
363
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Total Empty Run Ratio is calculated as total kilometres travelled empty divided by the total kilometres travelled loaded
by the rolling stock fleet operated by Globaltrans (not including the relocation of rolling stock to and from maintenance,
purchased rolling stock in transition to its first place of commercial utilisation, or rolling stock leased out, Engaged Fleet,
flat cars and containers used in specialised container transportation) in the relevant period.
Total Fleet is defined as the fleet owned and leased in under finance and operating leases as at the end of reporting period.
It includes railcars, locomotives and specialised containers, unless otherwise stated, and excludes Engaged Fleet.
Total Operating Cash Costs (a non-IFRS financial measure) represent operating cost items payable in cash and
calculated as “Total cost of sales, selling and marketing costs and administrative expenses” less the “pass through” items:
“Infrastructure and locomotive tariffs: loaded trips” and “Services provided by other transportation organisations” and
non-cash items: “Depreciation of property, plant and equipment”, “Amortisation of intangible assets”, “Depreciation
of right-of-use assets”, “Loss on derecognition arising on capital repairs”, “Net impairment losses on trade and other
receivables”, “Impairment/(reversal of impairment) of property, plant and equipment” and “Net (gain)/loss on sale of
property, plant and equipment”.
Total Operating Non-Cash Costs (a non-IFRS financial measure) include the following cost items: “Depreciation of property,
plant and equipment”, “Amortisation of intangible assets”, “Depreciation of right-of- use assets”, “Loss on derecognition
arising on capital repairs”, “Net impairment losses on trade and other receivables”, “Impairment/(reversal of impairment) of
property, plant and equipment ” and “Net (gain)/loss on sale of property, plant and equipment”.
Transportation Volume is a measure of freight carriage activity over a particular period, measuring weight of cargo
carried in tonnes. It excludes volumes transported by Engaged Fleet (unless otherwise stated) and volumes related to the
specialised container transportation business.
Globaltrans Investment PLC
Annual Report & Accounts 2021
Definitions
Net Revenue from Engaged Fleet (a non-IFRS financial measure, derived from management accounts) represents the net
sum of the price charged for transportation to clients by the Group utilising Engaged Fleet less the loaded railway tariffs
charged by RZD (included in the EU IFRS line item “Infrastructure and locomotive tariffs: loaded trips”) less the cost of
attracting fleet from third-party operators (included in the EU IFRS line item “Services provided by other transportation
organisations”).
Net Revenue from Operation of Rolling Stock is a non-IFRS financial measure, derived from management accounts,
describing the net revenue generated from freight rail transportation services which is adjusted for respective “pass
through” loaded railway tariffs charged by RZD (included in the EU IFRS line item “Infrastructure and locomotive tariffs:
loaded trips”).
Net Revenue from Specialised Container Transportation is a non-IFRS financial measure, derived from management
accounts, that represents the revenue generated from the specialised container operations (included in the EU IFRS line
item: “Revenue from specialised container transportation”) less the respective “pass through” loaded railway tariffs charged
by RZD (included in the EU IFRS line item “Infrastructure and locomotive tariffs: loaded trips”).
Net Working Capital (a non-IFRS financial measure) is calculated as the sum of the current portions of “Inventories”,
“Current income tax assets”, “Trade receivables - net”, “Other receivables - net” (“Other receivables - third parties” and
“Other receivables - related parties” net of “Provision for impairment of other receivables”), “Prepayments - third parties”,
“Prepayments - related parties” and “VAT recoverable”, less the sum of the current portions of “Trade payables to third
parties”, “Trade payables to related parties”, “Other payables to third parties”, “Other payables to related parties”, "Accrued
expenses", “Accrued key management compensation, including share-based payment”, “VAT payable and other taxes”,
“Contract liabilities” and “Current tax liabilities”.
Other Operating Cash Costs (a non-IFRS financial measure) include the following cost items: “Advertising and promotion”,
“Auditors’ remuneration”, “Communication costs”, “Information services”, “Legal, consulting and other professional fees”,
“Expense relating to short-term leases (tank-containers)”, “Expense relating to short- term leases (office)”, “Taxes (other
than income tax and value added taxes)” and “Other expenses”.
Owned Fleet is defined as the fleet owned and leased in under finance lease as at the end of the reporting period.
It includes railcars, locomotives and specialised containers, unless otherwise stated, and excludes Engaged Fleet.
Share of Empty Run Kilometres paid by Globaltrans is defined as the percentage of empty run kilometres paid by
Globaltrans divided by the total amount of empty run kilometres incurred by the fleet operated by Globaltrans (not
including relocation of rolling stock to and from maintenance, purchased rolling stock in transition to its first place of
commercial utilisation, and rolling stock leased-out, Engaged Fleet, flat cars and containers used in specialised container
transportation) in the relevant period.
Total CAPEX (a non-IFRS financial measure) calculated on a cash basis as the sum of “Purchases of property, plant and
equipment” (which includes maintenance CAPEX), “Purchases of intangible assets”, “Acquisition of subsidiary undertakings
- net of cash acquired” and “Principal elements of lease payments for leases with financial institutions” (as part of the
capital expenditures was financed with a finance lease).
364
365
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
The Group, its Directors, employees, agents and advisers do
not accept or assume responsibility for any other purpose
or to any other person to whom this Annual Report is shown
or who may have access to it, and any such responsibility or
liability is expressly disclaimed.
Presentation of Financial
and Other Information
FINANCIAL INFORMATION
All financial information presented in this Annual Report
is derived from the Consolidated Management Report
and Consolidated Financial Statements of Globaltrans
Investment PLC (the “Company” and, together with its
subsidiaries, “Globaltrans” or the “Group”) and prepared
in accordance with International Financial Reporting
Standards as adopted by the European Union and the
requirements of Cyprus Companies Law, Cap. 113 (EU
IFRS). The Group’s Consolidated Management Report and
Consolidated Financial Statements and the parent company
financial statements for the year ended 31 December 2021
are included in the Financial Statements section of this
Annual Report. Financial statements for prior years can be
found on Globaltrans’ corporate website (www.globaltrans.
com). Certain financial information derived from the
management accounts is marked in this Annual Report with
an asterisk (*). The presentational currency of the Group’s
financial results is Russian roubles (RUB), which is the
functional currency of the Company as well as of its Cypriot
and Russian subsidiaries.
NON-IFRS FINANCIAL INFORMATION
In this Annual Report, the Group has used certain
measures not recognised by EU IFRS or IFRS (referred to
as “non-IFRS measures”). The management believes that
these non-IFRS measures provide valuable information to
readers because they enable them to focus more directly
on the underlying day-to-day performance of the Group’s
business and are frequently used by securities analysts,
investors and other interested parties in the evaluation
of companies in the freight rail transportation sector.
Further explanations of the reasons for presenting such
measures are included in the Financial Review section of
this Annual Report. The non-IFRS measures that have been
used in this Annual Report as supplemental measures of
the Group’s operating performance. All non-IFRS financial
information is calculated on the basis of EU IFRS financial
statements and/or management accounts. Reconciliations
to the closest IFRS measures are included in the Financial
Review section of this Annual Report. Non-IFRS measures
requiring additional explanation or definitions appear with
initial capital letters and the definitions and explanations are
provided in the Definitions section of this Annual Report.
Other companies in the freight rail transportation sector
may calculate the above non-IFRS measures differently
or may use each of them for different purposes than the
Group, limiting their usefulness as comparative measures.
All non-IFRS financial information presented in this Annual
Report should be used only as an analytical tool and
investors should not consider such information, in isolation
or in any combination, as a substitute for analysis of the
Group’s Consolidated Financial Statements reported under
EU IFRS and included in the Financial Statements section of
this Annual Report.
OPERATIONAL AND MARKET INFORMATION
Globaltrans reports certain operational information to
illustrate the changes in the Group’s operational and
financial performance during the reporting periods. This
operational information is derived from management
accounts. The Group’s selected operational information
for the year ended 31 December 2021 is provided in the
Additional Information section of this Annual Report.
Selected operational information for prior years can be
found on Globaltrans’ corporate website (www.globaltrans.
com). Terms referring to such operational information
appear with initial capital letters with definitions or
explanations provided in the Definitions section of this
Annual Report. The Group has obtained certain statistical,
market and pricing information that is presented in this
announcement on such topics as the Russian freight
rail transportation market and related subjects from the
following third-party sources: Federal State Statistics
Service of Russian Federation (“Rosstat”), JSC Russian
Railways (“RZD”) and the Federal Antimonopoly Service
(“FAS”). The Group has accurately reproduced such
information and, as far as it is aware and can ascertain
from information published by such third-party sources, no
facts have been omitted that would render the reproduced
information inaccurate or misleading. The Group has
not independently verified this third-party information.
In addition, the official data published by Russian
governmental agencies may be substantially less complete
or researched than that of more developed countries.
CAUTIONARY NOTE
This Annual Report, including its appendices, may contain
forward-looking statements regarding future events or
the future financial performance of the Group. You can
identify forward-looking statements by terms such as
expect, believe, estimate, anticipate, intend, will, could,
may or might, the negative of such terms or other similar
expressions. These forward-looking statements include
matters that are not historical facts and statements
regarding the Group’s intentions, beliefs or current
expectations concerning, among other things, the
Group’s results of operations, financial condition, liquidity,
prospects, growth, strategies and the industry in which the
Group operates. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events
and depend on circumstances that may or may not occur
in the future. The Group cautions that forward-looking
statements are not guarantees of future performance and
that the Group’s actual results of operations, financial
condition, liquidity, prospects, growth and strategies,
and the development of the industry in which the Group
operates, may differ materially from those described in or
suggested by the forward-looking statements contained in
this Annual Report. In addition, even if the Group’s results
of operations, financial condition, liquidity, prospects,
growth and strategies and the development of the industry
in which the Group operates are consistent with the
forward-looking statements contained in these materials,
those results or developments may not be indicative of
results or developments in future periods. The Group does
not intend to update these statements to reflect events
and circumstances occurring after the date hereof or
to reflect the occurrence of unanticipated events. Many
factors could cause the actual results to differ materially
from those contained in forward-looking statements of the
Group. Among others, these include general economic
conditions, the competitive environment, risks associated
with operating in Russia, market change in the Russian
freight rail market and many other risks specifically related
to the Group and its operations. This Annual Report
has been prepared to assist shareholders to assess the
Group’s financial condition, results of operations, business,
strategies and prospects and for no other purpose.
366
367
Globaltrans Investment PLC
Annual Report & Accounts 2021
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
GRI Content Index
Indicator Definition
Report section / notes
General disclosures
102-1
Name of the organisation
Corporate Structure
102-2
Activities, brands, products, and services
At a glance
Location of headquarters
Location of operations
Number of countries where the organization
operates
Operational performance
Key contacts
At a glance
Market review
Ownership and legal form
Corporate structure
Markets served
Market review
102-3
102-4
102-5
102-6
102-7
Scale of the organisation
Operational performance
102-8
Information on employees and other
workers
Financial review
Sustainability report
102-9
Supply chain
Operational performance
102-10
Significant changes to the organisation and
its supply chain
No significant changes in the supply chain
102-11
Precautionary Principle or approach
The Group does not explicitly use the precautionary principle
102-12
External initiatives
The Group does not have membership in external initiatives
A list of externally developed economic,
environmental and social charters,
principles, or other initiatives to which
the organisation subscribes or which it
endorses
Annual
report page
p.131
p.8
p.38-39
p.372
p.131
p.34-37
p.131
p.16
p.34-37
p.39
p.38-39
p.90-95
p.38-39
102-13
Membership of associations
Corporate Social Responsibility
p.80-105
A list of the main memberships of industry
or other associations, and national or
international advocacy organisations
Union of Railway Transport Operators - SOZHT (AO New
Forwarding Company)
Council of Russian Transport Workers - STR (AO New Forwarding
Company)
Railway Engineering Association – OPZHT (AO Ural Wagonrepair
Company)
Estonian Chamber of Commerce and Industry (AS Spacecom
(Estonia) and AS Spacecom Trans (Estonia)
102-14
Statement from senior decision-maker
Chairman’s statement
102-15
Key impacts, risks opportunities
Risk management
CEO review
Sustainability report
Sustainability report
Governance structure
Sustainability report
102-16
Values, principles, standards, and norms of
behaviour
102-18
Governance structure
102-32
Highest governance body’s role in
sustainability reporting
102-35
Remuneration policies
368
Corporate Structure - Remuneration of the Board of Directors
and management
p.123
p.20-24
p.28-32
p.62
p.80
p.87-89
p.101
Indicator Definition
Report section / notes
102-40
List of stakeholder groups
Sustainability report
102-41
Collective bargaining agreements
As at 31122021, 30% of total employees in OOO BaltTransServis
were covered by collective bargaining agreements. In other
Group subsidiaries there were no collective bargaining
agreements
102-42
102-43
102-44
102-45
102-46
Identifying and selecting stakeholders with
whom to engage
The organisation’s approach to stakeholder
engagement
Key topics and concerns that have been
raised through stakeholder engagement
Sustainability report
Sustainability report
Sustainability report
Entities included in the consolidated
financial statements
Defining report content and topic
boundaries
Sustainability report
Notes to the consolidated financial statements
p.234-235
Annual
report page
p.85-86
p.85-86
p.84-86
p.85-86
p.80-81
p.80-81
102-47
List of the material topics
Sustainability report
102-48
102-49
Restatements of information given in
previous reports
No restatements of information given in the previous report were
made
Significant changes from previous reporting
periods in the list of material topics and
topic boundaries
No significant changes
102-50
Reporting period
Calendar year 2021
102-51
Date of most recent report
102-52
Reporting cycle
April 2021
Annual
102-53
Contact point for questions regarding the
report
Investor Relations
Phone: +357 25 328 860
Email: irteam@globaltranscom
102-54
Claims of reporting in accordance with the
GRI standards
The Report was prepared in accordance with the GRI Standards
– Core option
102-55
GRI content index
GRI content index
p.368
102-56
External assurance
Management
External assurance for the Group’s Corporate social responsibility
section was not conducted in the reporting period
103-1
103-2
Explanation of the material topic and its
boundary
Sustainability report
The management approach and its
components
Sustainability report
103-3
Evaluation of the management approach
Sustainability report
Economic impact
Economic performance
201-1
Direct economic value generated and
distributed
Financial review
Indirect economic impacts
203-2
Significant indirect economic impacts
Sustainability report
Anti-corruption
205-3
Confirmed incidents of corruption and
actions taken
Sustainability report
p.80-105
p.80-105
p.80-105
p.38-39
p.101
p.80-105
p.88
369
Globaltrans Investment PLC
Annual Report & Accounts 2021
GRI Content Index
Indicator Definition
Report section / notes
Environmental impact
Materials
301-1
301-2
Energy
Materials used by weigh or volume
Sustainability report
Recycled input materials used
Sustainability report
302-1
Energy consumption within the organisation Sustainability report
Water and effluents1
303-5
Water consumption
Sustainability report
Emissions
305-2
305-2
Direct (Scope 1) GHG emissions
Sustainability report
Energy indirect (Scope 2) GHG emissions
Sustainability report
Environmental compliance
307-1
Non-compliance with environmental laws
and regulations
Sustainability report
No incidents of non-compliance with environmental laws and
regulations occurred in the reporting period
Social impact
Employment
401-1
401-2
New employee hires and employee turnover Sustainability report
Benefits provided to full-time employees
that are not provided to temporary or part-
time employees
Sustainability report
Notes to the consolidated financial statement
Occupational health and safety
Occupational health and safety
management system
Sustainability report
Worker training on occupational health and
safety
Sustainability report
403-1
403-5
403-6
403-9
Promotion of worker health
Work-related injuries
Training and education
404-1
Average hours of training per year per
employee by gender and employee
category
Diversity and equal opportunity
405-1
Diversity of governance bodies and
employees
405-2
Ratio of basic salary and remuneration of
women to men
Non-discrimination
406-1
Incidents of discrimination and corrective
actions taken
Sustainability report
Sustainability report
Sustainability report
Sustainability report
Corporate governance report
Consolidated management report
Management report
Sustainability report
No incidents of discrimination occurred in the reporting period
p.90
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
TCFD Index
Code
Governance
TCFD 1 (a)
TCFD 1 (b)
Strategy
TCFD 2 (a)
TCFD 2 (b)
TCFD 2 (c)
Risk Management
TCFD 3 (a)
Targets & Metrics
TCFD 4 (a)
TCFD 4 (b)
TCFD 4 (c)
TCFD
Recommended Disclosures
Comments
Describe the Board’s oversight of climate-related risks and opportunities.
p.102-103
Describe management’s role in assessing and managing climate-related
risks and opportunities.
p.102-103
Describe the climate-related risks and opportunities the organisation has
identified over the short, medium, and long term.
Describe the impact of climate-related risks and opportunities on the
organisation’s business, strategy and financial planning.
Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios.
p.104-105
p.104-105
p.104-105
Describe the organisation’s processes for identifying and assessing climate-
related risks.
p.102-103
Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process.
p.105
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas
emissions, and the related risks
p.105
Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets.
Going forward,
the Group will work
to demonstrate its
progress in addressing
climate change.
Annual
report page
p.96-97
p.98
p.97
p.98
p.99
p.99
p.91
p.92
p.223
p.94
p.92
p.95
p.93
p.90
p.118
p.152
p.279
p.92
This excludes data from AS Spacecom and BaltTransServis (except for data from the BTS railcar repair depot in Ivanovo which is included).
1
370
371
Globaltrans Investment PLC
Annual Report & Accounts 2021
Contacts
GENERAL CONTACTS
DEPOSITARY BANK
Globaltrans Investment PLC
Citibank, N.A.
www.globaltrans.com
Legal address
Omirou 20, Agios Nikolaos, CY-3095 Limassol, Cyprus
Postal address
Office 201, 4 Profiti Ilia Street, Germasogeias, CY-4046
Limassol, Cyprus
Phone: +357 25 212 382
Fax: +357 25 503 155
Website: www.globaltrans.com
FOR INVESTORS AND SHAREHOLDERS
Investor Relations
Mikhail Perestyuk
Daria Plotnikova
Phone: +357 25 328 860
E-mail: irteam@globaltrans.com
COMPANY SECRETARY
Elia Nicolaou
Anastasio Building, 6th Floor, 15 Dimitriou Karatasou Street,
CY-2024 Strovolos, Nicosia, Cyprus
Phone: +1 212 723 5435 / +44 207 500 2030
Email: citiadr@citi.com
Website: www.citi.com/adr
STOCK EXCHANGES
London Stock Exchange plc
10 Paternoster Square, London EC4M 7LS, UK
Phone: +44 20 7797 1000
Website: www.londonstockexchange.com
Moscow Exchange
125009 Moscow, Vozdvizhenka Str, 4/7, Bld 1
Phone: +7 (495) 363-3232, +7 (495) 232-3363
Website: www.moex.com
AUDITORS
PricewaterhouseCoopers Limited
City House, 6 Karaiskakis Street,
CY-3032 Limassol, Cyprus
Phone: +357 25 555 000
Fax: +357 25 555 001
FOR MEDIA
Russian Media
Anna Vostrukhova
Head of Media Relations
Phone: +357 25 328 863
Email: media@globaltrans.com
International Media
Laura Gilbert
Lightship Consulting
Phone: +44 7799 413351
Email: laura.gilbert@lightshipconsulting.co.uk
372