2022
Annual Report &
Accounts
Annual Report & Accounts 2022
Contents
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
4
OVERVIEW
16
STRATEGIC
REPORT
68
SUSTAINABILITY
REPORT
100
GOVERNANCE
124
FINANCIAL
STATEMENTS
334
ADDITIONAL
INFORMATION
Highlights of 2022
At a Glance
Our Assets
Our History
6
8
12
14
Chairman's Statement
18
Highlights of 2022
Our Strategy
CEO Review
Market Review
Financial and Operational
Review
Risk Management
20
22
26
28
51
ESG Committee Chair’s
Message
Stakeholder Engagement
Ethics and Behaviour
Employees
Communities
Environment
Climate-Related Financial
Disclosure (TCFD)
70
73
76
79
81
88
90
94
Board of Directors
Executive Management
Corporate Governance
Report
Share Capital
Corporate Structure
102
108
112
122
123
Consolidated Management
Report and Consolidated
Financial Statements
Management Report and
Parent Company Financial
Statements
Selected Operational
Information
126
Definitions
Presentation of Financial
and Other Information
250
GRI Content Index
TCFD Index
Contacts
336
342
346
348
351
352
Summary of presentation of financial and other 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 has 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 (“EU
IFRS”).
The Group’s Consolidated Management
Report and Consolidated Financial
Statements and the Parent Company
Financial Statements for the year ended
31 December 2022 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). The presentational currency of the
Group’s financial results is the Russian
rouble (RUB), which is the functional
currency of the Company as well as of
its Russian subsidiaries. Certain financial
information derived from management
accounts is marked in this Annual
Report with an asterisk (*). In this Annual
Report, the Group has used certain
“non-IFRS financial information” (i.e.
measures not recognised by EU IFRS
or IFRS) as supplementary explanations
of the Group’s operating performance.
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. However, these
non-IFRS measures are unaudited and
have not been prepared in accordance
with IFRS or any other generally accepted
accounting principles. As such, they have
limitations as analytical tools, and you
should not consider them in isolation or
place undue reliance on them. Similarly
titled measures are used by other
companies for a variety of purposes and
are often calculated in ways that reflect
the circumstances of those companies.
You should exercise caution in comparing
these measures as reported by us to the
same or similar measures as reported by
other companies.
Information (non-IFRS financial and
operating measures) requiring additional
explanation or defining is marked with
initial capital letters and the explanations
or definitions are provided at the end of
this Annual Report. Reconciliations of the
non-IFRS measures to the closest EU IFRS
measures are included in the body of this
Annual Report. Rounding adjustments
have been made in calculating some of
the financial and operational information
included in this Annual Report. As a result,
numerical figures shown as totals in some
tables may not be exact arithmetical
aggregations of the figures that precede
them.
This Annual Report, including its
appendices, may contain forward-looking
statements regarding future events or
the future financial performance of the
Group. Forward-looking statements can
be identified by terms such as expect,
believe, estimate, anticipate, intend, will,
could, may or might, and the negative of
such terms or other similar expressions.
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.
For a detailed description of the
presentation of financial and
other information, please see the
Presentation of Financial and Other
Information section at the end of this
Annual Report.
Globaltrans
Globaltrans
2
2
3
3
Annual Report 2022
Annual Report 2022
Annual Report & Accounts 2022
Overview
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
The summary information on pages 6 to 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. Non-IFRS measures are unaudited and have not been prepared in
accordance with IFRS or any other generally accepted accounting principles,
and as such have limitations as analytical tools. For further information, please
see the Presentation of Financial and Other Information section at the end of this
Annual Report.
Globaltrans
4
5
Annual Report 2022
Highlights of 2022
In difficult markets we have
demonstrated our resilience.
"We have again delivered strong results and improved operational
efficiency in 2022 by providing first-class services underpinned
by strong logistical expertise and excellent cost control. Against
this backdrop, we have invested significantly into the growth of the
business, increasing our Total CAPEX adjusted for M&A to over
RUB 20 billion.
Our markets remain challenging. Nevertheless, Globaltrans enjoys
a leading competitive position in its sector, supported by our
outstanding logistics competences, strong service culture as well
as a solid client base. Our experienced team continues to pursue
a clearly defined strategy which has proven its effectiveness."
Valery Shpakov
Chief Executive Officer
+40%
+69%
RUB 81.6 bln
RUB 49.2 bln
Adjusted Revenue
Adjusted EBITDA
-8%
+165%
RUB 14.8 bln
RUB 20.2 bln*
Free Cash Flow
Total CAPEX adjusted for M&A
(31.12.2021: 0.6x)
(2021: 44%)
0.1x
Net Debt
to Adjusted EBITDA
41 %
Empty Run Ratio
for gondola cars
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Market
Logistics transformation supporting demand
for railcars even as market volumes remain
under pressure
· Following a robust Q1 2022, overall Russia’s
freight rail turnover and volumes started
to deteriorate, largely reflecting a weakening
bulk cargo segment.
· Overall Russia’s freight volumes (measured
in tonnes) fell 3.7% year on year in 2022.
The transformation of logistics with an
increased proportion of longer-distance routes
supported overall Russian freight rail turnover
(measured in tonnes-km), which was broadly
flat (-0.1% year on year).
Globaltrans
Strong financial performance, robust Free Cash
Flow and further deleveraging with dividends
remaining on hold
· Adjusted Revenue increased to RUB 81.6
billion (+40% year on year) in 2022, reflecting
the recovery in both the gondola and tank car
segments’ revenue streams largely supported
by a recovery in gondola market pricing in H1
2022 from the depressed levels of H1 2021.
However, a subsequent decline in gondola
market pricing over the second half of 2022
drove a 9% decrease in Adjusted Revenue
in H2 2022 compared to H1 2022.
· Net Debt reduced to RUB 4.6 billion at the end
of 2022. Further deleveraging with Net Debt
to Adjusted EBITDA at 0.1x compared to 0.6x
at the end of 2021.
· Dividend payments continue to be suspended
due to the technical limitations regarding
upstreaming cash to the holding company
incorporated in Cyprus.
Operational efficiency significantly improved,
Service Contracts performed well, average
pricing was robust
· Globaltrans successfully adjusted its logistics
with the Empty Run Ratio for gondola cars
improving to 41% (2021: 44%).
· The Group’s Freight Rail Turnover declined
8% year on year in 2022, reflecting logistics
readjustments and volatility in demand in the
gondola segment along with the decline in the
average gondola fleet in operation. In the
tank segment, Freight Rail Turnover rose 7%
year on year, supported primarily by changes
in logistics with more longer-distance routes.
· Robust average pricing despite volatile
gondola pricing where a strong first half was
followed by a decline in the second half
of 2022. Rail tank rates remained solid.
· The Group maintained its focus on Service
Contracts2 and client retention. Service
Contracts remain intact contributing about 59%
of the Group’s Net Revenue from Operation
of Rolling Stock in 2022.
1
In March 2022 Globaltrans completed the acquisition
· Adjusted EBITDA of RUB 49.2 billion in 2022
of the outstanding 40% shareholding in BaltTransServis
(+69% year on year), although H2 2022
Adjusted EBITDA declined 18% compared
to H1 2022.
· Expansion CAPEX and acquisition
expenditure (including selective investments
in new gondolas and rail tanks along
with the acquisition of the remaining 40%
of BaltTransServis1) rose six-fold driving
the growth in Total CAPEX adjusted for M&A
to RUB 20.2 billion* in 2022.
· Robust Free Cash Flow of RUB 14.8 billion
(“BTS”) bringing its shareholding to 100% for RUB 9.1
billion in cash (RUB 0.3 billion was prepaid in 2021
and RUB 8.8 billion was paid in 2022). BTS is one
of the leading Russian freight rail operators of tank
cars, with a strong market position, long-term Service
Contracts and unique competencies in operating its own
locomotives; Total Fleet of 13.1 thousand units as of the
end of 2021.
2 Service Contracts represent contracts with an initial
term greater than one-year that stipulate an obligation
to transport a specified amount of cargoes with the client.
As of the end of 2022, Globaltrans had six Service
in 2022 (-8% year on year).
Contracts.
6
7
Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Annual Report & Accounts 2022
At a Glance
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
WHO WE ARE
HOW WE DELIVER VALUE
• •
Robust business model and efficient
operations
Entrepreneurial culture combined
with strong governance
Financial stability and strength
· Strong positions in key freight
rail segments of metals and oil
products and oil
· Diversified blue-chip customer
portfolio underpinned by long-
term service agreements
Industry-leading operational
efficiency
·
· Founded and led by
entrepreneurs with a focus
on quality and innovation
· Experienced Board
and management team
· Aligned with best practice
governance standards
· Sustainable business with
· High proportion of multi-year
Service Contracts
· Robust balance sheet
· Strong Free Cash Flow generation
· Significant liquidity available
· Focus on long-term value creation
· Opportunistic investments
and prudent capital allocation
· Transparent Dividend Policy
a strong environmental, social
and governance (“ESG”) focus
· Dual-listed on the London Stock
Exchange (“LSE”)1 and the Moscow
Exchange (“MOEX”)
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.
66,115
Total Fleet
at year-end 2022 (units)
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 constant drive for innovation.
59%
Share of Net Revenue from
Operation of Rolling Stock
covered by Service Contracts
in 2022
1
Imposed suspension of Global Depositary Receipts (“GDRs”) trading on the LSE since
3 March 2022 continued as of the date of publication.
We consistently
deliver value to our
clients through our
pursuit of operational
and service excellence.
Our operating platform
is fundamental to our
success.
Sophisticated logistics
Sector-leading operational efficiency
We are experts in managing complex
freight logistics that improve our customers’
productivity, saving them time and money.
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.
High-quality long-term client base
In-house locomotives improve productivity
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.
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.
Market Share,
2022, %2
Historical Empty Run
Ratio, 2018-22, %
Overall Russia’s freight rail transportation volumes
6.5
Metallurgical cargoes
16.2
Oil products and oil
9.0
Coal
4.2
Construction materials
3.4
2 Coal including coke;
metallurgical cargoes including
ferrous metals, scrap metal and
ores; construction materials
including cement.
2022
41
2021
44
2020
45
2019
42
2018
38
50
51
51
49
46
Globaltrans
8
9
0%
5%
10%
15%
20%
0%
10%
20%
30%
40%
50%
60%
Source: Globaltrans
Empty Run Ratio for gondola cars
Total Empty Run Ratio (for all types of railcars)
Annual Report 2022
Annual Report & Accounts 2022
At a Glance
Overview
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Governance
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Additional
Information
OUR APPROACH TO ESG
Delivering sustainable value through
· Oversight from the Board's ESG Committee
· Clear ESG supervision at the management
level
· Transparent reporting of key metrics
Sustainable business practices
· Embedding sustainability in our way
of working and business mindset
· Minimising our impact on the environment
·
Improving our energy efficiency
· Reducing our carbon emissions
Positive social impact
· Focus on employee development
· Providing support to our communities
"In 2022, Globaltrans continued to operate efficiently, ethically and
responsibly. We acted responsibly towards our employees, our
clients and the community at large, and maintained our commitment
to a wide range of sustainable practices. In my two years serving
on the ESG Committee, I have seen positive progress and a
gradual transformation in Globaltrans' corporate culture, employee
perceptions, internal procedures and decision-making mechanisms.
In addition, we have taken further important steps to advance the
governance of our ESG processes at all levels of the Group since
this ensures a solid foundation for effective management and
accountability."
Elia Nicolaou
Chair of the ESG Committee, Non-executive Director
Read more on the Group’s sustainability
commitments and actions on pages 68 to 99.
Globaltrans
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Annual Report 2022
Annual Report & Accounts 2022
Our Assets
LARGE FLEET
· Operational flexibility maintained by striking appropriate balance
between Owned Fleet (94%) and Leased-in Fleet (6%).
· Fleet composition corresponds to the industrial segments served:
universal gondola cars for bulk cargoes (69%); tank cars for liquid
cargoes (28%); flat cars for other cargoes (2%).
· Current average age of the Group’s Owned Fleet is 14.5 years which
compares with average 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.
66,115
Total Fleet
at year-end 2022 (units)
Total Fleet composition at year-end 2022, %
2%
Flat cars
0.1%
Locomotives
6%
Leased-
in Fleet
28%
Tank cars
Source: Globaltrans
69%
Gondola cars
94%
Owned Fleet
Overview
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Governance
Financial
Statements
Additional
Information
69%
28%
45,711 units
18,796 units
GONDOLA CARS
TANK CARS
· Open-top, high-sided universal railcar.
· Backbone of Globaltrans’ fleet.
· Designed to carry bulk cargoes
like metals, ores, coal, construction
materials, etc.
· Designed to carry liquid cargoes
including oil and petroleum products,
chemicals, liquefied gas and other liquid
substances.
· Principally used by Globaltrans in the
· Able to be rapidly redeployed between
transportation of oil products.
different bulk cargoes in response
to changing market demand.
2%
0.1%
1,537 units
FLAT CARS
· Open, flat deck cars designed
to carry intermodal containers.
71 units
LOCOMOTIVES
· Globaltrans has its own fleet of mainline
locomotives, which haul block trains,
principally in the oil products and oil
segment.
Globaltrans
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Annual Report 2022
Annual Report & Accounts 2022
Our History
>18 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 CIS1. Through strong organic growth and the acquisition
of both railcars and other freight rail businesses, we have created a profitable company
with market-leading capabilities.
Our commitment to transparency and good corporate governance helped make
us the first Russia-focused freight rail group to be listed on an international stock
exchange. Since the Initial Public Offering (“IPO”) on the LSE in 20082, 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
GDRs on MOEX in order to diversify our investor base.
1 Commonwealth of Independent States
(“CIS”).
2
Imposed suspension of GDRs trading
on the LSE since 3 March 2022
continued as of the date of publication.
2004
Established as a merger of two
entrepreneur-led companies.
2008
Successful IPO on the LSE.
2009
Secondary Public Offering (“SPO”) to fund
further business expansion.
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,
iron ore products and high-quality steel.
Signed industry’s first ever long-term
outsourcing contract with Metalloinvest.
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.
Globaltrans
14
15
Overview
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Sustainability
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Governance
Financial
Statements
Additional
Information
2014–2016
The Group's corporate structure
simplified to drive efficiency and cut costs.
Formed specialised SyntezRail subsidiary
with partners to transport petrochemicals
in tank containers.
Extended long-term partnership with
Rosneft, a long-standing client of the
Group.
2017
The enhanced Dividend Policy introduced
linking dividends to Attributable Free
Cash Flow and Leverage Ratio.
2018
The Group celebrated its 10th anniversary
of its Main Market listing on the LSE.
Two new long-term 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.
2019
A new long-term service contract 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.
2020
Globaltrans' GDRs began trading on
MOEX, and are included in Level One,
MOEX’s highest quotation list.
2021
Established Board ESG Committee.
60% stake in SyntezRail (a small non-core
specialised container operator) sold.
2022
The Group takes full control of its key rail
tank and locomotive operating subsidiary
BaltTransServis, increasing its stake
to 100%.
2023
Intra-group consolidation of rail tank fleet
in BaltTransServis, followed by sale of the
Group’s 65.25% shareholding in its leasing
subsidiary Spacecom.
Annual Report 2022 Annual Report & Accounts 2022
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Strategic Report
Each of the Directors confirms that, to the best of his or her
knowledge, the Strategic Report presented on pages 16 to 67
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
Sergey V. Tolmachev
Director
Globaltrans
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Annual Report 2022
Chairman's Statement
Overview
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Governance
Financial
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Additional
Information
Globaltrans reported a year of solid progress in
2022 under challenging circumstances, delivering
strong financial results and reassuring operational
performance.
The results demonstrate both the resilience of our
business model and the quality of our operations.
We delivered robust growth in all key financial
metrics with solid cash generation and controlled
costs despite inflationary pressures. Due to sustained
deleveraging, the Group ended the year in healthy
financial shape.
We have extensive experience navigating difficult
markets, built mainly around our dynamic business
model that responds fast to shifts in market
conditions and short-term market volatility.
Because of this, we could react effectively to the
pronounced turbulence our industry encountered in
2022, which was characterised by volatile logistics,
declining freight volumes, and substantial market
uncertainty.
Consequently, our top priorities were supporting
our customer base, improving fleet efficiency, and
controlling costs. The issue of client retention
was a particular focus, and the Group's long-
term partnerships performed well. Dynamic fleet
management is central to our business, and we
successfully adjusted our logistics footprint to
accommodate market volatility and shifting cargo
flows. As a result, we maintained good efficiency
levels, improving our Empty Run Ratio for gondola
cars despite market conditions.
In 2022, we increased our expansion CAPEX and
acquisition expenditure six-fold with selective
investments in new gondolas and rail tanks alongside
taking full control of BTS, a prominent player in the
oil products and oil segment. Additionally, in early
2023, we completed the reorganisation of our rail
tank operations as BTS acquired the majority of the
rail tanks from our 65.25% held leasing subsidiary
Spacecom which was subsequently sold.
The Board
The Board remains committed to the principles
and practice of good corporate governance, and I
would like to thank my board colleagues for their
steadfast support throughout the last year. Given
the industry headwinds, the Board's main focus
was protecting value for our shareholders.
Several board changes occurred during the past
year. In June, Sergey Foliforov joined the Board
as a Non-executive Director, replacing Alexander
Tarasov, who stepped down. I welcome Sergey
and look forward to working with him.
In September, we announced the sad news that
Dr Johann Durrer, our Senior Independent Non-
executive Director, had passed away. Johann
served on our Board with distinction for 14 years,
ever since the Company listed on the LSE. I know
I speak for the Board when I say he will be greatly
missed as a colleague and friend.
Sustainability
Notwithstanding the unprecedented macro
environment, the Group made positive
progress in implementing our ESG strategy,
under the direction of the ESG Committee. Our
Sustainability Report, published alongside the
Annual Report, contains more details. I would
highlight here the work being done to strengthen
the safety culture at Globaltrans. In 2022, the
Group reached its goal of zero harm, marking
another important milestone in our development
as a responsible business.
People
Our people are our most important asset and the
driving force behind our consistent performance
history. They continued to deliver superior service
and support to our customers in challenging
conditions in 2022. So again, I wish to thank all
our employees for their hard work and dedication
over the last year.
Listing and Dividend
The Group’s GDRs are listed on the Moscow
and London stock exchanges. There was good
trading volume in the Company’s GDRs listed
on the Moscow Exchange during the period.
However, the London Stock Exchange suspended
trading in Globaltrans GDRs in March 2022, and
trading remains suspended.
Dividend payments also remain suspended due
to technical limitations regarding upstreaming
cash to the holding company in Cyprus. The
Group continues to analyse options to address
the limitations of its corporate structure and
listing constraints.
Summary
Globaltrans delivered robust performance in
2022 thanks to its clear strategy, proven business
model, and strong management. Although
the macroeconomic backdrop remains highly
uncertain, the Board is nonetheless confident
in the Group's strategy and business model to
deliver results.
Sergey V. Maltsev
Chairman of the Board,
Executive Director,
Chief Strategy Officer,
Co-founder and shareholder of Globaltrans
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Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Our Strategy
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: they are at the
heart of our business and we work
hard to exceed their expectations.
Deliver excellence: we strive for
excellence in everything we do.
Prioritise safety: safety is our number
one priority and we act safely and
responsibly at all times.
• •
• •
• •
Respect people: we respect the rights
of all employees and invest in their
training and development.
Uphold good governance: we aim
to pursue a course that benefits all
stakeholders.
Protect our environment: we value our
communities and the world around us
and treat them with the respect and
consideration they deserve.
Deliver excellence and
efficiency in operations
Deliver value through
sustainable business practices
OUR
STRATEGIC
PRIORITIES
Focus on opportunistic investments
and pursue prudent capital allocation
Promote a strong entrepreneurial
and governance culture
Overview
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Additional
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STRATEGY
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 as it allows us to seize
opportunities and remain flexible
in the face of any change to the
business environment or market.
1 Total dividends (including interim, final
and special) in respect of declared year.
2 Final 2021 dividends were suspended
in April 2022 and no further dividends
were declared due to technical
limitations regarding upstreaming cash
to the Cyprus holding company.
Adjusted Revenue, RUB bln
Adjusted EBITDA, RUB bln
2022
81.6
2021
58.5
2020
54.9
2019
68.8
2018
60.9
2022
49.2
2021
29.0
2020
26.8
2019
39.6
2018
33.1
0
20
40
60
80
100
0
10
20
30
40
50
Adjusted EBITDA Margin, %
Free Cash Flow, RUB bln
2022
60
2021
50
2020
49
2019
57
2018
54
2022
14.8
2021
16.1
2020
15.1
2019
13.3
2018
12.3
0%
10%
20%
30%
40%
50%
60%
0
5
10
15
20
Net Debt to Adjusted
EBITDA at year-end
Total dividends1,
RUB per share/GDR
2022
0.1
2021
0.6
2020
1.0
2019
0.6
2018
0.6
2022
–2
2021
22.502
2020
74.55
2019
93.10
2018
92.40
0,0
0,2
0,4
0,6
0,8
1,0
0
20
40
60
80
100
Source: Globaltrans
20
21
Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Overview
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CEO Review
The Group’s robust performance in 2022
attests to the resilience of our business
in uncertain markets. We were able to draw
on all our experience to deliver a strong set
of results, underlining the Group’s reputation
for operational excellence and quality
delivery for our clients.
Results
Despite the challenging backdrop,
Globaltrans delivered a strong financial
performance, by leveraging our scale,
customer relationships, and highly efficient
logistics. As a result, headline results for
2022 were higher than the previous year.
Adjusted Revenue climbed 40% year on
year to RUB 81.6 billion, benefiting from
the recovery in both the gondola and
tank car segments’ revenue streams. The
Group’s profitability maintained its positive
trajectory of recent years, with Adjusted
EBITDA climbing to RUB 49.2 billion, up
69%, accompanied by Adjusted EBITDA
Margin expansion to 60% from 50% in 2021.
And in an inflationary environment, with
business costs rising, we kept a firm lid on
operating expenses, limiting the increase in
Total Operating Cash Costs to just 9% year
on year.
The Group generated strong cash flows,
with net cash from operating activities
up 47% year on year to RUB 40.2 billion in
2022. Expansion CAPEX and acquisition
expenditure rose six-fold year on year,
bringing the Total CAPEX adjusted for M&A
to RUB 20.2 billion*, as the Group took full
ownership of BTS by acquiring the 40%
minority shareholding for RUB 9.1 billion1.
We also made selective purchases of
rolling stock (gondolas and rail tank cars),
while the level of maintenance CAPEX
slightly declined. Despite the increase
in overall capital expenditure, the Group
still recorded robust Free Cash Flow at
RUB 14.8 billion in 2022 (-8% year on year).
Our solid balance sheet provides optionality
for prudent capital allocation. We ended the
year with a Net Debt to Adjusted EBITDA
ratio of 0.1x (31.12.2021: 0.6x). Thanks to
solid cash generation, we delivered another
significant reduction in borrowings, with
Net Debt down 75% from year end 2021 to
RUB 4.6 billion.
1
Including RUB 0.3 billion prepaid in the second half
of 2021.
22
23
Market Overview
The performance of Russia's freight rail
transportation sector was negatively
impacted by the challenging operating
environment that persisted for most of
2022, and which resulted in widespread
transformation of freight flows and logistics,
as well as concerted pressure on cargo
volumes and intensified cost inflation.
The transformation of logistics, with an
increased proportion of longer-distance
routes, helped support overall Russia’s
freight rail turnover (measured in tonnes-km)
which was broadly unchanged as a stronger
first half was largely offset by a weaker
second half. However, overall transportation
volumes (measured in tonnes) declined by
3.7%, with the bulk cargo segment taking the
hit, as softer demand in key cargo categories
like coal and metallurgical products put
pressure on volumes, being only partially
offset by strong construction cargo volumes.
In contrast, demand for oil products and oil
held steady, with overall volumes broadly
in line with the previous year’s levels.
Our Performance
Service performance in our operations was
generally excellent, as we worked hard
to mitigate the adverse impact of market
uncertainty on our operations and our
customers. The Group’s Service Contracts
performed well. In 2022, our six anchor Service
Contracts covered about 59% of the Group’s Net
Revenue from Operation of Rolling Stock.
We continued to actively manage our fleet
to ensure we could meet customer demand
and replenished about 3.8 thousand units
ofrolling stock (mostly gondolas) blocked in
Ukraine by expanding our Leased-in Fleet and
acquiring new gondola units. In the tank car
segment, we also continued the substitution
of leased-in tanks with newly acquired units.
Annual Report & Accounts 2022GlobaltransAnnual Report 2022 CEO Review
We ended the year with a Total Fleet of 66.1
thousand units, about 4% fewer than at the
end of 2021.
Safety remains a key management concern.
It is, therefore, gratifying that for the second
year in a row, we have had no fatalities among
our workforce.
Moreover, we also met our target of zero-
harm, a great achievement, reflecting the
tremendous effort made by our colleagues
across the business to support our safety
programmes.
We also improved support for our employees
by introducing better benefits packages,
providing more training and establishing
better feedback mechanisms.
Summary
In difficult markets we have demonstrated
our resilience as a business. We have again
delivered strong results and improved
operational efficiency in 2022 by providing
first-class services underpinned by strong
logistical expertise and excellent cost control.
Against this backdrop, we have invested
significantly into the growth of the business,
increasing our Total CAPEX adjusted for M&A
to over RUB 20 billion.
Our markets remain challenging. Nevertheless,
Globaltrans enjoys a leading competitive
position in its sector, supported by our
outstanding logistics competences, strong
service culture as well as a solid client base.
Our experienced team continues to pursue
a clearly defined strategy which has proven
its effectiveness.
The Group’s Freight Rail Turnover fell 8% year on
year, partly due to operational challenges in the
bulk cargo segment and partly due to a smaller
average gondola fleet in operation. Despite
volatile gondola market rates, we benefitted
from an overall robust pricing environment in
both gondola and tank segments.
Alongside customer service, another key
priority of management was maintaining
operational efficiency, a crucial concern
in times of market dislocation. Our teams
once more proved their expertise and
professionalism in logistics management,
as the Group reported a year on year
improvement in Empty Run Ratio for gondola
cars to 41% from 44% in the previous year.
Our ESG Focus
ESG activities are overseen by the Board’s
ESG Committee and implemented by
management. The importance of sustainable
behaviour is recognised right across the
Group and we are committed to improving
our programmes, proactively managing
our ESG risks, and providing high-quality
reporting for our stakeholders.
At Globaltrans, we are committed to doing our
part to combat climate change and contribute
to a lower carbon future.
As a result, our sustainability performance has
continued to improve, helped by the ongoing
roll-out of our Green Office initiative. We have
also improved our climate-related disclosures
to make them more effective, consistent
with the recommendations of the Task Force
on Climate-related Financial Disclosures
(“TCFD”).
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OUR APPROACH TO DIVIDENDS
The Group’s Dividend Policy strikes a balance between investing in business expansion and delivering
returns to shareholders.
· Focusing on maximising shareholder 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.
· Clear formula linking dividends to Attributable
Free Cash Flow and Leverage Ratio1 provides
flexibility and transparency in capital allocation.
Leverage Ratio (Net Debt to Adjusted EBITDA)
Dividends as a % of Attributable Free Cash Flow
Less than 1.0x
From 1.0x to 2.0x
From 1.0x to 2.0x
Not less than 50%
Not less than 30%
0% or more
Our approach to dividends,
RUB per share/GDR2
To view the Dividend Policy, please visit our
corporate website www.globaltrans.com.
20225
H2 20215
–
–
H1 20214
22.50
H2 20204
28.00
H1 20204
46.55
H2 20194
46.55
H1 20194
46.55
H2 20184
46.50
H1 20184
45.90
H2 20174
44.85
H1 20174
44.80
2016
39.20
2014–20153
12.41
2013
22.28
2012
22.20
2011
18.86
2010
10,34
2009
4,42
1 The Board of Directors of Globaltrans reserves the right
22.50
to recommend to the General Meeting of Shareholders
74.55
93.10
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.
92.40
2 Prior to 2016, dividends on Globaltrans' shares/GDRs
were declared and paid in US dollars, thus the amounts
89.65
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.
3 The dividend declared in 2016 related to both the 2014
and 2015 financial years.
4
Including regular and special dividends.
5 Final 2021 dividends were suspended in April 2022 and
no further dividends were declared due to technical
limitations regarding upstreaming cash to the Cyprus
holding company.
Valery Shpakov
CEO
0
10
20
30
40
50
Source: Globaltrans
24
25
Annual Report & Accounts 2022GlobaltransAnnual Report 2022
Market Review
The performance of Russia’s freight rail
transportation sector was negatively impacted
by the challenging operating environment
that persisted for most of 2022, and which
resulted in widespread transformation
of freight flows and logistics, as well as
concerted pressure on cargo volumes
and intensified cost inflation.
1 Regulated Russian Railways (“RZD”)
tariffs for the traction of empty railcars
rose 6.8% from 1 January 2022 and by
a further 11% from 1 June 2022.
2 Coal including coke; metallurgical
cargoes including ferrous metals, scrap
metal and ores; construction materials
including cement.
Logistics transformation supporting
demand for railcars even as market
volumes remain under pressure
Non-oil (bulk) cargo volumes under
pressure from Q2 20222
· Following a robust Q1 2022,
overall Russia’s freight rail turnover
and volumes started to deteriorate,
largely reflecting a weakening bulk
cargo segment.
· Overall Russia’s freight volumes
(measured in tonnes) fell 3.7% year
on year in 2022.
The transformation of logistics
with an increased proportion
of longer-distance routes supported
overall Russia’s freight rail turnover
(measured in tonnes-km) which was
broadly flat (-0.1% year on year).
Intensified cost inflation with
regulated RZD tariffs for the traction
of empty railcars up about 18.6%
during 2022¹.
·
· Overall non-oil (bulk) cargo volumes
decreased 4.3% year on year in 2022
which was largely driven by the
deterioration in volumes for coal
(-5.0% year on year) and metallurgical
cargoes (-5.7% year on year).
Volumes in the construction segment
remained robust (+3.8% year on year).
· Gondola market rates recovered
from the depressed levels of H1 2021
but deteriorated from late Q2 2022
before showing signs of stabilisation
by the year end.
Demand in oil products and oil
segment stabilised
· Overall Russia’s oil products and oil
volumes slipped 0.6% year on year
in 2022.
· Market pricing conditions in the oil
products and oil segment remained
robust.
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Russia’s freight rail turnover,
bln tonnes-km
Russia’s freight rail volumes,
mln tonnes
2022
2,637
-0.1%
2022
1,236
2021
2,639
+3.6%
2021
1,284
2020
2,545
-2.2%
2020
1,245
2019
2,601
+0.2%
2019
1,279
2018
2,597
2018
1,292
-3.7%
+3.2%
-2.7%
-0.9%
0,0
0,5
1,0
1,5
2,0
2,5
3,0
0,0
0,3
0,6
0,9
1,2
1,5
Russia’s freight rail
transportation volumes
by cargo type, in 2022, %2
Russia's total railcar fleet
by car type at year-end
2022, ths units
23%
Other
29%
Coal
32% / 414
Other
48% / 606
Gondola cars
13%
Construction
materials
17%
Metallurgical
cargoes
17%
Oil products
and oil
20% / 255
Rail tank cars
1,275
units
Russia’s freight rail turnover,
bln tonnes-km, quarter on quarter change, %
2021 2022
635
661
4.0%
668
659
-1.4%
656
649
-1.1%
679
668 -1.6%
Q1
Q2
Q3
Q4
Source: Globaltrans; Rosstat.
26
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Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Financial
and Operational Review
FINANCIAL RESULTS
Strong financial performance, robust Free Cash
Flow and further deleveraging with dividends
remaining on hold
· Revenue rose to RUB 94.5 billion with
Adjusted Revenue (a key component)
increasing to RUB 81.6 billion (+40% year on
year) in 2022 reflecting the recovery in both
the gondola and tank car segments’ revenue
streams largely supported by a recovery in
gondola market pricing in H1 2022 from the
depressed levels of H1 2021. A subsequent
decline in gondola market pricing over the
second half of 2022 drove a 9% decrease in
Adjusted Revenue in H2 2022 compared to H1
2022.
· Adjusted EBITDA of RUB 49.2 billion in
2022 (+69% year on year), although H2 2022
Adjusted EBITDA declined 18% compared to
H1 2022.
· Expansion CAPEX and acquisition expenditure
(including selective investments in new
gondolas and rail tanks along with the
acquisition of the remaining 40% of BTS) rose
6x driving the growth in Total CAPEX adjusted
for M&A to RUB 20.2 billion* in 2022.
· Robust Free Cash Flow of RUB 14.8 billion in
2022 (-8% year on year).
· Profit for the year increased to RUB 24.9
billion (+65% year on year).
· Net Debt reduced to RUB 4.6 billion at the
end of 2022. Further deleveraging with Net
Debt to Adjusted EBITDA at 0.1x compared to
0.6x at the end of 2021.
· Group debt was all at fixed interest rates and
denominated in RUB, the functional currency
of the Group.
· Dividend payments remain suspended
due to the technical limitations regarding
upstreaming cash to the holding company
incorporated in Cyprus.
· Robust average pricing despite volatile
gondola market pricing where a strong
first half was followed by a decline in
the second half of 2022. Rail tank rates
remained solid.
· The Group maintained its focus on
Service Contracts¹ and client retention.
Service Contracts remain intact
contributing about 59% of the Group’s
Net Revenue from Operation of Rolling
Stock in 2022.
OPERATIONAL PERFORMANCE
Operational efficiency significantly
improved, Service Contracts performed
well, average pricing was robust
· Globaltrans successfully adjusted its
logistics with the Empty Run Ratio for
gondola cars improving to 41% (2021:
44%). Total Empty Run Ratio (for all types
of rolling stock) improved to 50% (2021:
51%).
· The Group’s Freight Rail Turnover
declined 8% year on year in 2022
reflecting logistics readjustments and
volatility in demand in the gondola
segment, along with the decline in the
average gondola fleet in operation. In the
tank segment, Freight Rail Turnover rose
7% year on year supported primarily by
changes in logistics with more longer-
distance routes.
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Adjusted Revenue,
RUB mln
Total CAPEX adjusted
for M&A, RUB mln
2022
81,610
2021
58,492
+40%
2022
20,224*
2021
7,629*
Total Operating Cash Costs,
RUB mln
Free Cash Flow,
RUB mln
2022
32,373
2021
29,751
+9%
2022
14,825
2021
16,131
Adjusted EBITDA,
RUB mln
Net Debt,
RUB mln
2022
49,216
2021
29,044
+69%
31 Dec 2022
4,596
31 Dec 2021
18,464
+165%
-8%
-75%
Adjusted EBITDA Margin,
%
Net Debt to Adjusted
EBITDA
2022
60%
2021
50%
31 Dec 2022
0.1
31 Dec 2021
0.6
1 Service Contracts represent contracts with an initial term
greater than one year that stipulate an obligation to transport
a specified amount of cargoes for the client. As of the end of 2022,
Globaltrans had six Service Contracts.
28
29
Source: Globaltrans
Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Financial and Operational Review
RESULTS IN DETAIL
The following tables provide the Group’s key financial and operational information for the
years ended 31 December 2022 and 2021.
EU IFRS financial information
Revenue
Total cost of sales, selling and marketing costs and
administrative expenses
Other gains/(losses) — net
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)
Cash generated from operations (after changes in working capital)
30,058
Tax paid
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
RUB mln
RUB mln
73,151
94,474
(52,630)
(58,838)
796
(1,335)
21,627
(2,189)
19,438
34,302
(1,150)
33,152
(4,338)
(8,232)
15,100
24,920
12,987
25,193
2,113
72.69
(274)
141.23
%
29%
12%
NM
59%
-47%
71%
90%
65%
94%
NM
94%
2021
2022
Change
RUB mln
RUB mln
(2,808)
27,250
48,631
(8,455)
40,176
(7,154)
(19,652)
(12,217)
(17,520)
2021
2022
Change
Net Revenue from Operation of Rolling Stock
54,319*
76,798*
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Non-IFRS financial information
Adjusted Revenue
Including
Operating leasing of rolling stock
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 (incl. maintenance CAPEX)
Total CAPEX adjusted for M&A
Free Cash Flow
Attributable Free Cash Flow
Debt profile
Total debt
Cash and cash equivalents
Net Debt
Net Debt to Adjusted EBITDA (x)
2021
2022
Change
RUB mln
RUB mln
58,492
81,610
%
40%
41%
84%
9%
12%
23%
-1%
2%
69%
35%
165%
-8%
8%
1,832
3,372
29,751
32,373
15,429*
17,283*
5,491
3,969
1,972
6,781
3,943
2,017
29,044
49,216
50%
60%
8,439
11,424
7,629*
20,224*
16,131
14,825
14,018
15,098
As of 31 Dec 2021
As of 31 Dec 2022
RUB mln
RUB mln
31,318
12,855
18,464
0.6
20,649
16,052
4,596
0.1
%
62%
201%
47%
175%
43%
30
31
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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
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
2022
134.9
77.0
64,553
56,637
1,733
21.0
50%
41%
99%
66,115
62,354
3,761
7,474
14.5
1,768
In 2022, the Group’s total revenue increased 29% year on year to RUB 94,474 million
reflecting the combination of a 40% year-on-year rise in Adjusted Revenue and a 12% year-
on-year decrease in “pass through” items (a combination of “Infrastructure and locomotive
tariffs: loaded trips” and “Services provided by other transportation organisations”).
The following table provides details of total revenue, broken down by revenue-generating
activity, for the years ended 31 December 2022 and 2021.
Railway transportation — operators services (tariff borne by the
Group)
2021
2022 Change
RUB mln
RUB mln
31,744
30,341
%
-4%
Railway transportation — operators services (tariff borne by the
client)
37,238
60,197
62%
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.
In 2022, the Group’s Adjusted Revenue was RUB 81,610 million up 40% year on year largely
driven by the increase in Net Revenue from Operation of Rolling Stock.
The following table provides details of Adjusted Revenue for the years ended 31 December
2022 and 2021 and its reconciliation to total revenue.
2021
2022
Change
Total revenue
Minus “pass through” items
RUB mln
RUB mln
73,151
94,474
Infrastructure and locomotive tariffs: loaded trips
12,964
10,465
Services provided by other transportation organisations
1,695
2,399
Adjusted Revenue
58,492
81,610
%
29%
-19%
42%
40%
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.
The following table provides a breakdown of the components of Adjusted Revenue for the
years ended 31 December 2022 and 2021.
2021
2022
Change
Operating leasing of rolling stock
Revenue from specialised container transportation
Other
Total revenue
1,832
1,824
514
3,372
84%
-
-100%
564
73,151
94,474
10%
29%
32
33
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
RUB mln
RUB mln
54,319*
76,798*
1,832
1,643*
184*
514
3,372
876*
564
58,492
81,610
%
41%
84%
375%
10%
40%
-
-100%
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Net Revenue from Operation of Rolling Stock
Other revenue
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 94% of
the Group’s Adjusted Revenue in 2022, increased 41% year on year to RUB 76,798 million*
reflecting the recovery in both the gondola and tank car segments’ revenue streams which
was largely aided by the market pricing recovery in the gondola segment in the first half of
2022 albeit with a subsequent decline in the second half.
Revenue from operating leasing of rolling stock
Revenue from operating leasing of rolling stock contributed 4% of the Group’s Adjusted
Revenue in 2022 and increased 84% year on year to RUB 3,372 million reflecting the
increase in the average number of leased-out fleet along with a rise in average leasing rates.
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 was eliminated in 2022 due to the
deconsolidation of this business segment reflecting the sale of SyntezRail (a subsidiary of
Globaltrans) in October 2021. In 2021 the revenue from this segment amounted to RUB 1,643
million* and accounted for 3% of the Group’s Adjusted Revenue.
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 1% of the Group’s Adjusted Revenue in
2022, increased 375% year on year in 2022 to RUB 876 million*, largely reflecting a rise in the
number of Engaged Fleet operations in the oil products and oil segment.
34
35
Other revenue, comprising less than 1% of the Group’s Adjusted Revenue in 2022, 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 10% year
on year to RUB 564 million in 2022.
Cost of sales, selling and marketing costs and administrative
expenses
The following table provides a breakdown of cost of sales, selling and marketing costs
and administrative expenses for the years ended 31 December 2022 and 2021.
Cost of sales
Selling and marketing costs
Administrative expenses
Total cost of sales, selling and marketing costs and
administrative expenses
2021
2022
Change
RUB mln
RUB mln
48,334
53,929
249
282
4,046
4,626
52,630
58,838
%
12%
13%
14%
12%
A 12% year-on-year rise in the Group’s total cost of sales, selling and marketing costs
and administrative expenses to RUB 58,838 million in 2022 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”) decreased
12% year on year to RUB 12,864 million primarily due to a decrease 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 21% year on year to RUB 45,973 million in
2022, due to:
̙ An 9% year-on-year increase in Total Operating Cash Costs to RUB 32,373 million
in 2022, which largely reflected the rise in Empty Run Costs and employee benefit
expense with repairs and maintenance costs relatively unchanged (-1% year on year).
̙ Total Operating Non-Cash Costs rose 65% year on year to RUB 13,600 million
principally due to the impairment of about 3.8 thousand units of rolling stock
(mostly gondola cars) blocked in Ukraine along with a 130% year-on-year increase in
depreciation of right-of-use assets as the Group substantially increased the number
of gondola cars leased-in under long-term operating leases.
Annual Report & Accounts 2022GlobaltransAnnual Report 2022
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:
2021
2022
Change
“Pass through” cost items
Infrastructure and locomotive tariffs: loaded trips
RUB mln
RUB mln
14,659
12,864
12,964
10,465
Services provided by other transportation organisations
1,695
2,399
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
Impairment of property, plant and equipment
Depreciation of right-of-use assets
Loss on derecognition arising on capital repairs
Gain on sale of property, plant and equipment
Net impairment losses on trade and other receivables
Amortisation of intangible assets
37,971
45,973
29,751
32,373
15,429*
17,283*
5,491
3,969
1,972
1,219*
294
274
1,103
6,781
3,943
2,017
1,258*
116
35
941
8,221
13,600
6,643
-
1,127
484
(42)
8
0.7
6,753
3,933
2,597
310
(13)
21
0.3
Total cost of sales, selling and marketing costs and
administrative expenses
52,630
58,838
%
-12%
-19%
42%
21%
9%
12%
23%
-1%
2%
3%
-61%
-87%
-15%
65%
2%
NM
130%
-36%
-70%
165%
-52%
12%
“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 Group and is reflected in equal amounts in both the Group’s total revenue and cost of
sales.
The 19% year-on-year decrease in this item in 2022 to RUB 10,465 million primarily reflected
the lower proportion of clients that pay infrastructure and locomotive tariffs: loaded trips
through the Group.
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Services provided by other transportation organisations
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 rose 42% year on year
to RUB 2,399 million in 2022 primarily due to a higher number of Engaged Fleet operations
in the oil products and oil segment along with the rise in the cost of fleet engagement.
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 2022 of RUB 32,373 million were 9% higher compared to
the previous year due to a combination of the factors described below.
The following table provides a breakdown of the Total Operating Cash Costs for the years
ended 31 December 2022 and 2021.
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
Empty Run Costs
2022
2021
2022
Change
% of total
RUB mln
RUB mln
53%
21%
12%
6%
4%
0.4%
0.1%
3%
15,429*
17,283*
5,491
6,781
3,969
3,943
1,972
2,017
1,219*
1,258*
294
274
1,103
116
35
941
100%
29,751
32,373
%
12%
23%
-1%
2%
3%
-61%
-87%
-15%
9%
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.
36
37
Annual Report & Accounts 2022GlobaltransAnnual Report 2022
Financial and Operational Review
Empty Run Costs, which accounted for 53% of the Group’s Total Operating Cash Costs in
2022, increased 12% year on year to RUB 17,283 million* due to:
· Regulated RZD tariffs for the traction of empty railcars which rose about 18.6% over 2022
(an increase of 6.8% from 1 January 2022 and an additional increase of 11% from 1 June
2022);
· A decline in the Group’s Freight Rail Turnover of 8% year on year in 2022;
· An improved Total Empty Run Ratio (for all types of rolling stock) of 50% (2021: 51%) with
the Share of Empty Run Kilometres paid by Globaltrans remaining stable year on year at
99%.
Employee benefit expense
Employee benefit expense, which represented 21% of the Group’s Total Operating Cash Costs
in 2022, increased 23% year on year to RUB 6,781 million. This resulted from:
Inflation-driven growth in wages and salaries;
·
· A 2% year-on-year increase in the average headcount due to the continued shift to in-
·
house locomotive crews;
Increases in bonuses largely reflecting the Group’s strong business performance in 2022
and successful M&A.
Repairs and maintenance
Repairs and maintenance costs, which comprised 12% of the Group’s Total Operating Cash
Costs in 2022, declined 1% year on year to RUB 3,943 million as a decrease in the number of
depot repairs was partially offset by the inflation-driven rise in costs of certain repair works
and spare parts in the reporting year.
Fuel and spare parts — locomotives
Fuel and spare parts — locomotives expenses, which accounted for 6% of the Group’s Total
Operating Cash Costs in 2022, rose 2% year on year to RUB 2,017 million reflecting an
inflation-driven rise in the cost of fuel and engine oil.
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 2022 and rose 3% year on year to RUB 1,258 million*, impacted
largely by the changed logistics in the oil products and oil segment.
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Engagement of locomotive crews
Costs related to the engagement of locomotive crews from RZD in 2022 (less than 1% of
the Group’s Total Operating Cash Costs) declined 61% year on year to RUB 116 million due
to a reduction in the amount of outsourcing of locomotive crews as the Group continued to
increase its use of in-house crews.
Expense relating to short-term leases (rolling stock)
In 2022, expense relating to short-term leases (rolling stock), representing less than 1% of
the Group’s Total Operating Cash Costs, fell 87% year on year to RUB 35 million primarily
due to the intentional decrease in the average number of fleet leased-in under short-term
operating leases.
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 2022 and 2021.
Expense relating to short-term leases (office)
Auditors remuneration
Legal, consulting and other professional fees
Advertising and promotion
Communication costs
Information services
Expense relating to short-term leases (tank containers)
Taxes (other than on income and value added taxes)
Other expenses
Other Operating Cash Costs
2021
2022
Change
RUB mln
RUB mln
99
57
74
46
25
16
23
27
735
1,103
93
46
94
41
25
15
-
24
603
941
%
-6%
-19%
27%
-10%
-3%
-7%
-100%
-13%
-18%
-15%
Other Operating Cash Costs, which comprised 3% of the Group’s Total Operating Cash
Costs, fell 15% year on year to RUB 941 million in 2022 reflecting cost optimisation efforts.
38
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The Group’s Adjusted EBITDA rose 69% year on year to RUB 49,216 million in 2022. The
Adjusted EBITDA Margin increased to 60% in 2022 from 50% in 2021 reflecting the 40%
year-on-year increase in Adjusted Revenue while Total Operating Cash Costs rose 9% year
on year.
The following table provides details on Adjusted EBITDA for the years ended 31 December
2022 and 2021, and its reconciliation to EBITDA and profit for the year.
Profit for the year
Plus (Minus)
Income tax expense
Finance costs — net
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 (losses)/gains on financing
activities
Other gains/(losses) — net
Gain on sale of property, plant and equipment
Impairment of property, plant and equipment
Adjusted EBITDA
2021
2022 Change
RUB mln RUB mln
%
15,100
24,920
65%
4,338
8,232
90%
2,189
1,150
-47%
(10)
0.7
641
0.3
NM
-52%
1,127
2,597
130%
6,643
6,753
29,388
44,293
2%
51%
(484)
(10)
(310)
-36%
641
NM
796
(1,335)
NM
42
13
-70%
-
(3,933)
29,044
49,216
NM
69%
2,597
130%
Net foreign exchange transaction (losses)/gains on financing activities
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 (gains)/losses on trade and other receivables”, “impairment/(reversal of
impairment) of property, plant and equipment” and “(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 2022 and 2021.
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Loss on derecognition arising on capital repairs
Net impairment gains on trade and other receivables
Amortisation of intangible assets
Gain on sale of property, plant and equipment
Impairment of property, plant and equipment
2021
2022
Change
RUB mln
RUB mln
6,643
6,753
%
2%
1,127
484
8
0.7
(42)
-
310
21
0.3
(13)
3,933
-36%
165%
-52%
-70%
NM
65%
Total Operating Non-Cash Costs
8,221
13,600
A 65% year-on-year increase in Total Operating Non-Cash Costs to RUB 13,600 million in
2022 which stemmed primarily from:
·
Impairment of property, plant and equipment in the amount of RUB 3,933 million related
to the impairment of about 3.8 thousand units of rolling stock (mostly gondola cars)
blocked in Ukraine;
· A 130% year-on-year rise in depreciation of right-of-use assets as the Group substantially
increased the number of gondola cars leased-in under long-term operating leases.
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”, “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”.
40
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Annual Report & Accounts 2022GlobaltransAnnual Report 2022
Financial and Operational Review
Finance income and costs
The following table provides a breakdown of finance income and costs for the years ended
31 December 2022 and 2021.
Interest expense:
Bank borrowings
Non-convertible bonds
Total interest expense calculated using the effective interest rate
method
Other lease liabilities
Total interest expense
Other finance costs
Total finance costs
Interest income:
Bank balances
Short term deposits
Loans to related parties
Loans to third parties
2021
2022
Change
RUB mln
RUB mln
%
(1,483)
(1,258)
(772)
(561)
(2,255)
(1,820)
-15%
-27%
-19%
(202)
(781)
287%
(2,457)
(2,600)
(50)
(2)
(2,507)
(2,602)
209
72
-
3
521
222
18
-
6%
-96%
4%
149%
208%
NM
-100%
Total interest income calculated using the effective interest
rate method
284
761
168%
Finance leases — related parties
Finance leases — third parties
Total interest income
Other finance income
Total finance income
Net foreign exchange transaction gains 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
0.4
42
326
0.8
327
3
(12)
(10)
2
17
779
351%
-60%
139%
32
3,832%
812
148%
-
-100%
641
641
NM
NM
Net finance costs
(2,189)
(1,150)
-47%
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Finance costs
Total finance costs for 2022 increased 4% year on year to RUB 2,602 million.
A deleveraging-driven 19% year-on-year decrease in total interest expense, calculated
using the effective interest rate method (related to bank borrowings and non-convertible
bonds) to RUB 1,820 million, was more than offset by the rise in other lease liabilities
to RUB 781 million from RUB 202 million in 2021 as the Group increased the number of
gondola cars leased-in under long-term operating leases.
Finance income
In 2022, the Group’s total finance income increased 148% year on year to RUB 812 million,
primarily due to increases in short-term deposits and bank balances along with a rise in
deposit rates compared to the previous year.
Net foreign exchange transaction gains/(losses) on financing activities
The Group had net foreign exchange transaction gains on financing activities of RUB 641
million in 2022 compared to RUB 10 million of net foreign expense losses on financing
activities in 2021. This resulted from foreign exchange volatility on the available cash and
cash equivalents denominated in foreign currency.
Other gains/(losses) — net
The Group had other losses — net of RUB 1,335 million in 2022 that largely reflected the
foreign exchange volatility impact on the intragroup acquisition of rail tanks by BTS from
Spacecom and the subsequent sale of the Company’s shareholding in Spacecom. In 2021,
the Group reported RUB 796 million of other gains — net.
Profit before income tax
The Group reported a year-on-year increase of 71% in profit before income tax to
RUB 33,152 million in 2022, reflecting a 59% year-on-year increase in the Group’s operating
profit to RUB 34,302 million, which was largely linked to the factors described above.
Income tax expense
Income tax expense rose 90% year on year to RUB 8,232 million in 2022 primarily due to a
rise in taxable profits and an increase in the average tax rate used for 2022 to 24.8% (2021:
22.3%).
Profit for the year
The Group’s profit for the year increased 65% year on year to RUB 24,920 million reflecting
the factors described above.
Profit for the year attributable to the owners of the Company increased 94% year on year to
RUB 25,193 million reflecting the factors described above.
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Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Financial and Operational Review
Liquidity and capital resources
In 2022, the Group’s capital expenditure consisted principally of maintenance CAPEX
(including capital repairs) and the selective acquisition of rolling stock. In addition, the Group
acquired a 40% stake in its subsidiary BTS bringing its shareholding to 100%.
The Group was able to meet its liquidity and capital expenditure needs through operating
cash flow and available cash and cash equivalents.
The Group manages its liquidity based on expected cash flows. As at 31 December 2022,
the Group had Net Working Capital of RUB 3,630 million*. Given its anticipated operating
cash flow and borrowings, the Group believes that it has sufficient working capital to operate
successfully.
Cash flows
The following table sets out the principal components of the Group’s consolidated cash flow
statement for the years ended 31 December 2022 and 2021.
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
Cash flows from investing activities
Acquisition of non-controlling interest
Cash inflow from disposal of subsidiary undertakings — net of cash
disposed of
2021
2022
RUB mln
RUB mln
29,104
47,963
954
620
(139)
(488)
23
524
414
668
548
(86)
(1,285)
389
1,660
(557)
30,058
48,631
(2,808)
(8,455)
27,250
40,176
(300)
(8,800)
1,110
-
Purchases of property, plant and equipment
(8,439)
(11,422)
Purchases of intangible assets
Loans granted to third parties
Loans granted to related parties
Proceeds from sale of property plant and equipment
Loan repayments received from third parties
Loan repayments received from related parties
-
(75)
-
78
79
-
(2)
-
(800)
238
-
400
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Interest received
Receipts from finance lease — related parties
Receipts from finance lease — third parties
Other
Net cash used in investing activities
Cash flows from financing activities
2021
2022
RUB mln
RUB mln
326
-
108
(41)
761
9
28
(65)
(7,154)
(19,652)
Net cash inflows/(outflows) from borrowings and financial leases:
1,521
(10,549)
Proceeds from bank borrowings
Repayments of borrowings
Repayments of non-convertible unsecured bonds
Purchase of treasury shares
18,058
2,750
(15,287)
(9,549)
(1,250)
(3,750)
-
(114)
Principal elements of lease payments for other lease liabilities
(1,068)
(2,403)
Interest paid on bank borrowings and non-convertible unsecured bonds
(2,239)
(1,939)
Interest paid on other lease liabilities
Dividends paid to non-controlling interests in subsidiaries
Dividends paid to the owners of the Company
Net cash used in financing activities
Net increase in cash and cash equivalents
Exchange (losses)/gains on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Net cash from operating activities
(183)
(786)
(1,225)
(1,728)
(9,023)
-
(12,217)
(17,520)
7,879
3,005
(3)
193
4,978
12,855
12,855
16,052
In 2022, net cash from operating activities rose 47% year on year to RUB 40,176 million
primarily due to the following factors:
· The increase in cash generated from operations (after “changes in working capital”)
which rose 62% year on year to RUB 48,631 million, supported by growth in average
pricing combined with the Group’s market-leading operational capabilities;
· Tax paid was 201% higher year on year at RUB 8,455 million primarily reflecting the
increase in taxable profits.
Net cash used in investing activities
Net cash used in investing activities increased 175% (or RUB 12,497 million) year on year to
RUB 19,652 million largely reflecting:
· A 35% or RUB 2,983 million year-on-year increase in purchases of property, plant and
equipment (on a cash basis; including maintenance CAPEX) to RUB 11,422 million;
· RUB 8,800 million payment for the acquisition of the 40% shareholding in BTS bringing
the Group’s shareholding to 100% (RUB 300 million was prepaid in the second half of 2021).
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Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Financial and Operational Review
Net cash used in financing activities
The 43% year-on-year rise in net cash used in financing activities which increased to
RUB 17,520 million in 2022, was due to the factors described below:
· The Group continued to repay its debt out of its operational cash flow and available cash
and cash equivalents in 2022, with net cash outflow from borrowings and financial leases
amounting to RUB 10,549 million compared to net cash inflow from borrowings and
financial leases of RUB 1,521 million in the previous year;
Interest paid on bank borrowings and non-convertible unsecured bonds decreased 13%
year on year to RUB 1,939 million in 2022;
Interest paid on other lease liabilities rose to RUB 786 million from RUB 183 million on the back
of an increase in the number of gondola cars leased-in under long-term operational leases;
·
·
· As previously announced, the Group suspended dividend payments due to technical
limitations regarding upstreaming cash to the Cyprus holding company. As a result, no
dividends were paid to the owners of the Company in 2022 compared to the RUB 9,023
million paid in the previous year;
· Dividends paid to non-controlling interests in subsidiaries increased 41% year on year to
RUB 1,728 million in 2022.
Capital expenditure (including M&A)
Total CAPEX (a non-IFRS financial measure) is 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”.
Total CAPEX adjusted for M&A (a non-IFRS financial measure) is calculated as a combination
of Total CAPEX (which includes maintenance CAPEX) and cash inflows and outflows from
acquisitions and disposals.
In 2022 the Group’s Total CAPEX (on a cash basis, including maintenance CAPEX) was 35%
higher year on year at RUB 11,424 million, reflecting:
· Maintenance CAPEX which decreased 3% year on year to RUB 6,411 million*, with an
inflationary rise in the cost of certain spare parts more than offset by the decline in the
number of respective repairs;
· Expansion CAPEX which rose 174% year on year to RUB 5,013 million* and includes cash
outflow for the purchase of 1,341 units of rolling stock (composed of 541 rail tank cars and
800 gondola cars).
The Group’s capital expenditure (including maintenance CAPEX) on an accrual basis was
RUB 11,186 million in 2022 (2021: RUB 7,994 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.
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The Group’s Total CAPEX adjusted for M&A increased 165% year on year to RUB 20,224
million* in 2022:
·
·
In October 2021, Globaltrans sold its 60% shareholding in the small non-core container
operator SyntezRail for RUB 1.1 billion in cash;
In March 2022, Globaltrans completed the acquisition of the remaining 40%
shareholding in BTS bringing the Group’s shareholding to 100%. The respective payment
for the acquisition of the non-controlling interest amounted to RUB 8,800 million in the
first six months of 2022 (RUB 300 million was prepaid in the second half of 2021).
The following table sets out the principal components of the Group’s Total CAPEX and Total
CAPEX adjusted for M&A for the years ended 31 December 2022 and 2021.
2021
2022
Change
Purchase of property, plant and equipment
Purchases of intangible assets
Total CAPEX
Acquisition of non-controlling interest
Cash inflow from disposal of subsidiary undertakings — net
of cash disposed of
RUB mln
RUB mln
8,439
11,422
%
35%
NM
35%
2
11,424
8,800
2,833%
-
NM
-
8,439
300
(1,110)
Total CAPEX adjusted for M&A
7,629*
20,224*
165%
Free Cash Flow
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”.
Free Cash Flow decreased 8% or RUB 1,306 million year on year to RUB 14,825 million in
2022, primarily due to:
· A 62% or RUB 18,573 million year-on-year increase in cash generated from operations
(after “changes in working capital”) to RUB 48,631 million;
· Total CAPEX (including maintenance CAPEX) of RUB 11,424 million which was 35% or
RUB 2,985 million higher year on year;
· Tax paid which increased 201% or RUB 5,647 million year on year to RUB 8,455 million;
· Payment of RUB 8,800 million for the acquisition of a non-controlling interest reflecting
the acquisition of the remaining stake in BTS;
· A 155% or RUB 1,938 million year-on-year rise in a combined “principal elements of lease
payments for other lease liabilities” and “interest paid on other lease liabilities” which
rose to RUB 3,189 million as the Group substantially increased the number of gondola
cars leased-in under long-term operating leases.
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Financial and Operational Review
The following table sets out details on Free Cash Flow and Attributable Free Cash Flow for
the years ended 31 December 2022 and 2021, and its reconciliation to cash generated from
operations.
2021
2022
Change
%
62%
35%
201%
-13%
125%
330%
NM
Cash generated from operations (after “changes in working
capital”)
Total CAPEX (including maintenance CAPEX)
Tax paid
Interest paid on bank borrowings and non-convertible
unsecured bonds
RUB mln
RUB mln
30,058
48,631
(8,439)
(11,424)
(2,808)
(2,239)
(8,455)
(1,939)
Principal elements of lease payments for other lease liabilities
(1,068)
(2,403)
Interest paid on other lease liabilities
Cash inflow from disposal of subsidiary undertakings — net of
cash disposed of
Acquisition of non-controlling interest
Free Cash Flow
Minus
(183)
1,110
(786)
-
(300)
(8,800)
2,833%
16,131
14,825
-8%
Adjusted Profit Attributable to Non-controlling Interests
2,113
(274)
Attributable Free Cash Flow
14,018
15,098
NM
8%
Capital resources
As of 31 December 2022, the Group’s financial indebtedness consisted of borrowings and
non-convertible unsecured bonds for an aggregate principal amount of RUB 20,649 million
(including accrued interest of RUB 260 million*), a decrease of 34% compared to the end of
2021.
Under IFRS 16, other lease liabilities (not included in total debt) of RUB 4,195 million were
recognised on the balance sheet as of 31 December 2022 (31 December 2021: RUB 5,842
million) which was primarily related to the long-term leasing of certain fleet and offices.
As of 31 December 2022, the Group’s Net Debt decreased 75% to RUB 4,596 million
compared to 31 December 2021 with the Net Debt to Adjusted EBITDA ratio improving to
0.1x compared to 0.6x at the end of 2021.
The following table sets out details on the Group’s total debt, Net Debt and Net Debt to
Adjusted EBITDA at 31 December 2022 and 2021, and the reconciliation of Net Debt to total
debt.
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Total debt
Minus
Cash and cash equivalents
Net Debt
Net Debt to Adjusted EBITDA
As of 31 Dec 2021
As of 31 Dec 2022
Change
RUB mln
31,318
12,855
18,464
0.6x
RUB mln
20,649
16,052
4,596
0.1x
%
-34%
25%
-75%
Rouble-denominated borrowings accounted for 100% of the Group’s debt portfolio as of
31 December 2022. The Russian rouble is the functional currency of the Company.
The weighted average effective interest remained favourable at 8.1% as of 31 December
2022 (31 December 2021: 7.5%) despite significant market interest rate volatility over the
first half of 2022. All of the Group’s debt had fixed interest rates as of 31 December 2022.
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 42,783
million as of 31 December 2022.
The following table gives the maturity profile of the Group’s borrowings (including accrued
interest of RUB 260 million*) as of 31 December 2022.
Q1 2023
Q2 2023
Q3 2023
Q4 2023
2024
2025
2026
2027
Total
As of 31 Dec 2022
RUB mln
4,758*
1,940*
3,209*
1,689*
6,167*
1,764*
561*
561*
20,649
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Financial and Operational Review
Related party transactions
For the purposes of this Annual Report and the Group’s Consolidated Management
Report and Consolidated 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 2022 (31 December 2021: 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 2022 (31 December 2021: 3.1%)². As at
31 December 2022, another 0.1% (31 December 2021: 0.2%) of the shares of the
Company are controlled by Directors and key management of the Company. For further
details on Globaltrans’ shareholder structure, please see the Share Capital section of
this Annual Report on page 122.
For further details on the transactions carried out with the above related parties,
please see Note 35 of the Group’s Consolidated Management Report and Consolidated
Financial Statements which is included in the Financial Statements section of
this Annual Report. Except as set out in this section and Note 35 of the Group’s
Consolidated Management Report and Consolidated Financial Statements, during
the period 1 January to 31 December 2022, there were no transactions or proposed
transactions that were material to either the Company or any related party nor were
there any transactions with any related party that were unusual in their nature or
conditions.
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.
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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. 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.
In addition, in January 2021, the Board established the ESG Committee to analyse and
oversee risks related to environmental, social and governance issues.
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Risk Management
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 of 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
risks is an ongoing process and it
is recognised that the level and
extent of the risk management
system will evolve as the Group
evolves.
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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, decisions of regulatory authorities in the EU,
the UK, Russia and other jurisdictions, including the suspension of trading of its
GDRs on the LSE may affect the price of 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
and Kazakhstan, 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 2023 may be further
impacted by the Coronavirus outbreak,
which continues to cause uncertainty.
Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Risk Management
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 the
Russian Central Bank and a number of
commercial banks, the restrictions for
capital movements outside the Russian
Federation, sanctions imposed by the
United States, the European Union, the
United Kingdom and a number of other
countries on the biggest Russian industrial
groups and other institutions, companies
and individuals 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.
Moreover, many businesses are taking
a cautious approach to sanctions and export
compliance matters and have adopted
internal policies more restrictive than are
strictly required by the applicable rules
which may adversely affect the willingness
of counterparties to deal with our business.
In addition, the current situation in Ukraine
has a negative impact on the Group’s
business and assets in Ukraine and/or on
the ability of the Group to carry on business
in Ukraine. Some of the Group’s railcars
which were in Ukraine or used to transport
cargo from Russia into or through the
territory of Ukraine (about 5% of the Group's
Total Fleet) have been blocked in Ukraine.
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 material
amounts of cash to the Company’s bank
accounts outside of Russia as a result of
these restrictions. Further, the weakening
of the Russian rouble against the US dollar
and Euro and the accelerated inflation in
Russia 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 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.
The situation in Russia and Ukraine and
the resulting sanctions imposed on Russia
and other persons connected to Russia by
various countries around the world as well as
sanctions and restrictive measures imposed
by Russia may have unforeseen, long-term
and far-reaching consequences for the global
economy, the Russian economy and the
freight rail transportation industry in Russia.
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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.
Regulatory Risk and Relations
with Government Authorities
and State-owned Enterprises
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.
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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
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.
Regulatory Risk, Risks
of Banking System and Risk
of Termination of Listing
of the Company’s GDRs on the
London Stock Exchange (“LSE”)
and Admission to Trading,
Sanctions
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 3 March
2022, the LSE suspended the trading of
the Company’s GDRs and as at the date
of publication of this Annual Report this
suspension is still in place. There is a risk
that the admission of Company’s GDRs to
trading on the LSE will be cancelled due
to a potential change in the listing rules of
the 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 of this Annual Report,
suspended the instructions for transfers
and settlements of accounts connected
to the 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 of this Annual
Report, not possible in most cases.
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Following the sanctions, imposed by the
EU on NSD, the major clearing systems
Euroclear and Clearstream block the
amounts payable through NSD, thus
holders of GDRs traded on the Moscow
Exchange may have difficulties with
receiving dividends, if such dividends are
paid through Euroclear and Clearstream
clearing systems.
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.
In addition, management will seek to
maintain an open and constructive
dialogue with any regulators to discuss any
developments as they arise.
Constraints and Risks
to Growth Strategies
Description
Business growth can be constrained
by an increase in prices for new rolling
stock and spare parts, underproduction
of rolling stock, partial scrappage of the
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.
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Controls and mitigating factors
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. About 59% of the Group’s
Net Revenue from Operation of Rolling
Stock in 2022 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 2022, the share of
small and medium companies amounted
to about 33% of Net Revenue from
Operation of Rolling Stock (2021: 32%).
Furthermore, the Group’s marketing
function regularly monitors competitors’
business strategies, their use of
technology, their price strategies and
industry trends.
Competition and Customer
Concentration
Description
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 behaviour 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 about 67% of the Group’s
Net Revenue from Operation of Rolling
Stock in 2022. 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.
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Locomotive Traction and RZD
Authorisations
Heightened Risk
of Shareholder Activism
Description
Description
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.
Controls and mitigating factors
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 licences 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.
GDRs of Globaltrans have been listed
on the Main Market of the LSE since
May 2008 (although trading has been
suspended by the LSE since 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. In addition, the current geopolitical
environment surrounding Ukraine and
Russia may heighten the likelihood of these
risks.
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.
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Sustainability
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Financial
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Additional
Information
OPERATIONAL: RISKS THAT INFLUENCE THE GROUP’S
OPERATIONAL EFFICIENCY
Current State and Quality
of 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 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.
Risks to Operational
Performance, Including
Inflationary Pressures
Description
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.
Controls and mitigating factors
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.
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Employees
Description
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.
Controls and mitigating factors
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
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.
Controls and mitigating factors
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. The Group will
also continue to monitor its third party
service providers to ensure satisfactory
performance standards are being met.
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, the European Union, the United
Kingdom and a number of other countries,
a number of IT solutions used by the Group
will no longer be maintained by American,
British and European Union suppliers.
Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Risk Management
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 as well
as regularly reviewing and maintaining
business continuity plans 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.
Overview
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COMPLIANCE: RISKS THAT INFLUENCE THE GROUP’S ADHERENCE
TO RELEVANT LAWS AND REGULATIONS
Pending and Potential Legal
Actions
Description
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.
Controls and mitigating factors
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.
ESG Risks
Description
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.
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.
More information on climate-related
risks is available in the Sustainability
Report on pages 94 to 99.
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Compliance with Regulations
and Sanctions
Fiscal Risk from Evolving
Legal and Tax Regimes
Impact of Brexit and Takeover
Regulations
Controls and mitigating factors
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.
Description
Description
Description
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 LSE (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.
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. 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.
Controls and mitigating factors
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.
The Group functions in several
jurisdictions, including Cyprus, Russia
and Ukraine. In addition, the Group has
its GDRs listed on the LSE (although
the LSE suspended trading of the
Group’s GDRs on 3 March 2022 and
such suspension remains in place) 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, Ukraine, the United Kingdom
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), EU and UK
sanctions lists, special regulations
imposed by the Russian authorities and
the appropriate controls are in place to
ensure that all subsidiaries of the Group
comply with applicable regulations.
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FINANCIAL: RISKS THAT INFLUENCE THE GROUP’S
FINANCIAL PERFORMANCE
Currency Risks
Interest-rate Risks
Description
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 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 the
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 2022, all of the
Group’s debt was at fixed interest rates.
Management also considers alternative
means of financing.
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 dividends
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.
Controls and mitigating factors
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 2022, all of the
Group’s debt was denominated in Russian
roubles.
Overview
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Report
Governance
Financial
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Information
Credit Risk
Liquidity Risk
Description
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 about 79% of the
Group’s trade and other receivables as of
31 December 2022 and about 67% of the
Group’s Net Revenue from Operation of
Rolling Stock in 2022.
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. The Group also continues to explore
opportunities to diversify its customer and
supplier base.
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, the United Kingdom
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.
Controls and mitigating factors
The Group has a budgeting policy in
place that allows 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. Management continues
to monitor the current environment and its
potential impact on liquidity.
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Sustainability
Report
Overview
Overview
Strategic
Strategic
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Report
Sustainability
Sustainability
Report
Report
Governance
Governance
Financial
Financial
Statements
Statements
Additional
Additional
Information
Information
Globaltrans
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Annual Report 2022
Annual Report & Accounts 2022GlobaltransAnnual Report 2022
Sustainability
HIGHLIGHTS OF 2022
LTIFR1
zero
(2021: 0)
1.4 х
Increase
in training hours
GPG2-1 %
88 %
(2021: -3%)
Overall employee
engagement score
Overview
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Additional
Information
-9 %
Decrease in total emissions
(Scope 1 and Scope 2)
Green
Office
Ongoing implementation
of Initiative across the Group
Climate
Disclosure
Further enhancement: analysis
of climate-related risks and opportunities
OUR APPROACH
The Sustainability Report which
is integrated into the 2022 Annual Report
has been prepared in accordance with
the sustainability reporting guidelines
of the Global Reporting Initiative ("GRI"),
Task Force on Climate-Related Financial
Disclosures ("TCFD") recommendations
and in line with the non-financial and
diversity disclosure information contained
in the EU’s 2014/95/EU Directive.
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 reflect 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 2022.
ESG GOVERNANCE
Over the past few years, Globaltrans
has improved its ESG governance
structure to communicate and respond
effectively to emerging ESG issues while
proactively implementing sustainability
commitments, initiatives and practices.
The ESG Committee has overall
responsibility for the Group’s sustainability
strategy and is the Company's top
1 LTIFR (Loss 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.
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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 the Group attaches
to these issues.
unit in charge of its sustainable
development issues. The Committee
was created in January 2021 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 sets out formal ESG
commitments and established lines
of responsibility and accountability.
Annual Report 2022GlobaltransAnnual Report & Accounts 2022 Sustainability
MATERIALITY
How it works:
Globaltrans identifies its material
sustainability issues through a materiality
analysis. Materiality is an important concept
in the management of our sustainable
development. It makes it possible to identify
and consider the Group’s key economic,
environmental, social, and governance
issues, as well as issues most likely to
impact its stakeholders. Once identified,
they are reviewed annually. The materiality
assessment clearly demonstrates that
external events such as COVID-19 or any
potential change in Globaltrans’ business
activities can result in a revision of material
issues. In 2022, social issues such as
business resilience, employee wellbeing,
support and development re-emerged as
highly relevant issues for the Group.
Step 1
Identification
of material topics
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.
Step 2
Prioritisation
of material topics
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.
Step 3
Preparation
of materiality matrix
We developed a materiality matrix to identify those topics
that are deemed most important 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.
Materiality matrix
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
2
5
4
10
12
1
9
3
6
8
7
11
Important
Materiality for business
Extremely
important
Economic impact
Environmental impact
Social impact
1 Economic performance
2 Socioeconomic development of regions
3 Business ethics, risk management
and anti-corruption
4 Customer satisfaction
5 Risks and opportunities posed by climate
change
6 Management of carbon footprint
7 Reduction of energy consumption
8 Compliance with environmental
laws and regulations
9 Employee education and development
10 Employee motivation
11 Diversity and equal opportunity
12 Occupational health and safety
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stakeholders. And so I am pleased
to share with you our fifth integrated
Sustainability Report, which outlines
our ongoing initiatives to integrate
ESG standards more deeply into the
organisation.
In terms of environmental
responsibility, in 2022 we fully
complied with all the relevant
environmental rules, regulations and
laws during the reporting period. Our
total emissions (Scope 1 and Scope 2)
decreased by 9% year on year.
As part of our ongoing commitment
to lessen the Group’s environmental
footprint, we launched the Green
Office Initiative and embarked
on a small tree-planting project
which we intend to expand over
the next few years. In addition,
recognising the vital importance
of global action on climate change,
we published our second climate-
related disclosure in accordance with
the recommendations of the Task
Force on Climate-Related Financial
Disclosures ("TCFD"). In order to meet
the standards set by TFCD, we sought
to identify and evaluate the risks
and opportunities for the business
associated with climate change.
In terms of social issues, looking after
our people is even more important
during uncertain times. Therefore,
in 2022 we remained committed
to fulfilling our obligations to our
employees. The fact that we could
state that we had met our "zero harm"
target in 2022 is evidence of the high
priority Globatrans gives to workplace
safety.
The Group invested considerable time
and effort into strengthening its Human
Resources practices. For example,
we increased the total number
of training hours in our educational
programme by 1.4 times to better
support our employees’ development.
In addition, the Group is committed
to keeping lines of communication
open with its employees through
a range of engagement channels.
In 2022, we conducted our first
employee engagement survey, which
provided important insights on staff
engagement, staff development,
well-being, and culture. We are
encouraged by the positive employee
engagement score of 88%. The Group
always considers employee input and
feedback when making decisions
about organisational changes
and improvements. For instance,
improvements were made to the
benefits package for employees,
as a result of the findings of another
pulse-survey conducted last year.
As for the wider community, the
Group continued its long-standing
partnerships with and support for
various charitable organisations
throughout 2022.
In conclusion, I am pleased to note
the improvements we made in 2022.
Furthermore, I can assure you that
Globaltrans will continue to uphold its
commitment to sustainable business
development, report on its progress
and create value for its stakeholders.
Elia Nicolaou
Chair of the ESG Committee,
Non-executive Director
ESG COMMITTEE CHAIR’S
MESSAGE
In 2022, as the world recovered from
the COVID-19 pandemic, we faced
another set of social and economic
challenges and an unprecedented
macro environment. Nevertheless,
even during these highly uncertain
times Globaltrans continued
to operate efficiently, ethically and
responsibly. We acted responsibly
towards our employees, our clients
and the community at large, and
maintained our commitment to a wide
range of sustainable practices.
In my two years serving on the ESG
Committee, I have seen positive
progress and a gradual transformation
in Globaltrans’ corporate culture,
employee perceptions, internal
procedures and decision-making
mechanisms. In addition, we have taken
further important steps to advance
the governance of our ESG processes
at all levels of the Group since this
ensures a solid foundation for effective
management and accountability.
The ESG Committee’s responsibilities
include not only managing and
overseeing the Group’s environmental,
social, and governance initiatives but
also ensuring that high-quality ESG
information is provided to all of our
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OUR ESG JOURNEY
The timeline shows some key highlights
and progress we have made to date.
2018
2021
· ESG Committee formed
· ESG Policy adopted
· First time reporting оf Scope 2
· Publication of our first Sustainability
emissions
Report in accordance with GRI
standard
· First time reporting оf Scope 1
emissions
· Privacy Policy introduced
· Publication of first climate-related
report in accordance with TCFD
recommendations
Improvement in ESG ratings and ranking
positions (Sustainalytics, Expert RA)
·
2020
2022
·
Introduction of various social policies
such as Human Rights, Corporate
Diversity and Inclusion and Freedom
of Association Policies
· Health and Safety Policy adopted with
LTIFR maintained at 0
· Strengthening of HR practiсes.
Employee engagement survey held
· Environmental & Energy Policy
· Green Office Initiative introduced
adopted
· Suppliers’ Code of Conduct introduced
Introduction of Group-wide LTIFR
·
measure of employee health & safety
· Website relaunched with a separate
Sustainability section
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
KEY ESG ACTIVITIES:
Corporate governance
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.
Environment
Employing more energy-efficient
practices, reducing carbon emissions
and promoting recycling are means by
which we work to minimise the adverse
impact of Globaltrans’ activities on the
environment.
Communities
We are very conscious of the role we play
in supporting our communities. We do this
through our employees' interactions, the
opportunities our businesses create and
the economic value that our Company
generates. We also actively contribute to
community initiatives and provide direct
support to important community causes
through charitable giving.
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
applicable employment legislation.
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
simply to satisfy regulatory obligations
but also to meet the expectations of
our stakeholders. Further details on
Globaltrans’ Risk Management are set out
on pages 51 to 67.
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Sustainability
STAKEHOLDER ENGAGEMENT
At Globaltrans, we believe that regular
and consistent engagement is crucial for
building effective long-term relationships
with stakeholders. As a part of our
commitment to being a responsible
and trusted business, we have always
strived to maintain an open, ongoing
and two-way dialogue with our various
stakeholders. It gives us a clear
understanding of their needs, views
and priorities and enables us to reflect
them in our business, make better
decisions, balance different interests
and identify material issues, potential
risks and opportunities. Through a year-
round programme of active engagement
using various channels and processes,
we strive to improve transparency
for our stakeholders and deepen
their understanding of our strategy,
performance and initiatives.
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.
In 2022, due to the challenging macro
environment, demand for information
and communication increased. The
Group devoted considerable time and
effort to maintaining close engagement
with our stakeholders to address
their concerns and respond quickly
to information requests. We continued
to be responsive, transparent and
accountable in terms of our reporting.
We continued to use digital means
of communication in 2022 for a large
number of client engagements, investor
roadshows and conferences.
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.
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
STAKEHOLDER ENGAGEMENT MECHANISMS
Employees
Shareholders and investors
Customers and business partners
Mechanisms of engagement
Mechanisms of engagement
Mechanisms of engagement
· Open, effective and transparent
· Regular meetings, presentations,
Intranet
·
· Labour-management consultations
· Staff surveys
· Corporate booklets, information
boards
· Regular, direct communication
between managers, teams
and individuals
· Career development, training
and performance reviews
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
· Social media channels
and formal consultations
· Customer analytics, customer
evaluation system
Industry conferences and forums
·
· Customer satisfaction surveys
· Transparent supply chain
Outcomes in 2022
· Strong portfolio of Service
Contracts maintained contributing
about 59% of Net Revenue from
Operation of Rolling Stock in 2022
Outcomes in 2022
Outcomes in 2022
· Zero-harm target achieved with
LTIFR maintained at 0
·
Information disclosure on a semi-
annual basis
· Number of training hours up
· Analyst and investor events and
1.4x due to expansion of training
programmes and increased volume
of safety training
webcasts
· Virtual non-deal roadshows with
institutional investors
· First employee engagement survey
· Series of investor meetings with
held
retail investors
· Provision of social benefits and
guarantees, including medical
insurance
Improvement of employee benefit
packages as a result of pulse
surveys
·
· Publication of Annual Report and
integrated Sustainability Report
along with the climate-related
disclosure
· Completion of numerous ESG
questionnaires received from
investors, financial institutions and
rating agencies
Interaction with credit rating
agencies
·
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STAKEHOLDER ENGAGEMENT MECHANISMS
Government, regulators and
professional authorities
Mechanisms of engagement
· Regular communication with
regulators/policy makers on
industry issues
Industry and regulatory forums
·
Local communities
Media
Mechanisms of engagement
Mechanisms of engagement
· Corporate philanthropy and
charitable contributions
· Community investment
· Communication with media
representatives
· Transparent disclosure through
various channels
Outcomes in 2022
· Dedicated media section on
Outcomes in 2022
· Assistance to support
· Participation in industry
associations including the Council
of Railway Operators and the
Russian Union of Transport Workers
corporate website
· Dedicated media relations contacts
· Press conferences and exhibitions
socioeconomic development of our
communities
· Regular contributions to aid
Outcomes in 2022
charitable projects (In 2022 the
Group supported the Life Line
Charity Fund, Doctor Liza’s charity
foundation and other organisations.)
· Distribution of news and
information announcements
· Providing access to results
webcasts with CEO & CFO
· Responding to media queries
·
Interviews with senior
management, ad hoc commentary
on industry issues, and responding
to journalists’ questions
Overview
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Additional
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ETHICS AND BEHAVIOUR
A good reputation is an important
asset for every business, as it testifies
to the trustworthiness of our
employees, business partners,
investors and other stakeholders.
At Globaltrans, we have always strived
to maintain our good name by being
a strong values-based company.
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. We have
a number of Group policies that
express the high standards we are
committed to upholding. Each policy
has been endorsed at the Board level.
Our Code of Ethics and Conduct
defines the corporate values, the
basic principles of business conduct,
and the ethical commitments that the
Group and its employees must put into
practice on a daily basis. It describes
the Group’s principles with respect
to confidential information, anti-bribery,
conflicts of interest and reporting
concerns. The Code is intended
to help our employees become
aware of the responsibilities that each
one of them has and to understand
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.
We strongly believe that sustainability
is about cooperation. 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. We are glad
that nearly all our business partners
adhere to the highest ESG standards,
comply with all the environmental
and social regulations and provide
voluntary disclosures on sustainability
matters.
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.
The fundamental rights and freedoms
of individuals are an important
concern for Globaltrans in its relations
with employees and partners. 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. We act
to create a fair, equal, healthy, safe,
and engaging work environment
for all employees. That also means
a commitment to respecting human
rights.
Tolerance
Impartiality
Respect
Equality for all
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
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ETHICS AND BEHAVIOUR
Our Human Rights Policy, 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
continually progressing on this front,
we regularly review our conduct,
policies and training and incorporate
any required changes or learnings
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.
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
representatives1.
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 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
2022, no instances of alleged fraud,
bribery or corruption were reported
within the Group.
We are committed to protecting
the personal data and respecting
the privacy of our stakeholders.
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.
1 At the end of 2022, 31% of BaltTransServis’ (“BTS”, a 100% subsidiary of Globaltrans) workforce was covered by collective agreements. There are no such
agreements in other Group subsidiaries.
Overview
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Additional
Information
1,768
Total headcount
78,106
Total training hours
29 %
Share of women
in the workforce
88 %
Overall employee
engagement score
EMPLOYEES
Our people are our biggest strength
and driving force. Their expertise,
commitments and determination are
crucial to the success of Globaltrans.
We place great emphasis on the well-
being of our employees and we are
fully committed to creating a safe
and supportive workplace, promoting
equal opportunities and encouraging
professional growth.
As an employer, we must foster
a culture where employees can thrive
and feel respected, listened to, and
appreciated. This approach is in line
with our culture and the fundamental
values of the commitments, policies,
and initiatives of the Group. We are
dedicated to establishing the right
conditions in which employees can
work effectively and advance their
careers. At Globaltrans, we offer
fair remuneration that recognises
individual performance. In doing so,
we strive to encourage our people
to realise 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 prioritise our
employees’ safety. We have made
a stronger commitment to health
and safety issues in recent years.
We have put in place the appropriate
frameworks, health and safety policies
and training programmes to ensure
our employees can work safely.
As a result of these actions, we have
been able to enhance our overall
safety performance.
At our Company, we strive
to effectively manage people issues
through our robust HR strategy and
policies that define our philosophy
and values. These policies are 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;
·
Internal Code of Labour Conduct;
· Regulations on Contractual Work;
· Regulations on Business Trips;
· Regulations on Protection;
of Personal Data of Employees.
All these policies are intended
to ensure compliance with the
appropriate labour and social
standards as well as all local laws and
regulations relating to compensation
and benefits, recruitment, working
practices, equal opportunities, diversity
and discrimination. We take immediate
action to address and investigate any
suspected violations or issues which
are brought to our attention.
In 2022, we continued to improve
our HR management procedures
and activities at both the Group and
subsidiary levels.
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Workforce size and mix
In 2022, average employee
headcount increased 2% year on year
to 1,781 employees1 (2021: 1,750). Overall
headcount as at the year end declined 1%
compared to 2021 to 1,768 employees
(2021: 1,777). BTS continued to employ the
most people within the Group as a result
of the continuing shift to employing in-
house locomotive crews. Our workforce
comprises 29% of women and 71%
of men. We have a young talent pool with
more than 65% of our employees within
the age group of 30–50 years.
Permanent contract in 2022
(at year-end)
Part
time
Full
time
71 29
29 71
Women
Men
Temporary contract in 2022
(at year-end)
Part
time
Full
time
46 54
Women
Men
Headcount by companies
in 2021–22 (at year-end)
BaltTransServis (incl. its subsidiaries)
2022
826
2021
800
New Forwarding Company
2022
533
2021
540
Ural Wagonrepair Company
2022
326
2021
350
GTI Management
2022
47
2021
49
Other subsidiaries
2022
36
2021
38
Overview
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Governance
Financial
Statements
Additional
Information
Headcount by gender
in 2022 (at year-end)
Diversity
29%
Women
71%
Men
Headcount by age
in 2022 (at year-end)
25%
> 50 years
10%
< 30 years
65%
30–50 years
Source: Globaltrans
Equality, inclusion and diversity are
fundamental building blocks that must
be seen by every company as a source
of strength, and integrated into the
culture and business strategy. We firmly
believe that our different backgrounds
and perspectives enable us find
better business solutions, attract and
retain the best people, and help make
Globaltrans a better place to work.
At Globaltrans, we foster a culture
of equal opportunities and rights
between men and women, nationalities,
religious affiliations, sexual orientation
and people with or without physical
disabilities. Our philosophy is to treat
everyone with fairness and respect.
We value and embrace our employees’
individuality and respect them for their
performance, talents, and contributions.
By offering equitable employment to all
of our employees, we want to eliminate
all forms of discrimination. The
Group’s Diversity and Inclusion Policy
outlines this zero-tolerance approach
to discrimination, and any violations
are cause for disciplinary action. This
approach seeks to ensure that no cases
of discrimination occur.
At Globaltrans, our commitment
to diversity extends to all aspects
of our activities, including recruitment,
employee retention, promotions,
compensation and benefits, career
development and training, working
conditions, and Board appointments.
The Group has always sought to drive
greater equity across the organisation
and to provide equal pay opportunities
for both women and men. To help
increase the transparency of our
diversity data, we analyse and publish
our Gender Pay Gap2 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 2022, the average
Gender Pay Gap in our non-managerial
workforce was −1% (2021: -3%),
indicating that the average hourly wage
of female employees is higher than that
of male employees. This reflects the fact
that there are proportionally more men
in lower-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.
1 The difference between the headcount and the average headcount is due to different calculation techniques. The headcount is presented as at the
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
end of 2022, while the average headcount is calculated by summing up the number of employees on the list in each month of the reporting period and
difference in pay.
dividing this sum by the number of months.
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As at year end 2022, women
comprised 29% of our workforce.
At the Board level, women comprised
14% of the Board of Directors (two
Board members).
The second priority of how we
manage diversity is the inclusion
of employees with disabilities. We
believe it is important not only to hire
people with disabilities, but to create
an environment where people with
disabilities can easily work. There
are currently 25 employees with
disabilities whose daily contributions
help the Group meet its business
goals and achieve success.
Training and education
Developing talent and improving
employee performance are
essential to a business’ long-term
competitiveness and 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.
To better understand the exact
capabilities our employees need,
we look at identifying the training needs
of each employee in our organisation.
To help our people improve their
skills, contribute more effectively,
and become more future-ready,
we regularly host training events,
seminars and skills workshops tailored
to individual work requirements. Many
of the training and development
courses we offer, including those that
cover sustainability, social, strategic
and personal development issues are
available online through our intranet.
Overview
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Information
Number of employees
participating in training
Average training hours per employee
(participating in training)
2022
1,024
2021
607
Diversity matrix in 2022 (at year-end)
Average training hours by gender
Percentage of Board members
Percentage of Executive management
14%/2
Women
11%/1
Women
Men
2022
78
2021
77
2022
76
2021
92
Women
2022
71
2021
118
By offering an array of training and
development tools, we keep our
employees engaged in their jobs and
with the Company.
Over the course of 2022, the Group
increased the number of training
hours by 1.4 times, devoting 78,106
hours to learning and development
activities (2021: 55,780 hours).
Those areas where training was
provided included health and safety,
accounting, business administration,
environmental safety, information
technology, financial management and
marketing, as well as the development
of technical and soft skills.
In 2022, the majority of learning
activities remained digital, with 77%
of all training and development
happening online. The COVID-19
pandemic has accelerated our digital
transformation, especially in two key
areas: deepening digital literacy for
all our employees and advancing the
digitisation of processes.
Motivation
We strongly believe that sustainable
success can only be achieved
with employees who are satisfied
and committed. Therefore, good
human resources practices aimed
at empowering our employees
are extremely important for the
development of our business.
Globaltrans is taking proactive steps
to achieve continual improvement
by trying to provide the best possible
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 keeping
in close touch with our colleagues
and meeting 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.
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, provide
career development opportunities
and offer attractive compensation
and benefits as well as rewarding
work and opportunities for learning
and development. Our staff reward
packages can vary for every subsidiary
and include but are not limited to:
· Social insurance (compensation and
paid leave in case of pregnancy,
childbirth, and childcare);
· Medical coverage for employees
and their closed ones;
· Reimbursement of home-to-work
transportation costs and fuel
expenses for personal travel;
· Gym membership;
· Education of employees’ children
and grandchildren.
In addition, the Group reviews
different types of requests and
provides financial assistance
in challenging circumstances
and on special occasions. Eligible
employees can participate in various
incentive schemes operated
by the Group.
In 2022, our overall staff turnover
rate increased to 19% (14% for men
and 4% for women) (2021: 16%).
The majority of leavers were from
Uralwagon Repair Company and
BTS, two subsidiaries with a bigger
number of technical staff. The Group
intends to work to reduce the level
of employee-related terminations.
The HR function of each subsidiary
conducts exit interviews to analyse
the reasons and to help improve
retention practices and loyalty
among our employees.
86%/12
Men
89%/8
Men
Distribution of training
among employees
by employee categories
in 2022
Main types of training
formats in 2022
11%
Managers
23%
On-site learning
89%
Employees
77%
Distance
learning
Source: Globaltrans
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Sustainability
Employee Turnover Rate based on gender and age, 2021–22, %
Health and safety
19
16
14
12
10
8
4
3
3
3
5
4
Total
Men
Women
< 30 years
30–50 years
> 50 years
2021
2022
Source: Globaltrans
Corporate culture and internal
communications
Globaltrans strives to be a people
company. Respect, mutual
appreciation, transparency and
collaboration form the basis of our
corporate culture. We believe
that these values contribute
to sound business decisions, foster
a trustworthy and supportive
workplace, and help to 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
also have employee intranet and
helplines.
In 2022, we conducted our first
staff engagement survey, which
we consider a key indicator of how
effective our HR management is.
It gave us an opportunity
to learn from our people about
their experiences of working
at Globaltrans. Overall employee
engagement score stood at 88%.
The findings revealed that
employees support the Company’s
objectives and have confidence
in the Group’s strategy and future
success. This feedback is invaluable
in helping to refine our HR approach
to key issues like compensation,
professional development, staff
communications, and topics around
work-life balance, wellbeing and job
satisfaction. The survey findings also
help to improve dialogue between
managers and employees.
For example, colleagues expressed
a desire for more perks as part of the
employee benefits package and for
greater learning and development
opportunities to help progress their
careers. As a result, the Group took
the necessary steps to address these
issues.
To boost employee engagement,
engender a sense of unity and
promote better teamwork, we also
regularly host sports, cultural
and recreational events for our
employees and their families.
As a proactive and responsible
employer, Globaltrans places the
highest priority on health and safety
and wellbeing of its employees. The
Group is committed to maintaining
high standards of occupational safety
and to complying with all health and
safety regulations and legislation.
This approach has been firmly
embedded in our culture for many
years.
Our Code of Ethics and 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.
harm. For us, this means taking every
precaution to reduce each potential
risk to zero. In 2022, we formulated and
shared our philosophy on occupational
safety in the Group’s Health and
Safety Policy in order to strengthen
our workplace safety programme.
It is intended to provide guidance
on safety-complaint conduct and
to help us improve and promote
our culture of zero harm and risk
awareness among our people, thereby
reducing the number of work-related
incidents. Whilst we have a positive
occupational health and safety track
record because most of our employees
work in a low risk environment,
we remain focused on our ultimate
target of zero incidents.
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. General safety
Loss Time Injury
Frequency Rate (LTIFR),
2020–22
Following the COVID-19 pandemic
and the tragic accident in 2020,
that claimed the life of one of our
colleagues, the Group took the
decision to reconsider and reinforce
all aspects of its safety culture in order
to take it to the next level. Our vision for
occupational health and safety is zero
2022
2021
0
0
2020
0.66
awareness and training is undertaken
by all employees. We also have job
specific training applicable to the
area of work. Over the last few years,
the number of training sessions
on safety increased significantly.
Our HR department and safety
experts collaborate closely with our
employees, employing a systematic
approach to managing the work
environment, that involves analysing
work-related risks, evaluating
how applicable rules and policies
are implemented, and identifying
where there is scope for further
optimisation. We conduct regular
safety spot-checks to ensure that
they continue to meet high standards.
In 2022, we increased the number
of workplace safety audits to 526
visits (2021: 173 visits).
In 2022, thanks to the efforts of our
employees, Globaltrans reported
zero work-related incidents for the
second year in a row. Our continued
focus on implementing best practices
has meant we have made significant
progress enhancing employee safety
over recent years. We again achieved
the target of a zero LTIFR in 2022.
We are pleased that Globaltrans
is making progress, that our policies
and procedures are working, and
that the safety training programmes
we offer are making a positive
difference. Nevertheless, going
forward, our approach to health and
safety will continue to be proactive
and preventative. We will intensify
our efforts to build a safety-focused
culture across the whole Group.
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Governance
Financial
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Additional
Information
The following table illustrates how our Company creates financial value for its stakeholders.
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
2022
RUB mln
94,474
71,860
51,082
951
6,781
4,567
8,479
22,614
1
Information in the table is derived from the Consolidated Management Report and Consolidated Financial Statements
for the year ended 31 December 2022.
2 Direct economic value generated includes “revenue”.
3 Payments to providers of capital include “dividends paid to owners of the Company”, “dividends paid to non-controlling
interests in subsidiaries”, "interest paid on bank borrowings and non-convertible unsecured bonds”, "interest paid on other
lease liabilities" and “purchase of treasury shares”.
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.
Sustainability
In 2022, we continued to support our
longstanding partner, the Life Line
Fund, which provides vital assistance
to children with life-threatening
conditions. In the reporting period,
the Group also began working
with the Doctor Liza Charity Fund,
which helps socially disadvantaged
individuals, the homeless, and families
and children in difficult circumstances.
We also encourage our employees
to play an active role in the
communities where they work, for
example by supporting participation
in local volunteering activities.
In 2022, Globaltrans also contributed
to the society by launching a small
environmental project aimed
at minimising our carbon footprint
by planting trees. We believe that
this scheme benefits not only for the
local ecology, but also for restoring
biodiversity.
Going forward, the Group will continue
to increase its positive social impact
and improve the daily lives of its
people and broader communities
through sustainable, inclusive and
responsible practices and initiatives.
COMMUNITIES
Rail is essential in today’s society
as it promotes economic growth,
lowers greenhouse gas emissions
and provides an important source
of employment. Globaltrans
is aware of its socio-economic
and environmental impact. The
Group has always been committed
to being a good corporate citizen and
a good neighbour. As an employer
and business partner, we have
a responsibility to the communities
where we operate and the
people around us. We work hard
to be a positive force in society
by creating shared value for all our
stakeholders through our continued
focus on sustainability.
Our social commitments are
embedded in our culture, business
operations, client relationships,
community involvement and
charitable efforts.
We add value through our business
operations in various ways: direct and
indirect employment, tax payments
and social activities, and through
the provision of internships and
educational support. Our employees
welcome the opportunity to engage
with interns or take part in 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 determine what support —
skills, time or financial assistance —
will help deliver the best outcomes.
It is through our business success
that we can provide this support and
create opportunities for both current
and future employees. It also means
we are contributing directly to the
broader economy through local and
national taxes, licence payments and
other fees and by using third-party
services and suppliers.
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 improve the quality
of life for them and their families.
Our long-term goal of giving back
to communities through a range
of social initiatives is a priority for the
Group. In the past, we have invested
in good causes that are consistent
with our own culture and values.
We contribute directly to charitable
organisations in the areas of health,
welfare, culture and education. Our
focus on diversity and inclusion
demonstrates the Group’s commitment
to support the vulnerable — children,
seniors, disadvantaged families and
the disabled.
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Sustainability
ENVIRONMENT
Protecting the environment
is an ongoing challenge for all
businesses in all industries, all over
the world. As one of the greenest
and most efficient modes of transport
on land, rail has a unique position
in contributing to a more sustainable
economy and the decarbonisation
of the overall transportation sector.
Due to its lower greenhouse
gas emissions1 and low rates
of energy consumption, freight rail
transportation can play an important
future role in mitigating climate
change.
Globaltrans has always been
committed to conducting business
in an environmentally responsible
manner. We recognise the potential
for our operations to impact the
environment, particularly in the form
of greenhouse gas emissions. The
Group is committed to minimising
the environmental impact of its
activities, recognising its responsibility
to protect the environment for
the communities it serves, its
stakeholders and society as a whole.
To this end, we focus not just
on controlling emissions but also
on issues like 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 in order to stay
compliant. Our overall environmental
management approach
is underpinned by the Group’s
formal ESG and Environmental and
Energy Policies and Green Office
Initiative. 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. In accordance with
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 promoting environmental
awareness among our employees and
suppliers and improving transparency
for our investors. For this purpose,
we disclose the Group’s environmental
performance on 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 2022 results are set out below.
There were no recorded violations
of environmental legislation
or regulations during the reporting
period.
Energy usage
Managing our energy consumption
is a priority for Globaltrans.
We acknowledge that energy use and
climate change are interconnected,
and we are determined to use energy
prudently and be climate conscious.
By managing our energy consumption
efficiently, we are in a position
to reduce our greenhouse gas (GHG)
emissions1. 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 and electricity. Most
of the energy we use is electricity
in our offices, which is needed for
lighting, air conditioning and the
electrical power for computers and
communications devices.
In 2022, the Group’s energy
consumption performance was
somewhat mixed due to a number
of factors. There was a 1% year-
on-year increase in electricity use,
primarily attributable to the partial
return of employees to the offices
after the COVID-19 pandemic and
colder winter temperatures compared
to the previous year. On the other
hand, diesel consumption was
down 9% year on year as the result
of improved fuel efficiency thanks
to fuel efficiency of 10 modern
locomotives in BTS’ fleet together
with lower utilisation among NFC’s
locomotives. Lower use of the Group’s
vehicles contributed to the 29%
decrease in petroleum consumption.
Energy consumption is regularly
monitored, and, together with our
environmental experts, we are
constantly looking for ways
to improve energy efficiency and
reduce our carbon footprint.
Use of water
Water consumption management
is another important part of our
commitment to environmental
protection and resource conservation.
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 monitoring
of water use in our everyday activities.
Since 2018, we have been steadily
improving the monitoring, collection
and processing of water usage data
across the Group’s subsidiaries. In 2020,
we released our first annual water
consumption results. In 2022, water
consumption increased by 2% year-
on-year to 16,654 m3 (2021: 16,279 m3)2
due to the return of many employees
to the office. Globaltrans continues to
look for ways to improve water use and
adopt practices to help its employees
manage and use water more efficiently.
Total consumption of energy
resources by type, 2021–22
Electricity (KWh)
2022
4,426,367
2021
4,401,655
Diesel (litres)
2022
46,325,429
2021
50,758,074
Petroleum (litres)
2022
120,938
2021
171,1793
+1%
-9%
-29%
Petrol consumption per employee,
2021–22
2022
68
2021
984
-31%
Diesel consumption per employee,
2021–22
2022
26,011
2021
29,005
Source: Globaltrans
-10%
1 Greenhouse gas (GHG) emissions are the emission into the Earth's atmosphere of any of various gases, especially carbon dioxide, that contribute
3 The data for petroleum consumption in 2021 has been restated.
to the greenhouse effect.
4 The data for petroleum consumption per employee in 2021 has been restated.
2 This excludes data from Spacecom and BTS (except for data from the BTS railcar repair depot in Ivanovo which is included).
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Paper recycling
Paper is part of our everyday life
and we should use it wisely. The
environmental impact of paper is
significant, as its production, use
and disposal require a great deal of
energy and raw materials. Therefore,
we actively promote the value of
a green work environment and
encourage employees to reduce the
frequency and volume of printing. In
recent years, our focus has been on
digitising business processes and
employing electronic documentation,
and the COVID-19 pandemic has
served to accelerate these trends.
In 2022, employee paper consumption
slightly increased by 3% year on year
due to the return of many employees
to the office.
Green Office Initiative
In addition to minimising our
environmental footprint through various
corporate sustainability initiatives,
Globaltrans is also proactive in taking
action in our daily office life to make all
of our processes and day-to-day activities
more efficient. In 2022, we introduced
our Green Office Initiative which
is designed to promote the adoption
of the green office best practices across
the Group and educate employees
to become more climate-aware, given
the importance of their contribution
in helping transition us to a greener
world. We also strongly believe that our
focus on environmental best practice
is not only the right thing to do, it can also
deliver cost savings and help build strong
stakeholder relationships.
Paper consumption (kg per employee),
2021–22
2022
2021
6
6
Source: Globaltrans
We are committed to reducing
energy and natural resource
consumption and waste generation
by improving the environmental
efficiency of our offices. With respect
to energy savings, we have started
replacing lighting containing mercury
with energy-efficient LED lighting
and plan to optimise the efficiency
of our facilities’ heating and cooling
systems. Waste management
measures include paperless
communication methods, reduced
use of plastic and environmentally
friendly waste collection and
recycling. Wherever possible, our
focus is on reducing, reusing 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 how efficiently the Group
manages its waste. We are currently
working to harmonise waste
management data for all Group
companies.
Greenhouse gas management
Rail is the most efficient, safe and
sustainable mode of land-based freight
transportation. Our industry is among
the greenest and least polluting from
an energy and emissions perspective.
Nevertheless, our business activities
do generate greenhouse gases,
and their reduction is a priority for
Globaltrans as we seek to minimise our
environmental impact and mitigate the
effects of climate change.
From a strategic perspective,
Globaltrans’ main operational and
environmental objectives align
perfectly: delivering efficient logistics
and carefully managing assets are
our top priorities. Since its inception,
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.
Overview
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Additional
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As a part of the Group’s commitment
to mitigating climate change
and minimising its environmental
impact, in the reporting year BTS,
which operates the bulk of our
locomotive fleet, invested in a small
tree-planting project. This initiative
is about helping us reduce our
carbon footprint and make a positive
impact on our communities and
biodiversity.
In 2023, operational and
environmental efficiency will remain
our priority. We will continue our
efforts in the areas of emissions
reduction, resource efficiency, climate
change mitigation and protection
of the environment. The Group
will also continue to report on our
activities in the field of sustainability.
In the freight rail industry, GHG
emissions are directly linked to fuel
consumption and, as such, the
primary source of emissions is from
locomotives. RZD retains a monopoly
in the provision of rail infrastructure,
and is by far the largest provider
of locomotive traction services.
Globaltrans runs one of Russia’s
largest privately-owned locomotive
fleets, providing a specialised
service for its clients primarily
in the oil products and oil segment.
Consequently, we only measure,
report and record emissions (Scope 1)
that are 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 fuel-efficient and cleaner diesel
locomotives.
Since 2018, we have made significant
progress in measuring, managing
and disclosing direct GHG emissions1
information in our operations, and
this process is ongoing. In 2022, our
direct GHG emissions decreased
by 9% to 140,352 tonnes of CO2
equivalent1 due to the fuel efficiency
of 10 modern locomotives in BTS’
fleet and lower utilisation of NFC’s
locomotives in 2022 (2021: 153,871
tonnes of CO2 equivalent2).
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. In 2021 for the first time,
we calculated the indirect GHG
emissions generated by our energy
purchases (Scope 2) using Scope
2 GHG Protocol guidelines. In 2022,
the Group’s indirect emissions totalled
1,560 tonnes of CO2 equivalent (2021:
1,551 tonnes of CO2 equivalent3).
In total, the Group was responsible
for 141,912 tonnes of CO2 equivalent,
9% less than in 2021. While our path
to reducing emissions is not always
linear, the trend line over the past five
years reflects the Group’s ongoing
commitment in this area. Between
2018 and 2022, we achieved a 16%
decrease in our total GHG emissions.
This timeline enables our stakeholders
to track and quantify the efforts
of Globaltrans to reduce its emissions.
GHG emissions, 2018–22
Direct GHG emissions (Scope 1, tonnes of CO2 equivalent)
166,129
161,299
138,198
153,8712
140,352
Indirect GHG emissions from purchased electricity
(Scope 2, tonnes of CO2 equivalent)
2,589
1,690
1,474
1,5513
1,560
Total GHG emissions (Scope 1 + Scope 2)
168,718
162,989
139,672
155,422
141,912
2018
2019
2020
2021
2022
1 The Group’s greenhouse gas emissions were calculated per IPCC Guidelines for National Greenhouse Gas Inventories (2006).
2 The data for Scope 1 emissions in 2021 has been restated.
3 The data for Scope 2 emissions in 2021 has been restated.
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Disclosure ("TCFD")
As we move forward, we will continue
to develop our climate analytics
capabilities, further strengthen our
climate resilience and be transparent
about our progress on climate change
issues. At some point in the future
we intend to cooperate with industry
experts to conduct a high-level
quantitative scenario analysis that will
provide our stakeholders with a better
understanding of the potential financial
impacts of climate change on our
business and rail infrastructure in general.
Core elements
of recommended
climate-related financial
disclosures
Governance
Risk Management
THE GROUP’S EFFORTS
TO RESPOND TO CLIMATE
CHANGE — IMPLEMENTING
THE RECOMMENDATIONS
OF THE TCFD
Globaltrans has long identified
climate change as a material issue,
and we incorporate 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, in 2021 Globaltrans
voluntarily committed to aligning its
climate disclosure with the Taskforce
on Climate-related Financial Disclosures
("TCFD") framework in order to ensure
consistency, relevance and comparability
for all our stakeholders within and outside
our industry.
We believe that assessing climate risks
and opportunities is an evolving process.
This year, as disclosure of climate-related
information becomes mandatory, we will
continue to deepen our understanding
of potential climate-related risks and
opportunities, embed responses to them
into our strategy, planning and internal
processes, and increase the level
of climate-related disclosure. In line with
the TCFD recommendations, this Report
addresses the four key areas: governance,
strategy, risk management and metrics
and targets.
Metrics and Targets
Strategy
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
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Management
of climate-related issues
Responsibilities of the Board include:
· Overseeing the management
of climate-related issues, risks and
opportunities;
· 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, risk and
opportunities;
· 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.
GOVERNANCE
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 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.
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STRATEGY
Globaltrans’ material climate-
related risks
Globaltrans’ fleet, 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.
It is expected that the most significant
effects of climate change are likely
to emerge over the long term.
Nevertheless, we consider both the
short, medium and long-term time
horizons when assessing climate-
related risks (short-term: 0–5 years,
medium-term: 5–10 years, long-term:
10 years and above).
Physical
Acute and chronic physical risks
Time horizon: long-term
Transition
Policy/regulation
Time horizon: medium to long-term
Description
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.
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 (higher carbon prices)
which may lead to:
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.
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 with
potential involvement of external
industry experts and adopt strategies
to enhance its business resilience.
·
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 address 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 response to these types of transitional
risks, the Group will continue to improve
its operational efficiency and reduce its
energy consumption and environmental
footprint. Furthermore, Globaltrans will
continue to 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. We believe that annual
emissions testing will help us better
prepare for future changes to the
regulatory environment.
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Market
Time horizon: medium to long-term
Reputation
Time horizon: short to long-term
Description
Description
Market risks include potential
declines in demand for certain
types of freight transported by rail
due to increased 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.
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 mitigate changes in
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’ climate-related
opportunities
The TCFD framework recognises that
climate change and the transition
to a net zero economy may also
present opportunities for businesses.
Due to the nature of our business,
Globaltrans considers the following
climate-related opportunities:
Market
Time horizon: medium to long-term
Globaltrans regards transition
climate risks, together with increased
environmental awareness and further
decarbonisation of the economy,
as an opportunity to further promote
the environmental benefits of freight
rail transportation. As carbon pricing
regulation will sooner or later come
into force globally and demand for
lower carbon transport will continue
to grow, we may face a potential
increase in our business operations,
financial results and expansion of our
client base over the medium and long
term.
Resource efficiency
Time horizon: medium to long-term
Transition risks can also be regarded
as an opportunity to promote and
improve the Group’s energy efficiency
and enhance its environmental
performance. Thus, efficient use
of resources (energy, water) may
reduce the Group’s environmental
footprint and operating costs.
The Group will also continue
to investigate and steadily implement
fuel-saving measures.
Reputation
Time horizon: short to long-term
Globaltrans believes there
is a potential opportunity to enhance
its competitiveness and reputation
by improving its environmental
performance, further developing our
climate awareness and resilience
and ensuring high quality climate
reporting for all stakeholders.
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RISK MANAGEMENT
Responsible decision-making, risk
management and early action have
always been part of what we do as they
ensure the successful longevity of our
business. From the outset, Globaltrans
established a system to monitor and
control the uncertainties and risks it faces.
This system is overseen by a dedicated
risk management function responsible
for systematically identifying, assessing
and managing opportunities and risks,
including those related to climate change.
Many elements, such as extreme weather,
have long been recognised as a material
issue and captured within the Group’s
existing risk framework. However,
the TCFD recommendations and our
willingness to contribute to positive
climate action have led us to add both
physical and transition risks to our risk
watchlist. We also recognise that climate-
related risks are interconnected and can
trigger other types of risks (operational,
financial and reputational). Nevertheless,
each group of risks requires a tailored
management approach.
With regard to climate risk management,
we are continuously working on building
our expertise and enhancing the
methodology and tools to better assess
climate-related risks and opportunities.
Globaltrans is currently in the early stages
of conducting climate scenario analyses
to help quantify the potential financial
impacts and assess the resilience of the
business.
To mitigate the effects of climate change,
the Group is committed to a variety
of environmentally responsible practices.
We constantly monitor changes in the
external environment and review laws
and regulations. We also prepare and
conduct a detailed analysis of the Group’s
energy consumption and emissions
on a semi-annual basis.
For more information on our processes for
identifying and assessing risks and opportunities,
please see the Risk Management section of this
Annual Report on pages 51 to 67.
Overview
Strategic
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Sustainability
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Financial
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Additional
Information
Scope 1 GHG emissions,
tonnes of CO2 equivalent
Total GHG emissions
(Scope 1 + Scope 2),
tonnes of CO2 equivalent
2022
140,352
2021
153,871
2022
141,912
2021
155,422
Scope 2 GHG emissions,
tonnes of CO2 equivalent
Carbon intensity1
2022
1,560
2021
1,551
2022
1.7
2021
2.7
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.
At this stage, Globaltrans is not yet
ready to set emission reduction targets.
Nevertheless, over the recent years
we have focused on driving our carbon
reduction initiatives and enhancing
our operational efficiency. As a result,
our Empty Run Ratio for gondolas
has continued to improve despite the
challenging operational context and
is one of the lowest in the industry.
A few years ago, we purchased
10 new, cleaner and more fuel-efficient
locomotives. In 2022, Globaltrans
launched a small environmental project
that may potentially expand in the
coming years. It aims to offset the Group's
environmental footprint through planting
trees. Last year, we also took steps to
further promote green policies in day-
to-day office activities by introducing
the Green Office Initiative in all Group
companies with the aim of improving
energy efficiency and reducing the overall
waste levels.
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.
1 Carbon intensity is calculated as the sum of Scope 1 and Scope 2 emissions for the current baseline year,
expressed in tonnes of CO2 equivalent per Adjusted Revenue for the same baseline year.
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Globaltrans
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14
members
of the 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 comprised
of highly experienced directors
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
SERGEY V. MALTSEV
Chairman of the Board,
Executive Director, Chief Strategy Officer,
co-founder and shareholder
of Globaltrans
Appointed: April 2018, Chairman; August
2017, Chief Strategy Officer.
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. 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.
Chairman
Member
Nomination Committee
Remuneration Committee
Audit Committee
ESG Committee
JOHN CARROLL COLLEY
Independent Non-executive Director
VASILIS HADJIVASSILIOU
Independent Non-executive Director
GEORGE PAPAIOANNOU
Independent Non-executive Director
Appointed: April 2013.
Appointed: September 2019.
Appointed: April 2013.
Committee memberships:
Committee memberships:
Committee memberships:
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 various 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: 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 and several 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.
Other appointments: Mr. Hadjivassiliou
holds directorships in several companies
affiliated with his family and is also a
Board member of a number of other
private companies.
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 several family-
owned companies and other private
companies.
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independent
Non-executive
Directors
ALEXANDER ELISEEV
Non-executive Director,
co-founder of Globaltrans
Appointed: March 2008.
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. Mr. Eliseev is a graduate
of the Russian State Medical University
where he studied biophysics.
Other appointments: Mr. Eliseev is
Chairman of the Board of Globaltruck,
a leading freight trucking operator
in Russia, listed on the Moscow
Exchange.
SERGEY FOLIFOROV
Non-executive Director
ANDREY GOMON
Non-executive Director
Appointed: in June 2022.
Appointed: April 2017.
ELIA NICOLAOU
Non-executive Director,
Company Secretary, Secretary
to the Board
MELINA PYRGOU
Non-executive Director
Appointed: April 2013.
Skills and experience: Mr. Foliforov
has served on Globaltrans' subsidiary
boards since 2018, including
at New Forwarding Company,
BaltTransServis, GTI Management and
Ural Wagonrepair Company. Sergey
Foliforov has more than 18 years
of management experience working
at different companies focusing
on financial management and analysis.
He graduated from Lomonosov
Moscow State University and has
a Master of Science degree in Physics.
He also holds an MBA from the MIRBIS
Business School in Moscow.
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
Russia’s largest oil rail transportation
companies, having previously served
as CFO between 2003 and 2006. He
sits on the boards of two Globaltrans
subsidiaries — New Forwarding
Company and BaltTransServis.
Mr. Gomon studied economics at
St Petersburg State University and
holds an MBA from INSEAD.
Appointed: March 2008.
Committee memberships:
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 CyprusSouth 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.
Skills and experience: Ms. Pyrgou
is a barrister and registered insolvency
practitioner and has practised
corporate law for over 25 years. She
is 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.
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.
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KONSTANTIN SHIROKOV
Executive Director,
Head of Internal Audit
ALEXANDER STOROZHEV
Executive Director,
Chief Procurement Officer
MICHAEL THOMAIDES
Non-executive Director
MARIOS TOFAROS
Non-executive Director
Appointed: April 2014.
Appointed: April 2013.
Appointed: March 2008.
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 Financial University under
the Government of the Russian
Federation 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 the boards of two Globaltrans
subsidiaries — GTI Management and
BaltTransServis and serves on the
boards of other Group’s 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. He 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. 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 V. 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 has extensive experience
in financial analysis and modelling.
Mr. Tolmachev graduated from
Lomonosov Moscow State University
with a degree in Mechanics and
Applied Mathematics.
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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 the heads of 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 V. MALTSEV
Chief Strategy Officer, Chairman
of the Board, Executive Director,
co-founder and shareholder
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. 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.
ALEXANDER SHENETS
Chief Financial Officer
VYACHESLAV STANISLAVSKY
Deputy Chief Executive Officer,
Head of Operations
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 holds an MBA from
Lomonosov Moscow State University.
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.
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ALEXANDER STOROZHEV
KIRILL PROKOFIEV
ROMAN GONCHAROV
SVETLANA BROKAR
ARTEM GABESTRO
Chief Procurement Officer, member
of the Board, Executive Director
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 chairs the boards
of two Globaltrans subsidiaries — GTI
Management and BaltTransServis.
He also serves on the boards of two
other Group subsidiaries — New
Forwarding Company and Ural
Wagonrepair Company. 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.
CEO of BaltTransServis
Head of Treasury
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. 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. 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.
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.
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.
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Corporate
Governance Report
CORPORATE GOVERNANCE POLICIES
BOARD RESPONSIBILITIES AND ACTIVITIES
Globaltrans' corporate governance policies and practices are designed to ensure that the Group
upholds its responsibilities to shareholders and other stakeholders. The Group promotes and applies
this principle across all levels of its organisation, supported by clear and effective 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.
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 it can take decisions which it believes benefit
all its stakeholders and communities and create value for the Group.
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
· Anti-Fraud Policy
· Business Continuity Policy
· Code of Ethics and Conduct
· Corporate Diversity and Inclusion
of reference
Policy
· Board of Directors — terms
of 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
· Environmental 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://www.globaltrans.com/governance/
corporate-documents
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 Nomination Committee leads the
process for Board appointments 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 business’ scale, complexity and
strategic positioning. 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 14 members, ten
of whom are Non-executive Directors.
Three 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.
As of 31 December 2022, members
of the Board of Directors held
14,555,939 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 two female members on the
Board, equivalent to about 14% of
the Board. The average age of the
Board is 52 years and ranges in age
from 40 to over 60 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.
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Induction and professional
development
Activities
The Chair is responsible for ensuring
that the induction process for new
directors joining the Board is well
constructed and timely. Directors
have full access to a regular supply
of financial, operational, strategic and
regulatory information to help them
discharge their responsibilities.
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 whenever the Board
needs to discuss pressing matters in between the scheduled meetings.
The Board met 18 times during 2022 and considered 70 items including
the following:
Regular meetings
Ad hoc meetings
· Review of the Group's financial and
· Approval of material borrowings
Performance evaluation
operational performance
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.
· Approval of the annual budget.
· Review of the Group's performance
against the approved annual
budget
· Approval of the annual and semi-
annual financial statements
and the respective regulatory
announcements
and pledges by the Company and
its subsidiaries
· Approval of the contracts
of the 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 by
assessments
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
18
times
The Board
met in 2022
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
The Board and the Board Committees meetings in 2022 and the attendance of Directors
Board of Directors
Nomination
Committee
Remuneration
Committee
Audit Committee
ESG Committee
E
2
2
A
2
2
E
5
5
A
5
5
E
8
8
8
A
8
8
8
E
2
A
2
2
2
E
18
18
12
18
18
18
18
18
18
18
18
6
18
18
10
18
A
18
17
11
18
18
18
18
18
18
18
18
5
18
18
10
18
Sergey V. Maltsev (Chairman)
John Carroll Colley
Dr. Johann Franz Durrer1
Alexander Eliseev
Andrey Gomon
Vasilis Hadjivassiliou
Elia Nicolaou
George Papaioannou
Melina Pyrgou
Konstantin Shirokov
Alexander Storozhev
Alexander Tarasov2
Michael Thomaides
Marios Tofaros
Sergey Foliforov3
Sergey V. Tolmachev
E – Eligible
A – Attended
Remuneration of the Board
and 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,
1 Passed away in September 2022.
2 Resigned in May 2022.
3 Appointed in June 2022.
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 2022 at the Annual General Meeting
held on 26 April 2022.
For details of the remuneration paid
to the Board and key executives
in 2022, 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.
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Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Corporate Governance Report
BOARD COMMITTEES
Globaltrans has four 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
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 2022
Minimum
meetings
a year
Number
of meetings
in 2022
3
members;
all independent
John Carroll Colley, Independent
Non-executive Director
(Chairman)
Vasilis Hadjivassiliou, Independent
Non-executive Director
4 8
George Papaioannou,
Independent Non-executive
Director
Nomination Committee
Number
of members
Members
as at 31 December
2021
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.
2
members;
all
independent
Members as at
30 September
2022 and as at
31 December 2022
John Carroll Colley,
Independent Non-
executive Director
(Chairman)
Minimum
meetings
a year
Number
of meetings
in 2022
1 2
Johann Franz
Durrer, Senior
Independent Non-
executive Director
(Chairman)
John Carroll Colley,
Independent Non-
executive Director
George
Papaioannou,
Independent Non-
executive Director
Responsibilities
Issues considered in 2022
Responsibilities
Issues considered in 2022
·
Integrity of the Group's financial
statements
· Effectiveness of the Group's internal
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 Board's performance
· Review of the Group's Consolidated Financial Statements for 2021 and
interim financial results for the six months ended 30 June 2022
· Review of the external auditor's report to the Audit Сommittee following its
full-year audit for 2021 and review for the six months ended 30 June 2022
· Review of the Group's external auditor and terms of reappointment for 2022
· 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 26 April 2022
· Appointment of the new external auditors of the Company
· Review of the report of the external auditor on the audit strategy for 2022
· 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 Audit Committee meetings in 2022
the external auditor
· Preparation of selection criteria and
appointment procedures for Board
members
· Regular review of the Board's structure,
size and composition
· Future Board appointments.
· Recommendations regarding the
membership of the Audit and
Remuneration committees
· Advice to the Annual General Meeting
on the appointment of Board members
· Recommendation on appointment
of Directors to the Committees
of the Board
The Nomination Committee meetings
until September 2022
The Nomination Committee meetings
after September 2022
· Review of the internal audit function and reports on its activities,
Eligible
Attended
Eligible
Attended
Eligible
Attended
and on the internal audit model and plan
John Carroll Colley
George Papaioannou
Vasilis Hadjivassiliou
8
8
8
8
8
8
Dr. Johann Franz Durrer
John Carroll Colley
2
2
2
2
John Carroll Colley
George Papaioannou
0
0
0
0
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GlobaltransAnnual Report 2022Annual Report & Accounts 2022 Corporate Governance Report
Number
of members
Members as at
31 December 2021
Remuneration Committee
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.
2
members;
all independent
Members as at
30 September
2022 and as at
31 December 2022
John Carroll Colley,
Independent Non-
executive Director
(Chairman)
Johann Franz
Durrer, Senior
Independent Non-
executive Director
(Chairman)
John Carroll Colley,
Independent Non-
executive Director
George
Papaioannou,
Independent Non-
executive Director
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Minimum
meetings
a year
Number
of meetings
in 2022
1 5
ESG Committee
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 2022
Minimum
meetings
a year
Number
of meetings
in 2022
2
members;
1 independent
Elia Nicolaou,
Non-executive
Director (Chairman)
John Carroll Colley,
Independent Non-
executive Director
2 2
Responsibilities
Issues considered in 2022
Responsibilities
Issues considered in 2022
· 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 until September 2022
The Remuneration Committee
meetings after September 2022
Eligible
Attended
Eligible
Attended
John Carroll Colley
Dr. Johann Franz Durrer
5
5
5
5
John Carroll Colley
George Papaioannou
0
0
0
0
· 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 2021 covered in the annual integrated sustainability report
· Approval of the annual integrated sustainability report for 2021
· Approval of the 2022 meetings/work plan of the ESG Committee
· Review of latest sustainability trends, the Group's ESG activities,
and investor feedback during the H1 2022 non-deal roadshow
· Review of the Group's ESG plan, key activities and ESG performance
in H1 2022
· Review and approval of the ESG work plan for H2 2022
The ESG Committee meetings in 2022
Eligible
Attended
Elia Nicolaou
John Carroll Colley
2
2
2
2
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Strategic
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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. Management undertakes a
regular schedule of meetings, presentations, conference calls and webcasts with investors
and sell-side analysts. 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).
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 for 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
Audit 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 PricewaterhouseCoopers
as the Group's external auditor for 2022 and
2023. The appointment for 2022 was approved
by the Group's shareholders at the Annual
General Meeting on 26 April 2022. In August
2022, PricewaterhouseCoopers terminated
the audit engagement with the Company as a
result of which Company's Board of Directors
appointed GAC Auditors Ltd for the provision
of audit (review) services for the first six
months of 2022 and the year of 2022. GAC
Auditors Ltd were appointment by the Group's
shareholders at the Annual General Meeting
on 21 April 2023 for the provision of audit/
review services for 2023.
120
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Share Capital
Corporate Structure
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
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%, and their
entrepreneurial 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 about 0.1% of the
issued share capital.
In 2008, Globaltrans' founders recognised
the benefits of an international listing
and undertook an Initial Public Offering
on the LSE, becoming the first freight rail
company serving Russian cargo flows
to be listed internationally. In 2020,
Globaltrans' GDRs were admitted to
trading on MOEX.
Today, the majority of the Company's
shares are in public hands with
Globaltrans' free float amounting to about
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 GDRs. The GDRs represent
one ordinary share each and have
been traded on the Main Market of the
LSE (ticker symbol: GLTR) since May
2008 (although have been subject
to a suspension since 3 March 2022) 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 31 December 2022, the total number
of the GRDs held in treasury represented
0.2% of the Company’s share capital 1.
Ownership structure
as of 31 December 2022
5
founders
11.5%
Marigold Investments Ltd2
11.5%
Onyx Investments Ltd2
10.8%
Maple Valley Investments Ltd2
5.1%
Litten Investments Ltd3
3.1%
Goldriver Resources Ltd4
0.9%
Transportation Investments
Management Ltd5
0.2%
Treasury shares
0.1%
Directors and management
56.8%
Free float6
1 The cancellation of 422,657 shares
(representing 0.2% of the Company's
share capital) purchased in the form of
GDRs under the buyback programmes
and held in treasury was approved
by the Board of Directors. Following
the cancellation of these shares,
the total number of shares in issue
(including GDRs) of the Company will
be 178,318,259 with no shares/GDRs
held in treasury. An announcement will
be released once the cancellation has
been completed.
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.
6 For these purposes, the free float
consists of the ordinary shares and
GDRs held by investors not affiliated
or associated with Globaltrans.
Globaltrans provides freight rail
transportation, railcar leasing and other
ancillary services to clients through
its 100% owned subsidiaries: New
Forwarding Company, BaltTransServis,
GTI Management, Ural Wagonrepair
Company 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
New Forwarding Company,
AO (Russia)
100%
BaltTransServis,
OOO (Russia)
100%
GTI Management,
OOO (Russia)
Ukrainian New Forwarding
Company, LLC (Ukraine)
100%
100%
BTS-Locomotive solutions,
OOO (Russia)
100%
RemTransServis,
OOO (Russia)
100%
Ural Wagonrepair Company,
AO (Russia)
100%
Group structure as of 1 February 2023.
Source: Globaltrans
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Financial
Statements
Overview
Overview
Strategic
Strategic
Report
Report
Sustainability
Sustainability
Report
Report
Governance
Governance
Financial
Financial
Statements
Statements
Additional
Additional
Information
Information
Globaltrans
124
124
125
125
Annual Report 2022
Annual Report & Accounts 2022GlobaltransAnnual Report 2022 Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Consolidated Management Report
and Consolidated Financial Statements
for the Year Ended 31 December 2022
Board of Directors and other officers .................................................................................................................................................................................................................................... 127
Consolidated Management Report ................................................................................................................................................................................................................................... 128
Directors’ responsibility ............................................................................................................................................................................................................................................................. 148
Independent Auditor’s Report............................................................................................................................................................................................................................................... 150
Consolidated income statement ....................................................................................................................................................................................................................................... 154
Board of Directors
and other officers
Board of Directors
Mr. Vasilis Hadjivassiliou
Independent Non-Executive Director
Mr. Sergey Maltsev
Chairman of the Board of Directors
Board support
Consolidated statement of comprehensive income ............................................................................................................................................................................................... 155
Member of the Audit Committee (since
Executive Director
The Company Secretary is available
Consolidated balance sheet .................................................................................................................................................................................................................................................... 156
January 2021)
Alternate director: Mr. Yuri Isaev
to advise all Directors to ensure compliance
Consolidated statement of changes in equity ............................................................................................................................................................................................................ 158
Consolidated cash flow statement .................................................................................................................................................................................................................................. 162
Mr. John Carroll Colley
Independent Non-Executive Director
Chairman of the Audit Committee
Mr. Sergey Tolmachev
Executive Director
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
1. General information ........................................................................................ 164
23. Other assets ........................................................................................................ 231
Chairman of Remuneration Committee
2. Basis of preparation ....................................................................................... 164
24. Inventories ........................................................................................................... 232
Chairman of Nomination Committee
Mr. Alexander Storozhev
Executive Director
expense.
3. Adoption of new or revised standards and interpretations ..165
25. Cash and cash equivalents ........................................................................ 232
Member of ESG Committee (since January
Alternate Director: Ms. Elia Nicolaou
4. Summary of significant accounting policies .................................. 165
26. Share capital, share premium and treasury shares .................... 233
2021)
5. New accounting pronouncements ...................................................... 186
27. Dividends ............................................................................................................. 234
6. Financial risk management ....................................................................... 188
28. Borrowings .......................................................................................................... 235
7. Critical accounting estimates and judgements ............................ 198
29. Other lease liabilities .................................................................................... 238
Mr. George Papaioannou
Independent Non-Executive Director
8. Segmental information ................................................................................. 200
30. Deferred income tax ..................................................................................... 239
Member of the Audit Committee
9. Non-IFRS financial information ............................................................... 205
31. Trade and other payables ........................................................................... 241
Member of Remuneration Committee (since
Mr. Konstantin Shirokov
Executive Director
Company Secretary
Ms. Elia Nicolaou
Dimitriou Karatasou, 15
Mr. Alexander Eliseev
Non-executive Director
Anastasio Building, 6th floor, Office 601
Strovolos, 2024, Nicosia, Cyprus
10. Revenue ................................................................................................................. 210
32. Earnings per share .......................................................................................... 241
September 2022)
Alternate Director: Ms Ekaterina Golubeva
11. Expenses by nature ........................................................................................ 212
33. Contingencies ................................................................................................... 242
Member of Nomination Committee (since
Assistant secretary: Mr. Marios Tofaros
12. Other gains/(losses) – net ......................................................................... 214
34. Commitments .................................................................................................... 245
September 2022)
13. Employee benefit expense ........................................................................ 214
35. Related party transactions ........................................................................ 246
14. Finance income and costs ........................................................................ 215
36. Events after the balance sheet date ................................................... 249
15. Income tax expense ....................................................................................... 216
16. Net foreign exchange (losses) / gains .............................................. 217
17. Property, plant and equipment .............................................................. 218
18. Right-of-use assets ......................................................................................... 222
19. Intangible assets ............................................................................................. 223
20. Principal subsidiaries ..................................................................................... 224
21. Share-based payments ............................................................................... 228
22. Financial assets ................................................................................................ 229
Registered office
20 Omirou Street
Agios Nicolaos
CY-3095 Limassol, Cyprus
Mr. Andrey Gomon
Non-executive Director
Alternate Director: Ms. Melina Pyrgou
Ms. Elia Nicolaou
Non-executive Director
Chairwoman of the ESG Committee (since
January 2021)
Mr. Alexander Tarasov
Non-executive Director
Member of the Audit Committee (until
Resigned in May 2022
January 2021)
Company Secretary
Secretary of the Board
Mr. Sergey Foliforov
Non-executive Director
Alternate Director: Mr. Marios Tofaros
Appointed in June 2022
Mr. Michalakis Thomaides
Non-Executive Director
Dr. Johann Franz Durrer
Passed away on 3 September 2022
Ms. Melina Pyrgou
Non-executive Director
Mr. Marios Tofaros
Non-executive Director
Dr. Durrer was senior Independent Non-
Executive Director
Chairman of the Remuneration Committee
Chairman of the Nomination Committee
126
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Consolidated Management Report
The Board of Directors presents its report together with the audited consolidated financial statements
for the year ended 31 December 2022. 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
Globaltrans reported strong financial results in 2022 with growth achieved across all key
metrics. The performance of Russia’s freight rail transportation sector was negatively impacted by the
challenging operating environment that persisted for most of 2022, and which resulted in widespread
transformation of freight flows and logistics, as well as pressure on cargo volumes and intensified cost
pressures. The Group also improved its operational efficiency with service contracts remaining intact.
Robust financial profile was maintained with further deleveraging. Globaltrans sizably increased its
investments into fleet expansion and M&A in 2022.
IFRS financial information
Management considers amongst others the following IFRS measures in analysing the performance
of the Group.
The Group’s Total revenue increased 29% year on year to RUB 94,474,032 thousand in 2022 (2021: RUB
73,151,013 thousand). Operating profit increased 59% year on year to RUB 34,301,602 thousand in 2022
(2021: RUB 21,627,259 thousand). The profit for the year ended 31 December 2022 increased 65% year
on year to RUB 24,919,886 thousand (2021: RUB 15,099,559 thousand).
On 31 December 2022 the total assets of the Group were RUB 110,154,102 thousand (2021: RUB
108,284,996 thousand) and net assets were RUB 67,462,195 thousand (2021: RUB 56,505,223 thousand).
On 31 December 2022 the total debt of the Group was RUB 20,648,650 thousand which decreased
by 34% as compared to end of 2021 which amounted to RUB 31,318,470 thousand. Total cash and cash
equivalents on 31 December 2022 increased by 25% and amounted to RUB 16,052,345 thousand (31
December 2021: 12,854,707 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.
Overview
Strategic
Report
Sustainability
Report
Governance
Financial
Statements
Additional
Information
Adjusted Revenue increased 40% year on year to RUB 81,609,908 thousand (2021: RUB 58,492,364
thousand) reflecting the recovery in both the gondola and tank car segments’ revenue streams largely
supported by a recovery in gondola market pricing in first half 2022 from the depressed levels of first
half 2021. A subsequent decline in gondola market pricing over the second half of 2022 resulted in a
9% decrease in Adjusted Revenue in second half 2022 compared to first half 2022. Total Operating Cash
Costs were up 8.81% year on year to RUB 32,373,079 thousand (2021: RUB 29,750,883 thousand).
Adjusted EBITDA increased 69% year on year to RUB 49,216,294 thousand (2021: RUB 29,044,127
thousand) with the Adjusted EBITDA Margin rose to 60% (2021: 50%), mainly impacted by growing
Adjusted revenue by 40% while Total Operating Cash Costs rose 9% year on year.
The Group had a strong balance sheet with Net Debt to Adjusted EBITDA decreasing to 0.09x (2021
end: 0.64x). Net Debt reduced by 75% to RUB 4,596,305 thousand (2021 end: 18,463,763 thousand). As
at 31 December 2022 and 31 December 2021 100% of the Group’s debt was denominated in Russian
roubles.
Free Cash Flow of RUB 14,824,581 thousand decreased 8% year on year (RUB 16,130,930 thousand
for 2021) as the 47% year on year rise in Net cash from operating activities was offset by a 35% year
on year increase in Total CAPEX to RUB 11,423,671 thousand (2021: RUB 8,439,159 thousand) following
purchases of 1,341 units of rolling stock (including 541 rail tanks and 800 gondolas) and the cash outflow
related to the acquisition of the outstanding 40% shareholding in BaltTransServis bringing the Group’s
shareholding to 100%.
Operational information
In 2022, Freight Rail Turnover (excluding Engaged Fleet) decreased by 8% year on year and the Group’s
Transportation Volume (excluding Engaged Fleet) decreased by 9%. The Freight Rail Turnover amounted
to 134.9 billion tonnes-km (2021: 146.8 billion tonnes-km) and the Group’s Transportation Volume was
77.0 million tones in 2022 (2021: 85.1 million tones).
The Average Number of Loaded Trips per Railcar decreased by 9% year on year and the Average
Distance of Loaded Trips increased by 1% year on year, mainly reflecting changed logistics.
Average Price per Trip increased by 57% year on year to RUB 64,553 (2021: RUB 41,075) reflecting largely
the recovery in the gondola market rates in the first half from the depressed levels of H1 2021 followed
by a decline in the second half of 2022. Rail tank market rates remained robust over the reporting year.
The decrease in the Empty Run Ratio for gondola cars to 41% (2021: 44%) following successfully
adjusted Group’s logistics whereas the Total Empty Run Ratio remains stable at the level of 50% (2021:
51%).
Total Fleet decreased by 4% to 66,115 units (2021 end: 69,106 units) primarily reflecting impairment
of about 3.8k units of rolling stock (mostly gondola cars) blocked in Ukraine and the expansion CAPEX.
The financial position, development and performance of the Group as presented in the financial
statements is considered satisfactory.
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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”.
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.
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.
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).
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”.
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.
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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.
Net Debt is defined as the sum of total borrowings (including interest accrued) less “Cash and cash equivalents”.
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”.
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.
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.
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.
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Changes in group structure
There were no changes in the Group structure of the Company during the year ended 31 December 2022,
apart from acquisition in February 2022 of a 40% non-controlling interest in BaltTransServis, OOO (Note 20).
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.
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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 33 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 and CIS 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 2022; 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.
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 2022 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.
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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 and CIS 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.
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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.
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.
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Financial risks
Future developments
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 assets over current liabilities of RUB 4,946,447 thousand as
at 31 December 2022.
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.
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The Group’s strategic objective is to strengthen its position as a leading freight rail transportation
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. 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 22 and 23. 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.
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).
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Consolidated Management Report
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.
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Research and development activities
The Group has not undertaken any research and development activities during the year ended
31 December 2022.
Events after the balance sheet date
The events after the balance sheet date are disclosed in Note 36 to the consolidated financial statements.
Share capital
Branches
As at 31 December 2022 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.
The Group operates through branches and representative offices, maintaining seven branches and eight
representative offices during 2022 (eight branches and eight representative offices during 2021).
Treasury shares
Going concern
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.
During the first six months of 2022, the Company purchased a total of 345,780 GDRs, which are held
in treasury for a total consideration of 832 thousand US Dollars (equivalent to RUB 114,497 thousand). No
further acquisitions took place within the last six months of 2022.
As of 30 June 2022, the Company had purchased a total of 422,657 GDRs / (31 December 2021 76,877
GDRs) which are held in treasury for a total consideration of 1.254 thousand US Dollars (equivalent
to RUB 145,993 thousand).
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury for up
to two years. In June 2022 the Board of Directors approved the cancellation of all purchased GDRs. As
of 31 December 2022 the cancellation of GDRs was in progress.
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 33 to the
consolidated financial statements, the Directors consider that the Group has adequate resources
to continue in operation for the foreseeable future.
Auditors
The previous Independent Auditor, PricewaterhouseCoopers Limited resigned, there has been no
disagreement between previous auditors and management related to the last audit. GAC Auditors
Ltd was appointed as Independent Auditor and 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.
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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.
Full details of our governance policies can be found at https://globaltrans.com/governance/corporate-
documents.
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.
Members of the Board of Directors
As at 31 December 2022 and at the date of this report, the Board comprises of 14 members (2021: 15
members), 10 (2021: 11 members) of whom are non-executive directors. Three (2021: 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 2022 and at the date of this report are shown
on page 1. All of them were members of the Board throughout the year 2022 except Dr. Johann Franz
Durrer who passed away on 3 September 2022, Mr. Sergey Foliforov, who was appointed as Non-executive
director in June 2022 and Alexander Tarasov who resigned from the Board of Directors in May 2022.
There were no significant changes in the assignment of responsibilities of the Board of Directors, with
the exception of Dr. Johann Franz Durrer who passed away on 3 September 2022.
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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.
The total gross remuneration of the members of the Board of Directors incurred by the Group in 2022
amounted to RUB 776,827 thousand (2021: RUB 604,062 thousand) (Note 35).
Board performance
The Board held 18 meetings in 2022. The Directors’ attendance is presented in the table below.
Eligible
Attended
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
Sergey Foliforov
Vasilis Hadjivassiliou
Michalakis Thomaides
12
18
18
18
18
18
18
18
18
18
18
18
6
10
18
18
11
17
18
18
18
18
18
18
18
18
18
18
5
10
18
18
140
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Consolidated Management Report
The Board Committees
During 2022 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 2022 the members of the 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.
As of 31 December 2022 the Nomination Committee was chaired by Carroll Colley and George
Papaioannou was 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.
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Remuneration Committee
The Remuneration Committee comprises of two Independent Directors and meets at least once a year.
As of 31 December 2022 the Remuneration Committee was chaired by Carroll Colley and George
Papaioannou was 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 also 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: Elia Nicolaou, Non-executive Director, who
serves as the Chair, and Carroll 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 26 April 2022.
Refer to Note 35 of the consolidated financial statements for details of remuneration of directors
and other key management personnel.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Consolidated Management Report
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 14% 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 52 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.
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.
Those charged with governance are responsible for overseeing the Group’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.
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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.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Consolidated Management Report
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 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 56.8%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 2022 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%
0.2%
0.1%
56.8%
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.
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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 2022 and 31 December
2021 are shown below:
Name
Type of holding
2022
2021
Alexander Eliseev
Indirect holding of ordinary shares and GDRs
9,065,790
9,065,790
Sergey Maltsev
Indirect holding of GDRs
5,490,149
5,490,149
Johann Franz
Durrer
Holding of GDRs
n/a
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, 24 March 2023
146
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 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.
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Directors’ confirmations
Each of the directors, whose names and functions are listed in page 1 confirms that, to the best of his or
her knowledge:
a. the consolidated financial statements, which are presented on pages 19 to 76, 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 taken 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.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
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.
By Order of the Board
Sergey Tolmachev
Director
Limassol, 24 March 2023
148
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Independent Auditor’s Report
To the Members of Globaltrans Investment PLC
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of the parent company
Globaltrans Investment PLC (the ‘’Company’’), which comprise the consolidated statement of financial
position as at 31 December 2022, and the consolidated statements of profit or loss and other
comprehensive income, changes in equity and cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the
consolidated financial position of the parent company Globaltrans Investment PLC as at 31 December
2022, 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.
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 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. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to the operating environment of the consolidated financial statements, which
describes the impact of conflict between Russia and Ukraine. Our opinion is not modified in respect of
this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period.
We have determined that there are no Key Audit Matters to communicate in our report.
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Other information
The Board of Directors is responsible for the other information. The other information comprises the
information included in the Management Report, but does not include the consolidated financial
statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information 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, 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.
Responsibilities of the Board of Directors for the Consolidated Financial Statements
The Board of Directors is responsible for the preparation of consolidated financial statements that give
a true and fair view in accordance with International Financial Reporting Standards as adopted by the
European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal
control as the Board of Directors determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
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 Board of Directors is 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.
150
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Independent Auditor’s Report
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
·
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.
· 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 and 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 the Board of Directors 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.
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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 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 Management Report.
Other Matters
This report, including the opinion, has been prepared for and only for the Group’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.
Comparative figures
The consolidated financial statements of the Company for the year ended 31 December 2021
were audited by another auditor who expressed an unmodified opinion on those financial statements
on 25 March 2022.
Michalis Lambrianides
Certified Public Accountant and Registered Auditor
for and on behalf of
GAC Auditors Ltd
Certified Public Accountants and Registered Auditors
48 Inomenon Ethnon, Guricon House 1st floor, 6042
Larnaca, 24 March 2023
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Consolidated
income statement
Consolidated statement
of comprehensive income
for the year ended 31 December 2022
for the year ended 31 December 2022
Revenue
Cost of sales
Gross profit
Selling and marketing costs
Administrative expenses
Other income
Other (losses)/gains – net
Operating profit
Finance income
Finance costs
Net foreign exchange transaction gains/(losses) 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 outstanding
(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
2022
2021
RUB’000
RUB’000
94,474,032
73,151,013
(53,929,494)
(48,334,442)
40,544,538
24,816,571
(282,458)
(249,390)
(4,625,577)
(4,046,220)
10
11
11
11
-
12
(1,334,901)
310,381
795,917
14
14
14
14
34,301,602
21,627,259
811,588
326,962
(2,602,339)
(2,506,627)
641,196
(9,559)
(1,149,555)
(2,189,224)
33,152,047
19,438,035
15
(8,232,161)
(4,338,476)
24,919,886
15,099,559
25,193,420
12,987,020
(273,534)
2,112,539
24,919,886
15,099,559
32
32
178,382
178,664
141.23
72.69
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 outstanding during the year.
2022
2021
RUB’000
RUB’000
Profit for the year
24,919,886
15,099,559
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
(1,546,414)
(564,312)
-
-
(86,158)
86,158
Items that will not be reclassified to profit or loss
Currency translation differences attributable to non-
controlling interest
(442,197)
(311,762)
Other comprehensive income for the year, net of tax
(1,988,611)
(876,074)
Total comprehensive income for the year
22,931,275
14,223,485
Total comprehensive income for the year attributable to:
- owners of the Company
- non-controlling interest
23,647,006
12,422,708
(715,731)
1,800,777
22,931,275
14,223,485
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 164 to 249 are an integral part of these consolidated financial statements.
The notes on pages 164 to 249 are an integral part of these consolidated financial statements.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Consolidated balance sheet
at 31 December 2022
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Other assets
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
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
Note
31 December
2022
31 December
2021
RUB’000
RUB’000
17
18
19
23
22
24
23
22
22
77,606,926
81,101,184
3,838,027
5,606,845
1,760
85
1,011,970
1,146,917
-
237,680
82,458,683
88,092,711
798,621
680,363
6,047,171
2,681,218
433,091
30,358
3,750,433
3,638,450
613,758
307,189
25
16,052,345
12,854,707
27,695,419
20,192,285
110,154,102
108,284,996
26
26
516,957
516,957
27,929,478
27,929,478
(145,993)
(31,496)
(10,429,876)
(10,429,876)
3,332,461
4,878,875
2,694,851
2,694,851
43,579,823
24,688,577
Total equity attributable to the owners of the Company
67,477,701
50,247,366
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Non-controlling interest
Total equity
Non-current liabilities
Borrowings
Other lease liabilities
Trade and other payables
Contract liabilities
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Borrowings
Other lease liabilities
Trade and other payables
Contract liabilities
Current tax liabilities
Total current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Note
31 December
2022
31 December
2021
28
29
31
10
30
28
29
31
10
RUB’000
RUB’000
(15,506)
6,257,857
67,462,195
56,505,223
9,052,778
17,650,210
1,794,464
3,928,163
-
14,454
9,225
14,019
9,081,239
9,752,314
19,942,935
31,353,931
11,595,872
13,668,260
2,400,332
1,913,410
6,384,348
2,721,027
813,406
1,371,024
1,555,014
752,121
22,748,972
20,425,842
42,691,907
51,779,773
110,154,102
108,284,996
On 24 March 2023, the Board of Directors of Globaltrans Investment PLC authorised these financial
statements for issue.
By Order of the Board
By Order of the Board
Sergey Tolmachev
Director
Konstantin Shirokov
Director
Limassol, 24 March 2023
Limassol, 24 March 2023
The notes on pages 164 to 249 are an integral part of these consolidated financial statements.
156
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Overview
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Consolidated statement of changes in equity
for the year ended 31 December 2022
Attributable to the owners of the Company
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
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 subsidiaries
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)
-
-
-
-
-
-
-
-
-
-
-
-
-
4,878,875
2,694,851
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)
24,688,577
-
(9,022,550)
50,247,366
-
(1,218,516)
(1,218,516)
6,257,857
(9,022,550)
(1,218,516)
(10,241,066)
56,505,223
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Consolidated statement of changes in equity
for the year ended 31 December 2022
Attributable to the owners of the Company
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
Balance at 1 January 2022
Comprehensive income
Profit for the year
Other comprehensive income
Currency translation differences
Total comprehensive income for 2022
Transactions with owners
Dividends to owners of the Company
Dividends to non-controlling interest
Acquisition of NCI
Purchase of treasury shares
27
27
26
Total transactions with owners
516,957
27,929,478
(31,496)
(10,429,876)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(114,497)
-
-
-
-
-
-
-
-
-
Balance at 31 December 2022
516,957
27,929,478
(145,993)
(10,429,876)
-
-
-
-
-
-
-
-
-
-
4,878,875
2,694,851
24,688,577
50,247,366
6,257,857
56,505,223
-
(1,546,414)
(1,546,414)
-
-
-
-
-
-
-
-
-
-
-
-
-
3,332,461
2,694,851
25,193,420
25,193,420
(273,534)
24,919,886
-
(1,546,414)
25,193,420
23,647,006
-
-
-
-
(6,302,174)
(6,302,174)
(114,497)
(6,416,671)
67,477,701
(6,302,174)
43,579,823
(442,197)
(715,731)
-
(2,759,806)
(2,797,826)
-
(5,557,632)
(15,506)
(1,988,611)
22,931,275
-
(2,759,806)
(9,100,000)
(114,497)
(11,974,303)
67,462,195
The notes on pages 164 to 249 are an integral part of these consolidated financial statements.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Consolidated cash flow statement
for the year ended 31 December 2022
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
Gain on sale of property, plant and equipment
Loss on derecognition arising on capital repairs
Impairment (credit)/charge on property, plant and equipment
Other impairment
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
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Note
2022
2021
RUB’000
RUB’000
33,152,047
19,438,035
Acquisition of non-controlling interest
Cash flows from investing activities
17
18
19
17
17
11
12
12
11
14
14
14
6,752,811
6,642,505
2,596,568
1,127,459
325
675
(12,624)
(41,501)
309,878
483,647
3,932,833
19,237
-
-
-
(751,487)
20,535
7,735
(779,268)
(326,140)
2,602,339
2,506,627
(641,196)
9,768
9,559
6,731
47,963,253
29,103,845
547,813
619,532
(86,363)
(139,090)
(1,285,225)
(487,942)
388,690
23,294
1,659,908
523,879
(557,133)
414,084
48,630,943
30,057,602
(8,455,068)
(2,807,806)
40,175,875
27,249,796
Cash inflow from disposal of subsidiary undertakings -
net of cash disposed of
Loans granted to related parties
Loans granted to third parties
Loan repayments received from related parties
Loans repayments received from third parties
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds from sale of property, plant and equipment
Interest received
Receipts from finance lease - related parties
Receipts from finance lease - third parties
Other
Net cash used in investing activities
Cash flows from financing activities
Proceeds from bank borrowings
Repayments of borrowings
Repayments of Non-convertible unsecured bonds
Principal elements of lease payments for other lease liabilities
Interest paid on bank borrowings and non-convertible unsecured bonds
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
Net cash used in financing activities
Net increase in cash and cash equivalents
Exchange (losses)/gains on cash and cash equivalents
Cash and cash equivalents at beginning of year
Note
2022
2021
RUB’000
RUB’000
23
20
(8,800,000)
(300,000)
-
1,110,051
(800,000)
-
-
(75,000)
400,000
-
-
78,803
(11,421,671)
(8,439,159)
(2,000)
238,377
-
77,932
761,235
326,140
9,261
28,163
(64,972)
-
108,327
(41,418)
(19,651,607)
(7,154,324)
2,750,000
18,058,000
(9,549,396)
(15,286,973)
(3,750,000)
(1,250,000)
(2,402,700)
(1,067,922)
(1,938,619)
(2,238,779)
(786,304)
(183,057)
-
(9,022,550)
(1,728,073)
(1,225,275)
(114,497)
-
(17,519,589)
(12,216,556)
3,004,679
7,878,916
192,959
(2,531)
12,854,707
4,978,322
17
28
28
28
28
28
28
27
27
26
Cash and cash equivalents at end of year
25
16,052,345
12,854,707
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 164 to 249 are an integral part of these consolidated financial statements.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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 24
March 2023.
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 2022 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 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.
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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 2022. 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.
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.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Notes to the consolidated financial
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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.
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.
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.
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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 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.
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.
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Notes to the consolidated financial
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Revenues earned by the Group are recognised on the following bases:
Revenue from railway transportation services - using own, leased or engaged rolling stock
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. 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).
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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.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Notes to the consolidated financial
statements
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.
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.
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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).
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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:
Number of years, range
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
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.
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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.
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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.
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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.
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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.
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.
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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.
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Notes to the consolidated financial
statements
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.
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.
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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.
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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.
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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.
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.
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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.
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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.
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.
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statements
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.
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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.
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.
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Developments in auditing
ISA 315 (Revised 2019) – Identifying and Assessing the Risks of Material Misstatement (effective
for audits of financial statements for periods beginning on or after 15 December 2021) The International
Audit and Assurance Standards Board (IAASB) approved major changes to ISA 315 in September 2019.
The effects of the revisions will be far-reaching and will require firms of all sizes to revise their approach
to risk assessments. The following are the main areas of the revisions:
· The introduction of five new inherent risk factors to aid in risk assessment; subjectivity,
complexity, uncertainty, change and susceptibility to misstatement due to management bias
or fraud
· A new spectrum of risk, at the higher end of which lie significant risks
· Requiring “sufficient, appropriate” evidence to be obtained from risk assessment procedures
as the basis for the risk assessment
· A great deal more on IT, particularly IT general controls
· More on controls relevant to the audit and on the design and implementation work required
for these controls
· Removal of considerations specific to smaller entities as a separate category of paragraph
and inclusion of that material within the main body of the text and the addition of new material
The revisions aim to drive better quality and more consistent risk assessments, as well as promote
the exercise of professional skepticism.
None of the new standards, amendments to existing standards or interpretations is expected to have
a significant effect on the consolidated financial statements.
Notes to the consolidated financial
statements
5. New accounting pronouncements
The new standards, interpretations, and amendments to the existing standards effective for annual
accounting periods commencing on 1 January 2022 are as follows:
· Amendment to IFRS3 – (issued on 14 May 2020 and are effective for business combinations
for annual periods beginning on or after 1 January 2022). The IASB published Reference
to the Conceptual Framework (Amendments to IFRS 3) with amendments to IFRS 3,
Business Combinations that update an outdated reference in IFRS 3 without significantly
changing its requirements. IFRS 3, Business Combinations specifies how an entity should
account for the assets and liabilities it acquires when it obtains control of a business. IFRS 3
requires an entity to refer to the Conceptual Framework for Financial Reporting (Conceptual
Framework) to determine what constitutes an asset or a liability.
· Amendment to IAS16 – Property, Plant and Equipment – Proceeds before intended use
(issued in June 2017 and has now finalized the amendments and are effective for annual
periods beginning on or after 1 January 2022). Proceeds before Intended Use (Amendments
to IAS 16) amends the standard to prohibit deducting from the cost of an item of property,
plant and equipment any proceeds from selling items produced while bringing that asset
to the location and condition necessary for it to be capable of operating in the manner
intended by management. Instead, an entity recognizes the proceeds from selling such
items, and the cost of producing those items, in profit or loss.
· Amendment to IAS37 – Onerous contracts – Cost of fulfilling a contract (proposed
clarifications in December 2018 and has now finalized the amendments and are effective
for annual periods beginning on or after 1 January 2022). The changes in Onerous
Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) specify that the ‘cost
of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that
relate directly to a contract can either be incremental costs of fulfilling that contract
(examples would be direct labour, materials) or an allocation of other costs that relate
directly to fulfilling contracts (an example would be the allocation of the depreciation
charge for an item of property, plant and equipment used in fulfilling the contract).
We understand that, based on management’s assessment, none of the above new standards,
interpretations and amendments to existing standards had any material effect on the Group/Company.
Management’s assessment will be considered during our audit.
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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 2022, 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 2022 the Russian Rouble has increased against the US Dollar from 74.2926
as of 31 December 2021 to 70.3375 Russian Roubles (5.4% increase) and against the Euro from 84.0695
as of 31 December 2021 to 75.6553 Russia Roubles (10.0% 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
2022 and 31 December 2021 are as follows:
Assets
Liabilities
2022
2021
RUB’000
RUB’000
1,046,653
410,316
29,070
198,078
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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 2022,
would have increased/decreased by RUB 158,706 thousand (2021: 20% change, effect RUB 32,074
thousand) and equity would have increased/decreased by RUB 491,067 thousand (2021: 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 2022, would
have increased /decreased by RUB 32,836 thousand (2021: 30% change, effect RUB 13,143 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.
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 NIL thousand (2021: RUB 86,158 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 NIL
thousand (2021: RUB 86,158 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.
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statements
As at 31 December 2022 and 31 December 2021, 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.
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 78.83% of the Group’s trade receivables as at 31 December 2022 (2021: 75.74%).
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;
loans and other receivables; and cash and cash equivalents.
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.
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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.
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statements
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.
The Group’s exposure to credit risk for each class of asset subject to the expected credit loss model
is set out 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 2022
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 2021
Current (not past due)
1-30 days past due
31-90 days past due
more than 90 days past due
Total
Trade
receivables
RUB’000
Finance lease
receivables
RUB’000
3,134,198
589,065
26,111
11,402
149,746
-
-
-
3,760,776
149,746
Trade
receivables
RUB’000
Finance lease
receivables
RUB’000
2,786,170
196,557
782,791
67,298
101,146
-
-
-
3,737,405
196,557
The gross carrying amounts, as per above, represent the Group’s maximum exposure to credit risk
on these assets as at 31 December 2022 and as at 31 December 2021 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.
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The movement in the credit loss allowance for trade receivables during the years 2022 and 2021
is presented in the table below:
Opening balance as at 1 January
New assets originated or purchased
Net loss allowance of financial assets at the start of the year
Assets written off during the year as uncollectible
Unused amounts reversed
Recoveries
Other
Trade receivables
2022
2021
RUB’000
RUB’000
(98,955)
(135,124)
-
(2,736)
23,874
66,606
868
-
(603)
(1,277)
37,310
-
-
739
Closing balance as at 31 December
(10,343)
(98,955)
The estimated expected credit loss allowance on finance lease receivables as at 31 December 2022
and as at 31 December 2021 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 2022 and 2021:
Internal credit risk
rating grade
Performing
Under-performing
Company definition of category
Stage 1 - Counterparties have a low risk of default
and a strong capacity to meet contractual cash
flows
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
2022
RUB’000
2021
RUB’000
22,155
260,896
9,762
7,122
Non-performing
or Credit-impaired
Stage 3 - Interest and/or principal repayments are
more than 90 days past due
4,602
14,868
The gross carrying amounts, as per above, represent the Group’s maximum exposure to credit risk
on these assets as at 31 December 2022 and as at 31 December 2021 without taking into account any
collateral held. The Group does not hold any collateral as security for any loans receivable or other
receivable balances.
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Notes to the consolidated financial
statements
The movement in the credit loss allowance for other receivables during the years 2022 and 2021
The Group does not hold any collateral as security for any of the above balances.
is presented in the table below:
The estimated expected credit loss allowance on cash and cash equivalents as at 31 December
2022 and as at 31 December 2021 based on the general approach of IFRS 9, was immaterial. All cash
and cash equivalents were performing (Stage 1) as at 31 December 2022 and as at 31 December 2021.
Liquidity risk
The Group has an excess of current assets over current liabilites of RUB 4,946,447 thousand as
at 31 December 2022 (2021: excess of current liabilities over current assets RUB 233,557 thousand).
The Group has an excess of current assets over current liabilites of RUB 4,946,447 thousand as at
31 December 2022 (2021: excess of current liabilities over current assets RUB 233,557 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 42,783,333 thousand as of 31 December 2022 (2021: RUB 42,888,000
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.
Opening balance as at 1 January
Assets written off during the year as uncollectible
Other
Closing balance as at 31 December
Non-performing
2022
2021
RUB’000
RUB’000
(14,868)
(20,195)
1,707
(168)
58
5,269
(13,329)
(14,868)
The estimated expected credit loss allowance on loans receivable as at 31 December 2021 was immaterial.
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 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 2022 and 2021:
Moody’s1
Moody’s1
Moody’s1
Moody’s1
Standard & Poor’s2
Fitch3
ACRA4
Expert RA5
Other external non-rated banks – satisfactory credit quality (performing)
Rating
A3 – Aa2
2022
RUB’000
4,187,545
2021
RUB’000
1,975,283
Baa3 – Baa1
127,458
10,677,131
Ba3 – Ba1
B1 – B2
BB+ – BBB-
BBB-
-
1,337
-
-
AAA(RU) - A(RU)
11,600,969
ruA+
28,926
95,360
121
84,865
43,378
40,565
-
-
33,144
Total cash at bank and bank deposits6
16,041,595
12,854,487
1
International rating agency Moody’s Investors Service.
2 International rating agency Standard & Poor’s.
3 International rating agency Fitch Rating.
4 Russian authorized credit rating agency ACRA.
5 Russian authorized credit rating agency Expert RA.
6 The rest of the balance sheet item ‘cash and cash equivalents’ is cash on hand.
194
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
The table below summarises the analysis of financial liabilities of the Group by maturity as of
31 December 2022 and 31 December 2021. 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.
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 2022
Borrowings
1,240,580
3,761,571
2,200,301
5,437,567
6,693,045
3,216,301
567,310
52,789
81,137
-
-
-
-
-
22,549,365
701,236
230,754
447,630
685,969
1,371,635
1,792,351
102,732
3,433
4,634,504
1,874,097
5,419,295
2,886,270
6,809,202
8,485,396
3,319,033
3,433
28,796,726
Borrowings
814,665
2,833,542
2,993,360
8,590,841
12,192,783
6,772,325
567,310
52,789
81,137
-
-
-
-
-
34,197,516
701,236
Trade
and other
payables
Other lease
liabilities
31 December 2021
Trade
and other
payables
Other lease
liabilities
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
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The rate of borrowings to total capitalisation as at 31 December 2022 and 31 December 2021 are as follows:
Total borrowings
Total capitalisation
2022
2021
RUB’000
RUB’000
20,648,650
31,318,470
88,126,351
81,565,836
Total borrowings to total capitalisation ratio (percentage)
23.43%
38.40%
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 2022 and 2021. 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
Note: statutory liabilities are excluded as the analysis is provided for financial liabilities only.
the fair value of financial instruments.
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.
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.
196
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
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 2022 and 31 December 2021 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 2022 and 31 December 2021 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 2022 and 31 December 2021, respectively. The discount rate used was 11.1%
p.a. (2021: 10.5% p.a.) (Note 28). The fair value as at 31 December 2022 and 31 December 2021 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.
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.
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:
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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:
·
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 2022 both would have decreased by RUB 12,963,846
thousand (2021: RUB 10,957,305 thousand).
198
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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.
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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 2022
Total revenue – operator’s services
59,447,945
31,077,753
12,299
90,537,997
Total revenue – operating lease
437,427
2,048,795
885,958
3,372,180
Inter-segment revenue
-
-
-
-
Revenue (from external customers)
59,885,372
33,126,548
898,257
93,910,177
less Infrastructure and locomotive tariffs -
loaded trips
less Services provided by other transportation
organisations
(4,266,905)
(6,193,899)
(4,091)
(10,464,895)
(2,051,228)
(348,001)
-
(2,399,229)
Adjusted revenue for reportable segments
53,567,239 26,584,648
894,166
81,046,053
Depreciation and amortisation
(6,804,486)
(2,011,804)
(241,882)
(9,058,172)
Impairment of property, plant and equipment
(3,814,843)
(74,990)
(43,000)
(3,932,833)
Loss on derecognition arising on capital
repairs
Additions to non-current assets (included
in reportable segment assets)
(192,293)
(117,581)
(4)
(309,878)
9,286,205
4,324,926
17,961
13,629,092
Reportable segment assets
47,459,256
29,754,578
3,233,340
80,447,174
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
25,435
1,348,619
457,630
1,831,684
Inter-segment revenue
-
-
-
-
Revenue (from external customers)
41,466,677
28,179,425
1,166,657
70,812,759
less Infrastructure and locomotive tariffs -
loaded trips
less Services provided by other
transportation organisations
(6,857,931)
(5,762,331)
(162,883)
(12,783,145)
(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
Additions to non-current assets (included
in reportable segment assets)
(199,187)
(284,460)
-
(483,647)
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
200
201
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 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 equipment,
depreciation of property, plant and equipment and right-
of-use assets, amortisation of intangible assets and loss
on derecognition arising on capital repairs)
2022
2021
RUB’000
RUB’000
81,046,053
56,334,811
563,855
2,157,553
81,609,908
58,492,364
(27,695,998)
(25,659,527)
Selling, marketing and administrative expenses (excl.
depreciation, amortisation and impairments)
(4,664,457)
(4,049,855)
Depreciation and amortisation
(9,349,704)
(7,770,639)
Net impairment losses on trade and other receivables
(20,535)
(7,735)
Reversal of impairment/(impairment) of property, plant
and equipment
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
(3,932,833)
-
(309,878)
(483,647)
-
(1,334,901)
310,381
795,917
34,301,602
21,627,259
811,588
326,962
(2,602,339)
(2,506,627)
641,196
(9,559)
Profit before income tax
33,152,047
19,438,035
2022
2021
Assets
Liabilities
Assets
Liabilities
RUB’000
RUB’000
RUB’000
RUB’000
Segment assets/ liabilities
80,447,174
-
85,565,978
-
Unallocated:
Deferred tax liabilities
-
9,081,239
-
9,752,314
Current income tax assets/liabilities
613,758
1,555,014
307,189
752,121
Property, plant and equipment
Right-of-use assets
Intangible assets
Other assets
Trade receivables
Loans and other receivables
Inventories
834,936
162,843
1,760
7,059,141
3,750,433
433,091
798,621
Cash and cash equivalents
16,052,345
-
-
-
-
-
-
-
-
821,924
320,127
85
3,828,135
3,638,450
268,038
680,363
12,854,707
-
-
-
-
-
-
-
-
Borrowings
Other lease liabilities
Trade and other payables
Contract liabilities
-
-
-
-
20,648,650
4,194,796
6,384,348
827,860
-
-
-
-
31,318,470
5,841,573
2,730,252
1,385,043
Total
110,154,102
42,691,907
108,284,996
51,779,773
202
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
Geographic information
Revenues from external customers
Revenue
Russia
Estonia
Ukraine
2022
2021
RUB’000
RUB’000
92,677,592
71,666,818
1,701,153
1,231,965
95,287
252,230
94,474,032
73,151,013
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:
2022
2021
RUB’000
% revenue
RUB’000
% revenue
Revenue
Customer A – rail tank cars segment
Customer B – gondola cars segment
21,234,661
15,126,672
Customer C – gondola cars segment1
11,046,722
22
16
12
18,134,091
14,040,336
-
25
19
-
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
2022
2021
RUB’000
RUB’000
81,174,663
75,463,257
1,175,214
11,398,063
-
527,404
12,105
316,724
82,361,982
87,705,448
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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 2022 and 2021 and its reconciliation
to Total revenue.
Total revenue
Minus “pass through” items
2022
2021
RUB’000
RUB’000
94,474,032
73,151,013
Infrastructure and locomotive tariffs: loaded trips
(10,464,895)
(12,963,846)
Services provided by other transportation organisations
(2,399,229)
(1,694,803)
Adjusted Revenue
81,609,908
58,492,364
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”.
204
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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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
Reversal of impairment/(impairment) of property, plant and equipment
Gain on sale of property, plant and equipment
Total cost of sales, selling and marketing costs
and administrative expenses
2022
2021
RUB’000
RUB’000
(12,864,124)
(14,658,649)
(10,464,895)
(12,963,846)
(2,399,229)
(1,694,803)
(45,973,405)
(37,971,403)
(32,373,079)
(29,750,883)
(18,540,527)
(16,647,787)
(3,942,968)
(3,968,788)
(6,780,615)
(5,491,140)
(34,798)
(274,177)
(2,016,665)
(1,972,429)
(116,042)
(293,924)
(941,464)
(1,102,638)
(41,260)
(46,187)
(24,676)
(15,230)
(94,298)
-
(92,990)
(23,721)
(45,849)
(56,908)
(25,371)
(16,357)
(74,192)
(23,271)
(98,619)
(27,420)
(603,102)
(734,651)
(13,600,326)
(8,220,520)
(6,752,811)
(6,642,505)
(2,596,568)
(1,127,459)
(325)
(675)
(309,878)
(483,647)
(20,535)
(7,735)
(3,932,833)
-
12,624
41,501
(58,837,529)
(52,630,052)
206
207
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 2022 and 2021 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/(losses) – net
Gain on sale of property, plant and equipment
Impairment of PPE
Adjusted EBITDA
2022
2021
RUB‘000
RUB‘000
24,919,886
15,099,559
8,232,161
4,338,476
1,149,555
2,189,224
641,196
(9,559)
325
675
2,596,568
1,127,459
6,752,811
6,642,505
44,292,502
29,388,339
309,878
483,647
(641,196)
9,559
1,334,901
(795,917)
(12,624)
(41,501)
3,932,833
-
49,216,294
29,044,127
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 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 2022
and 2021, and its reconciliation to Cash generated from operations.
Cash generated from operations
Tax paid
2022
2021
RUB’000
RUB’000
48,630,943
30,057,602
(8,455,068)
(2,807,806)
Interest paid on bank borrowings and non-convertible unsecured bonds
(1,938,619)
(2,238,779)
Interest paid on other lease liabilities
Purchases of property, plant and equipment
Purchases of intangible assets
Principal elements of other lease payments
Cash inflow from disposal of subsidiary undertakings - net of cash
disposed of
Acquisition of non-controlling interest
Total CAPEX
Free Cash Flow
Attributable Free Cash Flow
(786,304)
(183,057)
(11,421,671)
(8,439,159)
(2,000)
-
(2,402,700)
(1,067,922)
-
1,110,051
(8,800,000)
(300,000)
(11,423,671)
(8,439,159)
14,824,581
16,130,930
15,098,115
14,018,391
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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 2022 and 2021, and reconciliation of Net Debt to Total Debt.
Total debt
Minus
Cash and cash equivalents
Net Debt
Net Debt to Adjusted EBITDA
2022
2021
RUB’000
RUB’000
20,648,650
31,318,470
16,052,345
12,854,707
4,596,305
18,463,763
0.09x
0.64x
208
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
10. Revenue
a. Disaggregation of revenue
2022
2021
RUB’000
RUB’000
Railway transportation – operator’s services (tariff borne by the Group)
30,340,686
31,743,569
Railway transportation – operator’s services (tariff borne by the client)
60,197,311
37,237,506
Revenue from specialised container transportation
Other
-
1,824,121
563,855
514,133
Total revenue from contracts with customers recognised over time
91,101,852
71,319,329
Operating lease of rolling stock
Total revenue
3,372,180
1,831,684
94,474,032
73,151,013
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 2022 amounting
to RUB 10,464,895 thousand (for the year ended 31 December 2021: RUB 12,963,846 thousand)
and the cost of engaging the fleet from third parties recharged to clients of the Group amounting
to RUB 2,399,229 thousand (2021: RUB 1,694,803 thousand).
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b. Liabilities related to contracts with customers
The Group has recognised the following liabilities related to contracts with customers as of 31
December 2021 and 31 December 2022:
Current
Contract liabilities relating to railway transportation
contracts – Third parties
Contract liabilities relating to railway transportation
contracts – Related parties (Note 35)
Non-current
Contract liabilities relating to railway transportation
contracts – Third parties
Contract liabilities relating to railway transportation
contracts – Related parties (Note 35)
Total contract liabilities
31 December
2022
31 December
2021
1 January
2021
RUB’000
RUB’000
RUB’000
811,178
1,369,599
964,042
2,228
1,425
-
813,406
1,371,024
964,042
9,575
9,140
8,710
4,879
4,879
-
14,454
14,019
8,710
827,860
1,385,043
972,752
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 2022 includes RUB 1,346,417 thousand that were
included in the balance of the contract liability as of 1 January 2022 (year ended 31 December 2021:
RUB 945,900 as of 1 January 2021).
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.
210
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Notes to the consolidated financial
statements
11. Expenses by nature
Cost of sales
Infrastructure and locomotive tariffs: loaded trips
10,464,895
12,963,846
Infrastructure and locomotive tariffs: empty run trips and other tariffs
18,540,527
16,647,787
Services provided by other transportation organisations
2,399,229
1,694,803
2022
2021
RUB’000
RUB’000
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 on sale of property, plant and equipment
Impairment of property, plant and equipment
Other expenses
Total cost of sales
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)
34,798
-
274,177
23,271
2,847,269
2,186,776
3,942,968
3,968,788
6,662,020
6,555,041
2,464,331
976,920
309,878
483,647
310
658
2,016,665
1,972,429
116,042
293,924
(7,470)
(38,173)
3,932,833
-
205,199
330,548
53,929,494
48,334,442
90,791
87,464
132,237
150,539
15
17
(5,154)
(3,328)
3,933,346
3,304,364
20,535
92,990
46,187
94,298
41,260
24,676
15,230
23,721
7,735
98,619
56,908
74,192
45,849
25,371
16,357
27,420
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Information
2022
2021
RUB’000
RUB’000
Total expenses
Depreciation of property, plant and equipment (Note 17)
6,752,811
6,642,505
Depreciation of right-of-use assets (Note 18)
2,596,568
1,127,459
Loss on derecognition arising on capital repairs (Note 17)
309,878
483,647
Amortisation of intangible assets (Note 19)
Impairment of property, plant and equipment (Note 17)
325
3,932,833
675
-
Gain on sale of property, plant and equipment (Note 17)
(12,624)
(41,501)
Employee benefit expense (Note 13)
6,780,615
5,491,140
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
20,535
34,798
92,990
7,735
274,177
98,619
3,942,968
3,968,788
2,016,665
1,972,429
116,042
293,924
Infrastructure and locomotive tariffs: loaded trips
10,464,895
12,963,846
Infrastructure and locomotive tariffs: empty run trips and other tariffs
18,540,527
16,647,787
Services provided by other transportation organisations
2,399,229
1,694,803
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
Total cost of sales, selling and marketing costs
and administrative expenses
-
46,187
94,298
41,260
24,676
15,230
23,721
23,271
56,908
74,192
45,849
25,371
16,357
27,420
603,102
734,651
58,837,529
52,630,052
Note: The auditors’ remuneration stated above includes fees of RUB 7,723 thousand (2021: RUB 17,206
thousand) for statutory audit services and NIL (2021: RUB 5,899 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 NIL thousand for the year 2022 (RUB
3,811 thousand for the year 2021) in relation to fees paid to the Company’s statutory audit firm for tax
consultancy services.
Other expenses
397,903
404,103
Total selling, marketing and administrative expenses
4,908,035
4,295,610
212
213
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Overview
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Notes to the consolidated financial
statements
12. Other gains/(losses) – net
14. Finance income and costs
Other gains
Other losses
Net foreign exchange (losses) / gains (Note 16)
Gain from sale of subsidiaries (Note 20)
Other impairment
2022
2021
RUB’000
RUB’000
320,248
429,688
(448,484)
(407,997)
(1,187,428)
-
(19,237)
22,739
751,487
-
Total other gains/(losses) – net
(1,334,901)
795,917
13. Employee benefit expense
Wages and salaries
Termination benefits
Bonuses
Share based payment expense (Note 21)
Social insurance costs
Total employee benefit expense
2022
2021
RUB’000
RUB’000
2,925,075
2,653,146
8,744
2,449
2,611,365
1,783,574
125,737
123,971
1,109,694
928,000
6,780,615
5,491,140
Average number of employees during the year
1,781
1,750
Interest expense:
Bank borrowings
Non-convertible bonds
Total interest expense calculated using the effective interest rate
method
Other lease liabilities
Total interest expense
Other finance costs
Total finance costs
Interest income:
Bank balances
Short term deposits
Loans to related parties (Note 35)
Loans to third parties
2022
2021
RUB’000
RUB’000
(1,258,143)
(1,483,022)
(561,448)
(772,198)
(1,819,591)
(2,255,220)
(780,601)
(201,632)
(2,600,192)
(2,456,852)
(2,147)
(49,775)
(2,602,339)
(2,506,627)
520,642
222,453
18,033
-
208,700
72,172
-
3,173
Total interest income calculated using the effective interest rate
method
761,128
284,045
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)
1,609
16,531
357
41,738
779,268
326,140
32,320
811,588
-
822
326,962
2,642
641,196
(12,201)
641,196
(9,559)
Net finance costs - net
(1,149,555)
(2,189,224)
214
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
15. Income tax expense
Current tax:
Corporation tax
Withholding tax on dividends
Withholding tax on interest payments
Defence contribution
Total current tax
Deferred tax (Note 30):
Origination and reversal of temporary differences
Total deferred tax
Income tax expense
2022
2021
RUB’000
RUB’000
8,763,224
3,293,525
122,696
125,700
11,997
-
1,301
2,043
8,897,917
3,422,569
(665,756)
(665,756)
915,907
915,907
8,232,161
4,338,476
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 distribution1
Dividend tax provision in relation to intended dividend
distribution of subsidiaries
2022
2021
RUB’000
RUB’000
33,152,047
19,438,035
8,940,987
4,656,083
29,216
102,088
119,070
(127,081)
(119,649)
(6,091)
-
2,043
1,772,393
213,377
(2,354,808)
(308,614)
Withholding tax on interest payments
190
1,301
Over provision of current and deferred tax in prior years
(155,238)
(194,630)
Tax charge
8,232,161
4,338,476
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 2022 and 2021, the Group incurred taxes on distributions from Estonian subsidiaries.
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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.
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.
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 arise. 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 (losses) / gains
The exchange differences credited to the income statement are included as follows:
Finance income and costs (Note 14)
Other (losses) / gains – net (Note 12)
2022
2021
RUB’000
RUB’000
641,196
(1,187,428)
(546,232)
(9,559)
22,739
13,180
216
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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Notes to the consolidated financial
statements
17. Property, plant and equipment
At 1 January 2021
Cost
Rolling stock
Land
and buildings
Motor
vehicles
Other
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
123,222,340
374,471
207,796
3,642,951
127,447,558
Year ended 31 December 2022
Opening net book amount
Additions
Disposals
Rolling stock
Land
and buildings
Motor
vehicles
Other
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
80,279,260
11,003,172
(263,571)
276,128
39,063
-
111,649
39,422
(2,942)
434,147
104,841
(2,359)
81,101,184
11,186,498
(268,872)
Accumulated depreciation
(41,879,984)
(119,217)
(97,563)
(929,853)
(43,026,617)
Net book amount
Year ended 31 December 2021
Opening net book amount
Additions
Disposals
Disposed through disposals of subsidiaries
81,342,356
255,254
110,233
2,713,098
84,420,941
81,342,356
255,254
110,233
2,713,098
84,420,941
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
Depreciation charge (Note 11)
(6,594,915)
(16,170)
(40,968)
(100,758)
(6,752,811)
Transfers
Impairment charge
Reversal of impairment
Transfer to inventories
Derecognition arising on capital repairs
1,792
(4,085,082)
152,532
(681,307)
(309,878)
-
-
-
-
-
-
-
-
-
-
(1,792)
(283)
-
(87)
-
-
(4,085,365)
152,532
(681,394)
(309,878)
Currency translation differences
(2,730,013)
(1,374)
(3,181)
(400)
(2,734,968)
Closing net book amount
At 31 December 2022
Cost
76,771,990
297,647
103,980
433,309
77,606,926
128,806,367
447,195
247,323
1,046,626
130,547,511
Accumulated depreciation
(52,034,377)
(149,548)
(143,343)
(613,317)
(52,940,585)
Net book amount
76,771,990
297,647
103,980
433,309
77,606,926
125,742,564
410,314
231,770
962,979
127,347,627
2022 (2021: RUB 5,202 thousand).
Borrowing costs amounting to RUB 4,053 thousand were capitalised within rolling stock during the year
Accumulated depreciation
(45,463,304)
(134,186)
(120,121)
(528,832)
(46,246,443)
Net book amount
At 1 January 2022
Cost
80,279,260
276,128
111,649
434,147
81,101,184
Useful lives of rolling stock
The estimation of the useful lives of items of rolling stock is a matter of judgment based on the
125,742,564
410,314
231,770
962,979
127,347,627
experience with similar assets. The future economic benefits embodied in the assets are consumed
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
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 2022 is considered appropriate.
218
219
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
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
2022, 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 2022 is RUB 312,613
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
2022 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 2022, the management considered the deterioration of the economic environment,
the weak prevailing industry conditions, conflict between Russia and Ukraine 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, the Group recognised impairment losses in amount RUB
3,932,833 thousand related to the impairment of about 3.8 thousand units of rolling stock (mostly
gondola cars) blocked in Ukraine (Note 11).
No other impairment indicators or losses were noted. The impairment testing for all the CGUs, indicated
a significant headroom in the recoverable amount over the carrying amount of these CGUs.
In the cash flow statement, proceeds from sale of property, plant and equipment comprise:
Net book amount
Gains on sale of property, plant and equipment (Note 11)
Consideration from sale of property, plant and equipment
2022
2021
RUB’000
RUB’000
268,872
50,280
12,624
281,496
41,501
91,781
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The consideration from sale of property, plant and equipment is further analysed as follows:
2022
2021
RUB’000
RUB’000
Cash consideration received within year
238,377
Movement in advances received for sales of property, plant and equipment
43,119
281,496
77,932
13,849
91,781
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):
Rolling stock
2022
2021
RUB’000
RUB’000
11,529,299
17,997,866
11,529,299
17,997,866
Depreciation expense of RUB 6,662,020 thousand in 2022 (2021: RUB 6,555,041 thousand) has been
charged to “cost of sales” and RUB 90,791 thousand in 2022 (2021: RUB 87,464 thousand) has been
charged to “selling, marketing and administrative expenses” (Note 11).
220
221
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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18. Right-of-use assets
19. Intangible assets
Rolling stock
Land
and buildings
Other
Total
RUB’000
RUB’000
RUB’000
RUB’000
Year ended 31 December 2021
Opening net book amount
529,987
480,306
70,122
1,080,415
Additions
4,697,662
40,888
45,172
4,783,722
Change of terms of leases
1,275,580
(29,743)
(6,830)
1,239,007
Depreciation charge (Note 11)
(944,815)
(151,613)
(31,031)
(1,127,459)
Currency translation differences
-
(946)
-
(946)
Disposed through disposals
of subsidiaries
(271,696)
(18,765)
(77,433)
(367,894)
As at 31 December 2021
5,286,718
320,127
Year ended 31 December 2022
Opening net book amount
5,286,718
320,127
Additions
Disposals
Change of terms of leases
2,625,920
(1,413,726)
(360,471)
8,711
(11,457)
(19,465)
Depreciation charge (Note 11)
(2,463,257)
(133,311)
Currency translation differences
-
(1,762)
As at 31 December 2022
3,675,184
162,843
-
-
-
-
-
-
-
-
5,606,845
5,606,845
2,634,631
(1,425,183)
(379,936)
(2,596,568)
(1,762)
3,838,027
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 2021 and 31 December 2022, 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.
The total cash outflow for leases in 2022 was RUB 3,189,004 thousand (2021: RUB 1,501,860 thousand).
222
223
At 1 January 2021
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
Year ended 31 December 2022
Opening net book amount
Additions
Amortisation charge (Note 11)
Closing net book amount
At 31 December 2022
Cost
Accumulated amortisation
Net book amount
Computer
software
Customer
relationships
Total
RUB’000
RUB’000
RUB’000
11,766
(10,306)
1,460
1,460
(675)
(700)
85
10,934
(10,849)
85
85
2,000
(325)
1,760
12,934
(11,174)
1,760
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,766
(10,306)
1,460
1,460
(675)
(700)
85
10,934
(10,849)
85
85
2,000
(325)
1,760
12,934
(11,174)
1,760
Amortisation of RUB 310 thousand (2021: RUB 658 thousand) has been charged to “cost of sales”
in the income statement and RUB 15 thousand (2021: RUB 17 thousand) to “selling, marketing
and administrative expenses” (Note 11).
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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20. Principal subsidiaries
The Company had the following subsidiaries at 31 December 2022 and 31 December 2021:
the following:
The accumulated non-controlling interest as of 31 December 2022 and 31 December 2021 comprised
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 (%)
New Forwarding
Company, АО
GTI Management,
OOO
Ural Wagonrepair
Company, AO
Ukrainian New
Forwarding Company
OOO
Russia
Railway transportation
100
2022
2021
100
2022
100
Russia
Railway transportation
100
100
100
Russia
Repair
and maintenance
of rolling stock
100
100
100
2021
100
100
100
Ukraine
Railway transportation
100
100
100
100
BaltTransServis, OOO
Russia
Railway transportation
100
BTS-Locomotive
Solutions OOO1
RemTransServis,
OOO2
Russia
Support activities
for locomotive traction
Russia
-
-
60
-
-
100
60
60
60
60
60
Proportion
of ordinary shares
held by non-
controlling interest
(%)
2022
2021
-
-
-
-
-
40
40
-
-
-
-
40
40
40
Spacecom AS
Estonia
Spacecom Trans AS3
Estonia
65.25
65.25
65.25
65.25
34.75
34.75
-
-
65.25
65.25
34.75
34.75
Repair
and maintenance
of rolling stock
Operating lease
of rolling stock
Operating lease
of rolling stock
1 BTS-Locomotive Solutions, OOO is a 100% subsidiary of BaltTransServis.
2 RemTransServis, OOO is a 100% subsidiary of BaltTransServis, OOO.
3 Spacecom Trans AS is 100% subsidiary of Spacecom AS.
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.
224
225
BaltTransServis, OOO (including RemTransservis, OOO
and BTS-Locomotive Solutions, OOO)
Spacecom AS (including Spacecom Trans AS)
Total
2022
2021
RUB’000
RUB’000
-
2,417,810
(15,506)
3,840,047
(15,506)
6,257,857
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. 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.
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.
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.
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Overview
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Notes to the consolidated financial
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Summarised balance sheet
Summarised cash flow statements
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Summarised income statement
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-controlling interests
Dividends paid to non-controlling interest
BaltTransServis OOO
Spacecom AS
2022
2021
2022
2021
RUB’000
RUB’000
RUB’000
RUB’000
-
-
-
-
-
-
-
3,919,016
10,040,495
4,057,738
5,025,524
190,983
491,136
(138,722)
5,014,971
(300,153)
11,738,961
1,127,303
11,345,889
5,555,714
3,379
47,414
6,183,247
1,123,924
11,298,475
6,044,525
6,138,895
10,998,322
BaltTransServis OOO
Spacecom AS
2022
2021
2022
2021
RUB’000
RUB’000
RUB’000
RUB’000
-
-
-
-
-
-
-
-
26,932,363
1,701,153
1,231,965
6,024,506
6,095,012
408,092
(1,014,814)
(1,740,042)
(198,224)
5,009,692
4,354,970
209,868
-
(1,984,219)
(621,865)
5,009,692
2,370,751
(411,997)
2,003,877
1,513,352
72,929
(876,000)
(2,759,806)
(342,516)
Cash flows from operating activities
Cash generated from/(used in) operations
Income tax paid
Net cash generated from/(used in)
operating activities
Net cash generated from/(used in) investing
activities
Net cash used in financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning
of year
Exchange differences on cash and cash
equivalents
Cash and cash equivalents at end of year
BaltTransServis OOO
Spacecom AS
2022
2021
2022
2021
RUB’000
RUB’000
RUB’000
RUB’000
-
-
-
-
-
-
-
-
-
7,003,173
(1,170,770)
1,235,883
(1,135,617)
(368,772)
(213,715)
5,867,556
(1,539,542)
1,022,168
(2,512,085)
6,671,629
(30,889)
(2,660,088)
(4,978,418)
(1,011,676)
695,383
153,669
(20,397)
837,867
71,069
94,868
-
(2,296)
(3,402)
1,533,250
222,442
71,069
The information above includes the amounts before inter-company eliminations.
226
227
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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 125,737 thousand in this respect for the
year ended 31 December 2022 (2021: RUB 123,971 thousand) and the Group’s liability in respect of this
amounted to RUB 125,739 thousand as of 31 December 2022 (2021: RUB 123,971 thousand).
The share-based payment liability as of 31 December 2022 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.
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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
Total non-current portion
Current portion
2022
2021
RUB’000
RUB’000
3,760,501
3,736,801
275
604
(10,343)
(98,955)
3,750,433
3,638,450
-
-
3,750,433
3,638,450
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.
The carrying amounts of the Group’s trade receivables are denominated in the following currencies:
Currency:
US Dollar
Russian Roubles
Euro
Ukrainian Hryvnia
2022
2021
RUB’000
RUB’000
32,859
9,709
3,693,691
3,531,548
23,883
96,068
-
1,125
3,750,433
3,638,450
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.
228
229
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
b. Loans and other receivables
Loans receivables – related parties (Note 35)
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:
Other receivables - third parties
Total non-current portion
Current portion
2022
2021
RUB’000
RUB’000
401,151
-
36,519
282,886
23
18
(4,602)
(14,866)
433,091
268,038
-
-
237,680
237,680
433,091
30,358
The carrying amounts of the Group’s loans and other receivables are denominated in the following
currencies:
Currency:
Russian Roubles
Ukrainian Hryvnia
Euro
Other
2022
2021
RUB’000
RUB’000
433,089
267,105
-
2
-
922
11
-
433,091
268,038
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.
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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
2022
2021
RUB’000
RUB’000
3,889,771
3,151,716
137,914
175,400
11,832
21,157
3,019,624
479,862
7,059,141
3,828,135
95,748
137,835
953
11,748
915,269
997,334
1,011,970
1,146,917
6,047,171
2,681,218
The Group’s finance leases as at 31 December 2022 and 31 December 2021 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 2022
Minimum lease receivable
Less: Unearned finance income
Present value of minimum lease receivables
At 31 December 2021
Minimum lease receivable
Less: Unearned finance income
66,018
98,363
(12,973)
53,045
(1,662)
96,701
64,952
164,382
(17,978)
(14,799)
Present value of minimum lease receivables
46,974
149,583
-
-
-
-
-
-
164,381
(14,635)
149,746
229,334
(32,777)
196,557
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.
The effective interest rates on finance lease receivables at the balance sheet were as follows:
Finance leases to third parties
2022
%
10.43
2021
%
10.42
230
231
Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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24. Inventories
26. Share capital, share premium and treasury shares
Raw materials, spare parts and consumables
All inventories are stated at cost.
25. Cash and cash equivalents
Cash at bank and in hand
Short term bank deposits
Total cash and cash equivalents
2022
2021
RUB’000
RUB’000
798,621
680,363
798,621
680,363
2022
2021
RUB’000
RUB’000
14,997,495
5,634,742
1,054,850
7,219,965
16,052,345
12,854,707
The weighted average effective interest rate on short-term deposits was 5.18-8.76% in 2022 (2021: 6.74-
7.25%) and these deposits have a maturity of 1 to 18 days (2021: 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
2022
2021
RUB’000
RUB’000
16,052,345
12,854,707
16,052,345
12,854,707
2022
2021
RUB’000
RUB’000
11,616,051
12,246,089
1,013,793
422,914
3,422,501
121,006
-
64,698
16,052,345
12,854,707
The carrying value of cash and cash equivalents approximates their fair value.
At 1 January 2021 /31 December 2021 /
1 January 2022 / 31 December 2022
At 1 January 2021 /31 December 2021 /
1 January 2022 / 31 December 2022
Number
of shares
Share
capital
Share
premium
Total
USD’000
USD’000
USD’000
178,740,916
17,875
949,471
967,346
Number
of shares
Share
capital
Share
premium
Total
RUB’000
RUB’000
RUB’000
178,740,916
516,957
27,929,478
28,446,435
The total authorised number of ordinary shares at 31 December 2022 was 233,918,128 shares with a par
value of US$0.10 per share (31 December 2021: 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.
During the first six months of 2022, the Company purchased a total of 345,780 GDRs, which are held
in treasury for a total consideration of 832 thousand US Dollars (equivalent to RUB 114,497 thousand). No
further acquisitions took place within the last six months of 2022.
As of 30 June 2022, the Company had purchased a total of 422,657 GDRs / (31 December 2021 76,877
GDRs) which are held in treasury for a total consideration of 1.254 thousand US Dollars (equivalent
to RUB 145,993 thousand).
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury for up
to two years. In June 2022 the Board of Directors approved the cancellation of all purchased GDRs. As
of 31 December 2022 the cancellation of GDRs was in progress.
232
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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27. Dividends
28. Borrowings
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 2021 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 2022 and 2021, 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 Company1
Dividends declared to non-controlling interest
Dividends paid to non-controlling interest
2022
2021
RUB’000
RUB’000
-
-
9,022,550
9,022,550
2,759,806
1,218,516
1,728,073
1,225,275
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 relating to dividend declared and paid on the treasury shares.
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
2022
2021
RUB’000
RUB’000
7,690,301
9,658,062
3,905,571
4,010,198
11,595,872
13,668,260
7,802,778
12,651,536
1,250,000
4,998,674
9,052,778
17,650,210
20,648,650
31,318,470
6,165,311
11,188,564
2,887,467
6,461,646
9,052,778
17,650,210
Bank borrowings
Bank borrowings mature by 2027 (2021: by 2025) and bear average interest of 7.9% per annum (2021:
7.2% per annum). There were no defaults or breaches of loan terms during the years ended 31 December
2022 and 31 December 2021.
The current and non-current bank borrowings amounting to RUB 7,356,968 thousand and RUB
5,056,405 thousand respectively (2021: RUB 8,099,674 thousand and RUB 11,304,448 thousand
respectively) are secured by pledge of rolling stock and tank-containers with a total carrying net book
value of RUB 11,529,299 thousand (2021: RUB 17,997,866 thousand) (Note 17).
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
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
2022
2021
RUB’000
RUB’000
6,700,884
5,951,833
4,894,988
7,716,428
9,052,778
17,650,209
20,648,650
31,318,470
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Year ended 31 December 2022
Opening amount as at 1 January 2022
22,309,598
Cash flows:
Amounts advanced
Repayments of borrowings
Interest paid
Non-cash changes:
Interest charged
Net foreign exchange
Other lease liability
Change of terms of leases
Other
Closing amount as at 31 December 2022
2,750,000
(9,549,396)
(1,273,870)
1,262,196
-
-
(5,449)
15,493,079
-
-
-
-
-
-
-
-
-
5,841,573
9,008,872
37,160,043
-
-
2,750,000
(2,402,700)
(3,750,000)
(15,702,096)
(786,304)
(664,749)
(2,724,923)
780,601
(2,755)
2,569,659
(1,805,278)
-
561,448
2,604,245
-
-
-
(2,755)
2,569,659
(1,805,278)
(5,449)
4,194,796
5,155,571
24,843,446
Note: The amounts above are based on the earliest of their contractual re-pricing dates and maturity dates
Movements in borrowings are analysed 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
The carrying amount and fair value of current and non-current borrowings are as follows:
Carrying amount
Fair value
2022
2021
2022
2021
RUB’000
RUB’000
RUB’000
RUB’000
Bank borrowings
15,493,079
22,309,598
15,134,443
21,424,779
Non-convertible unsecured bonds
5,155,571
9,008,872
5,028,375
8,705,000
20,648,650
31,318,470
20,162,818
30,129,779
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
-
-
-
-
-
-
-
-
-
-
-
1,404,596
10,286,974
33,419,835
with stated maturity denominated in Russian Rouble was estimated based on expected cash flows
The fair value as at 31 December 2022 and 31 December 2021 of fixed interest rate instruments
-
-
18,058,000
(1,067,922)
(1,250,000)
(17,604,895)
discounted using the rate of similar Russian Rouble denominated instruments entered into by the Group
close to 31 December 2022 and 31 December 2021. The discount rate was 11.1% p.a. (2021: 10.5% p.a.).
The fair value measurements are within level 2 of the fair value hierarchy (2021: level 2). The fair value as
at 31 December 2022 and 31 December 2021 of the fixed interest rate non-convertible bonds was equal
(183,057)
(800,300)
(2,421,836)
to their quoted price and the resulting fair value measurement is within level 1.
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
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.
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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Notes to the consolidated financial
statements
The carrying amounts of the Group’s borrowings are denominated in the following currencies:
30. Deferred income tax
Russian Rouble
The Group has the following undrawn borrowing facilities:
Fixed rate:
Expiring within one year
Expiring beyond one year
2022
2021
RUB’000
RUB’000
20,648,650
31,318,470
20,648,650
31,318,470
2022
2021
RUB’000
RUB’000
10,083,333
7,788,000
32,700,000
35,100,000
42,783,333
42,888,000
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
2022
2021
RUB’000
RUB’000
9,752,314
8,862,587
(665,756)
-
(5,319)
915,907
(22,592)
(3,588)
9,081,239
9,752,314
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.
The movement on the deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within
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
Other lease liabilities
Between 1 and 2 years
Between 2 and 5 years
Over 5 years
2022
2021
%
7.9
8.5
%
7.2
8.2
2022
2021
RUB’000
RUB’000
2,400,332
1,913,410
1,794,464
3,928,163
4,194,796
5,841,573
1,694,562
2,002,349
96,970
1,898,921
2,932
26,893
1,794,464
3,928,163
the same tax jurisdiction, is as follows:
Deferred tax liabilities
At 1 January 2021
Charged/(credited) to:
Income statement (Note 15)
Disposed through disposals of subsidiaries
Translation differences
At 31 December 2021
Charged/(credited) to:
Property, plant
and equipment
Withholding tax
provision
Intangible
assets
Right-of-use
assets
Total
RUB’000
RUB’000
RUB’000
RUB’000
RUB’000
8,466,355
673,758
(210)
147,055
9,286,958
702,541
(86,158)
453,254
-
-
(3,588)
9,082,738
1,123,424
56
154
-
-
-
-
-
724,589
1,880,440
(73,579)
(159,583)
-
(3,588)
798,065
11,004,227
(76,425)
(761,664)
-
(5,319)
721,640
10,237,244
Income statement (Note 15)
(249,779)
(435,460)
Translation differences
At 31 December 2022
-
8,832,959
(5,319)
682,645
238
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
Deferred tax assets
At 1 January 2021
Charged/(credited) to:
Income statement (Note 15)
Disposed through disposals of subsidiaries
At 31 December 2021
Charged/(credited) to:
Income statement (Note 15)
At 31 December 2022
Tax losses
RUB’000
(53,416)
1,334
52,082
-
-
-
Trade
and other
payables
Other lease
liabilities
and Borrowings
Other assets/
liabilities
Total
RUB’000
(92,490)
(133,715)
(1,435)
RUB’000
RUB’000
RUB’000
(223,956)
(54,509)
(424,371)
(728,150)
(104,002)
(964,533)
103,517
(17,173)
136,991
(227,640)
(848,589)
(175,684)
(1,251,913)
36,420
(191,220)
46,774
12,714
95,908
(801,815)
(162,970)
(1,156,005)
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 89,231 thousand (2021: RUB 267,717 thousand) for tax losses amounting
to RUB 713,852 thousand (2021: RUB 1,487,319 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 2022.
Deferred income tax liabilities of RUB 1,683,687 thousand (2021: RUB 1,215,876 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 32,832,980 thousand as at 31 December 2022 (2021: RUB
11,155,035 thousand).
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31. Trade and other payables
Current
Trade payables to third parties
Other payables to third parties
VAT payable and other taxes
Accrued expenses
Accrued key management compensation, including share-based
payment (Note 35)
Non-current
Other payables to third parties
2022
2021
RUB’000
RUB’000
338,540
529,454
2,036,750
437,960
3,441,091
614,664
98,140
95,960
469,827
1,042,989
6,384,348
2,721,027
-
-
9,225
9,225
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)
25,193,420
12,987,020
Weighted average number of ordinary shares in issue (thousand)
178,382
178,664
Basic and diluted earnings per share (expressed in RUB per share)
attributable to the equity holders of the Company during the year
141.23
72.69
2022
2021
240
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
Notes to the consolidated financial
statements
33. Contingencies
Operating environment
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 geopolitical situation in Eastern Europe intensified on 24 February 2022 with the commencement
of the conflict between Russia and Ukraine. As at the date of authorizing these financial statements
for issue, the conflict continues to evolve as military activity proceeds. In addition to the impact
of the events on entities that have operations in Russia or Ukraine or that conduct business with
their counterparties, the conflict is increasingly affecting economies and financial markets globally
and exacerbating ongoing economic challenges.
The European Union as well as United States of America, Switzerland, United Kingdom and other
countries imposed a series of restrictive measures (sanctions) against the Russian government, various
companies, and certain individuals. The sanctions imposed include an asset freeze and a prohibition
from making funds available to the sanctioned individuals and entities. In addition, travel bans
applicable to the sanctioned individuals prevent them from entering or transiting through the relevant
territories. The Republic of Cyprus has adopted the United Nations and European Union measures.
The rapid deterioration of the conflict in Ukraine may as well lead to the possibility of further sanctions
in the future.
Emerging uncertainty regarding global supply of commodities due to the conflict between Russia
and Ukraine conflict may also disrupt certain global trade flows and place significant upwards pressure
on commodity prices and input costs as seen through early March 2022. Challenges for companies
may include availability of funding to ensure access to raw materials, ability to finance margin payments
and heightened risk of contractual non-performance.
The impact on the Group largely depends on the nature and duration of uncertain and unpredictable
events, such as further military action, additional sanctions, and reactions to ongoing developments
by global financial markets.
The financial effect of the current crisis on the global economy and overall business activities cannot be
estimated with reasonable certainty at this stage, due to the pace at which the conflict prevails and the
high level of uncertainties arising from the inability to reliably predict the outcome.
The event did not exist in the reporting period and is therefore not reflected in the recognition
and measurement of the assets and liabilities in the financial statements as at 31 December 2022 as it is
considered as a non-adjusting event.
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The Group actively monitors political developments on an ongoing basis. However, the macroeconomic
situation in Ukraine, Russia is out of Management’s control. The scope and impact of any new potential
sanctions (and any counter-sanctions) is yet unknown, however they might further affect key Russian
financial institutions as well as companies operating in the Russian Federation.
Fluctuations in foreign exchange rates may also impact the operations of the Goup. The Russian
central bank had raised the key rate of interest from 9,5% to 20% as a preventive measure to stop
the devaluation of the RUB.
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 2022 and 2021 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.
242
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022 Overview
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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
2022
2021
RUB’000
RUB’000
879,341
373,492
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:
Not later than 1 year
Later than 1 year not later than 5 years
2022
2021
RUB’000
RUB’000
2,635,180
2,612,600
856,038
1,692,999
3,491,218
4,305,599
There were no contingent-based rents to be recognised in the income statement for the year ended 31
December 2022 and 31 December 2021.
Notes to the consolidated financial
statements
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.
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 2022 and 31 December 2021 (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
In the opinion of management, there are no legal proceedings or other claims outstanding, as of 31
December 2022 and 2021 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.
244
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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Notes to the consolidated financial
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35. Related party transactions
b. Sale of goods and services
Litten Investments Ltd, controlled by a Director of the Company, has a shareholding in the Company
of 5.1% as at 31 December 2022 (31 December 2021: 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 2022 (31 December 2021: 3.1%).
As at 31 December 2022, another 0.1% (2021: 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
2022
2021
RUB’000
RUB’000
Key management salaries and other short-term employee benefits
2,702,399
1,887,429
Share based compensation (Note 21)
125,737
123,971
2,828,136
2,011,400
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 776,827 thousand (2021: RUB 604,062 thousand) and analysed
as follows:
Non-executive directors’ fees
Emoluments in their executive capacity
Share based compensation in their executive capacity
2022
2021
RUB’000
RUB’000
20,793
25,881
738,450
561,000
17,584
17,181
776,827
604,062
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
2022
2021
RUB’000
RUB’000
813,750
134,312
880
125
814,630
134,437
2022
2021
RUB’000
RUB’000
96,722
96,722
525
525
2022
2021
RUB’000
RUB’000
275
275
23
23
604
604
18
18
Key management remuneration – current (Note 31):
Accrued salaries and other short-term employee benefits
344,088
919,018
Share based payment liability (Note 21)
e. Interest income
Finance leases (Note 14):
Entity under control of members of key management
Loans (Note 14):
Entity under control of members of key management
125,737
123,971
469,825
1,042,989
2022
2021
RUB’000
RUB’000
1,609
1,609
18,033
18,033
357
357
-
-
246
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Globaltrans Annual Report 2022Consolidated Management report and consolidated financial statements for the year ended 31 December 2022
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. Loans
Loans receivables (Note 22):
Entity under control of member of key management
At the beginning of the period
Loans advanced during the year
Loans repaid during the year
Interest charged (Note 14)
Interest received
At the end of the period
h. 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
2022
2021
RUB’000
RUB’000
2,228
2,228
4,879
4,879
1,425
1,425
4,879
4,879
2022
2021
RUB’000
RUB’000
401,151
401,151
-
800,000
(400,000)
18,033
(16,882)
401,151
-
-
-
-
-
-
-
2022
2021
RUB’000
RUB’000
10,879
10,879
953
953
9,409
9,409
11,748
11,748
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i. 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.
j. 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
2022
2021
RUB’000
RUB’000
836,960
820,549
856,038
1,692,999
1,692,998
2,513,547
36. Events after the balance sheet date
Disposal of Spacecom AS
In January 2023 the Group disposed of its 65.25% shareholding in Spacecom AS for EUR 65,300,000.
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 150 to 153.
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Management report and parent company
financial statements for the year ended
31 December 2022
Board of Directors and other officers ............................................................................................................................................................................................................................... 251
Management Report .................................................................................................................................................................................................................................................................. 252
Directors’ responsibility ............................................................................................................................................................................................................................................................ 268
Independent Auditor’s Report .............................................................................................................................................................................................................................................. 270
Income statement ........................................................................................................................................................................................................................................................................ 274
Board of Directors
and other officers
Board of Directors
Mr. Vasilis Hadjivassiliou
Independent Non-Executive Director
Mr. Sergey Maltsev
Chairman of the Board of Directors
Board support
Statement of comprehensive income ............................................................................................................................................................................................................................. 275
Member of the Audit Committee (since
Executive Director
The Company Secretary is available
Balance sheet ................................................................................................................................................................................................................................................................................. 276
January 2021)
Alternate director: Mr. Yuri Isaev
to advise all Directors to ensure compliance
Statement of changes in equity .......................................................................................................................................................................................................................................... 278
Cash flow statement .................................................................................................................................................................................................................................................................. 280
Mr. John Carroll Colley
Independent Non-Executive Director
Mr. Sergey Tolmachev
Executive Director
1. General information ........................................................................................ 282
19. Loans and other receivables ................................................................... 317
Chairman of the Audit Committee
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
2. Basis of preparation ........................................................................................ 282
20. Other assets ........................................................................................................ 318
Chairman of Remuneration Committee
3. Adoption of new or revised standards and interpretations ...283
21. Cash and cash equivalents ...................................................................... 319
Chairman of Nomination Committee
Mr. Alexander Storozhev
Executive Director
expense.
4. Summary of significant accounting policies ...................................283
22. Share capital, share premium and treasury shares ................... 320
Member of ESG Committee (since January
Alternate Director: Ms. Elia Nicolaou
5. New accounting pronouncements ...................................................... 296
23. Borrowings ......................................................................................................... 321
2021)
6. Financial risk management ....................................................................... 298
24. Other lease liabilities .................................................................................... 324
7. Critical accounting estimate and judgements .............................. 309
25. Payables and accrued expenses .......................................................... 324
8. Revenue ................................................................................................................ 309
26. Related party transactions ........................................................................ 325
Mr. George Papaioannou
Independent Non-Executive Director
9. Other losses/(gains) – net ......................................................................... 309
27. Contingencies .................................................................................................. 330
Member of the Audit Committee
10. Expenses by nature ...................................................................................... 310
28. Events after the balance sheet date ................................................... 333
Member of Remuneration Committee (since
Mr. Konstantin Shirokov
Executive Director
Company Secretary
Ms. Elia Nicolaou
Dimitriou Karatasou, 15
Mr. Alexander Eliseev
Non-executive Director
Anastasio Building, 6th floor, Office 601
Strovolos, 2024, Nicosia, Cyprus
11. Employee benefit expense ........................................................................ 310
12. Finance income and costs ........................................................................ 311
13. Income tax expense ....................................................................................... 311
14. Net foreign exchange gains/(losses) .................................................. 312
15. Dividends ............................................................................................................. 312
16. Property, plant and equipment .............................................................. 313
17. Right-of-use assets ........................................................................................ 314
18. Investments in subsidiary undertakings ............................................ 315
Assistant secretary: Mr. Marios Tofaros
Registered office
20 Omirou Street
Agios Nicolaos
CY-3095 Limassol, Cyprus
September 2022)
Alternate Director: Ms Ekaterina Golubeva
Member of Nomination Committee (since
September 2022)
Ms. Elia Nicolaou
Non-executive Director
Mr. Andrey Gomon
Non-executive Director
Alternate Director: Ms. Melina Pyrgou
Chairwoman of the ESG Committee (since
January 2021)
Mr. Alexander Tarasov
Non-executive Director
Member of the Audit Committee (until
Resigned in May 2022
January 2021)
Company Secretary
Secretary of the Board
Mr. Sergey Foliforov
Non-executive Director
Alternate Director: Mr. Marios Tofaros
Appointed in June 2022
Mr. Michalakis Thomaides
Non-Executive Director
Dr. Johann Franz Durrer
Passed away on 3 September 2022
Ms. Melina Pyrgou
Non-executive Director
Mr. Marios Tofaros
Non-executive Director
Dr. Durrer was senior Independent Non-
Executive Director
Chairman of the Remuneration Committee
Chairman of the Nomination Committee
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Management Report
The Board of Directors presents its report together with the audited parent company financial
statements for the year ended 31 December 2022. 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 increased to RUB 5,705,759 thousand compared to RUB 3,509,530
thousand for the year ended 31 December 2021. This was mainly the result of the increase in the
dividend income earned from the subsidiaries from RUB 3,154,405 thousand during the year ended 31
December 2021 to RUB 7,064,907 thousand in the current year.
The net asset position of the Company has increased as of 31 December 2022 compared to 31
December 2021, with net assets as of 31 December 2022 amounting to RUB 48,272,615 thousand
compared to RUB 42,681,353 thousand as of 31 December 2021.
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
2022, apart from acquisition in February 2022 of a 40% non-controlling interest in BaltTransServis, OOO.
For the principal subsidiaries of the Company, refer to Note 18 of the 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.
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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 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.
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 27 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.
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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, 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 2022; 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 2022 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 and number of commercial banks, the 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 risks. 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.
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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, 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.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022 Management Report
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.
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 listed. 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.
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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 2022, the Company has an excess of current assets over current liabilities of RUB
4,843,276 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.
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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. 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 17 and 18. 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.
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 2021 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).
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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 2022 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 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.
During the first six months 2022, the Company purchased a total of 345,780 GDRs, which are held
in treasury for a total consideration of 832 thousand US Dollars (equivalent to RUB 114,497 thousand). No
further acquisitions took place within the last six months 2022.
As of 30 June 2022, the Company had purchased a total of 422,657 GDRs / (31 December 2021 76,877
GDRs) which are held in treasury for a total consideration of 1.254 thousand US Dollars (equivalent
to RUB 145,993 thousand).
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury for up
to two years.
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Research and development activities
The role of the Board of Directors
The Company has not undertaken any research and development activities during the year ended 31
December 2022.
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 27 to the financial statements, the Directors consider that
the Company has adequate resources to continue in operation for the foreseeable future.
Auditors
The previous Independent Auditor, PricewaterhouseCoopers Limited resigned, there has been no
disagreement between previous auditors and management related to the last audit. GAC Auditors
Ltd was appointed as Independent Auditor and 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.
Full details of our governance policies can be found at https://globaltrans.com/governance/corporate-
documents.
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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.
Members of the Board of Directors
As at 31 December 2022 and at the date of this report, the Board comprises of 14 members (2021: 15
members), 10 (2021: 11 members) of whom are non-executive directors. Three (2021: 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 2022 and at the date of this report are shown
on page 1. All of them were members of the Board throughout the year 2022 except Dr. Johann Franz
Durrer who passed away on 3 September 2022, Mr. Sergey Foliforov, who was appointed as Non-
executive director in June 2022 and Alexander Tarasov who resigned from the Board of Directors in May
2022.
There were no significant changes in the assignment of responsibilities of the Board of Directors, with
the exception of Dr. Johann Franz Durrer who passes away on 3 September 2022.
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.
The total gross remuneration of the members of the Board of Directors incurred by the Company
in 2022 amounted to RUB 319,844 thousand (2021: RUB 312,985 thousand).
Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022 Management Report
Board performance
The Board held 18 meetings in 2022. The Directors’ attendance is presented in the table below.
Eligible
Attended
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
Sergey Foliforov
Vasilis Hadjivassiliou
Michalakis Thomaides
12
18
18
18
18
18
18
18
18
18
18
18
6
10
18
18
11
17
18
18
18
18
18
18
18
18
18
18
5
10
18
18
The Board Committees
During 2022 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 2022 all the members of the 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.
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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. As
of 31 December 2022 the Nomination Committee was chaired by Carroll Colley and George Papaioannou
was 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.
As of 31 December 2022 the Remuneration Committee was chaired by Carroll Colley and George
Papaioannou was 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 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: Elia Nicolaou, Non-executive Director, who
serves as the Chair, and Carroll Colley, Independent Non-executive Director. The ESG Committee meets
at least two times a year.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Management Report
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 26 April 2022.
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 female directors representing
approximately 14% 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 52.4 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 the 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
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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
The Articles of Association of the Company may be amended from time to time by special resolution
· Group companies conduct their business in compliance with applicable laws.
at the General Meeting of the Shareholders.
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.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Management Report
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 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 56.8%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 2022 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%
0.2%
0.1%
56.8%
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.
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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 2022 and 31 December 2021 are shown below:
Name
Type of holding
2022
2021
Alexander Eliseev
Indirect holding of ordinary shares and GDRs
9,065,790
9,065,790
Sergey Maltsev
Indirect holding of GDRs
5,490,149
5,490,149
Johann Franz Durrer
Holding of GDRs
n/a
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, 24 March 2023
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022 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.
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Directors’ confirmations
Each of the directors, whose names and functions are listed in page 1 confirms that, to the best of his or
her knowledge:
a. the financial statements, which are presented on pages 17 to 56, 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.
Those charged with governance are responsible for overseeing the Company’s financial reporting
Further, each of the Directors confirms that, to the best of their knowledge:
process.
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, 24 March 2023
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022 Independent Auditor’s Report
To the Members of Globaltrans Investment PLC
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the parent company Globaltrans Investment
PLC (the ‘’Company’’), which comprise the statement of financial position as at 31 December 2022, and
the statements of profit or loss and other comprehensive income, changes in equity and cash flows
for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position
of the parent company Globaltrans Investment PLC as at 31 December 2022, 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.
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 Financial Statements’’ section of our report. 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 financial statements in Cyprus, and
we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA
Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Emphasis of Matter
We draw attention to the operating environment of the separate financial statements, which describes
the impact of conflict between Russia and Ukraine. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
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Other information
The Board of Directors is responsible for the other information. The other information comprises the
information included in the Management Report, but does not include the financial statements and our
auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
based on the work we have performed, 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.
Responsibilities of the Board of Directors for the Financial Statements
The 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.
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.
The Board of Directors is responsible for overseeing the Company’s financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 financial statements.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Independent Auditor’s Report
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
·
Identify and assess the risks of material misstatement of the 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
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 financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves a true and fair view.
We communicate with the Board of Directors 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.
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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 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 Matters
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 2022.
Comparative figures
The separated financial statements of the Company for the year ended 31 December 2021 were
audited by another auditor who expressed an unmodified opinion on those financial statements
on 25 March 2022.
Michalis Lambrianides
Certified Public Accountant and Registered Auditor
for and on behalf of
GAC Auditors Ltd
Certified Public Accountants and Registered Auditors
48 Inomenon Ethnon, Guricon House 1st floor, 6042
Larnaca, 24 March 2023
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Income statement
Statement of comprehensive
income
for the year ended 31 December 2022
for the year ended 31 December 2022
Revenue
Marketing costs
Administrative expenses
Reversal of impairment losses on loans receivable
Other income
Other (losses)/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
2022
RUB’000
2021
RUB’000
8
7,067,043
3,174,507
(1,512)
(2,633)
(677,369)
(603,758)
-
-
133,727
310,381
(8,661)
825,602
6,379,501
3,837,826
100,851
51,038
(1,391,809)
(239,086)
752,089
(11,204)
(538,869)
(199,252)
5,840,632
3,638,574
(134,873)
(129,044)
5,705,759
3,509,530
26
9
12
12
12
12
13
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
Total items that may be reclassified subsequently to profit or loss
Other comprehensive income for the year, net of tax
2022
2021
RUB’000
RUB’000
5,705,759 3,509,530
-
-
-
-
(86,158)
86,158
-
-
Total comprehensive income for the year
5,705,759 3,509,530
The notes on pages 282 to 333 are an integral part of these financial statements.
The notes on pages 282 to 333 are an integral part of these financial statements.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Balance sheet
at 31 December 2022
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
Note
31 December
2022
RUB’000
31 December
2021
RUB’000
18
16
17
20
19
19
20
21
22
22
53,951,099
44,851,099
5,400
5,790
915
-
8,039
8,685
300,000
259,875
53,963,204
45,427,698
2,330,277
481,110
692
713
4,687,835
1,977,191
7,018,804
2,459,014
60,982,008
47,886,712
516,957
516,957
27,929,478
27,929,478
2,694,851
2,694,851
(145,993)
(31,496)
17,277,322
11,571,563
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Total equity
Non-current liabilities
Borrowings
Lease liabilities
Total non-current liabilities
Current liabilities
Borrowings
Lease liabilities
Payables and accrued expenses
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Note
31 December
2022
RUB’000
31 December
2021
RUB’000
48,272,615
42,681,353
23
24
23
24
25
10,531,377
3,118,740
2,488
5,905
10,533,865
3,124,645
2,057,319
1,920,346
2,826
115,383
2,780
157,588
2,175,528
2,080,714
12,709,393
5,205,359
60,982,008
47,886,712
On 24 March 2023 the Board of Directors of Globaltrans Investment PLC authorised these financial
statements for issue.
Sergey Tolmachev
Director
Konstantin Shirokov
Director
The notes on pages 282 to 333 are an integral part of these financial statements.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Statement of changes in equity
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Dividend to owners of the Company
15
Total distributions to owners of the Company
for the year ended 31 December 2022
Balance at 1 January 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 2022
Transactions with owners
Total transactions with owners
Balance at 31 December 2022
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 2022
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 2022
Note
Share
capital
RUB’000
516,957
Share
premium
RUB’000
27,929,478
Capital
contribution
RUB’000
2,694,851
Treasury
shares
RUB’000
(31,496)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
516,957
27,929,478
2,694,851
(31,496)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
22
-
-
-
-
-
-
-
-
516,957
27,929,478
2,694,851
-
-
-
-
-
-
(114,497)
(114,497)
(145,993)
Cash flow hedge
reserve
RUB’000
-
-
(86,158)
86,158
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Retained
earnings
RUB’000
Total
RUB’000
17,084,583
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)
(9,022,550)
(9,022,550)
(9,022,550)
11,571,563
42,681,353
5,705,759
5,705,759
-
-
-
-
5,705,759
5,705,759
-
-
-
-
-
-
(114,497)
(114,497)
17,277,322
48,272,615
The notes on pages 282 to 333 are an integral part of these financial statements.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Cash flow statement
for the year ended 31 December 2022
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 expense
Reversal of impairment losses on loans receivable
Gain from sale of subsidiaries
Net foreign exchange transaction losses/(gains)
on financing activities
Note
2022
RUB’000
2021
RUB’000
5,840,632
3,638,574
16
17
8
12
12
26
9
12
2,639
2,895
(2,136)
(100,851)
1,391,809
-
-
(752,089)
2,639
2,633
(20,102)
(51,038)
239,086
(133,727)
(827,850)
11,204
Operating cash flows before working capital changes
6,382,899
2,861,419
Changes in working capital:
Dividend income not received
Other assets
Payables and accrued expenses
20
(1,624,666)
(50,192)
15,072
5,875
34,033
Net cash generated from operations
4,708,061
2,916,399
Interest received from loans from related parties
1,267
8,675
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
(134,692)
(127,001)
4,574,636
2,798,073
Proceeds from sale of subsidiary
18
-
1,128,000
Acquisition of non-controlling interest
18/20
(8,800,000)
(300,000)
Purchases of property, plant and equipment
Loans granted to related parties
Loan repayments received from related parties
16
26
26
Bank interest received
(915)
(6,858)
174,633
100,851
-
-
296,668
51,038
Net cash generated from investing activities
(8,532,289)
1,175,706
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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
Note
2022
RUB’000
2021
RUB’000
23
23
23
23
23
22
15
8,706,600
6,000,000
(1,865,079)
(1,000,000)
(2,328)
(3,209)
(297,378)
(199,680)
(253)
(114,497)
(320)
-
-
(9,022,550)
6,427,065
(4,225,759)
Net (decrease)/increase in cash and cash equivalents
2,469,412
(251,980)
Exchange gains on cash and cash equivalents
Cash and cash equivalents at beginning of year
241,232
1,977,191
Cash and cash equivalents at end of year
21
4,687,835
3,653
2,225,518
1,977,191
The notes on pages 282 to 333 are an integral part of these financial statements.
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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 parent company financial statements were authorised for issue by the Board of Directors of the
Company on 24 March 2023.
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 2022 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.
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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 2022 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 2022. 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 balance
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”.
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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.
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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
The Company recognises a liability and an expense for bonuses where contractually obliged or where
difference will not reverse in the foreseeable future.
there is a past practice that has created a constructive obligation.
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.
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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).
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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.
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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.
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.
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
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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.
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 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
Assets that have indefinite useful life and goodwill are not subject to amortisation and are tested
financial assets. Subsequently, these are measured at amortised cost.
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.
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.
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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.
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.
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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.
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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.
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.
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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.
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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.
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”.
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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. Furhermore, principal payments of deferred consideration are
recognised as acquisition of subsidiaries within cash flows from investing activities.
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financial statements
5. New accounting pronouncements
The new standards, interpretations, and amendments to the existing standards effective for annual
accounting periods commencing on 1 January 2022 are as follows:
· Amendment to IFRS3 – (issued on 14 May 2020 and are effective for business combinations
for annual periods beginning on or after 1 January 2022). The IASB published Reference
to the Conceptual Framework (Amendments to IFRS 3) with amendments to IFRS 3,
Business Combinations that update an outdated reference in IFRS 3 without significantly
changing its requirements. IFRS 3, Business Combinations specifies how an entity should
account for the assets and liabilities it acquires when it obtains control of a business. IFRS 3
requires an entity to refer to the Conceptual Framework for Financial Reporting (Conceptual
Framework) to determine what constitutes an asset or a liability.
· Amendment to IAS16 – Property, Plant and Equipment – Proceeds before intended use
(issued in June 2017 and has now finalized the amendments and are effective for annual
periods beginning on or after 1 January 2022). Proceeds before Intended Use (Amendments
to IAS 16) amends the standard to prohibit deducting from the cost of an item of property,
plant and equipment any proceeds from selling items produced while bringing that asset
to the location and condition necessary for it to be capable of operating in the manner
intended by management. Instead, an entity recognizes the proceeds from selling such
items, and the cost of producing those items, in profit or loss.
· Amendment to IAS37 – Onerous contracts – Cost of fulfilling a contract (proposed
clarifications in December 2018 and has now finalized the amendments and are effective
for annual periods beginning on or after 1 January 2022). The changes in Onerous
Contracts s— Cost of Fulfilling a Contract (Amendments to IAS 37) specify that the ‘cost
of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that
relate directly to a contract can either be incremental costs of fulfilling that contract
(examples would be direct labour, materials) or an allocation of other costs that relate
directly to fulfilling contracts (an example would be the allocation of the depreciation
charge for an item of property, plant and equipment used in fulfilling the contract).
We understand that, based on management’s assessment, none of the above new standards,
interpretations and amendments to existing standards had any material effect on the Group/Company.
Management’s assessment will be considered during our audit.
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Developments in auditing
ISA 315 (Revised 2019) – Identifying and Assessing the Risks of Material Misstatement (effective
for audits of financial statements for periods beginning on or after 15 December 2021) The International
Audit and Assurance Standards Board (IAASB) approved major changes to ISA 315 in September 2019.
The effects of the revisions will be far-reaching and will require firms of all sizes to revise their approach
to risk assessments. The following are the main areas of the revisions:
· The introduction of five new inherent risk factors to aid in risk assessment; subjectivity,
complexity, uncertainty, change and susceptibility to misstatement due to management bias
or fraud
· A new spectrum of risk, at the higher end of which lie significant risks
· Requiring “sufficient, appropriate” evidence to be obtained from risk assessment procedures
as the basis for the risk assessment
· A great deal more on IT, particularly IT general controls
· More on controls relevant to the audit and on the design and implementation work required
for these controls
· Removal of considerations specific to smaller entities as a separate category of paragraph
and inclusion of that material within the main body of the text and the addition of new
material
The revisions aim to drive better quality and more consistent risk assessments, as well as promote
the exercise of professional skepticism.
None of the new standards, amendments to existing standards or interpretations is expected to have
a significant effect on the consolidated financial statements.
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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 2022 the Russian Rouble has increased against the US Dollar from 74.2926
as of 31 December 2021 to 70.3375 Russian Roubles (5.4% increase) and has increased against the Euro
from 84.0695 as of 31 December 2021 to 75.6553 Russian Roubles (10.0% 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 2022 and 31
December 2021 are as follows:
Assets
Liabilities
2022
RUB’000
902,670
8,962
2021
RUB’000
817,566
15,379
The carrying amounts of monetary assets and liabilities denominated in Euro as at 31 December 2022
and 31 December 2021 are as follows:
Assets
Liabilities
2022
RUB’000
5,527,389
49,967
2021
RUB’000
321,536
97,640
Had US Dollar exchange rate strengthened/weakened by 20% (2021: 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 2022 would have increased/decreased by RUB 156,399 thousand (2021: RUB
140,383 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 2022
and as of 31 December 2021.
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Had Euro exchange rate strengthened/weakened by 30% (2021: 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 2022 would have increased/decreased by RUB 1,437,823 thousand (2021: by RUB
58,773 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
2022 and as of 31 December 2021.
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 NIL (2021: RUB 86,158 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 NIL thousand (2021: RUB 86,158 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 2022 and 31 December 2021
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 2022 and 31 December 2021 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.
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.
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 ‘B1’. These policies enable
the Company to reduce its credit risk significantly.
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financial statements
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
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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.
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.
·
significant changes in the value of the collateral supporting the obligation or in the quality
The Company’s exposure to credit risk for each class of financial instruments subject to the expected
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.
credit loss model is set out below:
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.
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receivable
RUB’000
Other
receivables
RUB’000
-
234,634
Opening balance
Reversals
Impairment
Foreign exchange difference
Closing balance
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The movement in the credit loss allowance for loans receivable during the years 2022 and 2021
is presented in the table below:
Loans Receivable
Non-performing
2022
2021
RUB’000
RUB’000
(1,476,783)
(1,601,472)
-
133,727
(386,089)
-
-
(9,038)
(1,862,872)
(1,476,783)
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 2022 and 31 December 2021 was not material.
During the years 2022 and 2021, the contractual cash flows of the Company’s credit-impaired loans
receivable as at 1 January 2022 and 1 January 2021, 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.
Notes to the parent company
financial statements
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 2021:
Internal credit risk
rating grade
Company definition of category
Gross carrying amount
Performing
Underperforming
Stage 1 - Counterparties have a low risk of default
and a strong capacity to meet contractual cash
flows
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
1,937,248
45,886
-
-
The gross carrying amounts below represent the Company’s maximum exposure to credit risk on these
assets as at 31 December 2022:
Internal credit risk
rating grade
Company definition of category
Gross carrying amount
Performing
Underperforming
Stage 1 - Counterparties have a low risk of default
and a strong capacity to meet contractual cash
flows
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
Loans
receivable
RUB’000
Other
receivables
RUB’000
-
-
-
2,243,297
-
-
The gross carrying amounts, as per above, represent the Company’s maximum exposure to credit
risk on these assets as at 31 December 2022 and 31 December 2021, without taking account of any
collateral held. The Company does not hold any collateral as security for any loans receivable or other
receivable balances.
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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 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 2022 and 31 December 2021:
ACRA1
ACRA1
Moody’s2
Moody’s2
Moody’s2
Moody’s2
Moody’s2
Total
Rating
AAA(RU)
AA+(RU)
A2
Aa2
B1
Ba1
Baa3
Gross carrying amount
2022
RUB’000
498,924
29
2021
RUB’000
-
-
4,187,545
1,812,682
-
1,337
-
-
161,516
705
43
2,245
4,687,835
1,977,191
1 Russian rating agency ACRA
2
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 2022
and 31 December 2021, based on the general approach of IFRS 9, was immaterial. All cash and cash
equivalents were performing (Stage 1) as at 31 December 2022 and 31 December 2021.
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
2022 and 31 December 2021, none of the Company’s subsidiaries had defaulted on or breached any
covenants on their borrowings/bonds.
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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 2022 and 31 December 2021.
Performing
Underperforming
Non-performing
Stage 1
2022
2021
RUB’000
RUB’000
10,818,511
18,884,714
-
-
-
-
Total unrecognised gross amount
10,818,511
18,884,714
The amounts, as per above, represent the Company’s maximum exposure to credit risk on these
financial instruments as at 31 December 2022 and 31 December 2021, 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 2022 and 31 December 2021 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 2022 and 31 December 2021 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.
Liquidity risk
As at 31 December 2022, the Company has an excess of current assets over current liabilities of RUB
4,843,276 thousand (2021: 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.
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16,517
-
-
-
-
16,517
Total borrowings to total capitalisation ratio (percentage)
26.08%
11.81%
Notes to the parent company
financial statements
The table below summarizes the analysis of financial liabilities of the Company by maturity as
of 31 December 2022 and 31 December 2021. 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.
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
31 December 2022
Payables and accrued
expenses1
Borrowings
Other lease liabilities
Financial guarantee
contracts2
31 December 2021
Payables and accrued
expenses1
382,148
236
-
471
5,662,940
5,155,571
1,324,737
733,958
2,067,258
11,485,758
15,993,859
707
-
1,413
-
2,488
-
-
-
5,314
10,818,511
6,045,324
5,172,559
1325444
735371
2069746
11485758
26,834,201
-
8,968
-
-
-
-
8,968
Borrowings
72,088
18,823
303,469
1,786,901
1,491,096
1,950,082
5,622,459
Other lease liabilities
232
463
Financial guarantee
contracts2
9,875,841
9,008,873
695
-
1,390
-
2,894
-
3,011
8,685
-
18,884,714
9,948,161
9,037,127
304,164
1,788,291
1,493,990
1,953,093
24,524,826
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.
306
307
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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 2022 and 31 December 2021 are as
follows:
Total borrowings
Total capitalisation
2022
RUB’000
2021
RUB’000
12,588,696
5,039,086
48,272,615
42,681,353
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 2022 and 2021. Management believes that the Company 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 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.
Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Notes to the parent company
financial statements
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 2022 and 31 December 2021 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 2022
was Nil (31 December 2021: 8%) and for Russian Rouble denominated loans to related parties as at 31
December 2022 was Nil (31 December 2021: 10.5%). The fair value measurements of loans to related
parties as at 31 December 2022 and 31 December 2021 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 2022 and 31 December 2021
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 2022, 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 2022.
The discount rate used for Russian Rouble denominated bank borrowings as at 31 December 2022
was 11.0% (Note 23). There were no US Dollar denominated borrowings as at 31 December 2022 and 31
December 2021. The fair value measurements of bank borrowings as at 31 December 2022 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.
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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.
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:
·
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)
Dividend income (Note 26)
Total
9. Other losses/(gains) – net
Net foreign exchange transaction (losses)/gains on non-financing
activities (Note 14)
Gain from sale of subsidiaries (Note 18)
Other losses/(gains) - net
2022
RUB’000
2021
RUB’000
2,136
20,102
7,064,907
3,154,405
7,067,043
3,174,507
2022
RUB’000
2021
RUB’000
(8,661)
(2,248)
-
827,850
(8,661)
825,602
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Notes to the parent company
financial statements
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)
2022
RUB’000
2021
RUB’000
7,722
5,398
1,512
331
2,639
2,895
17,206
5,899
2,633
-
2,639
2,633
Employee benefit expense (Note 11)
558,370
444,682
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
32,014
14,565
20,793
4,906
7,151
9,710
10,874
53,860
4,802
25,881
948
9,159
12,756
23,293
Total marketing costs and administrative expenses
678,881
606,391
Includes RUB NIL thousand for the year 2022 (RUB 3,683 thousand for the year 2021) in fees paid to the
Company’s statutory audit firm for tax consultancy services.
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12. Finance income and costs
Included in finance costs:
Interest expense on bank borrowings (Note 23)
Interest expenses on loans - Related parties (Note 26)
2022
RUB’000
2022
RUB’000
(291,615)
(238,766)
(713,852)
-
Total interest expense calculated using the effective interest rate method
(1,005,467)
(238,766)
Interest expense on other lease liabilities (Note 23)
Impairment of loans receivable
Total finance costs
Included in finance income:
(253)
(320)
(386,089)
-
(1,391,809)
(239,086)
Interest income on bank balances
100,851
51,038
Interest income on other receivables from related parties (Note 26)
-
-
Total interest income calculated using the effective interest rate method
100,851
51,038
Total finance income
Net foreign exchange transaction (losses)/gains on cash and cash
equivalents, loans and other receivables and dividends receivable
100,851
51,038
752,089
(11,204)
Net foreign exchange transaction gains on other financial liabilities
-
-
Net foreign exchange transactions (losses)/gains from financing activities
(Note 14)
752,089
(11,204)
Finance costs – net
(538,869)
(199,252)
11. Employee benefit expense
13. Income tax expense
Salaries
Bonuses
Share based compensation
Social security costs
Total employee benefit expense
Average number of staff employed during the year
2022
RUB’000
2021
RUB’000
204,413
316,782
21,954
15,221
212,936
195,978
22,570
13,198
558,370
444,682
9
8
Current tax:
Corporation tax
Withholding tax on dividends receivable
Withholding tax on bank interest
Defence contribution
Total tax expense
2022
RUB’000
2021
RUB’000
180
-
122,886
127,001
11,807
-
-
2,043
134,873
129,044
310
311
Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022 Notes to the parent company
financial statements
The tax on the Company’s results before tax differs from the theoretical amount that would arise using
the applicable tax rates as follows:
Profit before tax
Tax calculated at the applicable tax rate
Tax effect of expenses not deductible for tax purposes
2022
RUB’000
2021
RUB’000
5,840,632
3,638,574
730,079
454,822
(8,068)
77,480
Tax effect of allowances and income not subject to tax
(710,024)
(532,302)
Defence contribution
Foreign withholding tax on dividends receivable
Tax charge
-
2,043
122,886
127,001
134,873
129,044
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.
14. Net foreign exchange gains/(losses)
Finance income and costs (Note 12)
Other gains - net (Note 9)
Total foreign exchange gains/(losses)
15. Dividends
2022
RUB’000
2021
RUB’000
752,089
(11,204)
(8,661)
(2,248)
743,428
(13,452)
In April 2021, the shareholders of the Company approved the payment of a dividend for the financial
year ended 31 December 2021 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 2021 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).
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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 2022 and 31 December 2021, the Company declared and paid as
detailed in the table below.
Dividends declared1
Dividends paid1
2022
2021
RUB’000
RUB’000
-
-
9,022,550
9,022,550
1 Dividends declared and paid within the year 2021 as per the table above excludes RUB 3,867 thousand relating
to dividend declared and paid on the treasury shares.
16. Property, plant and equipment
At 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 / 1 January 2022
Cost
Accumulated depreciation
Net book amount
Year ended 31 December 2022
Depreciation charge (Note 10)
Closing net book amount
At 31 December 2022
Cost
Accumulated depreciation
Net book amount
Motor vehicles
RUB’000
Total
RUB’000
13,193
(2,515)
13,193
(2,515)
10,678
10,678
(2,639)
(2,639)
8,039
8,039
13,193
(5,154)
8,039
13,193
(5,154)
8,039
(2,639)
(2,639)
5,400
5,400
13,193
13,193
(7,793)
(7,793)
5,400
5,400
312
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17. Right-of-use assets
18. Investments in subsidiary undertakings
At 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 / 1 January 2022
Cost
Accumulated depreciation
Net book amount
Year ended 31 December 2022
Additions
Depreciation charge (Note 10)
Closing net book amount
At 31 December 2022
Cost
Accumulated depreciation
Net book amount
Offices
RUB’000
Total
RUB’000
7,292
(4,659)
2,633
8,685
(2,633)
8,685
15,977
(7,292)
8,685
8,685
(2,895)
5,790
7,292
(4,659)
2,633
8,685
(2,633)
8,685
15,977
(7,292)
8,685
8,685
(2,895)
5,790
15,977
15,977
(10,187)
(10,187)
5,790
5,790
At beginning of year
Disposals
Acquisition of subsidiaries
At end of year
2022
RUB’000
2021
RUB’000
44,851,099
45,151,248
-
(300,150)
9,100,000
-
53,951,099
44,851,099
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 (%)
New Forwarding
Company, АО
GTI Management,
OOO
Ural Wagonrepair
Company, AO
Ukrainian New
Forwarding
Company OOO
BaltTransServis,
OOO
RemTransServis,
OOO1
BTS-Locomotive
Solutions OOO2
Russia
Russia
Russia
Railway
transportation
Railway
transportation
Repair
and maintenance
of rolling stock
Ukraine
Railway
transportation
Russia
Russia
Russia
Railway
transportation
Repair
and maintenance
of rolling stock
Support activities
for locomotive
traction
Operating lease
of rolling stock
Operating lease
of rolling stock
2022
100
100
100
2021
100
100
100
2022
100
100
100
2021
100
100
100
100
100
100
100
100
60
-
-
-
-
100
100
100
60
60
60
2022
2021
-
-
-
-
-
-
-
-
-
-
-
40
40
40
65.25
65.25
65.25
65.25
34.75
34.75
-
-
65.25
65.25
34.75
34.75
Spacecom AS
Estonia
Spacecom Trans
AS3
Estonia
1 RemTransServis, OOO is a 100% subsidiary of BaltTransServis, OOO.
2 BTS-Locomotive Solutions, OOO is a 100% subsidiary of BaltTransServis, OOO.
3 Spacecom Trans AS is 100% subsidiary of Spacecom AS.
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Notes to the parent company
financial statements
Disposal of SyntezRail Limited during the year 2021
During the year 2021, the Company disposed of 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 9,100,000 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.
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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 - third parties
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
2022
RUB’000
-
-
-
2021
RUB’000
1,983,134
(1,476,783)
506,351
2,122
-
2,328,155
234,634
2,330,277
740,985
-
-
259,875
259,875
2,330,277
481,110
The weighted average contractual interest rate on loans receivable from related parties was 4.5%
at 31 December 2021. The weighted average effective interest rate on loans receivables from related
parties was 8.9% at the 31 December 2021.
The following amounts are included in the statement of cash flows in relation to acquisitions
The other receivables from related parties at 31 December 2022 and at 31 December 2022 carry
and disposals of subsidiaries:
no contractual interest.
Proceeds from sale of SyntezRail Limited
2022
RUB’000
2021
RUB’000
-
1,128,000
Acquisition of non-controlling interest in BaltTransServis, OOO
(8,800,000)
(300,000)
Total net cash inflow
(8,800,000)
828,000
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 2021, 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 2022, no indicators of impairment
of the Company’s investments in subsidiary undertakings were identified.
The carrying value of loans and other receivables at the reporting date approximates their fair value.
As at 31 December 2022, the fair values of US Dollar denominated loans to related parties are based
on cash flows discounted using a rate of Nil (31 December 2021: 8%). The discount rate used for Russian
Rouble denominated loans to related parties as at 31 December 2022 was Nil (31 December 2021:
10.5%). The fair value measurements of loans to related parties and other receivables from related
parties as at 31 December 2022 and 31 December 2021 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
2022
RUB’000
2021
RUB’000
-
460,465
89,102
45,886
2,241,175
234,634
2,330,277
740,985
Assessment of credit losses on loans receivable from subsidiaries
At 31 December 2022 and 31 December 2021, 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 impairment losses of RUB 386,089 thousand as at 31 December 2022 (31 December 2021:
reversal of impairment losses RUB 133,727 thousand).
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Notes to the parent company
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The assessment of expected credit losses on the loans receivable from Ukrainian New Forwarding
Company, AO, with a carrying amount of RUB Nil as at 31 December 2022 (31 December 2021: RUB
460,465 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 2021 and 31
December 2022.
20. Other assets
Prepayments – third parties
Total other assets
Less non-current portion:
Prepayments – third parties (Note 18)
Total non-current portion
Current portion
2022
2021
RUB’000
RUB’000
1,607
1,607
300,713
300,713
915
915
692
300,000
300,000
713
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21. Cash and cash equivalents
Cash at bank
Total cash and cash equivalents
2022
RUB’000
2021
RUB’000
4,687,835
1,977,191
4,687,835
1,977,191
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
2022
RUB’000
2021
RUB’000
4,687,835
1,977,191
4,687,835
1,977,191
2022
2021
RUB’000
RUB’000
902,670
357,101
498,951
1,533,188
3,286,214
86,902
4,687,835
1,977,191
The carrying value of cash and cash equivalents approximates their fair value.
318
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22.
Share capital, share premium and treasury shares
23. Borrowings
At 1 January 2021 /31 December 2021
/ 1 January 2022 /
31 December 2022
At 1 January 2021 /31 December 2021
/ 1 January 2022 /
31 December 2022
Number
of shares
Share capital
Share premium
Total
USD’000
USD’000
USD’000
178,740,916
17,875
949,471
967,346
Number
of shares
Share capital
Share premium
Total
RUB’000
RUB’000
RUB’000
178,740,916
516,957
27,929,478
28,446,435
The total authorised number of ordinary shares at 31 December 2022 was 233,918,128 shares with a par
value of US$0.10 per share (31 December 2021: 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.
During the first six months 2022, the Company purchased a total of 345,780 GDRs, which are held
in treasury for a total consideration of 832 thousand US Dollars (equivalent to RUB 114,497 thousand). No
further acquisitions took place within the last six months 2022.
As of 30 June 2022, the Company had purchased a total of 422,657 GDRs / (31 December 2021
76,877 GDRs) which are held in treasury for a total consideration of 1.254 thousand US Dollars
(equivalent to RUB 145,993 thousand).
In line with relevant legislation, GDRs repurchased by the Company may be held in treasury
for up to two years.
320
321
Current
Bank borrowings
Loans from related parties
Total current borrowings
Non-current
Bank borrowings
Loans from related parties
Total non-current borrowings
Total borrowings
Maturity of non-current borrowings
Between 1 and 2 years
Between 2 and 5 years
2022
2021
RUB’000
RUB’000
1,343,467
1,920,346
713,852
-
2,057,319
1,920,346
1,824,777
3,118,740
8,706,600
-
10,531,377
3,118,740
12,588,696
5,039,086
2022
2021
RUB’000
RUB’000
1,182,851
1,293,963
9,348,526
1,824,777
10,531,377
3,118,740
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
2022
2021
RUB’000
RUB’000
696,486
273,365
646,981
1,646,981
11,245,229
3,118,740
12,588,696
5,039,086
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 2022 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.
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The weighted average effective interest rates at the balance sheet are as follows:
Reconciliation of liabilities arising from financing activities:
Bank borrowings
Loans from related parties
2022
%
7.34
9.00
2021
%
7.38
-
The carrying amount and fair value of current and non-current borrowings are as follows:
Carrying amount
Fair value
2022
2021
2022
2021
RUB’000
RUB’000
RUB’000
RUB’000
Bank borrowings
3,168,244
5,039,086
3,048,328
4,840,888
Loans from related parties
9,420,452
-
8,695,882
-
12,588,696
5,039,086
11,744,210
4,840,888
The fair value of borrowings and other liabilities were determined using valuation techniques.
As at 31 December 2022, 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 2022. The discount rate used was a level 2 discount rate
of 11.10% as at 31 December 2022 (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:
Russian Roubles
Total borrowings
The Company has the following undrawn borrowing facilities:
Fixed rate:
Expiring within one year
Expiring beyond one year
2022
RUB’000
2021
RUB’000
12,588,696
5,039,086
12,588,696
5,039,086
2022
2021
RUB’000
RUB’000
-
1,000,000
16,293,400
30,000,000
16,293,400
31,000,000
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.
322
323
Bank borrowings
RUB’000
Other lease
liabilities
RUB’000
Total liabilities
from financing
activities
RUB’000
Opening balance 1 January 2022
5,039,086
8,685
5,047,771
Cash flows:
Amounts advanced
Repayment of principal
Interest paid
Non-cash changes:
Interest expense
Foreign exchange gains
At end of year
8,706,600
(1,865,079)
(297,378)
1,005,467
-
12,588,696
(2,328)
(253)
253
(1,043)
5,314
8,706,600
(1,867,407)
(297,631)
1,005,720
(1,043)
12,594,010
Bank borrowings
RUB’000
Other lease
liabilities
RUB’000
Total liabilities
from financing
activities
RUB’000
Opening balance 1 January 2021
-
3,220
3,220
Cash flows:
Amounts advanced
Repayment of principal
Interest paid
Non-cash changes:
Other lease liability
Interest expense
Foreign exchange losses
At end of year
6,000,000
(1,000,000)
(199,680)
-
238,766
-
5,039,086
-
6,000,000
(3,209)
(320)
(1,003,209)
(200,000)
8,685
320
(11)
8,685
8,685
239,086
(11)
5,047,771
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24. Other lease liabilities
26. Related party transactions
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
Current
Accrued key management personnel compensation, including share
based
payment (Note 26)
Accrued expenses
Other payables to third parties
Total current trade and other payables
2022
2021
RUB’000
RUB’000
2,826
2,488
5,314
2,488
-
2,488
2,780
5,905
8,685
2,894
3,011
5,905
2022
RUB’000
2021
RUB’000
93,195
138,296
5,671
16,517
10,324
8,968
115,383
157,588
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
2022
RUB’000
2021
RUB’000
49,967
56,454
8,962
-
97,640
44,569
15,379
-
Total payables and accrued expenses
115,383
157,588
Litten Investments Ltd, controlled by a Director of the Company, has a shareholding in the Company
of 5.1% as at 31 December 2022 (31 December 2021: 5.1%).
Goldriver Resources Ltd, which has a shareholding in the Company of 3.1% as at 31 December 2022
(2021: 3.1%), is controlled by a Director of the Company.
As at 31 December 2022, another 0.1% (2021: 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. 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
Impairment
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
-
-
-
2022
RUB’000
2021
RUB’000
506,351
658,729
6,858
2,136
-
20,102
(174,633)
(296,668)
(1,267)
(8,675)
(386,089)
-
46,644
-
-
-
-
-
133,727
(864)
506,351
259,875
246,476
506,351
1,983,134
(1,476,783)
506,351
The balances at the 31 December 2021 carry a weighted average contractual interest rate of 4.5% per
annum. The weighted average effective interest rate at the 31 December 2021 was 8.9%.
324
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Notes to the parent company
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b. Loans from related parties
Loans from subsidiaries:
At beginning of year
Loan advances
Interest charged (Note 8)
At end of year
Consists of:
Non-current portion
Current portion
At end of year
2022
RUB’000
2021
RUB’000
-
8,706,600
713,852
9,420,452
8,706,600
713,852
9,420,452
-
-
-
-
-
-
-
The balances at the 31 December 2022 carry a weighted average contractual interest rate of 9.0% per
annum. The weighted average effective interest rate at the 31 December 2022 was 9.0%.
c. Other receivables from related parties
Other receivables (dividends)
Subsidiaries
At end of year
Consists of:
Non-current portion
Current portion
At end of year
d. Dividend income from related parties
Dividend income from related parties:
Subsidiaries (Note 8)
Total
2022
RUB’000
2021
RUB’000
2,328,155
2,328,155
-
2,328,155
2,328,155
234,634
234,634
-
234,634
234,634
2022
RUB’000
2021
RUB’000
7,064,907
3,154,405
7,064,907
3,154,405
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e. Interest income
Interest income:
Interest on loans to subsidiaries (Note 8)
Total interest income calculated using the effective interest rate
method
f.
Interest expenses
Interest expenses:
Interest on loans from subsidiaries (Note 12)
Total interest expenses calculated using the effective interest rate
method
2022
RUB’000
2021
RUB’000
2,136
2,136
20,102
20,102
2022
RUB’000
2021
RUB’000
(713,852)
(713,852)
-
-
g. 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:
Subsidiaries1
Total guaranteed obligations
2022
RUB’000
2021
RUB’000
10,818,511
18,884,714
10,818,511
18,884,714
1 Represents the maximum amount of obligation under each contract, being the contractual undiscounted cash flows
under the loan agreements as at 31 December 2022 and 2021.
During the years ended 31 December 2022 and 31 December 2021 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 2022 and 31 December
2021 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 2022 and 31 December 2021 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.
326
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022 Notes to the parent company
financial statements
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.
h. Impairment losses
Reversal of impairment losses of loans to subsidiaries (Note 19)
-
133,727
Impairment losses of loans to subsidiaries (Note 19)
(386,089)
-
2022
RUB’000
2021
RUB’000
i. Key management personnel compensation
2022
2021
RUB’000
RUB’000
Key management salaries and other short-term employee benefits1
532,643
415,585
Share based compensation
21,954
22,570
554,597
438,155
1
‘key management salaries and other short term employee benefits’ include directors’ remuneration amounting
to RUB 319,844 thousand (2021: RUB 312,985 thousand), analysed as per below.
j. Directors’ remuneration
Directors’ fees (Note 10)
Emoluments in their executive capacity
Total directors’ remuneration
2022
RUB’000
2021
RUB’000
20,793
25,881
299,051
287,104
319,844
312,985
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k. 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
2022
RUB’000
2021
RUB’000
71,241
115,726
21,954
22,570
93,195
138,296
l. 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.
m. Loan commitments under borrowings from subsidiaries
As at 31 December 2022, the Company had undrawn facilities amounting to RUB 6,293,400,(at 31
December 2021 RUB 15,000,000) thousand under borrowings agreements with subsidiary
undertakings. These mature within 2026.
n. Guarantees from subsidiaries
Borrowings with a carrying amount of RUB 3,168,245 thousand as of 31 December 2022 (31 December
2021 RUB 2,013,559 thousand) are secured by pledge of rolling stock held by the Company’s subsidiary
GTI Management, OOO with a pledged market value RUB 3,640,452 thousand (2021: RUB 6,439,751
thousand)
328
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Globaltrans Annual Report 2022Management report and parent company financial statements for the year ended 31 December 2022
Notes to the parent company
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27. Contingencies
Operating environment of the Company
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 geopolitical situation in Eastern Europe intensified on 24 February 2022 with the commencement
of the conflict between Russia and Ukraine. As at the date of authorizing these financial statements
for issue, the conflict continues to evolve as military activity proceeds. In addition to the impact
of the events on entities that have operations in Russia or Ukraine or that conduct business with
their counterparties, the conflict is increasingly affecting economies and financial markets globally
and exacerbating ongoing economic challenges.
The European Union as well as United States of America, Switzerland, United Kingdom and other
countries imposed a series of restrictive measures (sanctions) against the Russian government, various
companies, and certain individuals. The sanctions imposed include an asset freeze and a prohibition
from making funds available to the sanctioned individuals and entities. In addition, travel bans
applicable to the sanctioned individuals prevent them from entering or transiting through the relevant
territories. The Republic of Cyprus has adopted the United Nations and European Union measures.
The rapid deterioration of the conflict in Ukraine may as well lead to the possibility of further sanctions
in the future.
Emerging uncertainty regarding global supply of commodities due to the conflict between Russia
and Ukraine conflict may also disrupt certain global trade flows and place significant upwards pressure
on commodity prices and input costs as seen through early March 2022. Challenges for companies
may include availability of funding to ensure access to raw materials, ability to finance margin payments
and heightened risk of contractual non-performance.
The impact on the Group largely depends on the nature and duration of uncertain and unpredictable
events, such as further military action, additional sanctions, and reactions to ongoing developments
by global financial markets.
The financial effect of the current crisis on the global economy and overall business activities cannot be
estimated with reasonable certainty at this stage, due to the pace at which the conflict prevails and the
high level of uncertainties arising from the inability to reliably predict the outcome.
The event did not exist in the reporting period and is therefore not reflected in the recognition
and measurement of the assets and liabilities in the financial statements as at 31 December 2022 as it is
considered as a non-adjusting event.
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The Group actively monitors political developments on an ongoing basis. However, the macroeconomic
situation in Ukraine, Russia is out of Management’s control. The scope and impact of any new potential
sanctions (and any counter-sanctions) is yet unknown, however they might further affect key Russian
financial institutions as well as companies operating in the Russian Federation.
Fluctuations in foreign exchange rates may also impact the operations of the Goup. The Russian
central bank had raised the key rate of interest from 9,5% to 20% as a preventive measure to stop
the devaluation of the RUB.
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 2022 and 2021 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.
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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.
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.
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28. Events after the balance sheet date
Disposal of Spacecom AS
In January 2023 the Group disposed of its shareholding 65.25% in Spacecom AS for EUR 65,300,000.
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 270 to 273.
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334
334
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Total Fleet by type, %
Gondola cars
Tank cars
Locomotives
Flat cars
Other railcars (incl. hopper cars, etc)
Total
Average age of Owned Fleet
Gondola cars
Tank cars
Locomotives
Flat cars
Other railcars (incl. hopper cars, etc)
Total
31.12.2021
31.12.2022
Change
Change, %
69%
28%
0.1%
2%
0.1%
100%
69%
28%
0.1%
2%
0.0%
100%
-
-
-
-
-
-
-
-
-
-
-
-
31.12.2021
31.12.2022
Change
Change, %
12.9
16.9
14.0
3.6
14.4
13.8
13.7
17.3
15.0
4.1
0.0
14.5
-
-
-
-
-
-
-
-
-
-
-
-
Selected operational information
for the year ended 31 December 2022
Fleet (including rolling stock and tank containers)
Owned Fleet
Gondola cars
Tank cars
Locomotives
Flat cars
Other railcars (incl. hopper cars, etc)
Total
Owned Fleet as % of Total Fleet
Leased-in Fleet
Gondola cars
Tank cars
Flat cars
Other railcars (incl. hopper cars, etc)
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)
Total
31.12.2021
31.12.2022
Change
Change, %
45,430
17,894
71
1,582
90
42,292
18,454
71
1,537
0
(3,138)
560
-
(45)
(90)
65,067
62,354
(2,713)
94%
94%
-
-7%
3%
0%
-3%
-100%
-4%
-
31.12.2021
31.12.2022
Change
Change, %
2,345
1,693
0
1
4,039
6%
3,419
342
0
0
3,761
6%
1,074
(1,351)
-
(1)
(278)
-
46%
-80%
0%
-100%
-7%
-
31.12.2021
31.12.2022
Change
Change, %
47,775
19,587
71
1,582
91
45,711
18,796
71
1,537
0
(2,064)
(791)
-
(45)
(91)
69,106
66,115
(2,991)
-4%
-4%
0%
-3%
-100%
-4%
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Information
Selected operational information
for the year ended 31 December 2022
Operation of rolling stock (excluding Engaged Fleet)1
Freight Rail Turnover, billion tonnes-km
Average Rolling Stock Operated, units
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
Transportation Volume, million tonnes
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
2021
2022
Change
Change, %
63.9
30.6
4.1
29.1
19.0
46,2
7.0
5.6
0.2
1.2
10.8
146.8
55.9
23.5
3.4
29.1
20.4
40.7
6.0
4.3
0.1
1.6
12.0
134.9
(8.0)
(7.2)
(0.8)
0
1.3
(5.5)
(1.0)
(1.3)
(0.1)
0.4
1.2
(11.9)
-12%
-23%
-19%
0%
7%
-12%
-14%
-23%
-48%
31%
11%
-8%
2021
2022
Change
Change, %
44%
13%
31%
5%
7%
41%
15%
30%
4%
9%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
2021
2022
Change
Change, %
36.5
14.5
3.7
18.2
18.9
15.7
7.6
6.5
0.1
0.9
6.4
32.2
12.2
2.8
17.2
18.9
14.7
5.4
4.2
0.1
1.1
5.8
85.1
77.0
(4.2)
(2.3)
(0.9)
(1.0)
0.0
(1.0)
(2.2)
(2.3)
(0.1)
0.2
(0.5)
(8.1)
-12%
-16%
-25%
-5%
0%
-7%
-29%
-35%
-49%
17%
-8%
-9%
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
Average Price per Trip, RUB
Net Revenue from Operation of Rolling Stock, RUB million
Net Revenue from Operation of Rolling Stock by largest clients
(incl. their affiliates and suppliers), %
Top-10 clients
Other (incl. small and medium enterprises)
Net Revenue from Operation of Rolling Stock by contract type, %
Service Contracts
Other contracts (incl. ad-hoc transportation)
2021
2022
Change
Change, %
45,039
12,123
50
136
44,240
12,332
49
16
57,347
56,637
(799)
209
(0)
(120)
(710)
-2%
2%
-1%
-88%
-1%
2021
2022
Change
Change, %
22.0
25.9
111.2
23.1
2021
1,965
1,006
201
1,716
19.8
25.6
13.5
21.0
(2.3)
(0.4)
(97.7)
(2.1)
-10%
-1%
-88%
-9%
2022
Change
Change, %
1,968
1,079
1,574
1,733
4
73
1,373
17
0%
7%
682%
1%
2021
2022
Change
Change, %
41,075
64,553
23,478
57%
2021
2022
Change
Change, %
54,319*
76,798*
22,479
41%
2021
68%
32%
2021
59%
41%
2022
Change
Change, %
67%
33%
-
-
-
-
2022
Change
Change, %
59%
41%
-
-
-
-
1 Excluding operational and financial information of the specialised container transportation business.
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Selected operational information
for the year ended 31 December 2022
Empty Run Ratio, %
Gondola cars
Rail tank cars and other railcars
Total
Empty Run Costs, RUB million
Share of Empty Run Kilometres Paid by Globaltrans, %
Operation of rolling stock (including Engaged Fleet)1
Freight Rail Turnover, billion tonnes-km
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
2021
2022
Change
Change, %
44%
94%
51%
41%
94%
50%
-
-
-
-
-
-
2021
2022
Change
Change, %
15,429*
17,283*
1,853
12%
2021
99%
2022
Change
Change, %
99%
-
-
2021
2022
Change
Change, %
69.6
34.0
4.5
31.1
19.2
47.7
7.1
5.7
0.2
1.2
11.0
154.7
60.6
24.6
3.5
32.5
21.2
41.4
6.0
4.3
0.1
1.6
12.1
141.4
(9.0)
(9.4)
(1.0)
1.4
2.0
(6.3)
(1.1)
(1.3)
(0.1)
0.4
1.1
(13.2)
-13%
-28%
-22%
4%
10%
-13%
-15%
-24%
-48%
31%
10%
-9%
Overview
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Additional
Information
Transportation Volume, million tonnes
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
Specialised container segment
Net Revenue from Specialised Container Segment, RUB million
Engaged Fleet
Net Revenue from Engaged Fleet, RUB million
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
2022
Change
Change, %
38.9
15.7
4.0
19.3
19.1
16.5
7.7
6.6
0.1
0.9
6.5
34.3
12.7
2.9
18.8
19.5
15.1
5.4
4.2
0.1
1.1
6.0
88.8
80.4
(4.6)
(3.0)
(1.1)
(0.5)
0.4
(1.3)
(2.3)
(2.4)
(0.1)
0.2
(0.5)
(8.3)
-12%
-19%
-28%
-2%
2%
-8%
-30%
-36%
-49%
17%
-8%
-9%
2021
1,643*
2022
Change
Change, %
0*
(1,643)
-100%
2021
184*
2022
Change
Change, %
876*
692
375%
31.12.2021
31.12.2022
Change
Change, %
1
6,815
1
1,641
8,458
12%
1
5,941
0
1,532
7,474
11%
-
(874)
(1)
(109)
(984)
-
0%
-13%
-100%
-7%
-12%
-
31.12.2021
31.12.2022
Change
Change, %
1,777
1,768
(9)
-1%
1 Excluding operational and financial information of the specialised container transportation business.
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Definitions
Terms that require definitions are marked with capital letters in this Annual Report 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”, “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.
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.
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”.
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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.
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.
Leased-in Fleet is defined as fleet leased in under operating leases, including railcars, locomotives and
specialised containers.
Leased-out Fleet is defined as fleet leased out to third parties under operating leases (excluding flat
Empty Run or Empty Runs means the movement of railcars without cargo for the whole or a substantial
cars and containers used in specialised container transportation).
part of the journey.
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.
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Definitions
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 Russia’s freight rail transportation volume or freight rail turnover and includes
volumes transported by Engaged Fleet, unless otherwise stated.
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
Net Debt (a non-IFRS financial measure) is defined as the sum of total borrowings (including interest
period.
accrued) less “cash and cash equivalents”.
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 (a non-IFRS financial measure, derived from
management accounts) describes 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 (a non-IFRS financial measure, derived from
management accounts) 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 – third parties”, “trade payables – related parties”,
“other payables – third parties”, “other payables – related parties”, "accrued expenses", “accrued key
management compensation, including share-based payment”, “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.
Service Contracts represent contracts with an initial term greater than one-year that stipulate
an obligation to transport a specified amount of cargoes for the client.
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Total CAPEX (a non-IFRS financial measure) is 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”.
Total CAPEX adjusted for M&A (a non-IFRS financial measure) is calculated as a combination of Total
CAPEX (which includes maintenance CAPEX) and cash inflows and outflows from acquisitions and
disposals.
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/(gains) on trade and other receivables”,
“impairment/(reversal of impairment) of property, plant and equipment” and “(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
“(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.
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Presentation of Financial
and other Information
FINANCIAL INFORMATION
OPERATIONAL AND MARKET 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 2022 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”). 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 are 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. These non-IFRS
measures are unaudited and have not been prepared in accordance with IFRS or any other generally
accepted accounting principles. As such, they have limitations as analytical tools, and you should not
consider them in isolation or place undue reliance on them. Similarly titled measures are used by other
companies for a variety of purposes and are often calculated in ways that reflect the circumstances of those
companies. You should exercise caution in comparing these measures as reported by us to the same or
similar measures as reported by other companies.
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 2022 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 Russia’s 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. 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.
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GRI Content Index
Indicator
Definition
General disclosures
Report section / notes
Annual Report page
Indicator
Definition
Report section / notes
Annual Report page
General disclosures
102-1
102-2
102-3
102-4
102-5
102-6
102-7
102-8
102-9
Name of the organisation
Corporate Structure
Activities, brands, products, and services At a Glance
Operational Performance
Location of headquarters
Location of operations
Number of countries where the
organization operates
Key Contacts
At a Glance
Market Review
Our History
Ownership and legal form
Corporate Structure
Markets served
Market Review
Scale of the organisation
Information on employees and other
workers
Supply chain
Operational Performance
Financial Review
Sustainability Report
CEO Review
Operational Performance
p. 123
p. 8-9
p. 28
p. 352
p. 8-9
p. 26-27
p. 14-15
p. 123
p. 26-27
p. 28-49
p. 81
p. 23
p. 28
102-10
Significant changes to the organisation
and its supply chain
102-11
Precautionary Principle or approach
102-12
102-13
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
Membership of associations.
A list of the main memberships
of industry or other associations, and
national or international advocacy
organisations
102-14
Statement from senior decision-maker
102-15
Key impacts, risks opportunities
No significant changes in the supply chain.
The Group does not explicitly use
the precautionary principle.
The Group does not have membership in external
initiatives.
Sustainability Report
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)
p. 78
Chairman’s Statement
CEO Review
Risk Management
TCFD Report
Sustainability Report
102-16
102-18
102-32
Values, principles, standards, and norms
of behaviour
Governance structure
Governance Structure
Highest governance body’s role in
sustainability reporting
ESG Committee
102-35
Remuneration policies
Corporate Structure - Remuneration of the
Board of Directors and management
102-40
102-41
List of stakeholder groups
Sustainability Report
Collective bargaining agreements
As at 31.12.2022, 31% 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
102-47
102-48
102-49
102-50
102-51
102-52
102-53
102-54
102-55
102-56
Identifying and selecting stakeholders
with whom to engage
Sustainability Report
The organisation’s approach to
stakeholder engagement
Sustainability Report
Key topics and concerns that have been
raised through stakeholder engagement
Sustainability Report
p. 76-78
p. 76-78
p. 76-78
Entities included in the consolidated
financial statements
Defining report content and topic
boundaries
Sustainability Report
Notes to the Consolidated Financial Statements p. 164
List of the material topics
Sustainability Report
Restatements of information given
in previous reports
The data for petroleum consumption in 2021,
Scope 1 and Scope 2 emissions has been restated.
Significant changes from previous
reporting periods in the list of material
topics and topic boundaries
No significant changes.
Reporting period
Calendar year 2022
Date of most recent report
Reporting cycle
April 2022
Annual
Contact point for questions regarding
the report
Investor Relations
Phone: +357 25 328 860
Email: irteam@globaltrans.com
Claims of reporting in accordance with
the GRI standards
The Report was prepared in accordance with
the GRI Standards – Core option.
GRI content index
External assurance
GRI Content Index
p. 348
External assurance for the Group’s Corporate
social responsibility section was not conducted
in the reporting period.
p. 70-72
p. 72
p. 91,93
p. 18-19
p. 22-24
p. 51-67
p. 94-99
p. 94-99
p. 100-123
p. 70-71
p. 115
p. 76-78
Management
103-1
103-2
103-3
Explanation of the material topic and its
boundary
Sustainability Report
The management approach and its
components
Sustainability Report
Evaluation of the management approach Sustainability Report
Economic impact
Economic performance
201-1
Direct economic value generated and
distributed
Financial Review
Sustainability Report
Indirect economic impacts
203-2
Significant indirect economic impacts
Sustainability Report
Economic impact
Anti-corruption
205-3
Confirmed incidents of corruption and
actions taken
Sustainability Report
No incidents in 2022.
p. 70-93
p. 70-93
p. 70-93
p. 28-49
p. 89
p. 88-89
p. 80
348
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Sustainability
Report
Governance
Financial
Statements
Additional
Information
TCFD Index
Report section / notes
Annual Report page
Code
TCFD Recommended Disclosures
Comments
Governance:
TCFD 1 (a)
Describe the Board’s oversight of climate-related risks and opportunities.
TCFD 1 (b)
Strategy:
TCFD 2 (a)
TCFD 2 (b)
TCFD 2 (c)
Describe management’s role in assessing and managing climate-related risks and
opportunities.
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 scenarios1.
p. 94-95
p. 94-95
p. 96-97
p. 96-97
p. 96-97
Risk Management:
TCFD 3 (a)
Describe the organisation’s processes for identifying and assessing climate-related risks.
p. 98
Targets & Metrics:
TCFD 4 (a)
TCFD 4 (b)
TCFD 4 (c)
Disclose the metrics used by the organisation to assess climate-related risks and
opportunities in line with its strategy and risk management process.
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas emissions, and the
related risks
Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets2.
p. 99
p. 99
GRI Content Index
Indicator
Definition
Environmental impact
Materials
301-1
301-2
Energy
302-1
Materials used by weigh or volume
Sustainability Report
Recycled input materials used
Sustainability Report
p. 90-93
p. 90-93
Energy consumption within the
organisation
Sustainability Report
Water and effluents
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
Benefits provided to full-time
employees that are not provided to
temporary or part-time employees
Sustainability Report
Sustainability Report
Occupational health and safety
403-1
403-5
403-6
403-9
Occupational health and safety
management system
Sustainability Report
Worker training on occupational health
and safety
Sustainability Report
Promotion of worker health
Sustainability Report
Work-related injuries
Sustainability Report
p. 90
p. 91
p. 92
p. 92
p. 90
p. 86
p. 85
p. 87
p. 87
p. 87
p. 87
Training and education
404-1
Average hours of training per year per
employee by gender and employee
category
Diversity and equal opportunity
Sustainability Report
p. 84-85
405-1
405-2
Diversity of governance bodies and
employees
Sustainability Report
Ratio of basic salary and remuneration
of women to men
Sustainability Report
Non-discrimination
406-1
Incidents of discrimination and
corrective actions taken
No incidents of discrimination occurred
in the reporting period
p. 83-84
p. 83
p. 79-80
1 As we move forward, we will continue to develop our climate analytics capabilities, further strengthen our climate resilience and be transparent
about our progress on climate change issues. At some point in the future we intend to cooperate with industry experts to conduct a high-level
quantitative scenario analysis that will provide our stakeholders with a better understanding of the potential financial impacts of climate change
on our business and rail infrastructure in general.
2 At this stage, Globaltrans is not yet ready to set emission reduction targets. Nevertheless, over the recent years we have focused on driving our
carbon reduction initiatives and enhancing our operational efficiency.
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Sustainability
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Governance
Financial
Statements
Additional
Information
Contacts
GENERAL CONTACTS
STOCK EXCHANGES
Globaltrans Investment PLC
London Stock Exchange plc
10 Paternoster Square, London EC4M 7LS, UK
Legal address Omirou 20, Agios Nikolaos, CY-3095
Phone: +44 20 7797 1000
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
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
FOR INVESTORS AND SHAREHOLDERS
AUDITORS
Investor Relations
Mikhail Perestyuk
Daria Plotnikova
Phone: +357 25 328 860
E-mail: irteam@globaltrans.com
ESG
Daria Plotnikova
Phone: +357 25 328 860
E-mail: esg@globaltrans.com
COMPANY SECRETARY
Elia Nicolaou
Anastasio Building, 6th Floor, 15 Dimitriou Karatasou Street,
GAC Auditors Ltd
Guricon House, 48 Inomenon Ethon Street, CY-6042
Larnaca, Cyprus
Phone: +357 24 638 833
Fax: +357 24 638 820
FOR MEDIA
Russian Media
Anna Vostrukhova
Head of Media Relations
Phone: +357 25 328 863
E-mail: media@globaltrans.com
International Media
Laura Gilbert
Lightship Consulting
Phone: +44 7799 413351
CY-2024 Strovolos, Nicosia, Cyprus
E-mail: laura.gilbert@lightshipconsulting.co.uk
DEPOSITARY BANK
Citibank, N.A.
Phone: +1 212 723 5435 / +44 207 500 2030
E-mail: citiadr@citi.com
Website: www.citi.com/adr
352
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www.globaltrans.com
Annual Report & Accounts 2022GlobaltransAnnual Report 2022