Globaltrans Investment Plc

Annual Report 
& Accounts 
2023

ANNUAL REPORT 2023

Overview

Contents

3 

15 

63 

99 

OVERVIEW

STRATEGIC REPORT

SUSTAINABILITY REPORT

GOVERNANCE

Message from the Board 

16

Sustainability 

64

Board of Directors 

100

Highlights of 2023 

At a Glance 

4

6

Message from the CEO 

Our Assets 

10

Our Strategy 

Our History 

12

Market Review 

Financial and Operational 
Review 

Risk Management 

Climate-related Financial 
Disclosure (TCFD) 

92

18

22

24

26

48

Executive Management  112

Corporate Governance 
Report 

Share Capital 

114

124

Corporate Structure 

125

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127 

FINANCIAL 
STATEMENTS

319 

ADDITIONAL 
INFORMATION

Consolidated Management 
Report and Consolidated 
Financial Statements 
for the year ended 
31 December 2023 

128

Selected Operational 
Information for the year 
ended 31 December 
2023 

Definitions 

320

323

Management Report 
and Parent Company 
Financial Statements 
for the year ended 
31 December 2023 

Presentation of Financial 
and Other Information  326

242

GRI Content Index 

TCFD Index 

Contacts 

328

335

336

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 2023 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). 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.

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.

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 

→	

	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.

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ANNUAL REPORT 2023

Overview

Strategic Report

2

Overview

The summary information on pages 4 to 5 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.

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p. 4

Highlights of 2023

Read more →

p. 6

At a Glance

Read more →

p. 10

Our Assets

Read more →

p. 12

Our History

Read more →

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Highlights of 2023

Both the economy and our industry faced 
challenges in 2023. Yet despite this, 
the overall performance of the freight 
rail sector was relatively stable. In turn, 
Globaltrans produced a strong performance 
over the year, taking advantage of market 
momentum to significantly improve 
its fleet efficiency. Our 2023 financial 
results reflected the underlying 
strength of our business model 
and our commitment to providing 
the service levels our customers expect. 
We delivered solid growth in Adjusted 
Revenue, kept our Operational Cash Costs 
under control, generated strong Free Cash 
Flow and ended the year with a solid net 
cash position.

Valery Shpakov  
Chief Executive Officer

ANNUAL REPORT 2023

Overview

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Further strong financial results  
with robust Free Cash Flow, stable 
Adjusted EBITDA Margin and solid  
net cash position

Strong operational efficiency,  
robust average pricing,  
all Service Contracts remain  
intact

•  Adjusted Revenue rose 7% year on year 

to RUB 87.4 billion in 2023 largely reflecting 
robust average pricing.

•  Adjusted EBITDA increased 6% year on year 
to RUB 52.3 billion with Adjusted EBITDA 
Margin remaining stable year on year at 60% 
despite ongoing cost pressures.

•  Total CAPEX adjusted for M&A was RUB 10.1 billion 

(2022: RUB 20.2 billion) on the back 
of a conservative approach to investment given 
elevated new rolling stock prices.

•  Strong Free Cash Flow of RUB 25.8 billion 

(2022: RUB 14.8 billion).

•  Net cash position was RUB 27.4 billion with 

negative Net Debt to Adjusted EBITDA at (0.5)x.

•  Dividend payments are in focus but remain 
suspended due to certain technical issues, 
which are being addressed.

•  Empty Run Ratio for gondola cars significantly 
improved to its lowest level in more than ten 
years at 36% (2022: 41%). Total Empty Run 
Ratio (for all types of rolling stock) decreased 
to 45% (2022: 50%).

•  Freight Rail Turnover (including Engaged 
Fleet) declined 2% year on year reflecting 
volatility in logistics and continued rail 
network infrastructure constraints1.

•  Average Price per Trip increased 10% year 

on year on the back of continued favourable 
market pricing conditions in both bulk and 
liquids segments, while the Average Number 
of Loaded Trip per Railcar declined 5% year 
on year.

•  The Group maintained its focus on client 
retention with all Service Contracts2 
due for renewal extended. Service Contracts 
contributed about 61% of the Group’s Net 
Revenue from Operation of Rolling Stock 
in 2023.

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+7%

87.4  

RUB bln  
Adjusted Revenue

+6%

52.3  

RUB bln  
Adjusted EBITDA

+74%

25.8  

RUB bln 
Free Cash Flow

(31.12.2022: 0.1x)

(0.5)x

Net Debt to Adjusted 
EBITDA 

-50%

10.1  

36%

(2022: 41%)

RUB bln  
Total CAPEX adjusted for M&A

Empty Run Ratio  
for gondola cars  

1  The Group’s Freight Rail Turnover declined 4% year on year excluding Engaged Fleet.

2  As of the end of 2023 Globaltrans had six Service Contracts.

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ANNUAL REPORT 2023

Overview

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7

At a Glance

WHAT WE DO

We are leaders in the provision of complex freight 
rail logistics and transportation services. 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 fleet, customer-
focused approach and constant drive for innovation.

WHO WE ARE

Robust business model 
and efficient operations

Entrepreneurial culture 
combined with strong 
governance

Financial stability 
and strength

•  Strong market positions
•  Diversified blue-chip customer 
portfolio underpinned by multi-
year Service Contracts

•  Industry-leading operational 

efficiency

•  Led by entrepreneurs with 

•  High proportion of multi-year 

a focus on quality and innovation

•  Experienced Board and 

management team

•  Aligned with best practice 
governance standards
•  Sustainable business with 

a strong environmental, social 
and governance (“ESG”) focus
•  Dual-listed on the London Stock 

Exchange1 and the Moscow 
Exchange

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

Historical Empty Run Ratio, 
2019–2023, %

2023

2022

2021

2020

2019

36

45

41

44

45

42

50

51

51

49

Empty Run Ratio for gondola cars

Total Empty Run Ratio (for all types of railcars)

Source: Globaltrans.

65,644  

units  
Total Fleet as of year-end 2023

138.8  

bln tonnes-km 
Freight Rail Turnover 
(including Engaged Fleet), 2023

6.4%

Market Share, 20232

36%

Empty Run Ratio  
for gondola cars, 2023

61%

Share of Net Revenue from  
Operation of Rolling Stock covered 
by Service Contracts, 2023

1 

Imposed suspension of Global Depositary Receipts (“GDRs”) trading on the LSE since 3 March 2022 continued as of the date of publication.

2  Market Share is calculated using the Group’s own information as the numerator and information published by the Federal State Statistics 
Service (Rosstat) as the denominator. It is defined as a percentage of the overall industry freight rail transportation volume and includes 
volumes transported by Engaged Fleet, unless otherwise stated.

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At a Glance

HOW WE DELIVER VALUE

OUR APPROACH TO ESG

ANNUAL REPORT 2023

Overview

8

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. 

In-house locomotives  
improve productivity

High-quality long-term  
client base

Our in-house locomotive fleet transports primarily 
liquid cargoes 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.

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 the industry’s largest fleets. 

We know it is important to both 
measure and mitigate our impact on the 
environment and our communities, and 
so sustainability remains an integral part 
of our business strategy. In 2023, we 
made further progress by continuing to 
fine-tune the internal mechanisms that 
support our ESG strategy. This included 
building greater employee engagement 
and enhancing our oversight and 
accountability processes. Externally, we 
continued the work of integrating our 
sustainability priorities into the business 
and improving disclosure on those areas 
that are important for both the business 
and our stakeholders. We are pleased that 
our efforts continue to be recognised by 
various ESG ranking groups.

Valery Shpakov  
Chief Executive Officer

Delivering sustainable 
value through

Sustainable  
business practices

Positive social 
impact

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•  Oversight from the ESG Board 

committee

•  Clear ESG supervision at the 

•  Embedding sustainability in our 
way of working and business 
mindset

•  Focusing on employee safety, 
wellbeing and professional 
development

management level

•  Minimising our impact on the 

•  Providing long-term support 

•  Transparent ESG reporting in 
line with GRI standards and 
TCFD recommendations

environment

to our communities

•  Improving our energy efficiency
•  Reducing our carbon emissions

→	 For further information on the Group’s sustainability commitments and actions, please see our Sustainability Report.

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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 (70%); and 
tank cars for liquid cargoes (28%).
•  Current average age of the Group’s 

Owned Fleet is 15 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.

65,644 

units  
Total Fleet at year-end 2023

15years  

Average age of Owned Fleet 

Total Fleet composition at year-end 2023, %

ANNUAL REPORT 2023

Overview

10

11

70%

28%

Gondola Cars

Tank Cars

45,686 units

•  Open-top, high-sided universal railcar.
•  Backbone of Globaltrans’ fleet.
•  Designed to carry various bulk cargoes.
•  Able to be rapidly redeployed between 

different bulk cargoes in response to changing 
market demand.

18,384 units

•  Designed to carry various liquid cargoes.

0.1%

2%

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94%

Owned Fleet

6%

Leased-in 
Fleet

Source: Globaltrans.

0.1%

Locomotives

2%

Other Cars

70%

Gondola Cars

28%

Tank Cars

Locomotives

66 units

•  Globaltrans has its own fleet of mainline 
locomotives, which haul block trains.

Other Cars

1,508 units

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Our History

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 the CIS countries1. Through 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 CIS-focused freight rail group to be listed on an international 
stock exchange. Since the Initial Public Offering (“IPO”) on the London Stock 
Exchange (“LSE”)2 in 2008, we have had a consistent focus on value creation 
and growth. Today, we operate a fleet that is almost three times larger 
than at the time of our IPO. In 2020, we also listed our GDRs on the Moscow 
Exchange (“MOEX”) in order to diversify our investor base.

2012

Acquired 
the captive freight 
rail operator of one 
of the leading 
producers of hot 
briquetted iron, 
iron ore products 
and high-quality 
steel. Signed 
industry’s first ever 
long-term Service 
Contract.

19  

years of growth  
and leadership

2008

Successful IPO 
on the LSE.

2004

Established 
as a merger of two 
entrepreneur-led 
companies.

2010

Organic expansion 
of the business — 
purchases of new rolling 
stock and the expansion 
of the Leased-in Fleet.

2009

Secondary Public 
Offering (“SPO”) 
to fund further 
business expansion.

ANNUAL REPORT 2023

Overview

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2018

The Group celebrated its 10th 
anniversary of its Main 
Market listing on the LSE. 
Two new long-term Service 
Contracts signed with leading 
manufacturers of steel pipes 
and pipe products.

2022

The Group took full control 
of its key liquid cargo operating 
subsidiary BaltTransServis, 
increasing its stake to 100%.

2024

Globaltrans 
Investment PLC, 
the holding 
company, 
was successfully 
re-domiciled from 
Cyprus to the Abu 
Dhabi Global 
Market effective 
26 February 2024.

2021

Established Board 
ESG Committee.

Sold the Group’s 
60% stake 
in SyntezRail 
(a small non-
core specialised 
container operator).

2017

The enhanced 
Dividend Policy 
introduced 
linking dividends 
to Attributable 
Free Cash Flow and 
Leverage Ratio.

2014

2016

2020

2023

2013

Acquired the captive 
freight rail operator 
of one of the world’s 
largest steel 
producers. Signed 
a long-term Service 
Contract. Created 
a single 24/7 
gondola dispatching 
centre.

The Group’s corporate 
structure simplified to drive 
efficiency and cut costs. 
Formed a small non-core 
specialised container 
operator SyntezRail.

Globaltrans’ GDRs began 
trading on MOEX and were 
included in Level One, MOEX’s 
highest quotation list.

2019

A new service for the steel 
industry launched, transporting 
high-quality rolled steel 
in specialised containers.

BaltTransServis, the Group’s 
key liquid cargo operating 
subsidiary, celebrated its 20th 
anniversary.

Intra-group consolidation 
of rail tank fleet 
in BaltTransServis, followed 
by the sale of the Group’s 
65.25% shareholding 
in its leasing subsidiary 
Spacecom.

The Group’s key gondola 
operational subsidiary 
New Forwarding Company 
celebrated its 20th 
anniversary.

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.

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ANNUAL REPORT 2023

Strategic Report

Sustainability Report

14

15

Strategic  
Report

Each of the Directors confirms that, to 
the best of his or her knowledge, the 
Strategic Report presented on pages 
14 to 61 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 

Alexander Storozhev
Director

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Message from  the Board

Read more →

p. 26

Financial and 
Operational Review

Read more →

p. 48

Risk Management

Read more →

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ANNUAL REPORT 2023

Strategic Report

16

17

Message from the Board

The Group had a successful 
year in 2023 despite ongoing 
market volatility and macro-
economic pressures. 
Globaltrans delivered further 
strong financial results, 
increased operational 
efficiency and maintained 
capital discipline. It also began 
the process of re-domiciling 
the Company to the Abu Dhabi 
Global Market (“ADGM”) 
to address certain limitations 
of its corporate structure, 
a process that is now complete.

The Board is very grateful to all our colleagues across 
the Group for their contribution to the Company’s 
performance over the past year. The loyalty shown 
by our customers is a testament to the Company’s 
success in delivering consistent, high-quality services 
to the client base.

Performance

The freight rail industry performed solidly in 2023, and 
overall freight rail turnover and volumes were broadly 
static year on year, despite infrastructure constraints 
and demand volatility.

Operationally, the Group focused on improving 
the efficiency of its fleet operations, a cornerstone 
of the business model. The result was a major 
improvement in efficiency levels, with the gondola fleet 
seeing its Empty Run Ratio fall to its lowest level in more 
than a decade, further reinforcing Globaltrans’ status 
as an industry leader.

The Group delivered strong financial results in 2023, 
with Adjusted Revenue and Adjusted EBITDA both 
growing year on year. The Free Cash Flow performance 
was particularly strong and the Group ended the year 
with a solid net cash position. By maintaining a strong 
balance sheet, Globaltrans can invest in its business and 
deliver for customers without compromising its financial 
health and ability to generate returns for shareholders.

The business model relies on a disciplined approach 
to capital allocation, which is an important value 
driver. Consequently, the Group held off investment 
in new rolling stock in 2023, as prices for new railcars 
reached historically high levels. Moving forward, 

the Group expects to have minimal scrappage 

requirements in 2024 and to continue 

to have the flexibility and financial strength 
to invest when conditions are right.

Re-domiciliation

Operational matters aside, a key focus 
for the Board in 2023 was analysing 
how best to address the limitations of 
Globaltrans’ corporate structure and 

listings constraints. The Board’s view was that 
re-domiciling the Company from Cyprus to the 
Abu Dhabi Global Market would address some of 
these limitations while we would also maintain our 
stock exchange listings, depositary programme, 
and international corporate governance and 
transparency standards.

We unanimously recommended this course of 
action and shareholders voted and approved the 
proposal at the Extraordinary General Meeting held 
in August 2023. The Group successfully completed 
the re-domiciliation on 26 February 2024 within 
the six-month timetable originally indicated. As a 
Board, we congratulate the management team on 
their tireless effort and exceptional execution in 
making this a reality. We are also grateful to our 
shareholders who supported our recommendation 
at the General Meeting.

Changes to Shareholding Structure 
and Governance

In early 2024, AQNIET Capital, an investment 
company with major interests in Kazakhstan, 
became a key shareholder in Globaltrans. 
AQNIET Capital is owned by Mr. Kairat Itemgenov, 
a prominent Kazakh businessman, who has 
successfully developed sizeable businesses 
across several sectors over the past 25 years. 
Mr. Itemgenov shares the Board’s belief in 
Globaltrans’ long-term future, and we are pleased 
to welcome him as a shareholder and a member of 
the new Board of Directors.

On 4 April 2024 at an Extraordinary General 
Meeting, shareholders approved a new Board of 
Directors1, which reflects our status as an ADGM 
company, along with the recent changes to the 
shareholder structure. We are grateful to those 
members who have departed the Board following 
the recent changes and thank them for their 
dedication and service over many years. 

Sustainability

The Board is committed to enhancing the sustainability 
of the Group and, guided by the ESG Committee, 
we continue to work with the management team to 
integrate sustainable work practices into the Group’s 
operations. In 2023 the Group made progress across a 
range of activities that support our efforts to meet our 
sustainability goals. And for the second consecutive 
year the Group successfully reduced its overall levels 
of carbon emissions. Sustainability is key to our long-
term success, and the Board is committed to driving its 
sustainability agenda as we move forward. For further 
information on our sustainability performance, please 
see our ESG Report.

Listing and dividends

The Group’s GDRs are listed on both the London and 
Moscow stock exchanges. Trading in Globaltrans 
GDRs remains suspended on the London Stock 
Exchange but trading volumes on the Moscow 
Exchange remained solid as the Company continued 
to attract significant interest from domestic investors. 

Dividend payments are in focus but remain suspended 
due to certain technical issues, which are being 
addressed. The primary focus at this time is on putting 
in place a fully operational financial framework for the 
Group in Abu Dhabi.

Summary

Our strategy is well-defined, our management team 
is excellent and our business model is proven. With 
a new corporate structure in place, and the backing 
of a new major shareholder, your Board is confident 
that Globaltrans is ready for the next stage in its 
development and well placed to deliver sustainable 
growth over the long term.

The Board of Directors

1  At the Extraordinary General Meeting on 26 August 2023 shareholders approved a Board of Directors which was effective from 26 February 
2024 (the date of the Company’s re-domiciliation to ADGM) to 4 April 2024. For further information, please see the Governance section.

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ANNUAL REPORT 2023

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Message from the CEO

Both the economy and our industry 
faced challenges in 2023. Yet 
despite this, the overall performance 
of the freight rail sector was relatively 
stable. In turn, Globaltrans produced 
a strong performance over the year, 
taking advantage of market momentum 
to significantly improve its fleet efficiency. 
Our 2023 financial results reflected 
the underlying strength of our 
business model and our commitment 
to providing the service levels our 
customers expect. We delivered 
solid growth in Adjusted 
Revenue, kept our Operational 
Cash Costs under control, 
generated strong Free Cash 
Flow and ended the year 
with a solid net cash 
position.

Relatively stable industry performance

Demand for freight rail transportation was broadly 
stable year on year in 2023. The industry had a 
strong first half of the year, but this was followed by 
a weaker second-half performance. Overall industry 
freight turnover (measured in tonnes-km) remained 
consistent with the previous year. Although the 
overall industry transportation volumes (measured 
in tonnes) were largely unchanged, almost all key 
segments experienced a slightly weaker performance 
than in 2022. The rail industry continued to face 
challenges due to fluctuating demand, logistics 
changes and rail network constraints. For both the 
bulk and liquids segments, the overall market pricing 
environment remained robust.

Building operational momentum

Operational efficiency has long been a key pillar of 
the Group’s business model, with our Empty Run 
Ratio for gondola cars consistently among the best 
in the industry. In 2023, we successfully leveraged 
our expertise in fleet management to significantly 
improve this key Empty Run Ratio, reducing it from 
41% in the prior year to an impressive 36%, the 
lowest level for gondola cars in more than ten years. 
This achievement was particularly notable in light of 
the multiple and substantial increases in regulated 
infrastructure and locomotive tariffs over the last 
two years and was of critical importance for the 
Group as Empty Run Costs account for more than half 
of our Total Operating Cash Costs.

Our business model, which focuses on a smooth 
integration into our clients’ logistics chains, has 
historically proven to be effective and continued to 
benefit us. The strong customer loyalty we achieve 
through our operational excellence and high-quality 
service offering underpins the Group’s ongoing 

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Message from the CEO

success, and I am pleased to highlight that all 
Service Contracts due for renewal in 2023 have been 
extended. Service Contracts contributed more than 
60% of the Group’s Net Revenue from Operation of 
Rolling Stock in the reporting year. 

The Group’s Freight Rail Turnover (including Engaged 
Fleet) decreased by 2% year on year reflecting 
volatility in logistics and persistent infrastructure 
related constraints across the rail network. While the 
Average Number of Loaded Trips per Railcar was 5% 
lower primarily due to these constraints, favourable 
market pricing conditions meant we still achieved a 
10% year-on-year increase in Average Price per Trip 
over the same period.

At year end, our Total Fleet consisted of 65,644 
units, down 1% year on year largely reflecting the 
sale of 680 railcars as part of Globaltrans’ disposal 
of its shareholding in Spacecom, its leasing 
subsidiary. The majority of the Total Fleet was 
owned by Globaltrans (94%).

Over the last two years, we have simplified our 
corporate structure through several transactions 
and today all our subsidiaries are fully owned by 
Globaltrans. In 2023, we consolidated all liquid cargo 
operations under one subsidiary, BaltTransServis, 
and our intention going forwards is to gradually 
switch some of the currently leased-out rail tanks into 
operation within the Group.

Delivering strong financial results

For the full year 2023, the Group achieved strong 
results with Adjusted Revenue rising 7% year on 
year to reach RUB 87.4 billion, primarily driven by 
supportive pricing dynamics in our core freight 
segments. We successfully controlled our cost base, 
helping contribute to a 6% year-on-year increase in 
Adjusted EBITDA, which reached RUB 52.3 billion. 
Underlying profitability remained stable year on year 
with the Adjusted EBITDA Margin at 60%. 

The Group’s Free Cash Flow was again strong at 
RUB 25.8 billion, up 74% year on year, reflecting a 
combination of continued robust cash generation 
from operations and lower levels of investment. 
Our Total CAPEX adjusted for M&A halved to 
RUB 10.1 billion due to our conservative approach to 
investment given the quite elevated prices for new 
rolling stock. 

We opportunistically target the acquisition and 
leasing of railcars given the robust demand for 
our services and the need to offset the expected 
retirement levels of our owned fleet over the coming 
years, which we estimate at an average of about 
3,500 units annually over the period 2025–2029. 
We will still have some level of flexibility 
over investments in 2024 and are 
well positioned to make sensible 
investments again when the 
time is right. 

ANNUAL REPORT 2023

Strategic Report

20

21

Our financial profile remained strong. We closed 
the year with a solid net cash position of RUB 27.4 
billion, and a negative Net Debt to Adjusted EBITDA 
ratio of (0.5) times. This strong capital position 
was recognised by ExpertRA, the leading domestic 
rating agency, which upgraded Globaltrans’ credit 
rating, assigning the Group its highest domestic 
grade of ruAAA with a stable outlook.

Dividends

We continued to work to resolve the limitations 
of our corporate structure, but for the time being 
dividends have remained suspended. In the 
second half of the year, the process to re-domicile 
the holding company to the ADGM got underway. I 
am pleased to announce that this complex process 
was successfully completed, effective 26 February 
2024, within a tight schedule of about six months. 
The next step for us is to put in place a fully 
operational financial framework for the Group in 
Abu Dhabi and we are bringing the same focus to 
bear on this next stage.

an integral part of our business strategy. In 
2023, we made further progress by continuing 
to fine-tune the internal mechanisms that 
support our ESG strategy. This included 
building greater employee engagement and 
enhancing our oversight and accountability 
processes. Externally, we continued the work of 
integrating our sustainability priorities into the 
business, and improving disclosure on those 
areas that are important for both the business 
and our stakeholders. We are pleased that our 
efforts continue to be recognised by various 
ESG ranking groups.

Summary

Our expertise, flexibility, and experience put 
us in a strong competitive position to execute 
our strategy, as we did so successfully in 2023. 
As a team, we remain focused on delivering 
the best possible service, providing the right 
opportunities for our people and producing a 
result all our stakeholders can be proud of as we 
move forward into 2024. 

Advancing our ESG strategy

We know it is important to both measure and 
mitigate our impact on the environment and our 
communities and so sustainability remains 

Valery Shpakov 
CEO

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25.8

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The Group’s Free Cash Flow 

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ANNUAL REPORT 2023

Strategic Report

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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

Respect people

They are at the heart of our business and 
we work hard to exceed their expectations.

We respect the rights of all employees and 
invest in their training and development.

Deliver excellence

Uphold good governance

We strive to achieve the highest standards 
in everything we do.

We aim to pursue a course that benefits 
all stakeholders.

Prioritise safety

Protect our environment

Safety is our number one priority and we act 
safely and responsibly at all times.

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

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 
nonorganic 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.

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Historical key financials

Adjusted Revenue, 
RUB bln

Free Cash Flow, 
RUB bln

2023

2022

2021

2020

2019

87.4

81.6

58.5

54.9

68.8

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2022

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2020

2019

25.8

14.8

16.1

15.1

13.3

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Net Debt to Adjusted 
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2023

2022

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2020

2019

52.3

2023

(0.5)

49.2

2022

0.1

29.0

26.8

39.6

2021

2020

2019

0.6

0.6

1.0

Adjusted EBITDA 
Margin, %

Total dividends1, 
RUB per share/GDR

2023

2022

2021

2020

2019

60

60

50

49

57

2023

2022

-

-

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2020

22.502

74.55

2019

93.10

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ANNUAL REPORT 2023

Strategic Report

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Market Review

The freight rail industry’s overall performance 
was solid despite infrastructure constraints and 
demand volatility. Overall freight rail turnover and 
freight volumes remained relatively unchanged year 
on year, with both the bulk and liquids segments 
benefitting from favourable pricing dynamics.

Relatively stable industry performance, continued favourable market pricing

•  Overall industry freight rail turnover and 

transportation volumes were broadly unchanged 
year on year in 2023 with a stronger first-half 
performance followed by a weaker second half.
•  Demand remained relatively solid with continued 

infrastructure constraints impacting the rail 
network efficiency.

•  Almost all key market segments experienced 
moderately weaker volume performance year 
on year.

•  Favourable market pricing sustained in both bulk 

and liquids segments.

•  Producer prices of new railcars reached historically 

high levels.

Overall industry freight rail turnover, 
bln tonnes-km

Overall industry freight rail turnover, 
year-on-year change, %

2023

2022

2021

2020

2019

2,638

2,638

2,639

2,545

2,602

0.0%

-0.1%

+3.6%

-2.2%

+0.2%

H1

H2

1,339

1,320

1,300

1,318

+1.4

-1.4

Source: Rosstat, Globaltrans.

2023

2022

Source: Rosstat, Globaltrans.

Overall industry freight 
rail volumes, 
mln tonnes

Overall industry freight rail 
transportation volumes by key 
freight, 2023, %1

2023

2022

2021

2020

2019

1,235

1,236

1,284

1,245

1,279

-0.1%

-3.7%

+3.2%

-2.7%

-0.9%

41%

Other 

12%

Construction
materials

29%

Coal

17%

Metallurgical
cargoes

Source: Rosstat, Globaltrans.

Source: Rosstat, Globaltrans.

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Other including liquid cargoes.

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Financial and 
Operational Review

Financial results

Operational performance

Further strong financial 
results with robust Free Cash 
Flow, stable Adjusted EBITDA 
Margin and solid net cash 
position

•  Revenue rose 11% year on year 

to RUB 104.7 billion with Adjusted 
Revenue (a key component) increasing 
7% year on year to RUB 87.4 billion 
in 2023 largely reflecting robust 
average pricing.

•  Adjusted EBITDA increased 6% year 
on year to RUB 52.3 billion with 
the Adjusted EBITDA Margin remaining 
stable year on year at 60% despite 
ongoing cost pressures.

•  Total CAPEX adjusted for M&A was 

RUB 10.1 billion (2022: RUB 20.2 billion) 
on the back of a conservative approach 
to investment given elevated new rolling 
stock prices.

Strong operational efficiency, 
robust average pricing, 
all Service Contracts 
remain intact

1 

•  Empty Run Ratio for gondola cars 

significantly improved to its lowest level 
in more than ten years at 36% (2022: 
41%). Total Empty Run Ratio (for all 
types of rolling stock) decreased to 45% 
(2022: 50%).

•  Freight Rail Turnover (including 
Engaged Fleet) declined 2% 
year on year reflecting volatility 
in logistics and continued rail network 
infrastructure constraints2.

•  Average Price per Trip increased 10% 

year on year on the back of continued 
favourable market pricing conditions 
in both bulk and liquids segments, while 
the Average Number of Loaded Trip per 
Railcar declined 5% year on year.

In February 2023, 
Globaltrans completed 
the restructuring of its liquids 
segment with the intra-
group acquisition of 5,800 
railcars by BaltTransServis 
from Spacecom (including 
Spacecom Trans), a 65.25% 
owned leasing subsidiary 
of Globaltrans, and 
the subsequent disposal 
of Globaltrans’ shareholding 
in Spacecom (including 
680 units) to its minority 
shareholder.

2  The Group’s Freight Rail 

Turnover declined 4% year 
on year excluding Engaged 
Fleet.

3  As of the end of 2023, 

Globaltrans had six Service 
Contracts.

•  Strong Free Cash Flow of RUB 25.8 billion 

•  The Group maintained its focus 

on client retention with all Service 
Contracts3 due for renewal extended. 
Service Contracts contributed about 
61% of the Group’s Net Revenue from 
Operation of Rolling Stock in 2023.
•  Specialisation was enhanced across 
subsidiaries with liquid cargo and 
locomotive expertise consolidated 
within BaltTransServis enabling 
currently leased-out railcars 
to be gradually switched into operation. 
New Forwarding Company is fully 
focused on the bulk segment.

(2022: RUB 14.8 billion).

•  Profit for the year rose to RUB 38.6 billion 
(2022: RUB 24.9 billion) largely reflecting 
the Group’s strong performance, a profit 
on the sale of the Group’s shareholding 
in its leasing subsidiary Spacecom1 
and a year-on-year rise in net foreign 
exchange transaction gains on financing 
activities in 2023 along with the sizable 
impairment of rolling stock in the year-
earlier period.

•  Net cash position was RUB 27.4 billion 
with negative Net Debt to Adjusted 
EBITDA at (0.5)x.

•  Dividend payments are in focus but 
remain suspended due to certain 
technical issues, which 
are being addressed.

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Strategic Report

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Adjusted Revenue, RUB mln

Total CAPEX adjusted for M&A, RUB mln

2023

2022

87,388

81,610

+7%

2023

2022

10,092

20,224

-50%

Total Operating Cash Costs, RUB mln

Free Cash Flow, RUB mln

2023

2022

35,049

32,373

8%

2023

2022

25,845

74%

14,825

Adjusted EBITDA, RUB mln

Net Debt, RUB mln

2023

2022

52,289

49,216

31 Dec 2023

6%

31 Dec 2022

4,596

(27,400)

Adjusted EBITDA Margin, %

Net Debt to Adjusted EBITDA

2023

2022

60

60

31 Dec 2023

0

31 Dec 2022

0.1

(0.5)

Source: Globaltrans.

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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 2023 and 2022.

EU IFRS financial information

Non-IFRS financial information

2022

2023

Change

2022

2023

Change

Revenue

RUB mln

RUB mln

94,474

104,748

Total cost of sales, selling and marketing costs and administrative expenses

(58,838)

(63,740)

Profit from sale of subsidiary

Other losses – net

Operating profit

Finance (costs)/income – 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)

-

(1,335)

34,302

(1,150)

33,152

(8,232)

24,920

25,193

(274)

141.23

3,400

(283)

44,125

2,962

47,087

(8,469)

38,618

38,620

(3)

216.58

%

11%

8%

NM

-79%

29%

NM

42%

3%

55%

53%

-99%

53%

Cash generated from operations (after changes in working capital)

Tax paid

Net cash from operating activities

Net cash used in investing activities

Net cash used in financing activities

2022

2023

Change

RUB mln

RUB mln

48,631

(8,455)

40,176

(19,652)

49,194

(8,267)

40,926

(6,851)

(17,520)

(10,462)

%

1%

-2%

2%

-65%

-40%

Adjusted Revenue

Including

  Net Revenue from Operation of Rolling Stock

  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 (including 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)

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RUB mln

RUB mln

81,610

87,388

76,798*

3,372

32,373

81,102*

4,538

35,049

17,283*

18,297*

6,781

3,943

2,017

8,174

4,274

1,958

49,216

52,289

60%

11,424

20,224

14,825

15,098

60%

8,261

10,092

25,845

25,848

%

7%

6%

35%

8%

6%

21%

8%

-3%

6%

-

-28%

-50%

74%

71%

As of 31 Dec 
2022

As of 31 Dec 
2023

Change

RUB mln

RUB mln

20,649

16,052

4,596

0.1

15,377

42,777

(27,400)

(0.5)

%

-26%

166%

NM

-

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Financial and Operational Review

Operational information

Freight Rail Turnover, billion tonnes-km (including Engaged Fleet)

Transportation Volume, million tonnes (including Engaged Fleet)

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 period end), including:

  Owned Fleet, units (at period end)

Leased-in Fleet, units (at period end)

Leased-out Fleet, units (at period end)

Average age of Owned Fleet, years (at period end)

Total number of employees (at period end)

2022

2023

Change

141.4

80.4

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

138.8

78.6

129.0

73.5

71,125

57,153

1,741

20.0

45%

36%

99%

65,644

61,813

3,831

6,164

15.2

1,802

%

-2%

-2%

-4%

-5%

10%

1%

0%

-5%

-

-

-

-1%

-1%

2%

-18%

-

2%

Revenue

In 2023, the Group’s Total revenue increased 11% 
year on year to RUB 104,748 million reflecting 
the combination of a 7% year-on-year rise in Adjusted 
Revenue (a key component) and a 35% year-on-year 

increase 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 2023 and 2022.

Railway transportation – operators services (tariff borne by the Group)1

Railway transportation – operators services (tariff borne by the client)

Operating leasing of rolling stock

Other

Total revenue

2022

2023

Change

RUB mln

RUB mln

30,341

60,197

3,372

564

36,656

62,930

4,538

624

94,474

104,748

%

21%

5%

35%

11%

11%

1 

Includes “Infrastructure and locomotive tariffs: loaded trips” for 2023 of RUB 13,015 million (2022: RUB 10,465 million) and “Services 
provided by other transportation organisations” of RUB 4,345 million (2022: RUB 2,399 million).

Adjusted Revenue

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 the rail infrastructure provider, 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 2023, the Group’s Adjusted Revenue was 
RUB 87,388 million, up 7% 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 year ended 31 December 2023 and 2022 
and its reconciliation to Total revenue.

Total revenue

  Minus “pass through” items

Infrastructure and locomotive tariffs: loaded trips

Services provided by other transportation organisations

Adjusted Revenue

2022

2023

Change

RUB mln

RUB mln

94,474

12,864

10,465

2,399

81,610

104,748

17,360

13,015

4,345

87,388

%

11%

35%

24%

81%

7%

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 Engaged Fleet, 

and (iv) other revenues generated by the Group’s 
auxiliary business activities, including freight 
forwarding, repair and maintenance services 
provided to third parties, and other.

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ANNUAL REPORT 2023

Strategic Report

32

33

Financial and Operational Review

The following table provides a breakdown of the components of Adjusted Revenue for the years ended 
31 December 2023 and 2022.

Cost of sales, selling and marketing costs and administrative expenses

Net Revenue from Operation of Rolling Stock

Operating leasing of rolling stock

Net Revenue from Engaged Fleet

Other

Adjusted Revenue

2022

2023

Change

RUB mln

RUB mln

76,798*

81,102*

3,372

876*

564

4,538

1,124*

624

81,610

87,388

%

6%

35%

28%

11%

7%

The following table provides a breakdown of Cost of sales, selling and marketing costs and administrative 
expenses for the years ended 31 December 2023 and 2022.

Cost of sales

Selling and marketing costs

Administrative expenses

RUB mln

RUB mln

53,929

57,899

282

4,626

347

5,494

Total cost of sales, selling and marketing costs and administrative expenses

58,838

63,740

%

7%

23%

19%

8%

2022

2023

Change

Net Revenue from Operation of Rolling Stock

Net Revenue from Engaged Fleet

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 
(included in the EU IFRS line item “Infrastructure and 
locomotive tariffs: loaded trips”).

The Group’s Net Revenue from Operation of Rolling Stock, 
which accounted for 93% of the Group’s Adjusted Revenue 
in 2023, increased 6% year on year to RUB 81,102 million* 
largely reflecting robust average pricing.

Revenue from operating leasing of rolling stock

Revenue from operating leasing of rolling 
stock contributed 5% of the Group’s Adjusted 
Revenue in 2023 and increased 35% year on year 
to RUB 4,538 million. This reflected a rise 
in the average leasing rates which was partially 
offset by a decline in the average number of leased-
out fleet during the reporting year due to the sale 
of some railcars as part of the disposal of Globaltrans’ 
shareholding in Spacecom1.

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 
(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 
about 1% of the Group’s Adjusted Revenue in 2023, 
increased 28% year on year to RUB 1,124 million*, 
largely reflecting a rise in the number of Engaged Fleet 
operations.

Other revenue

Other revenue, comprising less than 1% of the Group’s 
Adjusted Revenue in 2023, 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 11% year on year 
to RUB 624 million in 2023.

The Group’s Total cost of sales, selling and marketing 
costs and administrative expenses rose 8% year 
on year to RUB 63,740 million in 2023 principally 
due to the following factors:
•  “Pass through” cost items (a combination 
of “Infrastructure and locomotive tariffs: 
loaded trips” and “Services provided by other 
transportation organisations”) increased 35% 
year on year to RUB 17,360 million primarily 
due to an increase in the proportion of clients 
that pay Infrastructure and locomotive tariffs: 
loaded trips through the Group along with the rise 
in regulated infrastructure and locomotive tariffs 
and a higher number of Engaged Fleet operations.

•  The Group’s Total cost of sales, selling and 

marketing costs and administrative expenses 
adjusted for “pass-through” cost items rose 1% 
year on year to RUB 46,380 million in 2023, due to:

–  An 8% year-on-year increase in Total Operating 

Cash Costs to RUB 35,049 million which 
largely reflected accelerated cost inflation, 
primarily in the regulated tariffs for the traction 
of empty railcars, along with an increase 
in employee benefit expense and repairs and 
maintenance costs.

–  Total Operating Non-Cash Costs decreased 

17% year on year to RUB 11,331 million largely 
due to the fact that there was no significant 
impairment of rolling stock in 2023 compared 
to the RUB 3,933 million impairment in 2022 
related to rolling stock blocked in Ukraine. 
This was partially offset by a 31% increase 
in Depreciation of property, plant and 
equipment largely due to both the addition 
as well as the higher depreciation of acquired 
rolling stock2 along with a decrease in the scrap 
value of rolling stock.

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In February 2023, Globaltrans completed the restructuring of its liquids segment with the intra-group acquisition of 5,800 railcars 
by BaltTransServis from Spacecom (including Spacecom Trans), a 65.25% owned leasing subsidiary of Globaltrans, and the subsequent 
disposal of Globaltrans’ shareholding in Spacecom (including 680 units) to its minority shareholder.

2 

Including wheel pairs.

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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:

“Pass through” cost items

2022

2023

Change

RUB mln

RUB mln

“Pass through” cost items

Infrastructure and locomotive tariffs: loaded trips

  Services provided by other transportation organisations

Total cost of sales, selling and marketing costs and administrative expenses 
(adjusted for “pass through” cost items)

Total Operating Cash Costs

  Empty Run Costs

  Employee benefit expense

  Repairs and maintenance

  Fuel and spare parts – locomotives

Infrastructure and Locomotive Tariffs – Other Tariffs

  Engagement of locomotive crews

  Expense relating to short-term leases (rolling stock)

  Other Operating Cash Costs

Total Operating Non-Cash Costs

  Depreciation of property, plant and equipment

Impairment/(reversal of 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

12,864

10,465

2,399

45,973

32,373

17,283*

6,781

3,943

2,017

1,258*

116

35

941

13,600

6,753

3,933

2,597

310

(13)

21

0.3

17,360

13,015

4,345

46,380

35,049

18,297*

8,174

4,274

1,958

1,193*

94

59

1,001

11,331

8,853

(22)

2,446

284

50

0.4

Total cost of sales, selling and marketing costs and administrative expenses

58,838

63,740

%

35%

24%

81%

1%

8%

6%

21%

8%

-3%

-5%

-19%

69%

6%

-17%

31%

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ANNUAL REPORT 2023

Strategic Report

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35

Services provided by other transportation 
organisations rose 81% year on year 
to RUB 4,345 million in 2023 primarily due to a higher 
number of Engaged Fleet operations along with 
the increased 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 2023 
of RUB 35,049 million were 8% higher compared 
to the previous year due to a combination 
of the factors described below.

Infrastructure and locomotive tariffs: loaded trips

Infrastructure and locomotive tariffs: loaded trips 
is in principle a “pass through” cost item for the Group1 
and is reflected in equal amounts in both the Group’s 
Total revenue and Cost of sales.

The 24% year-on-year increase in this item in 2023 
to RUB 13,015 million primarily reflected the higher 
proportion of clients that pay infrastructure and 
locomotive tariffs: loaded trips through the Group 
along with higher regulated infrastructure and 
locomotive tariffs.

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).

The following table provides a breakdown of the Total Operating Cash Costs for the years 
ended 31 December 2023 and 2022.

2023

2022

2023

Change

(280)

2120%

% of total

RUB mln

RUB mln

145%

32%

8%

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

52%

23%

12%

6%

3%

0.3%

0.2%

3%

100%

17,283*

18,297*

6,781

3,943

2,017

1,258*

116

35

941

8,174

4,274

1,958

1,193*

94

59

1,001

32,373

35,049

%

6%

21%

8%

-3%

-5%

-19%

69%

6%

8%

1  Under contracts where the infrastructure tariff is borne by the Group, the Group has a contractual relationship with the client. The Group sets the 
terms of the transactions, such as selling and payment terms and, in some cases, bears credit risk and controls the flow of receipts and payments.

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Financial and Operational Review

Empty Run Costs

Fuel and spare parts – locomotives

Empty Run Costs (a non-IFRS financial measure 
meaning costs payable to the rail infrastructure 
provider for forwarding empty railcars) is derived 
from management accounts and presented as part 
of the “Infrastructure and locomotive tariffs: empty run 
trips and other tariffs” component of “Cost of sales” 
reported under EU IFRS.

Empty Run Costs, which accounted for 52% of the Group’s 
Total Operating Cash Costs in 2023, increased 6% year 
on year to RUB 18,297 million* due to:
•  A rise in regulated tariffs for the traction 

of empty railcars of 10% from January 2023 and 
by an additional 10.75% from December 2023, which 
was partially offset by:

•  A significant improvement in the Empty Run Ratio 
for gondola cars to 36% (2022: 41%) along with 
a small year-on-year decline in the Group’s Freight 
Rail Turnover.

Employee benefit expense

Employee benefit expense, which represented 23% 
of the Group’s Total Operating Cash Costs in 2023, 
increased 21% year on year to RUB 8,174 million. This 
resulted from inflation-driven growth in wages and 
salaries along with performance-driven increases 
in bonuses. The average headcount was little changed 
(down 1% year on year).

Repairs and maintenance

Repairs and maintenance costs, which comprised 12% 
of the Group’s Total Operating Cash Costs in 2023, 
increased 8% year on year to RUB 4,274 million, largely 
resulting from:
•  An inflation-driven rise in the cost of certain repairs, 

services and spare parts;

•  An increase in the cost of locomotive repairs;
•  A decline in the number of scheduled depot repairs.

Fuel and spare parts – locomotives expenses, which 
accounted for 6% of the Group’s Total Operating 
Cash Costs in 2023, declined 3% year on year 
to RUB 1,958 million largely reflecting lower fuel expenses.

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 Сost 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 3% of the Group’s Total Operating 
Cash Costs in 2023 and decreased 5% year on year 
to RUB 1,193 million* with the rise in the regulated 
infrastructure and locomotive tariffs more than offset 
by the continued cost optimisation measures.

Engagement of locomotive crews

Costs related to the engagement of locomotive crews 
from the rail infrastructure provider in 2023 (less than 
1% of the Group’s Total Operating Cash Costs) declined 
19% year on year to RUB 94 million due to the reduction 
in the amount of outsourcing of locomotive crews 
as the Group largely used its in-house crews.

Expense relating to short-term leases (rolling stock)

In 2023, Expense relating to short-term leases (rolling 
stock), representing less than 1% of the Group’s 
Total Operating Cash Costs, rose 69% year on year 
to RUB 59 million primarily due to an increase 
in the average number of fleet leased-in under short-
term operating leases along with the rise in average 
leasing rates.

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 (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 2023 and 2022.

Legal, consulting and other professional fees

Expense relating to short-term leases (office)

Advertising and promotion

Auditors’ remuneration

Communication costs

Information services

Taxes (other than on income and value added taxes)

Other expenses

Other Operating Cash Costs

2022

2023

Change

RUB mln

RUB mln

94

93

41

46

25

15

24

603

941

114

94

57

50

25

19

14

628

1,001

%

21%

1%

39%

8%

3%

22%

-43%

4%

6%

Other Operating Cash Costs, which comprised 3% 
of the Group’s Total Operating Cash Costs, increased 
6% year on year to RUB 1,001 million in 2023.

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”.

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Financial and Operational Review

The following table provides a breakdown of the Total Operating Non-Cash Costs for the years ended 31 December 
2023 and 2022.

The following table provides details on Adjusted EBITDA for the years ended 31 December 2023 and 2022, 
and its reconciliation to EBITDA and Profit for the year.

2022

2023

Change

2022

2023

Change

Profit for the year

Plus (Minus)

Income tax expense

  Finance costs/(income) – net

  Net foreign exchange transaction gains on financing activities

  Amortisation of intangible assets

  Depreciation of right-of-use assets

  Depreciation of property, plant and equipment

EBITDA

Minus (Plus)

Loss on derecognition arising on capital repairs

  Net foreign exchange transaction gains on financing activities

  Other losses – net

  Profit from sale of subsidiary

  Gain on sale of property, plant and equipment

(Impairment)/reversal of impairment of property, plant and equipment

Adjusted EBITDA

3,194

398%

RUB mln

RUB mln

24,920

38,618

8,232

1,150

641

0.3

2,597

6,753

8,469

(2,962)

0.4

2,446

8,853

44,293

58,618

(310)

641

(1,335)

-

13

(3,933)

49,216

(284)

3,194

(283)

3,400

280

22

52,289

%

55%

3%

NM

32%

-6%

31%

32%

-8%

398%

-79%

NM

2120%

NM

6%

Depreciation of property, plant and equipment

Depreciation of right-of-use assets

Loss on derecognition arising on capital repairs1

Net impairment losses on trade and other receivables

Amortisation of intangible assets

Gain on sale of property, plant and equipment

Impairment/(reversal of impairment) of property, plant and equipment

Total Operating Non-Cash Costs

6,753

2,597

310

21

0.3

(13)

3,933

13,600

RUB mln

RUB mln

8,853

2,446

284

50

0.4

%

31%

-6%

-8%

145%

32%

(280)

2120%

(22)

11,331

NM

-17%

A 17% year-on-year decrease in Total Operating Non-
Cash Costs to RUB 11,331 million in 2023 stemmed 
primarily from:
•  No large impairment of property, plant and 

equipment in 2023 compared to RUB 3,933 million 
in 2022 related to the impairment of rolling stock 
blocked in Ukraine.

•  A 31% year-on-year rise in Depreciation of property, 

plant and equipment largely due to both the addition 
as well as the higher depreciation of acquired rolling 
stock2 along with a decrease in the scrap value 
of rolling stock.

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”, 
“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”, “Reversal 
of impairment of intangible assets” and “Profit from sale 
of subsidiary”.

The Group’s Adjusted EBITDA increased 6% year on year 
to RUB 52,289 million in 2023. The Adjusted EBITDA 
Margin remained stable year on year at 60% on the back 
of the 7% year-on-year increase in Adjusted Revenue and 
an 8% year-on-year rise in Total Operating Cash Costs.

1  The cost of each major periodic capital repair (including the replacement of significant components) is recognised in the carrying amount 

of the relevant item of rolling stock repaired and separately depreciated. Simultaneously, the carrying amount of the repaired rolling stock 
that is attributable to the previous periodic capital repair and/or significant component replacement, if any, is derecognised and debited 
in “Cost of sales” in the income statement as “Loss on derecognition arising on capital repairs” for the period during which the repair 
was carried out. 

2 

Including wheel pairs.

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ANNUAL REPORT 2023

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40

41

Financial and Operational Review

Finance income and costs

Finance costs

Profit before income tax

The following table provides a breakdown of Finance income and costs for the years ended 
31 December 2023 and 2022.

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

  Total interest income calculated using the effective interest rate method

  Finance leases – related parties

  Finance leases – third parties

Total interest income

Other finance income

Total finance income

Net foreign exchange transaction losses on borrowings and other liabilities

Net foreign exchange transaction gains on cash and cash equivalents and other 
monetary assets

Net foreign exchange transaction gains on financing activities

2022

2023

Change

RUB mln

RUB mln

%

(1,258)

(561)

(1,820)

(781)

(1,734)

(205)

(1,939)

38%

-64%

7%

(465)

-40%

(2,600)

(2,403)

(2)

(2)

(2,602)

(2,405)

-8%

2%

-8%

218%

122%

-46%

NM

184%

-62%

-18%

179%

1,654

493

10

3

2,159

1

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2,173

-

-100%

2,173

(71)

168%

NM

3,265

409%

3,194

398%

521

222

18

-

761

2

17

779

32

812

-

641

641

Total finance costs for 2023 decreased 8% year 
on year to RUB 2,405 million. A 7% year-on-
year rise in Total interest expense calculated 
using the effective interest rate method (related 
to bank borrowings and non-convertible bonds) 
to RUB 1,939 million was more than offset 
by the 40% year-on-year decline in Other lease 
liabilities to RUB 465 million as the Group decreased 
the number of fleet leased-in under long-term 
operating leases.

Finance income

In 2023, the Group’s Total finance income increased 
168% year on year to RUB 2,173 million primarily 
due to increased bank balances along with 
a rise in the interest rates on deposits compared 
to the previous year.

The Group reported a year-on-year increase of 42% 
in Profit before income tax to RUB 47,087 million 
in 2023, reflecting a 29% year-on-year increase 
in the Group’s Operating profit to RUB 44,125 million, 
which was largely linked to the factors described 
above, including:
•  No large impairment of property, plant and 

equipment in 2023 compared to RUB 3,933 million 
the previous year related to the impairment 
of rolling stock blocked in Ukraine.

•  RUB 3,400 million of Profit from sale of subsidiary 

related to the disposal of the Company’s 
shareholding in Spacecom.

•  RUB 3,194 million of Net foreign exchange 

transaction gains on financing activities in 2023 
compared to RUB 641 million in the previous year.

Income tax expense

Net foreign exchange transaction gains/(losses) 
on financing activities

Income tax expense was up 3% year on year 
to RUB 8,469 million in 2023.

The Group had Net foreign exchange transaction 
gains on financing activities of RUB 3,194 million 
in 2023 compared to RUB 641 million in the previous 
year. This resulted from foreign exchange volatility 
on the available cash and cash equivalents 
denominated in foreign currency.

Profit from sale of subsidiary

The Group had a Profit from sale of subsidiary 
in the amount of RUB 3,400 million in 2023 (2022: 
nil) which reflected the disposal of the Company’s 
shareholding in Spacecom1.

Profit for the year

The Group’s Profit for the year increased 55% year 
on year to RUB 38,618 million reflecting the factors 
described above.

Profit for the year attributable to the owners 
of the Company increased 53% year on year 
to RUB 38,620 million reflecting the factors 
described above.

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(1,150)

2,962

NM

1 

In February 2023, Globaltrans completed the restructuring of its liquids segment with the intra-group acquisition of 5,800 railcars 
by BaltTransServis from Spacecom (including Spacecom Trans), a 65.25% owned leasing subsidiary of Globaltrans, and the subsequent 
disposal of Globaltrans’ shareholding in Spacecom (including 680 units) to its minority shareholder.

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ANNUAL REPORT 2023

Strategic Report

42

43

Financial and Operational Review

Liquidity and capital resources

In 2023, the Group’s capital expenditure consisted 
principally of maintenance CAPEX (including capital 
repairs) and the selective acquisition of rolling stock.

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 2023, the Group 
had Net Working Capital of RUB 6,048 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 2023 and 2022.

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

Payment for acquisition of non-controlling interest

Proceeds from sale of subsidiaries – net of cash disposed of

Payment for rolling stock to disposed subsidiary

Purchases of property, plant and equipment

Purchases of intangible assets

Proceeds from sale of property, plant and equipment

Loans granted to third parties

Loans granted to related parties

Loan repayments received from third parties

Loan repayments received from related parties

Interest received

Receipts from finance lease receivable – third parties

Receipts from finance lease receivable – related parties

Other

2022

2023

RUB mln

RUB mln

47,963

668

548

(86)

(1,285)

389

1,660

(557)

48,631

(8,455)

40,176

(8,800)

-

-

(11,422)

(2)

238

-

(800)

-

400

761

28

9

(65)

52,042

(2,848)

442

(2,424)

1,892

(260)

(2,489)

(10)

49,194

(8,267)

40,926

-

4,772

(6,603)

(8,260)

(1)

627

(885)

-

885

400

2,161

43

11

-

Net cash used in investing activities

(19,652)

(6,851)

Cash flows from financing activities

Net cash outflows from borrowings and financial leases1:

  Proceeds from bank borrowings

  Repayments of borrowings

  Repayments of non-convertible unsecured bonds

Purchase of treasury shares

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 non-controlling interests in subsidiaries

Net cash used in financing activities

Net increase in cash and cash equivalents

Exchange gains on cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at the end of the year

2022

2023

RUB mln

RUB mln

(10,549)

2,750

(9,549)

(3,750)

(114)

(2,403)

(1,939)

(786)

(1,728)

(5,138)

8,800

(10,188)

(3,750)

-

(2,478)

(2,051)

(460)

(334)

(17,520)

(10,462)

3,005

193

12,855

16,052

23,614

3,111

16,052

42,777

Net cash from operating activities

•  A RUB 6,603 million Payment for rolling stock 

to a disposed subsidiary in 2023 related 
to the completion of the intra-group acquisition 
of railcars by BaltTransServis from Spacecom 
(a leasing subsidiary disposed of in February 2023)2.

•  A RUB 4,772 million Proceeds from sale 

of subsidiaries – net of cash disposed of in 2023 
related to the disposal of the Group’s shareholding 
in Spacecom after acquiring the majority 
of its railcars compared to a RUB 8,800 million 
Payment for acquisition of non-controlling interest 
(the remaining 40% shareholding in BaltTransServis) 
that was carried out in the first half of 2022.

In 2023, Net cash from operating activities increased 
2% year on year to RUB 40,926 million primarily 
due to the following factors:
•  Cash generated from operations (after “Changes 

in working capital”) rose 1% year on year 
to RUB 49,194 million.

•  Tax paid was 2% lower year on year 

at RUB 8,267 million. 

Net cash used in investing activities

Net cash used in investing activities decreased 
65% (or RUB 12,801 million) year on year 
to RUB 6,851 million largely reflecting:
•  A 28% or RUB 3,162 million year-on-year decrease 
in Purchases of property, plant and equipment 
(on a cash basis; including maintenance CAPEX) 
to RUB 8,260 million on the back of significantly lower 
investments given elevated new rolling stock prices.

1  Net cash inflows (outflows) from borrowings and financial leases (a non-IFRS financial measure) is defined as the balance between the following 

line items: “Proceeds from bank borrowings”, “Proceeds from issue of non-convertible unsecured bonds”, “Repayments of borrowings” 
and  “Principal elements of lease payments for leases with financial institutions”.

2 

In February 2023, Globaltrans completed the restructuring of its liquids segment with the intra-group acquisition of 5,800 railcars 
by BaltTransServis from Spacecom (including Spacecom Trans), a 65.25% owned leasing subsidiary of Globaltrans, and the subsequent disposal 
of Globaltrans’ shareholding in Spacecom (including 680 units) to its minority shareholder. Deferred payments for the purchased railcars were 
executed after the disposal of Spacecom, thus as per IFRS requirements these payments have been reflected in the cash flow statement for 2023.

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Financial and Operational Review

Net cash used in financing activities

Net cash used in financing activities decreased 40% year 
on year to RUB 10,462 million in 2023, due to the factors 
described below:
•  The Group continued to repay its debt in 2023 with 
Net cash outflow from borrowings and financial 
leases amounting to RUB 5,138 million compared 
to RUB 10,549 million in the previous year.

The Group’s Total CAPEX adjusted for M&A 
(on a cash basis, including maintenance CAPEX) 
was RUB 10,092 million, a decrease of 50% compared 
to 2022 reflecting the following factors:
•  Total CAPEX (including maintenance CAPEX) down 

28% year on year to RUB 8,261 million in 2023:

–  Maintenance CAPEX increased 4% year on year 

to RUB 6,637 million*.

•  Interest paid on bank borrowings and non-convertible 

–  Expansion CAPEX decreased 68% 

unsecured bonds increased 6% year on year 
to RUB 2,051 million in 2023.

•  Interest paid on other lease liabilities declined 

41% year on year to RUB 460 million on the back 
of a decrease in the number of rolling stock 
leased-in under long-term operating leases.
•  Dividends paid to non-controlling interests 
in subsidiaries decreased 81% year on year 
to RUB 334 million in 20231.

Capital expenditure (including M&A)

Total CAPEX (a non-IFRS financial measure) calculated 
on a cash basis as the sum of “Purchases of property, 
plant and equipment” (which includes maintenance 
CAPEX), “Purchases of intangible assets” and “Principal 
elements of lease payments for leases with financial 
institutions”.

Total CAPEX adjusted for M&A (a non-IFRS financial 
measure) calculated as a combination of Total CAPEX 
(which includes maintenance CAPEX) and cash inflows 
and outflows from acquisitions and disposals.

to RUB 1,623 million2 reflecting the Group’s 
conservative approach to investment given elevated 
new rolling stock prices.

•  A RUB 6,603 million Payment for rolling stock 

to a disposed subsidiary in 2023 related 
to the completion of the intra-group acquisition of tank 
cars by BaltTransServis from Spacecom (a leasing 
subsidiary disposed of in February 2023).

•  A RUB 4,772 million Proceeds from sale 

of subsidiaries – net of cash disposed of in 2023 
related to the disposal of the Group’s shareholding 
in Spacecom after acquiring the majority 
of its railcars compared to a RUB 8,800 million 
Payment for acquisition of non-controlling interest 
(the remaining 40% shareholding in BaltTransServis) 
that was carried out in the first half of 2022.

ANNUAL REPORT 2023

Strategic Report

44

45

The Group’s capital expenditure (including maintenance 
CAPEX) on an accrual basis was RUB 9,070 million 
in 2023 (2022: RUB 11,186 million). The difference 
between capital expenditure given on a cash basis 
and on an accrual basis is principally because 
of a time lag between the prepayments for and 
the delivery of rolling stock.

Free Cash Flow

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”, “Payment 

for acquisition of non-controlling interest”, “Payment 
for rolling stock to disposed subsidiary” plus 
“Proceeds from sale of subsidiaries – net of cash 
disposed of”.

Free Cash Flow increased 74% or RUB 11,021 million 
year on year to RUB 25,845 million in 2023, primarily 
due to:
•  A 1% year-on-year increase in Cash generated from 
operations (after “Changes in working capital”) 
to RUB 49,194 million.

•  Tax paid which decreased 2% year on year 

to RUB 8,267 million.

•  An 8% year-on-year decrease in the combined 

“Principal elements of lease payments for other 
lease liabilities” and “Interest paid on other lease 
liabilities” which was down to RUB 2,938 million 
as the Group decreased the number of rolling 
stock leased-in under long-term operating leases.

•  The Group’s Total CAPEX adjusted 

for M&A decreased 50% year on year 
to RUB 10,092 million reflecting the factors 
described above.

The following table sets out details on Free Cash Flow and Attributable Free Cash Flow for the years ended 
31 December 2023 and 2022, and its reconciliation to Cash generated from operations.

2022

2023

Change

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48,631

49,194

RUB mln

RUB mln

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 2023 and 2022.

Total CAPEX adjusted for M&A

  Purchases of property, plant and equipment

  Purchases of intangible assets

2022

2023

Change

  Proceeds from sale of subsidiaries – net of cash disposed of

Purchase of property, plant and equipment

Purchase of intangible assets

Total CAPEX (including maintenance CAPEX)

Proceeds from sale of subsidiaries – net of cash disposed of

Payment for rolling stock to disposed subsidiary

Payment for acquisition of non-controlling interest

Total CAPEX adjusted for M&A

1  Effective from February 2023, Globaltrans owns 100% shareholdings in all its subsidiaries.

2 

Including Purchases of intangible assets.

RUB mln

RUB mln

11,422

8,260

%

-28%

-63%

-28%

NM

NM

1

8,261

(4,772)

6,603

-

-100%

10,092

-50%

2

11,424

-

-

8,800

20,224

  Payment for rolling stock to disposed subsidiary

  Payment for acquisition of non-controlling interest

Tax paid

Interest paid on bank borrowings and non-convertible unsecured bonds

Principal elements of lease payments for other lease liabilities

Interest paid on other lease liabilities

Free Cash Flow

Minus

Adjusted Profit Attributable to Non-controlling Interests

Attributable Free Cash Flow

-

-100%

%

1%

-50%

-28%

-63%

NM

NM

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-2%

6%

3%

-41%

74%

-99%

71%

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(20,224)

(10,092)

(11,422)

(8,260)

(2)

-

-

(8,800)

(8,455)

(1,939)

(2,403)

(786)

(1)

4,772

(6,603)

(8,267)

(2,051)

(2,478)

(460)

14,825

25,845

(274)

(3)

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ANNUAL REPORT 2023

Strategic Report

46

47

Financial and Operational Review

Capital resources

The Group had a Net cash position 
of RUB 27,400 million as of the end of 2023 compared 
to Net Debt of RUB 4,596 million as of the end of 2022.

•  Total debt (consisting of borrowings and non-
convertible unsecured bonds) amounted 
to RUB 15,377 million as of the end of 2023 
(including accrued interest of RUB 121 million*), 
a decrease of 26% compared to the end of 2022.

•  Cash and cash equivalents amounted 

to RUB 42,777 million, an increase of 166% compared 
to the end of 2022 with about 98%* denominated 
in Russian roubles.

The Net Debt to Adjusted EBITDA ratio was (0.5)x 
as of 31 December 2023 (31 December 2022: 0.1x).

Under IFRS 16, Other lease liabilities (not included 
in Total debt) of RUB 3,096 million were recognised 
on the balance sheet as of 31 December 2023 
(31 December 2022: RUB 4,195 million) which 
was primarily related to the long-term leasing 
of certain fleet and offices.

The following table sets out details on the Group’s Total debt, Net Debt and Net Debt to Adjusted EBITDA 
at 31 December 2023 and 31 December 2022, and the reconciliation of Net Debt to Total debt.

Total debt

Minus

Cash and cash equivalents

Net Debt

Net Debt to Adjusted EBITDA

As of
31 Dec 2022

As of
31 Dec 2023

Change

RUB mln

20,649

RUB mln

%

15,377

-26%

16,052

4,596

0.1x

42,777

166%

(27,400)

(0.5)x

NM

-

Rouble-denominated borrowings accounted for 100% 
of the Group’s debt portfolio as of 31 December 
2023. The Russian rouble is the functional currency 
of the Company.

The weighted average effective interest rate stood 
at 10.0% as of 31 December 2023 (31 December 2022: 
8.1%) reflecting the rise in interest rates on new 
borrowings. All of the Group’s debt had fixed interest 
rates as of 31 December 2023.

The Group has a balanced debt maturity profile 
supported by the Group’s solid cash flow 
generation, available cash and cash equivalents, 
as well as undrawn borrowing facilities 
of RUB 29,000 million as of 31 December 2023.

The following table gives the maturity profile of the Group’s borrowings (including accrued interest 
of RUB 121 million*) as of 31 December 2023.

Q1 2024

Q2 2024

Q3 2024

Q4 2024

2025

2026

2027

2028

Total

As of 
31 Dec 2023

RUB mln

3,419*

1,785*

1,363*

1,147*

3,560*

2,114*

1,918*

72*

15,377

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 2023 (31 December 
2022: 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 2023 
(31 December 2022: 3.1%)2. As at 31 December 
2023, another 0.1% (2022: 0.1%) of the shares 
of the Company is controlled by Directors and key 
management of the Company. For further information 
on the shareholder structure, please see the Share 
Capital section of this Annual Report.

→ 

 For further information 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 2023, 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  Litten Investments Ltd is beneficially owned by Alexander Eliseev, Non-executive Director (effective to 26 February 2024). This 

shareholding is subject to the signed binding agreement to sell to AQNIET Capital. The completion of the transaction is expected not 
later than second half of 2024.

2  Goldriver Resources Ltd was beneficially owned by Sergey V. Maltsev, Chairman of the Board (effective to 26 February 2024), and was 

sold to AQNIET Capital in January 2024.

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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, the oversight 
and analysis of risks related 
to environmental, social and 
governance issues is delegated 
to the ESG Committee.

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Risk management principles

Enterprise-wide

Aligned with the 
Group’s objectives

Integrated into 
corporate culture

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 
be aligned with the Group’s 
objectives and provide reasonable 
assurance regarding the 
achievement of those objectives.

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.

Forward-thinking 
approach

Integrated into the 
Group’s business

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.

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.

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.

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Systematic and 
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Evolving

Clear and 
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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.

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.

Risk management principles, 
methods and tools should be 
clear and easily understood by the 
Group’s employees.

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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 United Arab Emirates (“UAE”), 
the European Union (“EU”), the United 
Kingdom (“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 our ability to achieve our strategy

General Economic Situation and 
Operating Environment

conflict between Russia and Ukraine), may 
negatively impact the Group’s business and 
growth prospects.

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 

Although the coronavirus (“COVID-19”) has 
become seasonal and does not currently 
demonstrate a significant risk to human life and 
health, there is still a risk of new strains emerging 
that could impact the Group’s business and lead 
to lockdowns, trade wars and currency volatility. 
The freight rail market may experience reduced 
demand stemming from the effects of COVID-19 
and/or a new coronavirus outbreak/mutation. 
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 emergence 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 Bank 
of Russia and a number of commercial banks, 
the restrictions for payments with Russian-
sources funds as well as restrictions for capital 
movements outside the Russian Federation, 
sanctions imposed by the United States (“US”), 
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.

The threat of sanctions against the Group, 
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. 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 the Group.

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. 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 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.

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 

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Risk Management

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 between 
universal gondola cars and rail tank cars as one 
of the cornerstones of its business model. 
A balanced fleet 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 impact of sanctions imposed on Russian 
commercial banks, various Russian businesses 
and individuals, as well as the global outbreak 
of the COVID-19 and acts as the situation evolves.

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 local railway transportation 
market and railway industry reform. Any changes 
to the regulatory environment of the local 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 local railway transportation market. 

Any deterioration in the Group’s direct or indirect 
relationship with government authorities at either 
the local or federal level could result in greater 
government scrutiny of the Group’s business and 
how it conducts its operations or less effective 
access to services dependent upon government 
authorities.

In addition, the Group relies on its relationship 
with and the services (including maintenance and 
repairs), infrastructure and information provided 
by an entity controlled by the state. Railway 
transportation regulations in other bordering 
countries 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 state-owned entity remains 
the only provider of infrastructure and locomotive 
traction services (“the rail infrastructure 
provider”), 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 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 the rail 
infrastructure provider owned depots, obtain 
higher-quality service and minimise the costs 
of that service. 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 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 Risks of Listing 
of the Company’s GDRs and Admission 
to Trading on the London Stock 
Exchange (“LSE”) and Moscow 
Exchange (“MOEX”), 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.

The Company’s GDRs are also admitted to public 
trading on MOEX in the Russian Federation 
on the basis of approvals of both MOEX and the Bank 
of Russia which allow foreign listed securities 
to be admitted for public trading without requiring 
a securities registration prospectus in Russia.

The listing level of the Company’s GDRs on MOEX 
may be downgraded as a result of a potential 
change in the listing rules of MOEX which may result 
in smaller trading volumes and greater fluctuation 
in the Company’s GDRs.

On 11 September 2023, the Bank of Russia registered 
the Company’s prospectus for its GDRs which, if 
approved by MOEX, will enable the Company’s GDRs 
to be admitted to public trading on MOEX without 
reference to its international listing. Following 
the sanctions, imposed by the EU on National 
Settlement Depositary (“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, and with 
the execution of other corporate actions, including 
but not limited to voting at the general meetings 
of shareholders.

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.

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Although the Group takes a conservative approach 
to investments, any deterioration in the market 
environment may negatively impact the profitability 
and payback period of investments in rolling stock, 
thus limiting the Group’s return on its investments 
and ability to expand its business. Alongside 
pursuing organic growth strategies, the Group 
has expanded its operations through acquisitions 
in the past and may pursue more in the future 
if appropriate opportunities arise. The pursuit 
of an acquisition strategy entails certain risks, 
including problems with integrating and managing 
such new acquisitions.

The expiry of long-term Service Contracts with 
its key customers may also limit the Group’s growth 
opportunities as these may result in volatility 
in logistics, a reduction in the Group’s business 
volumes and/or profitability of its operations.

Controls and mitigating factors

Any acquisition of rolling stock is matched against 
projected demand for railway transportation and 
the economically viable expected payback period 
for such investments. The Group cooperates with 
numerous rolling stock producers in Russia and 
other CIS countries without placing too much 
reliance on any particular supplier. The Group 
is also focused on the diversification of its business. 
Any valuation of an acquisition target is subject 
to review by external advisers, and fairness opinions 
are normally provided by reputable appraisal 
companies to the Group’s Board of Directors when 
a transaction is considered.

Competition and Customer 
Concentration

Description

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 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 
68% of the Group’s Net Revenue from Operation 
of Rolling Stock in 2023. 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.

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 61% of the Group’s Net Revenue from 
Operation of Rolling Stock in 2023 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 2023, the share of small 
and medium companies amounted to about 32% 
of Net Revenue from Operation of Rolling Stock 
(2022: 33%). Furthermore, the Group’s marketing 
function regularly monitors competitors’ business 
strategies, their use of technology, their price 
strategies and industry trends.

Locomotive Traction and 
Authorisations

Heightened Risk of Shareholder 
Activism

Description

Description

The Group is dependent on the state-owned 
entity 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. 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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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 the state-owned 
entity, as well as the networks and infrastructure 
of other countries on which the Group depends 
to operate its rolling stock, like Kazakhstan 
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 could negatively impact the average 
speed of transportation and therefore affect 
the operational performance of railcars. 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, 
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.

Controls and mitigating factors

With immaterial exceptions, all of the Group’s 
rolling stock is insured against damage. Moreover, 
a state-owned freight carrier on the railway 
network 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

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

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.

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.

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 
the rail infrastructure provider 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. 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 sanctions imposed by the US, the EU, 
the UK and a number of other countries, 
a number of IT solutions used by the Group will 
no longer be maintained by American, British 
and EU suppliers.

The Group may potentially face risks related 
to access privileges, audit trails, authentication, 
authorisation, backup procedures, business 
continuation, change management (software 
and hardware), data integrity, disaster recovery, 
infrastructure, information/data security and 
cyber-attacks. The Group may lose access 
to IT products if third party providers do not 
renew commitments under existing or expiring 
service agreements. Further systems and 
products that the Group uses could cease 
to be maintained by third party service 
providers, requiring the Group to adopt new 
systems or products.

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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 the a state-owned freight carrier. 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.

Compliance: risks that influence the Group’s adherence to relevant laws 
and regulations

Pending and Potential Legal Actions

Controls and mitigating factors

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

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. 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.

→ 

 For further information on climate-related risks, 
please see the Sustainability Report.

Compliance with Regulations and 
Sanctions

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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.

Description

The Group functions in several jurisdictions, 
including UAE and Russia. In addition, the Group 
has its GDRs listed on the LSE (although 
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) 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 

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Risk Management

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 US, 
the EU, Ukraine, the UK 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.

Fiscal Risk from Evolving Legal and 
Tax Regimes

Description

Local tax, currency and customs legislation, 
especially in Russia, other emerging markets and 
the UAE, 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.

Financial: risks that influence our financial performance

Currency Risks

Description

exposure to the effects of currency fluctuations 
on bank balances between the US dollar and 
the Russian rouble.

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 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 

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 2023, 
all of the Group’s debt was denominated 
in Russian roubles.

Interest-rate Risks

Description

The Group’s income and operating cash flows 
are exposed to changes in market interest rates. 
These arise mainly from floating rate lease 
liabilities and borrowings. An increase in market 
interest rates in Russia may negatively influence 
the Group’s profits.

Controls and mitigating factors

The Group enters into long-term borrowing 
and leases with financial institutions to finance 
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 2023, all of the Group’s debt 
was at fixed interest rates. Management also 
considers alternative means of financing.

Credit Risk

Description

Financial assets that potentially subject 
the Group to credit risk consist principally 
of trade receivables, cash and cash equivalents. 
Furthermore, the Group’s business is substantially 
dependent on a few large key customers, 

including their affiliates and suppliers. Its top 10 
clients accounted for about 79% of the Group’s 
trade and other receivables as of 31 December 
2023 and about 68% of the Group’s Net Revenue 
from Operation of Rolling Stock in 2023.

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.

Liquidity Risk

Description

The Group’s business is capital-intensive. 
The current situation in Ukraine and 
the resulting increased and intensified 
sanctions imposed by the US, the EU, the UK 
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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Governance

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Sustainability  
Report

We are delighted to share our 6th 
annual Sustainability Report, which 
showcases our ongoing commitment to 
ESG initiatives throughout the Group. 
The Report covers the progress we 
have made in those focus areas that 
are not only critical to our business but 
also of interest to our stakeholders. 
The reporting format aligns with GRI 
standards and  TCFD recommendations, 
underlining our commitment to 
transparency and accountability.

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Employees

Read more →

p. 86

Environment

Read more →

p. 92

Climate-Related Financial 
Disclosure

Read more →

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Sustainability

Our approach

ESG Oversight

Materiality

Sustainable development has always been one of our 
top priorities, and we take it very seriously. Since 2018, 
the Group has made significant strides in integrating 
ESG factors into our daily business operations 
and developed a comprehensive ESG monitoring, 
management, and reporting programme. Leadership 
on ESG issues has always started with the Group’s CEO.

Over the past few years, we have enhanced our ESG 
governance structure – from proactively implementing 
sustainability commitments, policies and practices 
to hiring additional expertise and creating a new Board 
Committee.

The ESG Committee has overall responsibility 
for the Group’s sustainability strategy 
and is the Company’s top unit in charge 
of sustainable development issues. The Committee 
was established 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 the 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 of a formal 
ESG policy in January 2021 that sets out formal ESG 
commitments and established lines of responsibility 
and accountability.

The Sustainability Report, which is integrated 
into the 2023 Annual Report, has been prepared 
in accordance with the sustainability reporting 
guidelines of the Global Reporting Initiative (“GRI”) 
and Task Force on Climate-Related Financial 
Disclosures (“TCFD”) recommendations.

The overall aim is to achieve high standards 
in the areas of balance, comparability, accuracy, 
timeliness, clarity and reliability, as defined 
by the GRI Standards. The structure and content 
of this Sustainability Report reflects the relevant 
GRI Standards 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 2023.

ESG Strategy

Globaltrans’ sustainability strategy is based on a set 
of key environmental, social and governance (“ESG”) 
priorities that serve as the guiding principles for all 
its operations and decisions. They are deeply 
embedded in the Group’s culture and values, 
shaping its actions and driving its impact on society 
and the environment. These ESG priorities include:
•  delivering business efficiency and best-in-class 

services;

•  creating long-term value and serving the needs 

of a vast group of stakeholders;

•  keeping our employees safe, engaged, motivated 

and empowered;

•  minimising our environmental footprint 

and promoting sustainability;

•  making positive contributions to the communities 

where we operate.

Globaltrans identifies its material 
sustainability issues through a materiality 
analysis. Materiality plays a significant 
role in the management of our sustainable 
development, making it possible to identify 
the Group’s key ESG issues.

In 2023, we conducted a double 
materiality assessment to identify 
and prioritise our sustainability topics, 
and applied the principles of double 
materiality from a business and social 
impact perspective. The most important 
sustainability topics were employee safety, 
economic performance, business ethics 
and compliance as well as the minimisation 
of environmental footprint. While these 
topics have helped us to determine our 
strategic priorities, they do not limit the scope 
of our ESG efforts. We intend to repeat this 
assessment periodically and collect feedback 
from our stakeholders on a regular basis.

Materiality matrix

How it works:

Step 1

Identification 
of material 
topics

We identify 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 seek input from a range 
of stakeholders (employees, shareholders, 
investors, clients, regulators and other 
authorities) on what matters to them.

Step 3

Preparation 
of materiality 
matrix

We develop a materiality matrix 
to identify those topics that are deemed 
most important to the Group’s system 
of sustainability reporting.

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Important

Materiality for business

Extremely important

Economic impact
1. Economic performance
2. Socioeconomic development of regions
3. Business ethics, risk management and 
anti-corruption
4. Customer satisfaction

Environmental impact
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

Social impact
9. Employee education and development
10. Employee motivation
11. Diversity and equal opportunity
12. Occupational health and safety

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Sustainability

Highlights of 2023

ESG Executive Summary

Overall staff turnover improved to

16%

(2022: 19%)

2%

year-on-year 
decrease in the Group’s total emissions 
(Scope 1 and Scope 2)

52,184

total training hours 
recorded across the Group companies

Despite stringent safety regime Loss Time Injury 
Frequency Rate1 (LTIFR) increased to

0.90

First-time disclosure of waste 
management data

Gender pay gap at the non-managerial 
level stood at 1%, reflecting higher 
proportion of male employees

Ongoing analysis of climate-related risks 
and opportunities

Continued external recognition through 
various ESG rankings

1  LTIFR is the number of lost time injuries multiplied by 1,000,000, divided by the employee total hours worked in the reporting period.

In 2023, despite the challenging global context, 
we remained committed to our purpose and values. 
We maintained our focus on operational efficiency 
while staying true to our principles of reliability, safety, 
ethics, and transparency. At Globaltrans, we recognise 
that sustainability is a journey that requires 
continual improvement. There is always more to do, 
and we constantly strive to improve our performance 
in order to drive positive change and foster long-term 
value creation.

We are delighted to share our 6th annual Sustainability 
Report, which showcases our ongoing commitment 
to ESG initiatives throughout the Group. The Report 
covers the progress we have made in those focus 
areas that are not only critical to our business but 
also of interest to our stakeholders. The reporting 
format aligns with GRI standards and TCFD 
recommendations, underlining our commitment 
to transparency and accountability.

We understand the importance of monitoring our 
carbon footprint, which is why we keep a close eye 
on our emissions. In 2023, we are pleased to report 
that the Group’s total emissions (Scope 1 and Scope 2) 
decreased for the second consecutive year, with a 2% 
reduction year on year.

The people who work at the Group play a crucial role 
in our success and sustainable growth, and that is why 
taking care of them is our top priority. The Group 
is committed to providing equal opportunities 
to its employees, supporting their professional 
development and ensuring a safe and positive working 
environment. We continue to invest in developing 
an active learning culture across the Group, which 
resulted in over 50,000 training hours being logged 
across the Group’s companies in 2023. We are also 
proud to report that our HR strategy has proved 
to be highly effective in reducing staff turnover 
at the Group, which stood at 16% in 2023 (2022: 19%).

We have observed a growing shift towards more 
stringent ESG disclosure expectations in recent times. 
In response, we are concentrating on strengthening 
our governance practices, improving our risk 
management framework and providing effective 
oversight of sustainability matters. And we are pleased 
with the way we have managed to instill a culture 
of accountability and responsibility across all 
levels of the Group, from the Board to the executive 
management and down to our operations.

As a responsible business, we remain committed 
to our environmental initiatives and have continued 
our efforts to limit our impact on the environment. 
As you may know, the Group has always emphasised 
the importance of efficient resource use. In 2022, 
we introduced the Green Office Initiative enabling 
us to collect, analyse and report data on our waste 
management practices annually. It is important 
to highlight that Globaltrans operates in a relatively 
“green” industry, and therefore, we do not generate 
significant amounts of waste. In fact, 99% of our waste 
is categorised as low-hazardous, and in circumstances 
where waste is unavoidable, we strive to reduce, 
recover, or reuse it.

On a separate note, we should point out that even 
though our Group companies adhere to a stringent 
health and safety regime, we did see a rise in our 
LTIFR in 2023, which increased from 0 (zero) 
to 0.90. The increase in our LTIFR was due to work-
related injuries sustained by three of the Group’s 
depot workers, but none of these involved fatalities 
or serious injury. It is worth noting that while 
disappointing, such occurrences are infrequent 
at Globaltrans, a business with a strong track 
record in Health and Safety. However, they do serve 
as a reminder that we must be even more proactive 
in anticipating future risks.

As part of its commitment to making a positive impact 
on society, the Group continued to support vulnerable 
groups in 2023 through its long-standing partnerships 
with various charitable organisations.

In 2023, Globaltrans was again recognised by various 
external ESG agencies for its sustainability practices, 
as reflected in various rankings. This recognition 
indicates that we are heading in the right direction 
and motivates us to keep pushing ahead. Moving 
forward, we will keep striving to bring about positive 
change and contribute to a better future.

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Our ESG journey

Key ESG activities

The timeline shows some key highlights and the progress we have made to date.

2018

•  Publication of our first Sustainability 

Report in accordance with GRI 
standards

•  First time reporting Scope 1 emissions
•  Privacy Policy introduced

2020

•  Introduction of various social policies such 
as Human Rights, Diversity and Inclusion, 
and Freedom of Association Policies
•  Environmental & Energy Policy adopted
•  Suppliers’ Code of Conduct introduced
•  Introduction of Group-wide LTIFR measure 

of employee health & safety

•  Website relaunched with a separate 

sustainability section

2021

•  ESG Committee formed
•  ESG Policy adopted
•  First time reporting Scope 2 emissions
•  Publication of first climate-related report 

in accordance with TCFD recommendations

•  Improvement in ESG ratings and ranking 
positions (Sustainalytics, Expert RA)

2022

•  Health and Safety Policy adopted with LTIFR 

maintained at 0.

•  Strengthening of HR practices. Employee 

engagement survey held

•  Green Office Initiative introduced
•  Further enhancement of climate-related 

disclosure: analysis of climate-related risks 
and opportunities

2023

•  First time reporting waste management 
data with 99% of waste categorised 
as low-hazardous

•  Further external recognition through various 

ESG rankings

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Corporate governance

Employees

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.

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.

KEY 
ESG 
ACTIVITIES

Environment

Communities

Employing more energy-
efficient practices, reducing 
carbon emissions and promoting 
recycling are the means by which 
we work to minimise the adverse 
impact of Globaltrans’ activities 
on the environment.

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.

→ 

 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. For further information, please see the Risk Management section of this Annual Report.

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Sustainability

Contributing to the Sustainable 
Development Goals

Stakeholder engagement

This year’s Sustainability Report also referenced 
the United Nations Sustainability Development 
Goals (“SDGs”) framework, as Globaltrans directly 
or indirectly contributes to some of the UN’s 17 
SDGs. These goals provide a roadmap for societies 
and businesses around the world to end poverty, 
protect the planet and achieve a better future 
for everyone by 2030.

We focus on prioritising 
the wellbeing of our people 
and cultivating a zero-harm culture

We aspire to increase female 
representation at all levels within 
the Group

We focus on providing our 
employees with equal employment 
opportunities

We invest in learning and skill 
development of our staff 
to provide a safe and inclusive work 
environment

We constantly search 
for opportunities to optimise the use 
of resources and minimise waste

We are committed to minimising our 
carbon footprint

Effective stakeholder engagement is crucial 
for sustainable success and long-term value 
creation. Globaltrans recognises the significance 
of collaboration and actively promotes regular 
and transparent stakeholder engagement. Open 
and effective dialogue with our stakeholders allows 
us to be kept informed of their needs, expectations 
and concerns and enables us to receive valuable 
insights and create better outcomes for the business. 
It also helps us to identify and manage material issues 
as well as potential risks and opportunities.

We actively engage with our stakeholders throughout 
the year using various channels and processes 
to ensure accountability for our activities 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 local communities. 
At the Group level, we regularly engage with investors, 
shareholders, credit rating agencies, financial 
institutions and the media. The type of engagement 
varies depending on the stakeholder group.

In 2023, despite the challenging macro environment, 
the Group’s stakeholder interactions have been 
maintained at the same level as previous years. 
We devoted considerable time and effort to address 
the concerns of our stakeholders and respond quickly 
to information requests. During the year, we maintained 
our use of digital communication for a large number 
of client engagements, investor meetings and events.

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.

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Stakeholder engagement mechanisms

Stakeholder group Mechanisms of stakeholder engagement

Outcomes in 2023

Employees

Intranet

• 
•  Labour-management consultations
•  Staff surveys
•  Corporate booklets, information boards
•  Regular, direct communication between 

managers, teams and individuals

•  Career development, training 
and performance reviews

Shareholders 
and investors

•  Open, effective and transparent 

communication
Investor Relations website

• 
•  Dedicated Investor Relations team
•  Annual/Extraordinary General Meetings
•  Corporate reporting, webcasts
•  Conference calls, investor events 

and roadshows

•  Social media channels

• 
Improvement in overall staff turnover
•  Over 50,000 training hours provided 

to support the employee development

•  Provision of social benefits and guarantees, 

• 
• 

including medical insurance
Improvement in employee benefit packages
Improved colleague awareness of health 
and safety along with other ESG issues

•  Diversity and equality issues in focus – number 
of employees with disabilities increased to 30
•  Enhancement of corporate culture by hosting 

various events

Information disclosure on a semi-annual basis

• 
•  Analyst and investor events and webcasts
•  Non-deal roadshows with institutional 

investors

•  Series of investor meetings with retail 

investors

•  Publication of Annual Report 

and 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

• 

•  Regular meetings, presentations, and formal 

consultations

•  Customer analytics, customer evaluation 

•  Maintenance of robust portfolio of Service 
Contracts contributing 61% of Net Revenue 
from Operation of Rolling Stock in 2023

Customers 
and business 
partners

system
Industry conferences and forums

• 
•  Customer satisfaction surveys
•  Transparent supply chain

•  Regular communication with regulators/

•  Participation in industry associations 

policy makers on industry issues
Industry and regulatory forums

• 

including the Council of Railway Operators 
and the Union of Transport Workers

Government, 
regulators 
and professional 
authorities

•  Corporate philanthropy and charitable 

•  Assistance to socioeconomic development 

Local communities

contributions

•  Community investment

of our communities

•  Regular contributions to aid charitable 
projects (In 2023 the Group supported 
the Life Line Charity Fund, Road of Mercy 
Charity foundation and other organisations)

Media

•  Communication with media representatives
•  Transparent disclosure through various 

channels

•  Distribution of news and information 

announcements

•  Access to results webcasts 

•  Dedicated media section on corporate 

with the management

website

•  Dedicated media relations contacts
•  Press conferences and exhibitions

•  Responding to media queries
• 

Interviews with senior management, 
ad hoc commentary on industry issues, 
and responding to journalists’ questions

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Sustainability

Ethics and behaviour

Compliance and integrity are critical assets 
for any business, as they shape how a company 
is perceived by stakeholders and can have a significant 
impact on its long-term success. Globaltrans 
recognises the importance of upholding our values 
and ethics and is committed to doing the right 
thing and operating our business responsibly 
and with the highest levels of integrity. By acting 
with integrity, we gain the confidence and trust 
of our clients, investors and other stakeholders 
and create a positive societal impact. Our commitment 
is demonstrated through the Group’s adherence 
to legal and regulatory requirements, continuous 
improvement of the governance framework 
and constant focus on risk management. Our 
values and principles are clearly communicated 
through a wide range of Group policies, which serve 
as the foundation of all our business activities. Each 
policy has been endorsed by the Board.

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 formal Group-wide policies 
that address human rights, freedom of association, 
data protection, diversity and inclusion, and supplier 
conduct. These policies 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 policy 
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.

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 bargaining1 
This is enshrined in our Freedom of Association 
Policy, adopted in 2020, which reflects the Group’s 
commitment to respecting employees’ choices 
and maintaining a regular and constructive dialogue 
with them and their designated representatives.

Globaltrans has a zero-tolerance approach to bribery 
and corruption in all its forms. While this is detailed 
in our Anti-fraud Policy, we have always endeavoured 

to act ethically, professionally, fairly and with integrity 
in all our business activities and relationships. 
We are very clear on the standards of conduct 
that all employees must adhere to, and we provide 
guidance on how to avoid and recognise unacceptable 
behaviour. Our approach is consistent with all 
applicable regulations and we have established rules 
and procedures to deal with any alleged violations. 
We ensure that each employee understands 
the types of violations that can occur within their area 
of responsibility and closely monitor for any signs 
of potential non-compliance.

To support this, the Group maintains a Whistleblowing 
Policy which encourages the investigation 
and reporting of improper activities, including non-
compliance with our Code of Ethics and Conduct, 
and helps fosters a culture based on honesty 
and good behaviour. We encourage 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 2023, 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.

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

Complying 
with required rules 
to create a safe 
and healthy 
workplace

1 

In 2023, there were no employees covered by collective bargaining agreements.

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Sustainability

Employees

1,802

Total headcount

29%

Share of women in the workforce

52,184

Total training hours

16%

Employee turnover rate

1%

Gender pay gap (GPG) 
at non-managerial level

ANNUAL REPORT 2023

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75

It is our people that play the greatest role 
in moving us forward. Our progress primarily 
relies on the contribution of our people. Their 
skills, knowledge and dedication are fundamental 
to our long-term success and sustainable growth. 
As a responsible employer, we are committed 
to prioritising the interests of our employees 
and taking good care of them through solid human 
resources practices. This people-centred approach 
is in line with our culture and the fundamental 
values of the commitments, policies, and initiatives 
of the Group. To retain the best professionals 
in our industry, Globaltrans must be a workplace 
where people choose to join and stay. Hence, 
we are dedicated to establishing the right conditions 
in which employees can work effectively and advance 
their careers. We also strive to maintain a positive, 
inclusive, and inspiring work environment in which 
everyone feels valued, respected, and supported.

Globaltrans has always valued its employees 
as individuals. We embrace diversity and inclusivity, 
recognising that each person brings unique 
perspectives and strengths to our team. We strive 
to ensure that all our employees have equal 
opportunities in their daily work. 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’ 
wellbeing and safety and we are fully committed 
to fostering a culture of health and safety at both 
the individual and group levels. In recent years, 
we have made a stronger commitment to addressing 
health and safety issues and have developed robust 
policies and strategies to achieve this.

To maintain a positive and healthy work environment, 
clear communication, regular performance reviews, 
employee engagement surveys, and recognition 
programmes are essential. These initiatives help 
foster strong relationships between employees 
and employers, contributing to a positive work 
culture.

Our Company is committed to managing people 
issues effectively through a robust HR strategy 
and policies that define our philosophy and values. 
These policies cover areas such as 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. Should we become aware 
of any suspected violations or issues, we take 
immediate action to investigate and address them.

In 2023, we continued to improve our HR 
management procedures and activities at both 
the Group and subsidiary levels.

  Workforce size and mix

In 2023, our average employee headcount decreased 
1% year on year to 1,771 employees (2022: 1,781). 
Overall headcount, as at the year end, increased 2% 
compared to 2022 to 1,802 employees1 (2022: 1,768). 
BaltTransServis (“BTS”) continued to be the largest 
employer within the Group as a result 
of the continuing shift to employing in-house 
locomotive crews. Our workforce is predominantly 
male, with 71% male employees and 29% female 
employees. We have a young talent pool, with 64% 
of our employees aged between 30 and 50 years. 
Almost all our employees (99%) hold regular, full-
time positions.

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as at the end of 2023, while the average headcount is calculated by summing up the number of employees on the list in each month 
of the reporting period and dividing this sum by the number of months.

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Sustainability

Headcount by Group subsidiaries 
in 2023 and 2022, at year-end

Headcount by gender in 2023, 
at year-end

BaltTransServis (incl. its subsidiaries)

29%

Women

71%

Men

2023

2022

New Forwarding Company

2023

2022

Ural Wagonrepair Company

2023

2022

GTI Management

2023

2022

Other subsidiaries

2023

2022

11

869

826

530

533

346

326

46

47

36

Headcount by age in 2023, 
at year-end

25%

>50 years

11%

<30 years

64%

30-50

Temporary contract in 2023, 
at year-end

Permanent contract in 2023, 
at year-end, %

27%

Women

73%

Men

40

29

Part time

Full time

Women

Men

Source: Globaltrans.

60

71

Source: Globaltrans.

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   Diversity

We strongly believe that embracing diversity 
and inclusion within a company contributes to better 
business performance, decision-making processes 
and outcomes. At Globaltrans, we have always 
considered diversity as our strength and a competitive 
advantage and we strive to integrate it into our corporate 
culture and business strategy. Furthermore, prioritising 
diverse and unique perspectives, backgrounds 
and experiences translates into higher levels 
of employee satisfaction, retention, and performance. 
As a result, we can create a better work environment. 
Therefore, diversity and inclusion issues 
are an important focus area for the Group’s HR function.

At Globaltrans, we are committed to creating 
an inclusive work culture where everyone is treated fairly 
and with respect, regardless of their gender, nationality, 
religion, sexual orientation, or physical ability. We value 
and celebrate our employees’ individuality recognising 
their unique talents, contributions, and performance. 
Our commitment to equal opportunities and rights for all 
is at the core of our Company’s philosophy.

We strive to eliminate all forms of discrimination 
by offering equitable employment to all our employees. 
The Group’s approach to diversity issues is set 
out in the Diversity and Inclusion Policy adopted 
in 2020 and exists at all levels of the Group, including 
the Board of Directors and all subcommittees 
of the Board. The Diversity and Inclusion Policy covers 
all forms of diversity and inclusion, including without 
limitation aspects such as age, gender, education, 
professional background, ethnicity, sexual orientation, 
disability and socio-economic background. In line 
with the best practice and the Group’s commitment 
to diversity, the Board does take into account DE&I 
aspects when making new Board appointments 
and considering the composition of the Board.

During the reporting period no incidence 
of discrimination was reported.

Globaltrans is committed to upholding the principles 
of diversity, equal opportunities and anti-discrimination 
in all of our activities. This commitment applies 
to recruitment, employee retention, promotions, 
compensation and benefits, career development 
and training, working conditions, and Board 
appointments.

The Group is actively working to promote greater 
fairness and equality within the organisation 
by ensuring equal compensation opportunities for both 
men and women. By conducting a comprehensive 
analysis and publishing our gender pay gap data1, 
we aim to increase transparency and understanding 
of the challenges and opportunities for achieving gender 
equality in our workforce.

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 2023, the average gender pay gap in our 
non-managerial workforce was 1%, indicating that 
the average hourly wage of male employees is higher 
than that of female employees. This gap reflects the fact 
that there are proportionally more men at the non-
managerial level. Prior to that, for the previous three 
years, the Group has had a gender pay gap in favour 
of women.

We will continue to work on closing our gender 
pay gap and increasing the female representation 
in the Company.

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1  The gender pay gap at non-managerial level is the difference between the average hourly earnings of a company’s male and female 
employees who are below management level. Calculating the mean gender pay gap involves adding the hourly rates for all male 
employees and then for all female employees in two groups and then dividing these totals by the number of male or female employees 
in each list. Then one needs to subtract the female hourly rate from the male hourly rate, divide the total by the male hourly rate, and 
multiply the figure by 100. This will give a percentage difference in pay.

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Sustainability

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 has 
been an industry where women are under-
represented. By concentrating on attracting more 
women into the workforce, we are progressively 
and successfully addressing the gender imbalance 
within our Group. As at year-end 2023, women 
comprised 29% of our workforce. At the Board level, 
women comprised 14% of the Board of Directors (two 
Board members).

Our second priority for managing diversity is to ensure 
the inclusion of employees with disabilities. 
We believe it is important not only to hire people 
with disabilities but also create an environment 
where they can easily work and build successful 
careers, regardless of any disabilities they may have. 

There are currently 30 employees with disabilities 
(1.7% of the total workforce) whose daily 
contributions are helping the Group meet its business 
goals and achieve success.

Mean (average) gender pay gap, % 
at non-managerial level

1

-1

-3

2023

2022

2021

2020

-5

Source: Globaltrans.

Diversity matrix in 2023 (at year-end) – Gender

Number of Board members

Number in Executive management

2 (14%)

Women

12 (86%)

Men

1 (11%)

Women

8 (89%)

Men

Number of senior positions on the Board 
(Senior Independent Directors and Chair)

0 

Women

2

Men

Diversity matrix in 2023 (at year-end) – Ethnicity

Number 
of Board 
members

Percentage 
of Board 
members

Number of senior 
positions on the Board 
(Senior Independent 
Directors and Chair)

Number 
in Executive 
management

Percentage 
of Executive 
management

White British or other White 
(including minority-white 
groups)

Mixed / Multiple Ethnic 
Groups

Asian / Asian British

Black / African / Caribbean / 
Black British

Other ethnic group, 
including Arab

Not specified / prefer not 
to say

14

100

-

-

-

-

-

-

-

-

-

-

2

-

-

-

-

-

9

-

-

-

-

-

100

-

-

-

-

-

All the data in the tables was gathered voluntarily 
via self-reporting through questionnaires given 
to the relevant participants based on the criteria 
set out in the above tables. Although diversity, 
equality, and inclusion are important principles held 
throughout the Group, in 2023 we did not manage 
to meet the Board diversity targets in having at least 
40% of the Board comprised of women, a director 
from a minority ethnic background or a woman 
in the role of chair, chief executive, senior 
independent director or chief financial officer. 

In this regard, Globaltrans recognises that freight 
rail transportation industry historically has been 
male dominated and that in the regions where 
we operate and work, there are more limited 
opportunities for inclusion of numerous ethnic 
groups. Nevertheless, we consider that positive 
progress has been made to date in achieving 
greater diversity at all levels of the Group (including 
the Board) and we will continue to address these 
issues in the future and seek further opportunities 
to improve our diversity and achieve these targets.

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81

Sustainability

 Training and education

Continuous learning and professional development 
are as essential to the personal growth of our 
employees as they are to our business’ sustained 
success and competitiveness. A learning culture 
is an integral part of our people strategy as it enables 
our team members to better tackle complex problems, 
be more adaptive to change and improve their skills. 
Thus, the Group actively invests in the progress 
and skill enhancement of its employees by providing 
them with appropriate opportunities and experiences 
that are tailored to meet their professional needs 
and career goals.

1

To help our people enhance their knowledge 
and performance, 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. By offering 
an array of training and development tools, 
we keep our employees engaged in their jobs and 
with the Company.

In 2023, we provided a total of 52,184 hours of training 
for our employees, which is lower than the previous 
year’s figure (2022: 78,106). It was due to a decline 
in the amount of mandatory safety training required 
in the year. The learning and development activities 
focused on such areas as health and safety, 
accounting, business administration, environmental 
safety, information technology, financial management, 
and marketing. We also worked on the development 
of technical and soft skills. In 2023, the majority 
of learning activities remained digital, with 82% of all 
training and development happening online.

Number of employees participating 
in training

2023

2022

781

1,024

Average training hours per employee 
(participating in training)

2023

2022

67

76

Distribution of training among 
employees by employee categories 
in 2023

87%

Employees

13%

Managers

Main types of training formats in 2023

Average training hours by gender

18%

On-site 
learning

82%

Distance 
learning

68

78

65

71

2023

2022

Men

Women

Source: Globaltrans.

Source: Globaltrans.

  Motivation

Passionate, engaged and motivated employees 
are an important part of what makes any business 
successful and efficient. As an employer, we strive 
to be an employer of choice, by demonstrating 
that we care about our people’s quality of life 
and are committed to fostering a culture 
of appreciation. At Globaltrans, we are constantly 
improving our human resources practices 
to try to provide the best possible employee 
experience. Our goal is to inspire and motivate 
our people by providing them with a safe, creative 
and collaborative workplace. We keep in close 
touch with our colleagues, we listen to their 
needs and we work together to adapt to changing 
circumstances. We provide ongoing feedback to help 
them monitor their performance and achievements.

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, offer attractive compensation 
and benefits, and provide 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 families;
•  Reimbursement of home-to-work transportation 

costs and fuel expenses;

•  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.

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ANNUAL REPORT 2023

Sustainability Report

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83

Sustainability

Retaining our people is one of our top priorities. 
We have consistently tracked staff turnover 
historically, as it provides valuable insights into areas 
for improvement and helps us better understand 
our employees’ needs and engagement levels. 
In 2023, through our sustainable HR practices we have 
managed to improve our overall employee turnover 
rate to 16% (13% for men and 3% for women) (2022: 
19%). This is a good achievement that reflects well 
on our efforts to create a positive and supportive work 
environment for all our employees.

Employee Turnover Rate based 
on gender and age, 2022–2023, %

16

19

13

3

14

4

9

4

10

5

Total

2023

2022

Gender

2023

2022

Age

2023

2022

Men

Women

3

3

< 30 years

30-50 years

> 50 years

Source: Globaltrans.

  Corporate culture and internal 

communications

We place a high priority on our corporate culture 
at Globaltrans. We recognise that our people 
dedicate a substantial portion of their time to their 
job responsibilities. As such, we are committed 
to cultivating an environment that prioritises the well-
being and satisfaction of our employees. Our Company’s 
culture is built on respect, openness, and collaboration. 
We strive to uphold these values and create a thriving 
workplace that benefits both our employees and our 
organisation as a whole.

We listen to every employee’s voice at Globaltrans 
because we believe that it is a powerful way to help our 
business grow and progress. That is why we prioritise, 
promote and practise open communication with our 
people. All employees are encouraged to raise any issues 
and concerns and provide 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. Some of our Group subsidiaries also have 
employee intranet and helplines available.

Every two years we conduct a staff engagement survey 
to evaluate the effectiveness of our HR practices 
and policies, and to improve our approach to key issues 
like compensation, professional development, and staff 
communications. Our first staff engagement survey 
was conducted in 2022 and demonstrated an impressive 
88% engagement score. Through this survey, we learned 
that our people positively evaluate their experience 
working at Globaltrans, support the Company’s 
objectives and have confidence in the Group’s future 
success. The next survey will be conducted in 2024.

To enhance our culture and boost employee engagement, 
we regularly host sports, cultural and recreational 
events for our employees and their families. In 2023, 
our employees actively participated in the tree planting 
trips and other ESG initiatives aimed at minimising our 
environmental footprint.

We will continue to look for ways to improve our 
engagement mechanisms and seek feedback 
from employees more frequently to keep our 
people engaged.

  Health and safety

Ensuring that our people are safe and well is our 
highest priority and responsibility as an employer. 
It is also our duty to create a work environment 
that is free from incidents and safety hazards. 
The Group is committed to maintaining high standards 
of occupational safety and to complying with all health 
and safety regulations and legislation. Solid health 
and safety management is the basis of our culture.

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 continuously reviews its health and safety 
procedures, practices and policies to ensure that all levels 
of the Group conform to the rules. Our Group companies 
are implementing the following policies:
•  Fire-safety instructions;
•  Instruction for carrying out health and safety briefings;
•  Instruction on pre-medical first aid;
•  Occupational safety regulations;
•  Workplace safety guidance for PC users.

In response to the challenges brought about 
by the COVID-19 pandemic and a tragic event in 2020 that 
resulted in the loss of a colleague, the Group decided 
to re-evaluate and enhance its safety protocols 
and practices to achieve a higher standard of health 
and safety. Our primary goal was to implement 
stringent measures that would allow us to mitigate all 
potential risks. In 2022, the Group adopted its Health 
and Safety Policy that outlines our aim of achieving 
zero harm in occupational health and safety 
by eliminating any unsafe or unacceptable behaviour 
in the workplace. It also stresses the Group’s dedication 
to cultivating a culture of zero harm and increasing 
risks awareness among employees through ongoing 
improvements to workplace safety programmes.

Safety is always a team effort. We encourage our 
employees to adopt good health and safety practices 
and to make the right decisions about their everyday 
wellbeing. As a responsible employer, we provide 
appropriate information and training opportunities 
to all employees to prevent future workplace incidents. 
We ensure that all employees undergo general safety 
awareness and training. Additionally, we provide job-
specific training applicable to the area of work. Over 
the last few years, the number of training sessions 
on safety has increased significantly.

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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 we continue to meet high standards. 
In 2023, the number of workplace safety audits decreased 
to 172 visits (2022: 526 visits) due to the fact that 
the results of such audits are usually valid for the 5-year 
period, which is in line with the local labour legislation 
of the Group’s subsidiaries.

Most of our employees work in a low-risk environment. 
However, in recent years, some of our subsidiaries have 
hired more technical staff who are at higher risk of work-
related incidents than office workers. Unfortunately, 
in 2023, despite our stringent safety measures, 
three minor work-related incidents (involving minor 
and moderate injuries) occurred in two of the Group 
subsidiaries. These incidents resulted in an increase 
in our Lost Time Injury Frequency Rate (“LTIFR”), 
an indicator used to assess safety performance within 
the organisation. In 2023, the Group’s LTIFR stood at 0.90. 
It is important to note that all the incidents were assessed 
and thoroughly investigated on the days they occurred. 
We were able to determine the causes and develop 
remedial measures. Moving forward, we will continue 
to be proactive and work to restore our positive safety 
performance in future periods by learning from past 
mistakes, increasing the number of safety training 
sessions and implementing an incident prevention 
programme. There were no incidents that led to a fatal 
outcome in the reporting period.

Loss Time Injury Frequency Rate 
(LTIFR), 2020–2023

2023

2022

2021

2020

0

0

0.90

0.66

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Sustainability Report

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85

Sustainability

Communities

Rail transportation is essential in today’s 
society as it promotes economic growth, 
helps lower greenhouse gas emissions 
and generates employment opportunities. 
Globaltrans understands its socio-
economic and environmental impact, 
and is committed to being a responsible 
corporate citizen that makes a meaningful 
impact on society. We recognise that our 
business can contribute to a sustainable 
future for our Company, our employees 
and our planet by investing in social 
interests, minimising its carbon 
footprint and acting with integrity 
and transparency.

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 influence on society 
by creating shared value for all our 
stakeholders through our continued 
commitment to sustainability.

Our social commitments are embedded 
in our culture, business operations, client 
relationships, community involvement 
and charitable efforts.

Our business operations add value 
to society in various ways, including 
through direct and indirect employment, 
tax payments social activities, 
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. By maintaining close 
links with our local communities, 
we can determine how best to provide 
the support – whether it be skills, time 
or financial assistance – that will 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. 
Additionally, 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.

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

Tax payments4

Economic value retained

Source: Globaltrans.

1 

Information in the table 
is derived from 
the Consolidated 
Management Report and 
Consolidated Financial 
Statements for the year ended 
31 December 2023.

2  Direct economic value 
generated includes 
“Revenue”.

3  Payments to providers 

of capital include “interest 
paid”, “dividends paid 
to owners of the Company” 
and “dividends paid to non-
controlling interests 
in subsidiaries”.

4  Payments 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.

2023

RUB mln

104,748

74,853

54,518

1,035

8,174

2,846

8,281

29,895

We want our employees and those 
we work with to feel valued 
and supported. We want them to know 
we provide a safe, fair and respectful 
work environment where diversity 
is valued, and where everyone can 
prosper, and contribute to the success 
of their communities and Globaltrans. 
By providing childcare support, health 
insurance, and offering part-time 
work options, 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 align 
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.

In 2023, we continued to support our 
long-standing partner, the Life Line 
Fund, which provides vital assistance 
to children with life-threatening 
conditions. Additionally, the Group 
started working with the Road of Mercy 
Charity foundation, which helps 
children with autism.

We also encourage our 
employees to take an active role 
in the communities where they work, 
for example by participating in local 
volunteering activities. In 2023, 
Globaltrans further contributed 
to society by continuing its small 
environmental project aimed 
at minimising our carbon footprint 
by planting trees. We believe that this 
initiative benefits not only the local 
ecology, but also helps restore 
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.

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ANNUAL REPORT 2023

Sustainability Report

86

87

Sustainability

Environment

No recorded violations 
of environmental legislation

First-time reporting waste 
management data

-2%

decrease in total 
GHG emissions

1.6

carbon intensity

Climate change is one of the greatest challenges 
of our time. Being a responsible environmental 
citizen has become an essential obligation 
for businesses all around the world. The freight 
rail industry plays a crucial role in contributing 
to a low carbon economy by providing a sustainable 
and environmentally friendly mode of transportation. 
Rail is known for its efficiency, reliability, and reduced 
greenhouse gas emissions compared to other modes 
of transport on land.

At Globaltrans, we have always taken our global 
environmental responsibilities very seriously. 
We recognise that our operations can impact 
the environment, particularly in the form of greenhouse 
gas emissions. As a responsible business, 
we are committed to minimising the environmental 

impact of our activities, and protecting 
the environment for the communities we serve, our 
stakeholders and society as a whole. To this end, 
we focus not just on controlling emissions but also 
on energy efficiency, waste recycling, and water 
management.

The Group strictly adheres to the applicable 
environmental laws and industry regulations of all 
the markets where we operate. We continually seek 
to improve our environmental performance to stay 
compliant and reduce our environmental footprint.

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. We are constantly exploring ways to improve our 
subsidiaries’ environmental management and reporting 
systems, so that we can better monitor, measure 
and assess the environmental aspects of our activities.

To achieve our environmental objectives, we need 
the support of all our employees and suppliers. 
Therefore, we are actively promoting environmental 
awareness in the workplace and improving 
transparency for all our stakeholders. To this end, 
we disclose the Group’s environmental performance 
on a number of metrics consistent with external 
reporting frameworks like the Global Reporting 
Initiative (GRI). We include annual data and information 
on monitoring and progress in our integrated 
sustainability reports, which are publicly available 
on the Group’s website.

Our 2023 results are set out below. There were no 
recorded violations of environmental legislation 
or regulations during the reporting period.

  Energy usage

Energy consumption is a significant environmental 
concern for Globaltrans. The Group is committed 
to using resources prudently and exploring 
opportunities for further optimisation of its energy 
consumption. We believe that energy efficiency is one 
of the most cost-effective ways to combat climate 
change.

By managing our energy consumption efficiently, 
we are in a position to reduce our greenhouse 
gas (“GHG”) emissions. 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 powering computers 
and communications devices.

In 2023, the Group was successful in reducing 
its overall energy consumption due to a number 
of factors. There was a 1% year-on-year decrease 
in electricity usage, primarily attributable 
to the implementation of the Green Office Initiative 
and efficient energy-saving measures in the offices 
of the Group companies. Additionally, diesel 
consumption was down 2% year on year, partially 
attributable to the changes in logistics. A decrease 
in the use of the Group’s vehicles contributed to a 13% 
year-on-year decrease in petrol 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.

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resources by type, 2022–2023

Electricity (KWh)

2023

2022

Diesel (litres)

2023

2022

Petroleum (litres)

2023

2022

Source: Globaltrans.

4,369,124

4,426,367

45,184,013

46,325,429

-1%

-2%

105,429

120,938

-13%

Petrol and diesel consumption per 
employee, 2022–2023

Petrol

2023

2022

Diesel

2023

2022

Source: Globaltrans.

60

68

25,513

26,011

-12%

-2%

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  Use of water

  Green Office Initiative

  Waste management

Water is an essential natural resource for society 
and even though it is not an area where Globaltrans 
can make a meaningful impact, we are determined 
to use water responsibly as part of our commitment 
to environmental protection and resource conservation. 
All of our Group companies have managerial oversight 
on environmental matters that involve water use in our 
daily operations.

Since 2018, we have been steadily improving 
the monitoring, collection and processing of water 
usage data across the Group’s subsidiaries. In 2020, 
we published our first annual water consumption 
results. In 2023, our water consumption increased 
6% year on year to 17,603 m3 (2022: 16,654 m3)1 
due to the resumption of office-working for many 
employees. At Globaltrans, we are continually looking 
for ways to improve our water use and adopt practices 
that help our employees manage and use water more 
efficiently.

  Paper Recycling

Paper has a significant environmental impact, 
due to the energy and raw materials required 
for its production, use and disposal. Therefore, 
we actively promote the importance of a green work 
environment and encourage our employees to reduce 
the frequency and volume of printing. In recent 
years, our focus has been on digitising business 
processes and employing electronic documentation. 
The COVID-19 pandemic has served to accelerate 
these trends.

Besides minimising our environmental footprint through 
various different corporate sustainability initiatives, 
Globaltrans also takes proactive measures in daily 
office life to improve the efficiency of our processes 
and day-to-day activities. In 2022, we introduced our 
Green Office Initiative, which was designed to promote 
the adoption of the green office best practices across 
the Group and educate our staff to be more climate-
aware. We believe our staff have a contribution to make 
in helping us transition to a greener world. We also 
strongly believe that our focus on environmental best 
practice is not only the right thing to do, but it can also 
deliver cost savings and help build strong stakeholder 
relationships.

Our goal is to improve the environmental efficiency 
of our offices by reducing our energy and natural 
resource consumption and waste generation. 
To save energy, we have begun replacing mercury-
based lighting with energy-efficient LED lighting 
and have a plan to enhance the efficiency of our 
facilities’ heating and cooling systems. Our waste 
management measures include using paperless 
communication methods, reducing the use of plastic, 
and opting for environmentally friendly waste 
collection and recycling. Wherever possible, our focus 
is on reducing, reusing and recycling.

As part of our Green Office Initiative, we encourage 
employees to participate and take responsibility for their 
day-to-day actions, as these will significantly influence 
the success of the project.

In 2023, thanks to the effective implementation 
of the Green Office Initiative, the Group managed to lower 
its paper consumption per employee by 18% year on year.

Paper consumption, kg per 
employee, 2022–2023

2023

2022

Source: Globaltrans.

5

6

-18%

1  This excludes data from Spacecom (Globaltrans sold its shareholding in Spacecom in February 2023) and BTS (except for data from the BTS 

railcar repair depot in Ivanovo which is included).

ANNUAL REPORT 2023

Sustainability Report

88

89

As stated in our Environmental and Energy Policy 
and Green Office Initiative, we strive to use resources 
and materials efficiently and to increase their 
reuse and recycling. We believe this approach 
not only benefits the environment but also 
encourages a sense of responsibility among our 
employees. Over the last few years, we have been 
working on collecting and harmonising waste 
management data from across all Group companies. 
As a result, in 2023 we were able to finally report 
on this important issue.

In 2023, the Group’s generated 14,003 tonnes of waste. 
The largest portion of the waste generated in daily 
operations is classed as low-hazard waste (class IV 
and class V). Globaltrans is committed to managing 
these effectively to prevent and minimise adverse 
environmental impacts. Most of our waste is neutralised, 
disposed of and, where possible, recycled. These 
processes are handled by specialised waste processing 
professionals in compliance with environmental 
safety standards and legislation. We will continue 
to investigate ways to improve our waste management 
system and lower our impact on the environment.

Total waste volume, 2023

Waste type

Hazard class I 
(extremely 
dangerous)

Hazard class II 
(extremely 
dangerous)

Hazard class III 
(moderately 
hazardous)

Hazard class IV 
(low hazard)

Mercury lamps, mercury-quartz, fluorescent 
lamps

Single galvanic cells (batteries)

Waste mineral motor oils, 
waste lubricating oil

Office and household waste, waste 
(sediment) from cleaning operations 
containing petroleum, used tires, cartridges, 
computer and household appliances

Amount of generated 
and transferred waste, tonnes

Treatment Method

0.13

0.02

185

420

Neutralisation / 
Disposal

Neutralisation / 
Disposal

Neutralisation / 
Disposal/ Burial

Neutralisation / 
Disposal/ Burial

Hazard class V 
(practically 
non-hazardous)

Scrap metals and waste of steel products, 
ferrous metal shavings, paper and cardboard 
waste

Total

Disposal/ Burial/ 
Processing/ Burial 
at a special landfill

13,398

14,003

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ANNUAL REPORT 2023

Sustainability Report

90

91

Sustainability

  Greenhouse gas management

We fully acknowledge the importance of climate 
change mitigation. Rail transportation is widely 
considered as the most efficient, safe, 
and environmentally-friendly modes of moving 
cargoes over land. Our industry is among the greenest 
and least-polluting from an energy and emissions 
perspective. Being the lowest contributor to overall 
transport carbon emissions, rail can play a significant 
role in addressing the global challenge of climate 
change.

Nevertheless, we recognise that 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, specifically reducing 
the number of empty railcars transported as part 
of the Group’s logistics movements. Not only does 
this help us achieve solid financial and business 
results, but it also helps us improve our environmental 
performance. For many years, we have led 

the industry in operational efficiency, consistently 
delivering one of the sector’s lowest gondola Empty 
Run Ratios, which speaks to our commitment. 
In 2023, the Group continued its efforts to improve 
its operational efficiency and achieved a significant 
improvement in its Empty Run Ratio for gondola cars, 
reaching a more than 10-year low of 36%.

In the freight rail industry, GHG emissions 
are directly linked to fuel consumption and, as such, 
locomotives are the primary source of emissions. 
Most locomotive traction is handled by the state-
owned rail infrastructure provider. Globaltrans runs 
one of region’s largest privately-owned locomotive 
fleets, providing a specialised service for its clients, 
primarily in the liquids segment. Consequently, we only 
measure, report and record emissions (Scope 1) that 
are directly attributable to our fleet of 66 mainline 
locomotives. Operating a modern and well-maintained 
fleet also helps reduce our environmental footprint. 
Of our locomotive fleet, 15% are fuel-efficient 
and cleaner diesel locomotives.

Since 2018, we have made substantial progress 
in measuring, managing and disclosing direct 
GHG emissions information in our operations, and this 
process is ongoing. In 2023, our direct GHG emissions 
decreased 2% to 136,865 tonnes of CO2 equivalent1 
partially due to the changes in logistics (2022: 
140,352 tonnes of CO2 equivalent).

Understanding and reducing our carbon footprint 
is a significant step towards environmental 
sustainability. In recent years, we are constantly 
working to improve the quality and consistency 
of our data so that we learn more about 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 2023, the Group’s 
indirect emissions were down 1% year on year 
and totalled 1,540 tonnes of CO2 equivalent 
(2022: 1,560 tonnes of CO2 equivalent). In total, 
the Group was responsible for 138,405 tonnes 
of CO2 equivalent, 2% less than in 2022.

In 2023, the Group registered its lowest total 
GHG emissions since 2018. Furthermore, our carbon 
intensity indicator further declined to 1.6. 

We believe that this is proof that our approach 
is working and we are moving in the right direction 
towards minimising our carbon footprint.

As a part of the Group’s environmental response, 
BTS, which operates the bulk of our locomotive fleet, 
continued to invest in and develop its small tree-
planting project in 2023. This initiative helps to offset 
part of our carbon footprint and make a positive 
impact on our communities and biodiversity.

Going forward, to ensure the business’s resiliency 
against climate risks and their impact, we must 
continue to increase our energy efficiency, minimise 
our environmental impact and enhance transparency 
for both our internal and external shareholders.

GHG Emissions, 2018–2023

Direct GHG emissions (Scope 1, tonnes 
of CO2 equivalent)

Indirect GHG emissions from purchased 
electricity (Scope 2, tonnes 
of CO2 equivalent)

2018

2019

2020

2021

2022

2023

166,129

161,299

138,198

153,8712

140,352

136,865

2,589

1,690

1,474

1,5513

1,560

1,540

Total GHG emissions (Scope 1 + Scope 2)

168,718

162,989

139,672

155,422

141,912

138,405

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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 was restated.

3  The data for Scope 2 emissions in 2021 was restated.

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Sustainability Report

92

93

Climate-related Financial 
Disclosure (TCFD)

The Group’s efforts to respond to climate change – implementing 
the recommendations of the TCFD

Governance

Globaltrans has long identified climate change 
as a material issue, and we incorporate the most 
relevant climate-related risks into 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. As disclosure 
of climate-related information is now mandatory, 
we 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 & targets.

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. In the future, 
we intend to cooperate with industry experts 
on a high-level quantitative scenario analysis that 
will provide 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

Strategy

Metrics 
and Targets

Governance
The organisation’s governance around 
climaterelated 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

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. In turn, the Board has delegated responsibility 
for the efficient implementation and maintenance 
of the risk management system to the Group’s CEO. 
The CEO is actively involved in all sustainability-
related matters, including climate change, 
and closely monitors the Group’s overall ecological 
performance. He receives updates from the Group’s 
subsidiaries on their performance and planned 
initiatives. This careful monitoring of the Group’s 
environmental activities allows the CEO to set 
the right tone and guide the development 
of Globaltrans’ sustainability strategy.

Management of climate-related issues

Responsibilities of the Board include:

•  Overseeing the management of climate-related 

issues, 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, risks 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.

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Sustainability Report

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95

Climate-related Financial Disclosure (TCFD)

Strategy

  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 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

Description

Natural disasters, severe weather events and extreme 
temperatures pose a material risk to rail infrastructure 
in the regions where the Group operates and, therefore, 
to the Group’s operations and rolling stock.

Delays, disruptions, derailments, infrastructure damage 
and other events may result in significant interruption 
to, or disruption of, the Group’s business operations 
and damage to its rolling stock, which may negatively 
affect the Group’s operations and performance. 
Moreover, disruptions to our clients’ operations may 
also impact demand for the Group’s services and affect 
its business and performance. Although the Group’s 
rolling stock is fully insured, replacing damaged rolling 
stock may take a considerable amount of time.

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.

Transition

Policy/regulation

improvements and technological advances in fuel 
efficiency. We believe that annual emissions testing 
will help us better prepare for any future changes 
to the regulatory environment.

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.

Market

Time horizon: medium to long-term

  Climate-related opportunities

Time horizon: medium to long-term

Description

Description

As a fuel-intensive industry, the rail freight sector 
is exposed to the risk of increased regulation related 
to carbon emissions and the use of fossil fuels (higher 
carbon prices) which may lead to:
•  Increased fuel and energy costs, as well as spare 
parts and rolling stock due higher prices for iron 
and steel;

•  Problems operating diesel locomotives if one 
is unable to address increased regulations;

•  Increases in the cost of cleaner, more fuel-efficient 

locomotives;

•  Higher costs related to the introduction of carbon 
taxes, 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 

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 a variety of bulk cargoes, 
and tank cars that just transport liquid cargoes, 
the Group reduces its dependence on any one cargo 
flow. It also means it can adjust quickly to changing 
market conditions.

Reputation

Time horizon: short to long-term

Description

Increased expectations among stakeholders of more 
aggressive environmental measures and climate 
change actions may lead to greater scrutiny 
from investors and other stakeholders. If this happens 
and the Group fails to meet these expectations and/
or it fails to mitigate changes in climate change 
regulations, it may lead to a drop in investment, rising 
funding costs and a potential loss of clients.

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 becomes ever more likely and demand 
for lower carbon transport continues to grow, we may 
face a potential increase in our business operations, 
improved 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 implement fuel-saving measures.

Reputation

Time horizon: short to long-term

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Sustainability Report

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97

Climate-related Financial Disclosure (TCFD)

Risk management

Metrics & Targets

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.

The resilience of Globaltrans’ strategy, taking 
into consideration different climate-related scenarios

As stated earlier, at this stage the Group is not yet 
prepared to provide detailed information on climate-
related scenario analysis and calculate the projected 
financial impact from climate change. Nevertheless, 
we believe that our strategy is designed to be resilient 
and that the 1.5–2 degree scenario would result 
in minimal business impact on the Company’s 
operations.

In the 2 degree scenario, we expect there would 
be an increase in carbon taxes and energy costs 
(which would adversely affect the Group’s financial 
position) as well as a shift of clients from other 
means of transportation (which would be beneficial 
for the Group’s revenue). We anticipate that under 
the 4 degree scenario, there could be more frequent 
natural disasters brought on by climate change, 
which could potentially cause damage to the Group’s 
assets and railway infrastructure. We also anticipate 
that there would be higher maintenance costs 
and a decline in revenue due to the potential 
disruption of the Group’s operations.

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 are 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 building up our expertise 
and enhancing the methodology and tools to better 
assess climate-related risks and opportunities. 
At some point Globaltrans intends to conduct climate 
scenario analyses in collaboration with industry 
experts 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 further information on our processes for identifying 
and assessing risks and opportunities, please see the Risk 
management section of this Annual Report.

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. These 
metrics are further detailed in earlier section of this 
Sustainability Report.

At this stage, Globaltrans is not yet ready to set time-
bound 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 gondola cars has improved significantly 
despite the challenging operational context 
and remains 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 is gradually expanding. We also aim to offset 
the Group’s environmental footprint through tree-
planting. In 2022, we also took steps to further 
increase environmental awareness among our 
employees and promote green policies in our day-
to-day office activities by introducing the Green 
Office Initiative in all Group companies. As a result, 
in 2023 we managed to quantify, harmonise 
and disclose our waste management data.

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.

Scope 1 GHG emissions, tonnes 
of CO2 equivalent

2023

2022

2021

136,865

140,352

153,871

Scope 2 GHG emissions, tonnes 
of CO2 equivalent

2023

2022

2021

1,540

1,560

1,551

Total GHG emissions (Scope 1 + 
Scope 2), tonnes of CO2 equivalent

2023

2022

2021

138,405

141,912

155,422

Carbon intensity1

2023

2022

2021

1.6

1.7

2.7

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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Governance

Financial Statements

98

99

Governance

During 2023, Globaltrans’ corporate affairs were 
governed by the memorandum and articles of 
association of the Company and the provisions of 
applicable Cyprus law. Although the Company was 
not subject to any mandatory corporate governance 
code in its home jurisdiction of Cyprus, nor required 
to observe the UK Corporate Governance Code 
(formerly the Combined Code), it has implemented 
various corporate governance measures and 
practices. Globaltrans’ Board of Directors has 
adopted and updated the Company’s Code of 
Corporate Governance (the “Code”), guaranteeing 
that the interests of all shareholders are given due 
consideration. The Code comprises the various 
policies in relation to corporate governance which 
have been adopted by the Company. 

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Board of Directors

Read more →

p. 114

Corporate Governance Report

Read more →

p. 125

Corporate Structure

Read more →

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Governance

100

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Board of Directors

Effective to 26 February 2024

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.

The composition of the Board of Directors presented 
below was approved by shareholders at the Annual 
General Meeting on 21 April 2023 and continued 
to perform its function until 26 February 2024, being 
the effective date of the Company’s re-domiciliation 
from Cyprus to the Abu Dhabi Global Market, when 
the new composition of the Board of Directors, which 
was approved by shareholders at the Extraordinary 
General Meeting held on 16 August 2023, took effect.

Sergey V. Maltsev

John Carroll Colley

Chairman of the Board, Executive Director

Senior Independent Non-executive Director

Appointed: April 2018, Chairman

Appointed: April 2013

Mr. Maltsev was instrumental in the development 
of the freight rail market and has worked in the industry 
for over 30 years. He co-founded Globaltrans and served 
as Chief Executive Officer from 2008 until 2015, as Chairman 
of the Board from 2018 to the beginning of 2024 and as Chief 
Strategy Officer from 2017 until the beginning of 2024. 
Mr. Maltsev was a founding member and Chairman of the non-
profit partnership “Council of Railway Operators”. He has 
a degree in railway engineering.

Committee Memberships: Audit Committee (Chairman), 
Nomination Committee (Chairman), Remuneration Committee 
(Chairman), ESG Committee

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.

Vasilis Hadjivassiliou

George Papaioannou

Independent Non-executive Director

Independent Non-executive Director

Appointed: September 2019

Appointed: April 2013

Committee Memberships: Audit Committee

Committee Memberships: Audit Committee, Nomination 
Committee, Remuneration Committee

Skills and experience: Mr. Hadjivassiliou 
was a partner in Assurance and Advisory services 
at PricewaterhouseCoopers (PwC), Cyprus, from 1990 until 
2018 when he retired. During this time, he held various 
leadership positions with PwC including as an elected 
member of the Executive Board, Head of the Limassol 
office as well as a number of other offices in Cyprus and 
was a leading figure in business development. He has 
extensive experience in auditing, International Financial 
Reporting Standards and business advisory services having 
advised major local and international groups including 
companies publicly listed on the London Stock Exchange 
as well as in Cyprus. Mr. Hadjivassiliou is a graduate 
of the University of Manchester and a Fellow of the Institute 
of Chartered Accountants of England and Wales.

Other appointments: Mr. Hadjivassiliou holds directorships 
in a number of 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.

Alexander Eliseev

Non-executive Director

Sergey Foliforov 

Non-executive Director

Appointed: March 2008

Appointed: June 2022

Skills and experience: Mr. Eliseev co-founded Globaltrans 
in 2004 and has played a leading role in introducing market-
based reforms to the freight rail transportation market. 
He has spent more than 20 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.

Skills and experience: Mr. Foliforov has served 
on the several Globaltrans’ subsidiary boards since 2018. 
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.

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ANNUAL REPORT 2023

Governance

102

103

Board of Directors
Effective to 26 February 2024

Andrey Gomon

Non-executive Director

Michael Thomaides

Non-executive Director

Marios Tofaros

Non-executive Director

Alexander Storozhev

Executive Director, Chief Procurement Officer

Appointed: From 2013 to 2016 and rejoined in April 2017

Appointed: April 2014

Appointed: April 2013

Appointed: April 2013

Skills and experience: Mr. Gomon has over 13 years 
of management experience in the railway industry. From 
2006 to 2012 he was CEO of Transoil, one of Russia’s largest 
rail transportation companies, having previously served 
as CFO between 2003 and 2006. He sits on the boards of two 
Globaltrans subsidiaries. Mr. Gomon studied economics 
at St. Petersburg State University and holds an MBA 
from INSEAD.

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.

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 sits 
on the boards of all Group subsidiaries. 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.

Elia Nicolaou 

Non-executive Director, Company Secretary, 
Secretary to the Board

Melina Pyrgou

Non-executive Director

Konstantin Shirokov

Sergey V. Tolmachev

Executive Director, Head of Internal Audit

Executive Director, Managing Director

Appointed: April 2013

Appointed: March 2008

Appointed: March 2008

Committee Memberships: ESG Committee (Chair)

Skills and experience: Ms. Nicolaou has extensive experience 
in commercial, corporate and funds law. She is currently 
the Managing Director of Amicorp (Cyprus) Ltd. Previously, 
she was head of the Corporate Legal department at Polakis 
Sarris LLC and also worked at C. Patsalides LLC. Ms. Nicolaou 
is a member of the Board of CIFA and WICCI, the Chair 
of Cyprus South East Asia Business Association, participates 
in various associations of the Cyprus Chamber of Commerce 
and sits on the boards of a number of 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.

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.

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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ANNUAL REPORT 2023

Governance

104

105

Board of Directors

Effective from 26 February 2024 to 4 April 2024

The composition of the Board of Directors presented 
below was approved by shareholders at the Extraordinary 
General Meeting held on 16 August 2023 and become 
effective on 26 February 2024 being the effective date 
of the Company’s re-domiciliation from Cyprus to the Abu 
Dhabi Global Market.

On 4 April 2024 shareholders at the Extraordinary General 
Meeting approved the new composition of the Board (which 
is presented on pages 108 to 111 of this Annual Report).

Michael Thomaides

George Papaioannou

Chairman of the Board, Non-executive Director

Independent Non-executive Director

Appointed: April 2014; Chairman from February 2024

Appointed: April 2013

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.

John Carroll Colley

Senior Independent Non-executive Director

Appointed: April 2013

Committee Memberships: Audit Committee (Chairman), 
Nomination Committee (Chairman), Remuneration Committee 
(Chairman), ESG Committee.

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.

Committee Memberships: Audit Committee, Nomination 
Committee, Remuneration Committee.

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 in a very limited 
number of other private companies.

Yousef Abu Laban

Non-executive Director

Appointed: February 2024

Yousef Abu Laban is Co-founder and Managing Partner 
of Synergate LLC, a boutique financial services company 
principally focused on countries in the Gulf Cooperation Council. 
He has over 10 years’ experience in company formation, business 
development and start-up advisory services.

A specialist in Computer Science and Information 
Technology, Mr. Abu Laban graduated from the World Islamic 
Sciences & Education University (W.I.S.E) where he majored 
in Computer Network Systems.

Thomas Karsten Beute

Non-executive Director

Alexander Lemzakov

Non-executive Director

Appointed: February 2024

Appointed: February 2024

Thomas Karsten Beute has a Master’s degree 
in International Tax Law and has provided legal and 
financial services solutions to clients for over 15 years. 
He started his career at PricewaterhouseCoopers and 
Ernst & Young, focused on tax advising principally related 
to international real estate products. Mr. Beute then 
went on to work extensively in the areas of investment, 
asset management, consultancy and financing across 
international markets for businesses such as global 
management and financial services provider Amicorp and 
private Swiss bank Julius Baer. He is Director and Owner 
of both KCT Capital Ltd, which provides licensed asset 
management and fund services, and Doral Group LLC, 
an independent private financial services and investment 
firm, both based in Dubai.

Alexander Lemzakov has a proven track record 
in the IT industry, specialising in automotive, mobility and 
AI. Based in Dubai, over the past decade he has developed 
expertise in successfully identifying and developing market 
opportunities, delivering innovative approaches to drive 
business growth and creating important relationships 
with strategic partners, governments and regulators, and 
industry bodies.

Currently, he is Co-founder and Chief Executive Officer 
of Wize, an IT platform company targeting the automotive 
sector. As well as previous experience as an Executive Board 
Member and Strategic Officer at car-sharing company Green 
Crab, Mr. Lemzakov has held senior management positions 
in a number of technology focused businesses. He holds 
a Master’s degree in Information Technology.

Stefan Henrich

Non-executive Director

Mikhail Loganov

Non-executive Director

Appointed: February 2024

Appointed: February 2024

Stefan Henrich has more than 20 years’ experience 
in finance and business law with top tier financial 
institutions across Europe, the Middle East and Asia. 
In his role as a senior investment professional, multi-
jurisdictional transaction and asset management lawyer 
and general counsel, he obtained a deep understanding 
of asset and fund management, M&A, FinTech, trade 
finance, venture capital and capital markets across 
the global financial services industry.

As such, Mr. Henrich serves on a number of advisory, 
supervisory and company boards and is approved 
by the Dubai Financial Services Authority (DFSA), 
the Financial Conduct Authority, UK (FCA) and 
the Monetary Authority of Singapore (MAS). He is a Member 
of the Bar Associations in the UK and Germany and holds 
a Master of Laws (LL.M.) in International Business and 
Finance Law from Queen Mary University of London.

Mikhail Loganov has extensive experience in corporate 
finance, risk management, audit and business 
administration. Throughout his career he has held 
senior positions in the transportation and logistics 
industry including as Chief Financial Officer and 
then Chief Executive Officer at London-listed Global 
Ports Investments PLC from 2013 until 2018, having 
been on the Board since 2008. Mr. Loganov served 
as Managing Director and Executive member of the Board 
of Directors of Globaltrans Investment PLC for the five 
years following its listing on the London Stock Exchange 
in 2008 with responsibility for financial and reporting 
activities as well as having oversight of capital markets 
and M&A transactions. Currently he is based in Dubai 
and acts as Chief Operating Officer and Head of Finance 
at HeadOffice, a global multi family office firm.

Mr. Loganov started his career as a Financial Analyst 
at American Express (Europe) having graduated with 
honours from the UK’s University of Brighton with a degree 
in Business Administration with Finance.

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ANNUAL REPORT 2023

Governance

106

107

Board of Directors 
Effective from 26 February 2024 to 4 April 2024

Elia Nicolaou

Non-executive Director

Appointed: March 2008

Committee Memberships: ESG Committee (Chair)

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.

Anastasia van Rooijen

Non-executive Director

Appointed: February 2024

With her broad language base and deep understanding 
of diverse cultures, Anastasia van Rooijen has held 
various roles in multinational companies, strengthening 
their communication structures and change management 
processes. Specialising in employee and organisational 
development, her business experience over 20 years has 
spanned multiple industries including oil & gas, maritime, 
beverages and consulting.

Mrs. van Rooijen has recently served as Organisational 
Development Manager (2008–2022) at a residential 
property development company Bonava (formerly NCC 
AB), where she was responsible for the optimisation 
of Human Resources processes, practices and program 
initiatives. Having started her career as an interpreter, she 
gained extensive experience holding various positions 
in HEINEKEN, Det Norske Veritas and Deloitte.

Mrs. van Rooijen graduated from Saint Petersburg State 
University where she majored in Linguistics.

Andrei Ryan

Non-executive Director

Appointed: February 2024

Andrei Ryan works as the Chief of Staff at Conundrum, a UK 
based AI company that develops software for the digital 
transformation of manufacturing, and serves as the General 
Manager for their UAE business. Having started his 
career in Finance at Canada’s Department of Foreign 
Affairs and International Trade, Mr. Ryan spent five years 
at international management consultancy firm McKinsey, 
gaining extensive experience in advising global companies 
on driving investment decisions, strategy development 

and implementation of transformational change. From 
2018 to 2022 he served in senior executive roles at Yandex 
including as Head of Strategy for their E- commerce business 
unit.

Mr. Ryan holds an MBA degree from INSEAD, a Master’s 
in International Management degree from Vienna University 
of Business and Economics and an Honours Bachelor 
of Commerce (Finance) degree, from the University 
of Ottawa.

Evgeny Yakushkin

Non-executive Director

Appointed: February 2024

Evgeny Yakushkin has over 15 years of experience 
in management consulting and e-commerce, with deep 
knowledge of e-commerce logistics operations. For five 
years Mr. Yakushkin developed Alibaba’s retail business 
in CIS (AliExpress) as Director of Strategy and Business 
Development and was responsible for the operations, 
building partnerships and M&A principally in retail 
and logistics. Prior to that, he worked for McKinsey & 
Company in strategy and service operations and has 

designed and implemented transformation programmes 
for clients in numerous sectors including banking, 
financial services, telecom, energy, education, and 
logistics, as well as for Sovereign Wealth Funds and non-
governmental organisations. Prior to joining McKinsey, he 
worked in product marketing for Procter & Gamble, Sony and 
Microsoft.

Mr. Yakushkin graduated from the department of Economics 
and then Graduate School of Business at Lomonosov Moscow 
State University. He also holds an MBA from INSEAD.

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ANNUAL REPORT 2023

Governance

108

109

Board of Directors

Effective from 4 April 2024

The composition of the Board of Directors presented below was approved 
by shareholders at the Extraordinary General Meeting held on 4 April 2024.

Yerzhan Niyazaliyev

Chairman of the Board, Executive Director

Appointed: April 2024

Yerzhan Niyazaliyev has extensive experience 
in management, development and consulting across 
the pharmaceutical, hospitality, and food and beverage 
sectors. An entrepreneur by background, since 2018 he has 
held key senior positions at AQNIET Capital, a multi-format 
investment company domiciled in Kazakhstan with a portfolio 
of brands in retail, distribution, logistics and agriculture. 
He first served as its CEO before moving to the Supervisory 
Board in 2023. Mr. Niyazaliyev is also co-founder and 

Jaafar Borhan

Senior Independent Non-executive Director

Appointed: April 2024

Committee Memberships: Nomination Committee (Chairman), 
Remuneration Committee (Chairman), ESG Committee.

Jaafar Borhan Jaafar has over 13 years of experience 
in the fields of relationship management, investment 
consultancy, and government and corporate services. Since 
early 2023, he has been CEO of Business Hub, a corporate 
services provider in Abu Dhabi. Prior to that, Mr. Jaafar 

was Commercial Director – SME & Business Development 
for KEZAD Group (the Khalifa Economic Zone Abu Dhabi) and 
has held senior managerial positions at RAKEZ (the Ras Al 
Khaimah Economic Zone) as well as in various UAE companies 
such as OnTime Government Services, UAE Exchange Centre, 
and Emirates NBD.

He holds a Bachelor’s Degree in Business Administration and 
Finance from Beirut Arab University.

Abdulla Belobaida

Independent Non-executive Director

Chairman of Pana, a company focused on the hotel, restaurant 
and catering industry with significant business presence 
in Kazakhstan as well as Russia, the USA and Turkey.

Mr. Niyazaliyev graduated from M. Auezov South Kazakstan 
University with a Bachelor of Science degree in history 
and holds an LLB (Bachelor of Laws) degree from Maqsut 
Narikbayev University and an LLM (Master of Laws) degree 
from the Regional Social and Innovation University.

Appointed: April 2024

Committee Memberships: Audit Committee, Nomination 
Committee, Remuneration Committee.

Abdulla Belobaida has a wealth of entrepreneurial 
experience gained in various sectors including trading, 
real estate and the construction industry. He is a business 

partner and board member of Engineering Contracting Co, 
a well-established contracting firm providing engineering 
and construction services in the UAE, as well as sitting 
on the board of Prime Metal Industries, a leader 
in the provision of steel and aluminum metalworks 
in the region. Mr. Belobaida also manages a portfolio 
of properties across the UAE handling legal and compliance 
related issues.

Jouslin Khairallah

Independent Non-executive Director

Appointed: April 2024

Committee Memberships: Audit Committee (Chair), ESG 
Committee (Chair).

Jouslin Khairallah is a professional litigator and legal advisor 
having practiced law for over 18 years and is the founder 
and Managing Director of Khairallah Advocates and Legal 
Consultants, a law firm based in Dubai. Mrs. Khairallah has 
extensive experience in both the public and private sectors 

and has represented large Middle East and multinational 
corporate entities and individuals to resolve complex 
and high value disputes. In 2022, she became a member 
of the International Association of Lawyers and is also 
a member of the Emirates Human Rights Association and 
the Dubai Business Women Council.

Mrs. Khairallah holds a Bachelor of Law from Beirut Al 
Arabia University.

Yousef Abu Laban

Non-executive Director

Appointed: February 2024

Yousef Abu Laban is Co-founder and Managing Partner 
of Synergate LLC, a boutique financial services company 
principally focused on countries in the Gulf Cooperation 
Council. He has over 10 years’ experience in company 

formation, business development and start-up advisory 
services. A specialist in Computer Science and Information 
Technology, Mr. Abu Laban graduated from the World 
Islamic Sciences & Education University (W.I.S.E) where he 
majored in Computer Network Systems.

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ANNUAL REPORT 2023

Governance

110

111

Board of Directors
Effective from 4 April 2024

Albina Amangeldinova

Non-executive Director

Anton Gazizov

Executive Director, Managing Director

Kairat Itemgenov

Executive Director, Chief Strategy Officer, 
shareholder

Viacheslav Stanislavskiy

Executive Director, Head of Operations

Appointed: April 2024

Appointed: April 2024

Appointed: April 2024

Albina Amangeldinova has more than 25 years of experience 
in finance, freight rail transportation and logistics and since 
2011 has been Director General of DAR Company-2008, 
a Kazakh business focused on providing support services 
to the rail transportation sector. She spent more than 
a decade at National Company Kazakhstan Temir Zholy, 
a leading logistics and transportation holding company 
with the largest fleet of locomotives, freight and passenger 
railcars in Kazakhstan, holding several key positions during 
her time there.

Mrs. Amangeldinova has a degree in Economics from 
the Almaty Institute of National Economy and also studied 
law at Kazakh Humanitarian-Legal University.

Anton Gazizov has over 20 years of experience 
in the finance and banking sectors most recently with 
a focus on private equity, mezzanine financing and venture 
capital investments. Currently he serves as Portfolio 
Manager at AQNIET Capital, a multi-format investment 
company domiciled in Kazakhstan and with a portfolio 
of brands in retail, distribution, logistics and agriculture. 
He is also CEO of Sky Light Invest in the UAE, a family 
office. Mr. Gazizov’s international career comprises 
positions at prominent institutions such as Deutsche Bank, 
Goldman Sachs, and US hedge fund QVT. He holds a first-
class degree in Economics from Cambridge University, 
an executive MBA from the London Business School and 
is a Chartered Financial Analyst.

Appointed: April 2024

Kairat Itemgenov is a successful entrepreneur and owner 
of AQNIET Capital, a multi-format investment company 
domiciled and with major business interests in Kazakhstan. 
Over the past 25 years he developed sizable businesses 
across several sectors which include (i) a leading Kazakh 
pharmacy chain Europharma, (ii) several hotels and lodging 
properties, (iii) logistics company Satti Logistics which 
operates its own truck and van fleets as well as (iv) KBI 
Energy, an experienced player in the repair and instalment 
of large-scale power generating equipment. In January 2024, 
AQNIET Capital became a key shareholder of Globaltrans.

Prior to embarking on a business development path in 2006, 
Mr. Itemgenov practiced law for ten years. He graduated 
from Kazakh State National University where he majored 
in jurisprudence.

Mr. Stanislavsky has more than 30 years of experience 
in the rail industry. He 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. Prior 
to that, he had held various senior positions in a number 
of transportation companies. Mr. Stanislavsky graduated 
from Irkutsk National Research Technical University. He 
also has a degree in railway engineering.

Dr. Abdultaiyab Bahrainwala

Non-executive Director

Stefan Henrich

Non-executive Director

Ruslan Izatov

Non-executive Director

Alexander Storozhev

Executive Director, Chief Procurement Officer

Appointed: April 2024

Appointed: April 2024

Appointed: April 2024

Dr. Abdultaiyab Bahrainwala has more than 14 years’ 
experience in corporate law and has advised across a wide 
range of areas including real estate, company formation, 
intellectual property, employment and commercial 
transactions. He is a Partner at Dubai law firm Khairallah 
Advocates & Legal Consultants where he heads their 
Corporate Department. Dr. Bahrainwala has practiced law 
in the United Arab Emirates for over a decade and built 
an excellent reputation in the legal landscape of the region.

He holds a Law Doctorate from the European University Institute 
in Paris, an LLM in International Business Law from National 
University of Singapore, and a Bachelor of Arts and Laws from 
the Maharaja Sayajirao University of Baroda, India.

Stefan Henrich has more than 20 years’ experience in finance 
and business law with top tier financial institutions across 
Europe, the Middle East and Asia. In his role as a senior 
investment professional, multi-jurisdictional transaction and 
asset management lawyer and general counsel, he obtained 
a deep understanding of asset and fund management, M&A, 
FinTech, trade finance, venture capital and capital markets 
across the global financial services industry.

As such, Mr. Henrich serves on a number of advisory, supervisory 
and company boards and is approved by the Dubai Financial 
Services Authority (DFSA), the Financial Conduct Authority, 
UK (FCA) and the Monetary Authority of Singapore (MAS). He 
is a Member of the Bar Associations in the UK and Germany and 
holds a Master of Laws (LL.M.) in International Business and 
Finance Law from Queen Mary University of London.

Ruslan Izatov has extensive experience in finance and 
accounting across business including construction, hospitality 
and metals. In 2023, he was named Director General of AQNIET 
Capital, a multi-format investment company domiciled 
in Kazakhstan with a portfolio of brands in retail, distribution, 
logistics and agriculture. He has held a number of senior 
financial roles and is currently Chief Financial Officer of two 
Kazakh companies. Mr. Izatov has also worked in education 
as a senior lecturer in the Department of Economics at Kazakh 
Economic University.

Mr. Izatov graduated with honours from Taraz State 
University where he majored in economics.

Appointed: From April 2013 to February 2024 and rejoined 
in April 2024

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 sits 
on the boards of all Group subsidiaries. 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.

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Governance

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113

Executive Management

The executive leadership has responsibility 
for managing the Group’s day-to-day business 
operations and support functions. The senior 
management team comprises the executive 

directors along with 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.

Vyacheslav Stanislavsky

Deputy Chief Executive Officer, Head 
of Operations, member of the Board 
of Globaltrans, Executive Director

Mr. Stanislavsky has more than 30 years of experience 
in the rail industry. He 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. Prior 
to that, he had held various senior positions in a number 
of transportation companies. Mr. Stanislavsky graduated from 
Irkutsk National Research Technical University. He also has 
a degree in railway engineering.

Kirill Prokofiev

CEO of BaltTransServis

Roman Goncharov

Head of Treasury

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 the 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 20 years of management experience. He has an MBA 
from the Moscow International School of Business.

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Dmitry Frolov

Chief Financial Officer

Alexander Storozhev

Chief Procurement Officer, member of the Board 
of Globaltrans, Executive Director

Svetlana Brokar

Government Relations Officer

Dmitry Frolov was appointed CFO in December 20231. He has 
been with the Group since 2012 and has had responsibility 
for business development, M&A transactions and other 
areas of corporate finance. He is a member of a number 
of Globaltrans subsidiary boards. Mr. Frolov has more than 
15 years’ experience in finance in the transportation and 
logistics industry. He graduated from the Moscow State 
Institute of International Relations, where he majored 
in economics and finance.

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 sits on the boards 
of all Group subsidiaries. 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.

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. 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.

1  Dmitry Frolov succeeded Alexander Shenets who had served as Group CFO since 2008.

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Governance

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115

Corporate Governance 
Report

Corporate governance statement

Corporate governance policies

Board’s 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.

Globatrans’ policies include, inter alia:

Corporate documents and policies

•  Articles of Association
•  Appointment Policy for the Board of Directors and 

Committees

•  Audit Committee – terms of reference
•  Board of Directors – terms of reference
•  Corporate Secretary – terms of reference
•  Dividend Policy
•  ESG Committee – terms of reference
•  Internal Audit Charter
•  Nomination Committee – terms of reference
•  Policy on Assessment of Independence and 

Objectivity of External Auditor

•  Remuneration Committee – terms of reference
•  Risk Management Policy
•  Risk Management Standard

During 2023, Globaltrans’ corporate affairs were 
governed by the memorandum and articles 
of association of the Company and the provisions 
of applicable Cyprus law. Although the Company 
was not subject to any mandatory corporate 
governance code in its home jurisdiction of Cyprus, 
nor required to observe the UK Corporate Governance 
Code (formerly the Combined Code), it has 
implemented various corporate governance measures 
and practices, which are detailed below in this 
section. Globaltrans continues to review its corporate 
governance practices in line with international best 
practice.

Globaltrans’ Board of Directors has adopted and 
updated the Company’s Code of Corporate Governance 
(the “Code”), guaranteeing that the interests of all 
shareholders are given due consideration. The Code 
comprises the various policies in relation to corporate 
governance which have been adopted by the Company. 
Although the Code is based on principles 
recommended by the UK Corporate Governance Code, 
this does not constitute voluntary compliance with 
such governance code.

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.

This section provides an overview of our corporate 
governance practices. For further information, please see 
the Financial Statements section of this Annual Report.

Business ethics

•  Anti-fraud Policy
•  Business Continuity Policy
•  The Code of Ethics and Conduct
•  ESG Policy
•  Green Office Initiative
•  Policy on Reporting and Investigating Allegations 
of Suspected Improper Activities (Whistleblowing 
Policy)

•  Corporate Diversity and Inclusion Policy
•  Environmental and Energy Policy
•  Freedom of Association Policy
•  Health and Safety Policy
•  Human Rights Policy
•  Supplier Code of Conduct

Disclosure, transparency and market abuse 
regulation

•  Corporate Policy on the Treatment of the Rights 

of Minority Shareholders

•  Continuing Obligations Policy
•  Disclosure Policy
•  Internal Control Rules for Insider Information
•  List of Insider Information
•  Securities Dealing Code and 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

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.

Responsibilities

•  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

Membership

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 

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Corporate Governance Report

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 free-float shareholders are represented and that 
the interests of all stakeholders are taken into account.

As of 31 December 2023, 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 2023, 
members of the Board of Directors held 14,555,939 shares 
and GDRs in Globaltrans.

Diversity

Globaltrans values differences and is committed 
to diversity, equality and inclusion (“DE&I”). The Board 
does not operate a separate diversity policy. The Group’s 
approach to diversity issues is set out in the Diversity 
and Inclusion Policy adopted in 2020 and exists at all 
levels of the Group, including the Board of Directors. 
In line with the best practice and the Group’s commitment 
to diversity, the Board does take into account DE&I aspects 
when making new Board appointments and considering 
the composition of the Board. As of 31 December 2023, 
there are two female members on the Board, equivalent 
to about 14% of the Board. The average age of the Board 
is 53 years and ranges in age from 44 to over 60 years 
old. Board members are from a range of different socio-
economic and ethnic backgrounds and have experience 
across the following areas: the transportation and ports 
industry, audit, accounting, economics, finance and 
banking, law, engineering, international trade and risk 
management.

→	

	Please refer to the Sustainability Report for further details on certain 
diversity metrics in relation to the Board.

Induction and professional development

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.

Performance evaluation

The Board’s performance is assessed annually and 
the evaluation process is conducted through a combination 
of self-assessment and annual appraisals. The Chairman’s 
performance is evaluated by the Non-executive Directors.

Activities

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 24 times during 2023 and considered 105 
items including the following:

Regular meetings

•  Review of the Group’s financial and operational 

performance

•  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

•  Review of the results of risk assessments
•  Approval of the Annual General Meeting agenda, 

including dividend proposals and Board reappointments

•  Approval of appointments to the Board of Directors 

of subsidiaries

Ad hoc meetings

•  Approval of material borrowings 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
•  Approval of dividend distribution by subsidiaries
•  Review and consideration of various business 

development opportunities and major transactions

•  Consideration of M&A transactions

ANNUAL REPORT 2023

Governance

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117

The Board and the Board Committees meetings in 2023 and the attendance of Directors

Board of Directors

Nomination 
committee

Remuneration 
committee

Audit committee

ESG committee

E

5

A

5

E

5

A

5

5

5

5

5

E

5

5

5

A

5

5

5

E

2

A

2

2

2

Sergey V. 
Maltsev 
(Chairman)

John Carroll 
Colley

Alexander 
Eliseev

Sergey 
Foliforov

Andrey Gomon

Vasilis 
Hadjivassiliou

Elia Nicolaou

George 
Papaioannou

Melina Pyrgou

Konstantin 
Shirokov

Alexander 
Storozhev

Michael 
Thomaides

Marios Tofaros

Sergey V. 
Tolmachev

E

24

24

24

24

24

24

24

24

24

24

24

24

24

24

A

24

24

23

24

24

24

24

24

24

23

24

24

24

24

E – Eligible

A – Attended

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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, 
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 2023 
at the Annual General Meeting held on 21 April 2023.

→	

	For further information on the remuneration paid to the Board 
and key executives in 2023, please see 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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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.

decision-making responsibility for all matters lies 
with the full Board. Each committee has written terms 
of reference, approved by the Board, that summarises 
the committee’s role and responsibilities.

These committees oversee, review and monitor key 
areas on behalf of the Board and while they have 
the authority to make recommendations, ultimate 

The Audit Committee meetings in 2023

John Carroll Colley

Vasilis Hadjivassiliou

George Papaioannou

Eligible

Attended

5

5

5

5

5

5

Audit Committee

Nomination 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.

The role of the Nomination Committee is to monitor 
and review the size, composition and balance 
of the Board and its committees and to ensure 

Globaltrans has the right structure, skills 
and diversity for the effective management 
of the Group.

Number 
of members

Members 
as at 31 December 2023

Minimum 
meetings a year

Number 
of meetings in 2023

Number 
of members

Members 
as at 31 December 2023

Minimum 
meetings a year

Number 
of meetings in 2023

Members and 

meetings 3 members

all independent

John Carroll Colley
Independent Non-executive Director 
(Chairman)

Vasilis Hadjivassiliou
Independent Non-executive Director

George Papaioannou
Independent Non-executive Director

4 5

Responsibilities

Issues 
considered 
in 2023

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
• 
•  Assessment of the Chairman of the Board’s performance

Implementation of codes of conduct

•  Review of the Group’s Consolidated Financial Statements for 2022 and interim financial results 

for the six months ended 30 June 2023

•  Review of the external auditor’s report to the Audit Committee following its full-year audit for 2022 and 

review for the six months ended 30 June 2023

•  Review of the Group’s external auditor and terms of reappointment for 2023
•  The Committee recommended reappointment of the external auditors to the Board which, in turn, pro-

posed their reappointment at the Annual General Meeting of the Group held on 21 April 2023

•  Review of the report of the external auditor on the audit strategy for the audit of 2023 financial statements
•  Review of regulatory announcements by the Group
•  Review of internal controls and risk management processes
•  Review of the internal audit function and reports on its activities and on the internal audit model and plan

Members and 

meetings 2 members

2 independent

John Carroll Colley
Independent Non-executive 
Director (Chairman)

George Papaioannou
Independent Non-executive 
Director

1 5

Responsibilities

•  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
•  Termination of employment of CFO and appointment of new CFO

Issues considered 
in 2023

The Nomination Committee meetings in 2023

John Carroll Colley

George Papaioannou

Eligible

Attended

5

5

5

5

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Corporate Governance Report

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.

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 2023

Minimum 
meetings a year

Number 
of meetings in 2023

Number 
of members

Members 
as at 31 December 2023

Minimum 
meetings a year

Number 
of meetings in 2023

Members and 

meetings 2 members

2 independent

John Carroll Colley
Independent Non-executive Director 
(Chairman)

George Papaioannou
Independent Non-executive Director

1

5

Members and 

meetings 2 members

1 independent

Elia Nicolaou
Non-executive Director (Chair)

John Carroll Colley
Independent Non-executive Director

2 2

•  Monitoring of the development of the Group’s sustainability strategy (issues, policies, initiatives 

•  Remuneration of Executive Directors (Chairman and Executive Directors determine the remuneration 

Responsibilities

•  Review of the Group’s remuneration policies

for independent members)

•  Approval of bonuses to the Chief Strategy Officer, General Counsel, Chief Financial Officer and 

Responsibilities

related to ESG)

•  Oversight of ESG disclosures
•  Approval of annual sustainability report
•  Review of the ESG activities of the Group
•  Review of key performance indicators

Managing Director

Issues considered 
in 2023

Issues considered 
in 2023

•  Review of the latest sustainability trends and developments
•  Review of the Group’s ESG activities and key performance indicators in 2022 and in the six 

months ended 30 June 2023

•  Approval of the Group’s annual Sustainability Report for 2022
•  Approval of the Group’s ESG workplan and the activity of the ESG Committee in 2023–2024

The Remuneration Committee meetings in 2023

The ESG Committee meetings in 2023

John Carroll Colley

George Papaioannou

Eligible

Attended

5

5

5

5

Elia Nicolaou

John Carroll Colley

Eligible

Attended

2

2

2

2

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Shareholder engagement

External auditor

Internal control and audit

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.

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 appointment 
of GAC Auditors Ltd as the Group’s external auditor 
in respect of the audit of the financial year ending 
2023. The appointment was approved by the Group’s 
shareholders at the Annual General Meeting 
on 21 April 2023.

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.

•  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.

→ 

 Please refer to the Financial Statements section of this 
Annual Report for further details on our internal control 
and risk management systems in relation to the financial 
reporting process.

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ANNUAL REPORT 2023

Governance

124

125

Share Capital

Corporate Structure

1 

Imposed suspension of GDRs 
trading on the LSE since 
3 March 2022 continued 
as of the date of publication.

2  The information in this section 
is based upon notifications 
and other information received 
by the Company with respect 
to beneficial ownership as of 
5 February 2024.

3  For these purposes, the free 
float consists of the ordinary 
shares and GDRs held by 
investors not affiliated or 
associated with Globaltrans.

4  Directly or indirectly owned. 

AQNIET Capital LLP is 
beneficially owned by Kairat 
Itemgenov.

5  Beneficially owned by 

Andrey Filatov, co-founder of 
Globaltrans.

6  Beneficially owned by 

Alexander Eliseev, co-founder 
of Globaltrans. This 
shareholding is subject to the 
signed binding agreement 
to sell to AQNIET Capital 
LLP. The completion of the 
transaction is expected not 
later than the second half 
of 2024.

Public company driven by entrepreneurial spirit

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 CIS.

In 2008, Globaltrans successfully 
undertook an Initial Public Offering 
on the London Stock Exchange (“LSE”), 
becoming the first freight rail group 
servicing CIS cargo flows to be listed 
internationally. In 2020, Globaltrans’ 
GDRs were admitted to trading 
on the Moscow Exchange (“MOEX”).

Today, the majority of the Company’s 
shares are in public hands with 
Globaltrans’ free float amounting 
to 55.7% of the issued share capital.

AQNIET Capital LLP (“AQNIET”), 
an investment company domiciled and with 
major business interests in Kazakhstan 
is the largest single shareholder 
of Globaltrans. AQNIET is beneficially 
owned by Kairat Itemgenov, a Kazakh 
entrepreneur who has successfully 
developed sizeable businesses across 
several sectors over the past 25 years.

The issued share capital of Globaltrans 
consists of 178,318,259 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 
listed on the Main Market of the LSE 
(ticker symbol: GLTR) since May 20081 and 
on the Level One quotation list of MOEX 
(ticker symbol: GLTR) since October 
2020. Citibank N.A. is the depositary bank 
for the GDR programme of Globaltrans.

Shareholder structure2

5.1%6

Litten Investments 
Ltd

0.9%

Transportation 
Investments 
Management Ltd

0.1%

Directors and 
management

55.7%3

Free float

26.7%4

AQNIET Capital 
LLP

11.5%5

Marigold
Investments Ltd

Globaltrans provides freight rail transportation, 
railcar leasing and other ancillary services to clients 
through its 100% owned subsidiaries (see chart below). 

The Group’s corporate structure ensures effective 
asset management and operational control while 
creating logical business segments.

Globaltrans’ key operating subsidiaries

New Forwarding 
Company, 
AO (Russia)

BaltTransServis, 
OOO (Russia)

100%

100%

BTS-Locomotive 
solutions, 
OOO (Russia)

100%

GTI Management, 
OOO (Russia)

100%

Ural Wagonrepair 
Company, 
AO (Russia)

RemTransServis, 
OOO (Russia)

100%

100%

Source: Globaltrans; as of 31 December 2023.

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ANNUAL REPORT 2023

Financial Statements

Additional Information

126

127

Financial 
Statements

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p. 128

Consolidated Management Report 
and Consolidated Financial 
Statements

Read more →

p. 242

Management Report and Parent 
Company Financial Statements

Read more →

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Consolidated Management Report 
 
 
 
 
 
ANNUAL REPORT 2023

Financial Statements

128

129

Consolidated 
Management Report 
and Consolidated 
Financial Statements 
for the year ended 
31 December 2023

Board of Directors and other officers ...................................................................................................................................................................................129

Consolidated Management Report ........................................................................................................................................................................................130

Directors’ responsibility .................................................................................................................................................................................................................146

Independent Auditor’s Report ...................................................................................................................................................................................................148

Consolidated income statement ..............................................................................................................................................................................................152

Consolidated statement of comprehensive income ..................................................................................................................................................153

Consolidated statement of financial position ................................................................................................................................................................154

Consolidated statement of changes in equity ...............................................................................................................................................................156

Consolidated cash flow statement .........................................................................................................................................................................................160

Notes to the consolidated financial statements ..........................................................................................................................................................162

1. General information .................................................................... 162

20. Principal subsidiaries............................................................. 218

2. Basis of preparation ................................................................... 162

21. Share-based payments ......................................................... 221

3. Adoption of new or revised standards and 
interpretations ..................................................................................... 163

22. Financial assets .........................................................................222

23. Other assets .................................................................................224

4. Summary of significant accounting policies............ 163

24. Inventories .....................................................................................225

5. New accounting pronouncements ...................................181

25. Cash and cash equivalents ................................................225

6. Financial risk management .................................................. 183

7. Critical accounting estimates and judgements ..... 192

26. Share capital, share premium 
and treasury shares .........................................................................226

8. Segmental information ............................................................194

27. Dividends ........................................................................................227

9. Non-IFRS financial information .........................................199

28. Borrowings.....................................................................................227

10. Revenue........................................................................................... 204

29. Other lease liabilities .............................................................230

11. Expenses by nature ................................................................. 206

30. Deferred income tax ............................................................... 231

12. Other gains/(losses) – net ................................................. 208

31. Trade and other payables ....................................................233

13. Employee benefit expense ................................................ 208

32. Earnings per share ...................................................................233

14. Finance income/(costs) - net .......................................... 209

33. Contingencies .............................................................................234

15. Income tax expense .................................................................210

34. Commitments ..............................................................................237

16. Net foreign exchange (losses) / gains ........................211

35. Related party transactions ................................................238

17. Property, plant and equipment ....................................... 212

36. Business combinations ........................................................ 241

18. Right-of-use assets .................................................................. 216

37. Events after the balance sheet date ........................... 241

19. Intangible assets ........................................................................217

Board of Directors and other officers

Board of Directors as of 5 April 2024

Mr. Jaafar Borhan

Mr. Yerzhan Niyazaliyev

Board support

The Company Secretary 
is available to advise all Directors 
to ensure compliance with 
the Board procedures. Also 
a procedure is in place to enable 
Directors, if they so wish, to seek 
independent professional advice 
at the Company’s expense.

Company Secretary

Mr. Aleksandr Lavrentjev

Registered office

Office Unit 3, Floor 6, Al Sila Tower
Abu Dhabi Global Market Square
Al Maryah Island, Abu Dhabi, UAE

Senior Independent Non-Executive 
Director
Appointed on 4 April 2024, 
(Senior Independent Director 
since 5 April 2024)
Chairman of Nomination Committee 
(since 5 April 2024)
Member of ESG Committee 
(since 5 April 2024)

Chairman of the Board of Directors
Executive Director

Mr. Kairat Itemgenov

Executive Director

Mr. Anton Gazizov

Ms. Jouslin Khairallah

Executive Director

Independent Non-Executive Director
Appointed on 4 April 2024
Chairperson of the Audit Committee 
(since 5 April 2024)
Chairperson of ESG Committee 
(since 5 April 2024)

Mr. Alexander Storozhev

Executive Director

Mr. Viacheslav Stanislavskiy

Mr. Abdulla Belobaida

Executive Director

Independent Non-Executive Director
Member of the Audit Committee 
(since 5 April 2024)
Member of Remuneration Committee 
(since 5 April 2024)
Member of Nomination Committee 
(since 5 April 2024)

Mr. Abdultaiyab Bahrainwala

Mr. Ruslan Izatov

Non-Executive Director

Mr. Stefan Henrich

Non-Executive Director

Non-Executive Director

Mr. Yousef Abu Laban

Non-Executive Director

Ms. Albina Amangeldinova

Non-Executive Director

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ANNUAL REPORT 2023

Financial Statements

130

131

Consolidated Management Report

The Board of Directors presents its report together with the audited consolidated financial 
statements for the year ended 31 December 2023. 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 2023 with growth achieved across all key metrics. 
The overall performance of the freight rail transportation sector was relatively steady despite 
the continued challenging operating environment that persisted for most of 2023, 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 all service contracts remaining intact. Robust financial profile was maintained with further 
deleveraging. Globaltrans sizably decreased its investments into fleet expansion and M&A in 2023 
reflecting a conservative approach to investment given elevated new rolling stock prices.

IFRS financial information

Management considers amongst others the following IFRS measures in analysing the performance 
of the Group.

The Group’s Total revenue increased 11% year on year to RUB 104,748,023 thousand 
in 2023 (2022: RUB 94,474,032 thousand). Operating profit increased 29% year on year 
to RUB 44,124,702 thousand in 2023 (2022: RUB 34,301,602 thousand). The profit for the year 
ended 31 December 2023 increased 55% year on year to RUB 38,617,605 thousand (2022: 
RUB 24,919,886 thousand).

On 31 December 2023 the total assets of the Group were RUB 130,385,766 thousand 
(2022: RUB 110,154,102 thousand) and net assets were RUB 99,853,356 thousand (2022: 
RUB 67,462,195 thousand).

On 31 December 2023 the total debt of the Group was RUB 15,377,104 thousand which decreased 
26% as compared to end of 2022 which amounted to RUB 20,648,650 thousand. Total cash and 
cash equivalents on 31 December 2023 increased 166% and amounted to RUB 42,776,832 thousand 
(31 December 2022: 16,052,345 thousand).

Non-IFRS financial information

Amongst others, management analyses the following key non-IFRS measures. These non-IFRS 
measures are marked with capital letters and their definitions are provided at the end of this 
section in alphabetical order.

Adjusted Revenue increased 7% year on year to RUB 87,387,994 thousand (2022: 
RUB 81,609,908 thousand) largely supported by robust average pricing. Total Operating Cash 
Costs were up 8% year on year to RUB 35,048,708 thousand (2022: RUB 32,373,079 thousand).

Adjusted EBITDA increased 6% year on year to RUB 52,289,028 thousand (2022: 
RUB 49,216,294 thousand) with the Adjusted EBITDA Margin at 60% (2022: 60%) remains stable 
year on year despite ongoing cost pressures.

The Group had a strong balance sheet with Net Debt to Adjusted EBITDA decreasing 
to (0.52x) (2022 end: 0.09x). Net Debt reduced to RUB (27,399,728) thousand (2022 end: 
RUB 4,596,305 thousand). As at 31 December 2023 and 31 December 2022, 100% of the Group’s 
debt was denominated in Russian roubles.

Free Cash Flow of RUB 25,845,174 thousand increased 74% year on year 
(RUB 14,824,581 thousand for 2022) as the 28% year-on-year decrease in Total CAPEX 
to RUB 8,260,603 thousand (2022: RUB 11,423,671 thousand) and 50% year-on-year decrease 
in Total CAPEX adjusted for M&A to RUB 10,091,996 thousand (2022: RUB 20,223,671 thousand).

Operational information

In 2023, Freight Rail Turnover (including Engaged Fleet) decreased 2% year on year and 
the Group’s Transportation Volume (including Engaged Fleet) decreased 2%. The Freight Rail 
Turnover (including Engaged Fleet) amounted to 138.8 billion tonnes-km (2022: 141.4 billion 
tonnes-km) and the Group’s Transportation Volume (including Engaged Fleet) was 78.6 million 
tonnes in 2023 (2022: 80.4 million tonnes).

The Average Number of Loaded Trips per Railcar decreased 5% year on year and the Average 
Distance of Loaded Trips remained stable.

Average Price per Trip increased 10% year on year to RUB 71,125 (2022: RUB 64,553) reflecting 
largely continued favourable market pricing conditions in both bulk and liquids segments.

The Empty Run Ratio for gondola cars improved to its lowest level in more than ten years at 36% 
(2022: 41%) whereas the Total Empty Run Ratio decreased to 45% (2022: 50%).

Total Fleet decreased 1% to 65,644 units (2022 end: 66,115 units).

The financial position, development and performance of the Group as presented in the financial 
statements is considered satisfactory.

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 

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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 and Engaged 
Fleet).

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 and Engaged 
Fleet).

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 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”, “Payment for rolling stock to disposed 
subsidiary” 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).

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 providers 
of infrastructure tariff (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 and locomotives, 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”.

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.

ANNUAL REPORT 2023

Financial Statements

132

133

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 and Engaged Fleet) 
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 and locomotives, 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 tonnes. It excludes volumes transported by Engaged Fleet 
(unless otherwise stated).

Changes in group structure

There were no changes in the Group structure of the Company during the year ended 
31 December 2023 other than sale of 65.25% in Spacecom AS and incorporation of GLTR Cyprus Ltd.

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.

Human resources

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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.

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Consolidated Management Report 
 
 
 
Adequate remuneration packages, which are in line with or in excess of market levels, are offered 
to all employees and key managers and remuneration is linked to the Group’s financial results. 
The Human Resource function regularly monitors salary levels and other benefits offered 
by competitors to ensure that the Group’s remuneration packages are adequate.

Principal risks and uncertainties

The Group faces a number of diverse potential and actual risks to its business. The Board has 
adopted a formal process to identify, evaluate and manage principal risks and uncertainties faced 
by the Group.

To identify, evaluate and mitigate these, the Group has established an in-house system to monitor 
and control uncertainties and threats throughout its activities. This is overseen by a dedicated Risk 
Management function, which works directly with the Board of Directors in this area.

The escalation of the conflict in Ukraine and the associated sanctions imposed by the US, 
European Union and a number of other countries on some of the biggest Russian industrial 
groups, as described in Note 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 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 and CIS 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 2023; cost of borrowing and/or deterioration in market conditions 
with potential impacts on the profitability and recoverability of investments; and reliance on State 
railway company for issuing permits allowing the Group to operate locomotives.

The Group operates mainly in Russia, 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 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. Further, 

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135

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 61% of the Group’s Net Revenue from the Operation of Rolling Stock 
in 2023 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, National Settlement Depositary (“NSD”) 
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.

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, 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.

Operational risks

The operational risks faced by the Group that could influence the Group’s operational efficiency 
include the physical state of the Russian and CIS 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 State railway company 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.

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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 attracts 
external consultants.

Financial risks

The Group’s activities exposed it to a variety of financial risks: market risk (including foreign 
exchange risk, cash flow and fair value interest rate risk), credit risk and liquidity risk. The Group’s 
overall risk management program focuses on the unpredictability of financial markets and seeks 
to minimise potential adverse effects on the Group’s financial results.

Foreign exchange risk

Foreign exchange risk arises when future commercial transactions or recognised assets 
or liabilities are denominated in the currency different from the functional currency of each 
of the entities of the Group.

The Group is exposed to the effects of currency fluctuations between (i) the Russian Rouble and 
the US Dollars in relation to US Dollar denominated balances held in the Company and the Cypriot 
and Russian subsidiaries of the Group having the Russian Rouble as their functional currency.

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 39,017,720 thousand 
as at 31 December 2023.

Management controls current liquidity based on expected cash flows and expected revenue 
receipts. In the long-term perspective, the liquidity risk is determined by forecasting future 
cash flows at the moment of signing new credit, loan or lease agreements and by budgeting 
procedures.

Further details on the Group’s exposure to financial risks are presented in Note 6 
to the consolidated financial statements.

Contingencies

The Group’s contingencies are disclosed in Note 33 to the consolidated financial statements.

Future developments

The Group’s strategic objective is to strengthen its position as a leading 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 19 and 20. 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.

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139

Dividends

Branches

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.

On the date of this report, the Board of Directors of the Company, having considered 
the profitability and liquidity position of the Group as well as all the risks and recent developments, 
does not recommend a payment of final dividends.

Share capital

As of 31 December 2023, the issued share capital of the Company comprised 178,318,259 ordinary 
shares with a par value of US$0.10 per share (31 December 2022 comprised 178,740,916 ordinary 
shares with a par value of US$0.10 per share).

Treasury shares

As of 31 December 2023, the Company didn’t have treasury shares (31 December 2022: 422 657 
treasury shares).

Research and development activities

The Group has not undertaken any research and development activities during the year ended 
31 December 2023.

Events after the balance sheet date

The events after the balance sheet date are disclosed in Note 36 to the consolidated financial 
statements.

The Group operates through branches and representative offices, maintaining six branches 
and eight representative offices during 2023 (seven branches and eight representative offices 
during 2022).

Going concern

The Directors have access to all information necessary to exercise their duties. The Directors 
continue to adopt the going concern basis in preparing the consolidated financial statements 
based on the fact that, after making enquiries and following a review of the Group’s 
budget for 2024, 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

Following the completion of redomiciliation of Globaltrans Investment Plc from Cyprus to UAE, 
ADGM effective from 26 February 2024, the Independent Auditor, GAC Auditors Ltd will 
be replaced by RAI LLP, who has license in ADGM for the audit of public companies. A resolution 
giving authority to the Board of Directors to fix the remuneration of RAI LLP 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 role of the Board of Directors

Board performance

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 2023, the Board comprises of 14 members (2022: 14 members), 10 (2022: 
10 members) of whom are non-executive directors. Three (2022: three) 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 the date of this report are shown on page 129, 
the members of the Board of Directors as of 31 December 2023 are shown in the table below, all 
of them were members of the Board throughout the year 2023.

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 2023 amounted to RUB 1,076,241 thousand (2022: RUB 776,827 thousand) (Note 35).

The Board held 24 meetings in 2023. The Directors’ attendance is presented in the table below.

Eligible

Attended

John Carroll Colley

George Papaioannou

Alexander Eliseev

Melina Pyrgou

Konstantin Shirokov

Alexander Storozhev

Marios Tofaros

Elia Nicolaou

Sergey Tolmachev

Sergey Maltsev (Chairman)

Andrey Gomon

Sergey Foliforov

Vasilis Hadjivassiliou

Michalakis Thomaides

24

24

24

24

24

24

24

24

24

24

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24

24

24

24

24

23

24

23

24

24

24

24

24

24

24

24

24

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The Board Committees

During 2023 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 2022. 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 2023 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. 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 2023, 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 2023, 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

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 was comprised of two Board members: Elia Nicolaou, Non-executive Director, 
who served 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 21 April 2023.

Refer to Note 35 of the consolidated 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 31 December 2023 the Board had 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.

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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 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.

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.

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 2023 and 
31 December 2022 are shown below:

Name

Type of holding

2023

2022

Alexander Eliseev

Sergey Maltsev

Indirect holding of ordinary 
shares and GDRs

Indirect holding of ordinary 
shares

9,065,790

9,065,790

5,490,149

5,490,149

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

Alexander Storozhev

Director

Abu Dhabi, ADGM, 05 April 2024

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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.

As the Company has completed redomiciliation to ADGM, UAE on 26 February 2024, the Company’s 
Board of directors must ensure that all legal and financial aspects are properly addressed, 
including compliance with any new requirements in the new jurisdiction. From 1 January 2024 
International Financial Reporting Standards as adopted by the European Union and 
the requirements of the Cyprus Companies Law, Cap.113 will no longer be applicable and 
International Financial Reporting Standards will be applied.

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.

Those charged with governance are responsible for overseeing the Group’s financial reporting 
process.

Directors’ confirmations

Each of the directors, whose names and functions are listed in page 129 confirms that, 
to the best of his or her knowledge:
(a)  the consolidated financial statements, which are presented on pages 152 to 241, 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.

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

Alexander Storozhev

Director

Abu Dhabi, ADGM, 5 April 2024

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ANNUAL REPORT 2023

Financial Statements

148

149

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 2023, 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 2023, 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.

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.

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.

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Independent Auditor’s Report

•  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.

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.

ANNUAL REPORT 2023

Financial Statements

150

151

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.

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, 5 April 2024

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Consolidated income statement

for the year ended 31 December 2023

Revenue

Cost of sales

Gross profit

Selling and marketing costs

Administrative expenses

Note

10

11

11

11

Profit from sale of subsidiary

12,36

Other (losses) / gains – net

Operating profit

Finance income

Finance costs

Net foreign exchange transaction gains/
(losses) on financing activities

Finance income / (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

12

14

14

14

14

15

32

32

2023

RUB’000

2022

RUB’000

104,748,023

94,474,032

(57,899,197)

(53,929,494)

46,848,826

40,544,538

(346,867)

(282,458)

(5,494,083)

(4,625,577)

3,400,047

(283,221)

44,124,702

2,173,246

-

(1,334,901)

34,301,602

811,588

(2,405,410)

(2,602,339)

3,194,185

641,196

2,962,021

47,086,723

(8,469,118)

38,617,605

38,620,269

(2,664)

38,617,605

178,318

(1,149,555)

33,152,047

(8,232,161)

24,919,886

25,193,420

(273,534)

24,919,886

178,382

216.58

141.23

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.

ANNUAL REPORT 2023

Financial Statements

152

153

Consolidated statement of comprehensive income

for the year ended 31 December 2023

Profit for the year

Other comprehensive income:

Items that may be reclassified subsequently 
to profit or loss

2023

RUB’000

2022

RUB’000

38,617,605

24,919,886

  Currency translation differences

(3,332,461)

(1,546,414)

Items that will not be reclassified to profit 
or loss

  Currency translation differences 

attributable to non-controlling interest

Other comprehensive income for the year, 
net of tax

3,473

(442,197)

(3,328,988)

(1,988,611)

Total comprehensive income for the year

35,288,617

22,931,275

Total comprehensive income for the year 
attributable to:

  owners of the Company

  non-controlling interest

35,287,808

23,647,006

809

(715,731)

35,288,617

22,931,275

Items in the statement above are disclosed net of tax. There is no income tax relating 
to the components of other comprehensive income above.

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The notes on pages 162 to 241 are an integral part of these consolidated financial statements.

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Consolidated statement of financial position

at 31 December 2023

ASSETS

Non-current assets

Property, plant and equipment

Right-of-use assets

Intangible assets

Other assets

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

Note

31 December 2023

31 December 2022

RUB’000

RUB’000

17

18

19

23

24

23

22

22

25

26

26

75,211,678

2,738,914

2,076

196,310

77,606,926

3,838,027

1,760

1,011,970

78,148,978

82,458,683

1,142,672

3,268,427

272,353

4,627,397

149,107

42,776,832

52,236,788

798,621

6,047,171

433,091

3,750,433

613,758

16,052,345

27,695,419

130,385,766

110,154,102

515,735

27,929,478

-

516,957

27,929,478

(145,993)

Common control transaction reserve

(8,458,334)

(10,429,876)

Translation reserve

Capital contribution

Retained earnings

Total equity attributable to the owners 
of the Company

Non-controlling interest

Total equity

-

2,694,851

77,171,626

99,853,356

3,332,461

2,694,851

43,579,823

67,477,701

-

(15,506)

99,853,356

67,462,195

ANNUAL REPORT 2023

Financial Statements

154

155

Non-current liabilities

Borrowings

Other lease liabilities

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

Note

31 December 2023

31 December 2022

RUB’000

RUB’000

28

29

10

30

28

29

31

10

7,662,972

897,585

17,787

8,734,998

17,313,342

7,714,132

2,198,502

2,438,472

792,682

75,280

9,052,778

1,794,464

14,454

9,081,239

19,942,935

11,595,872

2,400,332

6,384,348

813,406

1,555,014

13,219,068

22,748,972

30,532,410

42,691,907

TOTAL EQUITY AND LIABILITIES

130,385,766

110,154,102

On 5 April 2024, the Board of Directors of Globaltrans Investment PLC authorised these financial 
statements for issue.

By order of the Board

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Director

Yerzhan Niyazaliyev

Director

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ANNUAL REPORT 2023

Financial Statements

156

157

Consolidated statement of changes in equity

for the year ended 31 December 2023

Note

Share capital

Share 
premium

Treasury 
shares

Cash flow 
hedge reserve

Common 
control 
transaction 
reserve

Attributable to the owners of the Company

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

516,957

27,929,478

(31,496)

(10,429,876)

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

27

27

  Purchase of treasury shares

26

Total transactions with owners

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(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)

-

-

-

-

-

-

-

-

-

-

-

-

-

25,193,420

25,193,420

(273,534)

24,919,886

-

(1,546,414)

(442,197)

(1,988,611)

25,193,420

23,647,006

(715,731)

22,931,275

-

-

-

-

-

-

(2,759,806)

(2,759,806)

(6,302,174)

(6,302,174)

(2,797,826)

(9,100,000)

(114,497)

-

(114,497)

(6,302,174)

(6,416,671)

(5,557,632)

(11,974,303)

3,332,461

2,694,851

43,579,823

67,477,701

(15,506)

67,462,195

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ANNUAL REPORT 2023

Financial Statements

158

159

Consolidated statement of changes in equity

for the year ended 31 December 2023

Note

Share capital

Share 
premium

Treasury 
shares

Cash flow 
hedge reserve

Common 
control 
transaction 
reserve

Attributable to the owners of the Company

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 2023

516,957

27,929,478

(145,993)

(10,429,876)

Comprehensive income

  Profit for the year

Other comprehensive income

  Currency translation 

differences

Total comprehensive income 
for 2023

Transactions with owners

  Dividends to owners 

of the Company

  Dividends to non-controlling 

interest

  Sale of SC

27

27

-

-

-

-

-

-

  Cancellation of treasury 

26

(1,222)

shares

Total transactions with owners

(1,222)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,971,542

145,993

-

145,993

1,971,542

Balance at 31 December 2023

515,735

27,929,478

-

(8,458,334)

-

-

-

-

-

-

-

-

-

-

3,332,461

2,694,851

43,579,823

67,477,701

(15,506)

67,462,195

-

(3,332,461)

(3,332,461)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

38,620,269

38,620,269

(2,664)

38,617,605

-

(3,332,461)

3,473

(3,328,988)

38,620,269

35,287,808

809

35,288,617

-

-

-

-

-

-

-

-

(4,883,695)

(2,912,153)

14,697

(2,897,456)

(144,771)

-

-

-

(5,028,466)

(2,912,153)

14,697

(2,897,456)

2,694,851

77,171,626

99,853,356

-

99,853,356

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Note

2023

RUB’000

2022

RUB’000

Note

2023

2022

RUB’000

RUB’000

Consolidated cash flow statement

for the year ended 31 December 2023

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

(Reversal of impairment)/impairment 
of 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 (gains) / 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

17

18

19

17

17

11

12

12

11

14

14

14

47,086,723

33,152,047

8,852,851

6,752,811

2,445,695

2,596,568

429

(280,219)

325

(12,624)

284,448

309,878

(22,052)

3,932,833

-

(3,400,047)

50,258

(2,173,246)

2,405,410

(3,194,185)

19,237

-

20,535

(779,268)

2,602,339

(641,196)

(14,145)

9,768

52,041,920

47,963,253

441,993

(2,424,377)

1,892,188

(259,777)

(2,488,682)

(9,695)

49,193,570

(8,267,084)

40,926,486

547,813

(86,363)

(1,285,225)

388,690

1,659,908

(557,133)

48,630,943

(8,455,068)

40,175,875

ANNUAL REPORT 2023

Financial Statements

160

161

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  Payment for acquisition of non-controlling interest

  Proceeds from sale of subsidiaries – net of cash 

disposed of

20

20

-

(8,800,000)

4,771,748

-

-

  Payment for rolling stock to disposed subsidiary

(6,603,141)

Loans granted to related parties

Loans granted to third parties

Loan repayments received from related parties

Loans repayments received from third parties

-

(800,000)

(884,700)

400,000

884,700

-

400,000

-

  Purchases of property, plant and equipment

(8,259,858)

(11,421,671)

  Purchases of intangible assets

(745)

  Proceeds from sale of property, plant and equipment

17

626,548

Interest received

  Receipts from finance lease receivable – related parties

  Receipts from finance lease receivable – third parties

2,160,854

10,796

42,891

(2,000)

238,377

761,235

9,261

28,163

  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 non-controlling interests in subsidiaries

  Purchase of treasury shares

Net cash used in financing activities

Net increase in cash and cash equivalents

-

(64,972)

(6,850,907)

(19,651,607)

8,800,000

2,750,000

(10,188,110)

(9,549,396)

(3,750,000)

(3,750,000)

(2,477,780)

(2,402,700)

(2,051,443)

(1,938,619)

(460,093)

(786,304)

(334,268)

(1,728,073)

-

(114,497)

(10,461,694)

(17,519,589)

23,613,885

3,004,679

28

28

28

28

28

28

27

26

  Exchange gains on cash and cash equivalents

3,110,602

192,959

  Cash and cash equivalents at beginning of year

16,052,345

12,854,707

Cash and cash equivalents at end of year

25

42,776,832

16,052,345

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 162 to 241 are an integral part of these consolidated financial statements.

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Financial Statements

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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. Until 26 February 2024 the address 
of its registered office was 20 Omirou Street, CY-3095 Limassol, Cyprus. On 26 February 2024 
the Company has completed redomiciliation to ADGM, UAE with the registered address: Office 
Unit 3, Floor 6, Al Sila Tower, Abu Dhabi Global Market Square, Al Maryah Island, Abu Dhabi, UAE.

The Group’s principal place of business is at Nizhnyayа Krasnoselskaya st. 39, bld. 1, Moscow, 
Russia.

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 2023. 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.

Approval of the consolidated financial statements

Basis of consolidation

These consolidated financial statements were authorised for issue by the Board of Directors 
on 5 April 2024.

Global Depositary Receipts

Global Depositary Receipts (“GDRs”), each representing one ordinary share of the Company, 
are listed on the London Stock Exchange International Main Market (the Imposed suspension 
of GDRs trading on the London Stock Exchange continued as of the date of publication) 
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, were listed on the Moscow Exchange, all outstanding 
bonds were redeemed in February 2024.

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 2023 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.

(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.

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 

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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.

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.

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 infrastructure 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 infrastructure 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 infrastructure tariff, such as selling and payment terms, bears credit risk and 
controls the flow of receipts and payments. The infrastructure tariff is paid by the Group 
and recharged to the customer as a reimbursement. Under these arrangements the Group 
recognises revenue net of infrastructure tariff.

•  The Group has a contractual relationship with the customer and sets the terms 

of the transaction, excluding the infrastructure 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 providers of infrastructure tariff. Under these arrangements 
the Group recognises revenue net of infrastructure 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 

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ANNUAL REPORT 2023

Financial Statements

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the stage of completion of the transaction, determined based on the actual trip days lapsed 
against the total estimated number of trip days for the entire trip, since the customer receives 
and consumes the benefits from the services simultaneously.

Customers are invoiced on a regular basis and in accordance with pre-agreed payment terms with 
credit periods not exceeding one year. If the services rendered by the Group exceed the payment 
and the Group does not have the unconditional right to consideration for the services rendered, 
a contract asset is recognised. If the payments exceed the services rendered, a contract liability 
is recognised.

Identification of performance obligations. The Group assesses whether contracts that involve 
the provision of a range of goods and/or services contain one or more performance obligations 
(that is, distinct promises to provide a good or service) and allocates the transaction price to each 
performance obligation identified on the basis of its stand-alone selling price. A good or service 
that is promised to a customer is distinct if the customer can benefit from the good or service, 
either on its own or together with other resources that are readily available to the customer (that 
is, the good or service is capable of being distinct) and the Group’s promise to transfer the good 
or service to the customer is separately identifiable from other promises in the contract (that is, 
the promise to transfer the good or service is distinct within the context of the contract).

In assessing whether two or more promises to transfer goods and/or services to a customer 
are separate performance obligations, the Group considers, amongst others, whether it provides 
a significant service of integrating the good or services with other goods or services promised 
in the contract into a bundle of goods or services that represent the combined output or outputs 
for which the customer has contracted (that is, the Group is using the goods or services as inputs 
to produce or deliver the combined output or outputs specified by the customer), whether one 
or more of the goods and/or services significantly modifies or customises, or is significantly 
modified or customised by, one or more of the other goods or services promised in the contract 
or whether the good or services are highly interdependent or highly interrelated. The Group 
considers that all of the above operator’s services contracts contain a single performance 
obligation.

Financing component. In determining the transaction price, the Group adjusts the promised 
amount of consideration for the effects of the time value of money if the timing of payments agreed 
to (either explicitly or implicitly) provides the customer or the Group with a significant benefit 
of financing. In these circumstances, the contract contains a significant financing element.

The Group does not have any material contracts where the period between the transfer 
of the promised goods or services to the customer and payment by the customer exceeds one year. 
Consequently, the Group elected to use the practical expedient provided by IFRS 15 and does not 
adjust any of the transaction prices for the effect of the financing component for the time value 
of money.

Contract assets and contract liabilities. In case the goods transferred or services rendered 
by the Group as of the reporting date exceed the payments made by the customer as of that date 
and the Group does not have the unconditional right to charge the client for the goods transferred 
or services rendered, a contract asset is recognised. If the payments made by a customer exceed 
the goods transferred or services rendered under the relevant contract, a contract liability 
is recognised. The Group recognises any unconditional rights to consideration separately 
from contract assets as a trade receivable because only the passage of time is required before 
the payment is due.

The Group assesses a contract asset for impairment in accordance with IFRS 9 using the simplified 
approach permitted by IFRS 9 which requires lifetime expected credit losses to be recognised 
from initial recognition of the contract asset. Impairments of contract assets are measured, 

presented and disclosed on the same basis as as for trade receivables. Contract assets 
are written off when there is no reasonable expectation of recovery. Indicators that there is no 
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage 
in a repayment plan with the Group and a failure to make contractual payments for a period 
of greater than 180 days past due.

Costs to obtain or fulfil contracts with customers. To the extent that these are recoverable, 
incremental costs incurred by the Group to obtain a contract and incremental costs 
incurred to fulfil a contract are capitalised and amortised on a straight-line basis over 
the term of the specific contract – consistent with the pattern of the transfer of the goods 
and/or services to which they relate to – and assessed for impairment. Incremental costs 
of obtaining contracts are those costs that the Group incurs to obtain a contract with 
a customer that would not have been incurred if the contract had not been obtained.

The Group does not have any contracts where the period of transfer of the goods and/
or provision of the services (that is, the period between the start and completion of a trip) 
exceeds one year. Accordingly, the Group recognises the incremental costs of obtaining 
a contract as an expense when incurred since the amortization period of the asset that it would 
otherwise have recognised is less than one year.

Foreign currency translation

(a) Functional and presentation currency
Items included in the financial statements of each entity of the Group are measured using 
the currency of the primary economic environment in which the entity operates (“the functional 
currency”). The functional currency of the Company and of the majority of its subsidiaries 
is the Russian Rouble (RUB). The consolidated financial statements are presented in Russian 
Roubles (RUB) (“the presentation currency”) because this is the currency better understood 
by the principal users of the financial statements.

(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;

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•  Income and expense items at the average yearly rate (unless this average is not a reasonable 

approximation of the cumulative effect of the rates prevailing on the transaction dates, in which 
case income and expenses are translated at the rate on the dates of the transactions); and
•  Share capital, share premium and all other reserves are translated using the historic rate.

All exchange differences resulting from the above translation are recognised in other 
comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign 
operations, including foreign exchange differences on long term loans receivable designated 
as part of the net investment in foreign operations, are recognised in other comprehensive 
income. When a foreign operation is disposed of or sold and control or significant influence is lost, 
exchange differences that were recorded in equity are recognised in the income statement as part 
of the gain or loss on disposal. On a partial disposal of a foreign operation, the proportionate share 
of the cumulative amount of the exchange differences recorded in equity relating to the amount 
disposed is reclassified in the income statement. The Group assesses whether there is a partial 
disposal of a foreign operation on the basis of the change in the Group’s proportionate ownership 
interest in the foreign operation.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated 
as assets and liabilities of the foreign entity and translated at the closing rate. Exchange 
differences arising are recognised in other comprehensive income.

Hedging activities

The Group is exposed to foreign exchange risk arising from dividends declared in Russian Roubles 
and paid in US Dollar at the rate set at the date of the declaration. The Group uses foreign currency 
cash deposits denominated in US Dollars to hedge this foreign exchange risk exposure.

In particular, the US Dollar denominated cash deposits are designated by the Group as hedging 
instruments in hedging the foreign exchange risk associated with the highly probable dividend 
payment and the resulting payable. At inception of the hedge relationship, the Group documents, 
amongst others, the economic relationship between the hedging instrument and hedged item, 
including whether changes in the cash flows of the hedging instrument are expected to offset 
changes in the cash flows of the hedged item. The Group documents its risk management objective 
and strategy for undertaking its hedge transactions.

As a result of the application of hedge accounting, the foreign exchange difference on the hedging 
instrument is recognised in other comprehensive income in the “Cash flow hedge reserve” within 
equity. Amounts recognised in equity are reclassified to the income statement, within “Finance 
income and costs”, in the same period or periods during which the hedged item impacts the income 
statement, being once foreign exchange differences are recognised on the hedged item.

Accordingly, in the cash flow statement “Dividends paid to the owners of the Company” 
are disclosed net-off foreign exchange differences on the relevant cash deposits (i.e., 
at the amounts declared) and the “Exchange (losses)/gains on cash and cash equivalents” do not 
include the impact from the relevant cash deposits used for hedging. In the income statement 
the amounts included in “Finance income and costs” (Note 14) within “Net foreign exchange 
transaction (losses)/gains on cash and cash equivalents and other monetary assets” and “Net 
foreign exchange transaction gains/(losses) on borrowings and other liabilities” are disclosed 
after application of hedge accounting (i.e., excluding the foreign currency gains/losses arising 
for the hedging).

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

Locomotives

Mounted wheels

Motor vehicles and other property, plant and equipment

30

22

32

30-40

15-26

20-32

9-45

7

3 to 10

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end 
of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s 
carrying amount is greater than its estimated recoverable amount.

Assets under construction are not depreciated until they are completed and brought into use, 
at which time they are reclassified in the relevant class of property, plant and equipment and 
depreciated accordingly.

Borrowing costs to finance the construction of property, plant and equipment are capitalised, 
during the period of time that is required to complete and prepare the asset for its intended use. 
All other borrowing costs are expensed.

Expenditure for repairs and maintenance of property, plant and equipment is charged 
to the income statement of the year in which they are incurred. The cost of major renovations 
and other subsequent expenditure are included in the carrying amount of the asset 
or recognised as a separate asset, as appropriate, only when it is probable that future 
economic benefits associated with the item will flow to the Group and the cost of the item can 
be measured reliably. The carrying amount of the replaced cost is derecognised.

Gains and losses on disposal of property, plant and equipment are determined by comparing 
the proceeds with carrying amount and these are included within operating profit as part 
of operating expenses.

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

170

171

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.

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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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

172

173

Right-of-use assets are measured at cost comprising the following:
•  the amount of the initial measurement of lease liability;
•  any lease payments made at or before the commencement date less any lease incentives 

received;

•  any initial direct costs; and
•  restoration costs.

Any remeasurement of the lease liability arising if the cash flows change based on the original 
terms and conditions of the lease results in a corresponding adjustment to the right-of-use asset. 
The adjustment can be positive or negative.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and 
the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase 
option, the right-of-use asset is depreciated over the underlying asset’s useful life.

In determining the lease term, the Group considers all facts and circumstances that create 
an economic incentive to exercise an extension option, or not exercise a termination option. 
Extension options (or periods after termination options) are only included in the lease term if 
the lease is reasonably certain to be extended (or not terminated).

Right-of-use assets are reviewed for impairment in accordance with the Group’s accounting policy 
for impairment of non-financial assets.

As an exception to the above, the Group accounts for short-term leases and leases of low value 
assets by recognising the lease payments as an expense on a straight-line basis in the income 
statement. Short-term leases are leases with a lease term of 12 months or less.

Right-of-use assets and associated lease liabilities are presented as separate lines on the face 
of the balance sheet, except for right-of-use assets and associated lease liabilities arising from 
leases with financial institutions that include purchase options that are reasonably certain 
to be exercised due to the exercise price being a nominal amount compared to the fair value 
of the leased asset on the exercise date. The latter are presented within the same line item 
as the corresponding underlying assets would be presented if they were owned and within 
borrowings, respectively. Management believes that this presentation best reflects the substance 
of the leases with financial institutions, being similar to that of purchases via collateralised 
borrowings.

Security deposits paid by the Group at the commencement of a lease contract that are held 
by the lessor throughout the term of the lease and are refunded to the Group at the end of the lease 
term if the Group has fully performed and observed all of the conditions set out in the contract 
are accounted for as financial assets.

Sale and leaseback
A sale and leaseback transaction involves the sale of an asset and the leasing back of the same 
asset.

The accounting of a sale and leaseback transaction depends on whether the transfer of the asset 
qualifies as a sale. In making this assessment, the Group assesses whether the buyer-lessor 
obtained control of the underlying asset.

If the transfer qualifies as a sale of the asset, the Group measures the right-of-use asset arising 
from the leaseback at the proportion of the previous carrying amount of the asset that relates 
to the right-of-use retained by the Group. Accordingly, the Group recognises only the amount 
of any gain or loss that relates to the rights transferred to the buyer-lessor. If the fair value 
of the consideration for the sale of the asset does not equal the fair value of the asset, or if 
the payments for the lease are not at market rates, the Group accounts for any below-market 

terms as a prepayment of lease payments; and any above-market terms as additional financing 
provided by the buyer-lessor to the Group. This is measured on the basis of the more readily 
determinable of the difference between the fair value of the consideration for the sale and 
the fair value of the asset; and the difference between the present value of the contractual 
payments for the lease and the present value of payments for the lease at market rates.

If the transfer does not qualify as a sale, the Group continues to recognise the transferred asset 
and recognises a financial liability equal to the transfer proceeds.

(b) The Group is the lessor
Finance leases
Where the Group is a lessor in a lease which transfers substantially all the risks and rewards 
incidental to ownership to the lessee, the assets leased out are presented as a finance lease 
receivable and carried at the present value of the future lease payments. Finance lease 
receivables are initially recognised at commencement (when the lease term begins) using 
a discount rate determined at inception (the earlier of the date of the lease agreement and 
the date of commitment by the parties to the principal provisions of the lease).

The difference between the gross receivable and the present value represents unearned 
finance income. The income is recognised over the term of the lease using the net investment 
method (before income tax and other taxes) which reflects a constant periodic rate of return. 
Incremental costs directly attributable to negotiating and arranging the lease are included 
in the initial measurement of the finance lease receivable and reduce the amount of income 
recognised over the lease term. Finance income from leases is recorded within interest income 
in the income statement.

Impairment of lease receivables
The Group recognises credit loss allowance on lease receivables in accordance with IFRS 9 
using the simplified approach permitted by the standard, which requires expected credit losses 
to be recognised from initial recognition of the lease receivable at an amount equal to lifetime 
ECL. The ECL is determined in the same way as for trade receivables and is recognised through 
an allowance account to write down the lease receivables’ net carrying amount to the present 
value of expected cash flows discounted at the interest rates implicit in the leases. 
The estimated future cash flows reflect the cash flows that may result from obtaining and 
selling the assets subject to the lease.

Operating leases
Assets leased out under operating leases are included in property, plant and equipment 
in the balance sheet based on the nature of the asset. They are depreciated over their expected 
useful lives on a basis consistent with similar owned property, plant and equipment.

Revenues from operating leasing
Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over 
the lease term.

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

174

175

Financial instruments

(a) Financial assets
Recognition and derecognition. All purchases and sales of financial assets that require delivery 
within the time frame established by regulation or market convention (“regular way” purchases 
and sales) are recorded at trade-date; being the date on which the Group commits to purchase 
or sell the asset. All other purchases and sales are recognised when the entity becomes a party 
to the contractual provisions of the instrument.

Financial assets are derecognised when the rights to receive cash flows from the financial assets 
have expired or have been transferred and the Group has transferred substantially all the risks 
and rewards of ownership. Any gain or loss arising upon their derecognition is recognised directly 
in the income statement.

Classification. The classification depends on the Group’s business model for managing 
the financial assets and the contractual cash flow characteristics of the assets. Management 
determines the classification of financial assets at initial recognition.

The Group classifies its financial assets at amortised cost. Financial assets at amortised cost 
are held for collection of contractual cash flows and their cash flows represent solely payments 
of principal and interest. They are included in current assets, except for maturities greater 
than twelve months after the balance sheet date. These are classified as non-current assets. 
The Group’s financial assets at amortised cost comprise of trade receivables, loans and other 
receivables and cash and cash equivalents on the balance sheet.

Reclassification. Financial instruments are reclassified only when the business model for managing 
those assets changes. The reclassification has a prospective effect and takes place from the start 
of the first reporting period following the change.

Measurement. At initial recognition, the Group measures financial assets classified at amortised 
cost at their fair value plus incremental transaction costs that are directly attributable 
to the acquisition of the financial assets. Subsequently, these are measured at amortised cost.

Interest income. Interest income on financial assets at amortised cost is recognised using 
the effective interest rate method and is included within “finance income” in the income statement. 
In particular, interest income is calculated by applying the effective interest rate to the gross 
carrying amount of a financial asset except for financial assets that subsequently become credit-
impaired. For credit-impaired financial assets, the effective interest rate is applied to the net 
carrying amount of the financial asset; that is after deduction of the loss allowance. The Group’s 
definition of credit-impaired assets is explained in Note 6, Credit risk section.

Impairment. The Group assesses on each reporting date and on a forward looking basis 
the expected credit losses (“ECL”) associated with its debt financial assets carried at amortised 
cost. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that 
is determined by evaluating a range of possible outcomes, (ii) time value of money, and (iii) all 
reasonable and supportable information that is available without undue cost and effort at the end 
of each reporting period about past events, current conditions and forecasts of future conditions.

The carrying amount of the financial assets is reduced through the use of an allowance account, 
and the amount of the loss is recognised in the income statement within “selling and marketing 
costs”. Subsequent recoveries of amounts for which loss allowance was previously recognised 
are credited against the same line item.

The impairment methodology applied by the Group for calculating expected credit losses 
depends on the type of financial asset assessed for impairment. Specifically:
•  For trade receivables the Group applies the simplified approach permitted by IFRS 9 

for calculating expected credit losses, which requires lifetime expected losses 
to be recognised from initial recognition of the financial assets. The assessment is done 
on an individual basis.

•  For all its other debt financial assets carried at amortised cost, the Group applies the general 
approach. In particular, the Group applies the three stage model for calculating impairment, 
which is based on changes in the credit quality of the financial asset since initial recognition. 
A financial instrument that is not credit -impaired on initial recognition is classified in Stage 1. 
The ECL of financial assets in Stage 1 is measured at an amount equal to the portion 
of lifetime ECL that results from default events possible within the next 12 months or until 
contractual maturity, if shorter. If the Group identifies a significant increase in credit risk 
(“SICR”) since initial recognition, the asset is transferred to Stage 2 and its ECL is measured 
based on ECL on a lifetime basis, that is, up until its contractual maturity but considering 
expected prepayments, if any. Refer to Note 6, Credit risk section for a description of how 
the Group determines when a SICR has occurred. If the Group determines that a financial 
asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured 
as a Lifetime ECL. The Group’s definition of credit impaired assets and definition of default 
is explained in Note 6, Credit risk section.

Write-off. Financial assets are written-off, in whole or in part, when the Group has concluded 
that there is no reasonable expectation of recovery. Indicators that there is no reasonable 
expectation of recovery include, amongst others, the failure of a debtor to engage 
in a repayment plan with the Group and a failure to make contractual payments for a period 
of greater than 180 days past due. The Group may write-off financial assets that are still subject 
to enforcement activity when the Group seeks to recover amounts that are contractually due, 
however, there is no reasonable expectation of recovery. Subsequent recoveries of amounts 
previously written off are credited against ‘selling and marketing costs’ in the income 
statement.

Classification as trade receivables. Trade receivables are amounts due from customers 
for services performed in the ordinary course of business. If collection is expected in one 
year or less (or in a normal operating cycle of the business, if longer than one year) they 
are classified as current assets, if not, they are presented as non-current assets. Trade 
receivables are recognised initially at the amount of consideration that is unconditional unless 
they contain significant financing components, in which case they are recognised at fair value. 
The Group holds its trade receivables with the objective to collect the contractual cash flows 
and their contractual cash flows represent solely payments of principal and interest and 
therefore measures them subsequently at amortised cost using the effective interest method, 
less provision for impairment.

Classification as loans and other receivables. These amounts generally arise from transactions 
outside the usual operating activities of the Group. These are held with the objective to collect 
their contractual cash flows and their contractual cash flows represent solely payments 
of principal and interest. Accordingly, these are measured at amortised cost using the effective 
interest method, less provision for impairment. Loans and other receivables are classified 
as current assets if they are due within one year or less (or in the normal operating cycle 
of the business if longer). If not, they are presented as non-current assets.

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

176

177

Classification as cash and cash equivalents. In the cash flow statement, cash and cash equivalents 
include cash in hand and deposits held at call with banks with original maturity of three months 
or less, less bank overdrafts, if any. Cash and cash equivalents are carried at amortised cost using 
the effective interest method, less provision for impairment. Bank overdrafts are shown within 
borrowings in the current liabilities on the balance sheet.

(b) Financial liabilities
Classification. The Group’s financial liabilities are initially recognised at fair value and classified 
as subsequently measured at amortised cost.

Derecognition of financial liabilities. A financial liability is derecognised when the obligation 
under the liability is discharged or cancelled or expires. The difference between the carrying 
amount of a financial liability that has been extinguished or transferred to another party and 
the consideration paid, including any non-cash assets transferred or liabilities assumed, 
is recognised in income statement as other income or finance costs. When an existing financial 
liability is replaced by another from the same lender on substantially different terms, or the terms 
of an existing liability are substantially modified, such an exchange or modification is treated 
as a derecognition of the original liability and the recognition of a new liability, and the difference 
in the respective carrying amounts, including costs or fees incurred for the modification, 
is recognised in profit or loss within finance costs. When the terms of the existing financial 
liability are not substantially modified, the existing liability is not derecognised and the gain/loss 
arising on the modification, including costs or fees incurred for the modification, is recognised 
in the income statement within finance costs.

Modifications. An exchange between the Group and its original lenders of debt instruments with 
substantially different terms, as well as substantial modifications of the terms and conditions 
of existing financial liabilities, are accounted for as an extinguishment of the original financial 
liability and the recognition of a new financial liability. The terms are substantially different if 
the discounted present value of the cash flows under the new terms, including any fees paid 
net of any fees received and discounted using the original effective interest rate, is at least 
10% different from the discounted present value of the remaining cash flows of the original 
financial liability. In addition, other qualitative factors, such as the currency that the instrument 
is denominated in, changes in the type of interest rate, new conversion features attached 
to the instrument and change in loan covenants are also considered.

If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, 
any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. 
If the exchange or modification is not accounted for as an extinguishment, any costs or fees 
incurred adjust the carrying amount of the liability and are amortised over the remaining term 
of the modified liability.

Modifications of liabilities that do not result in extinguishment are accounted for as a change 
in estimate using a cumulative catch up method, with any gain or loss recognised in profit or loss, 
unless the economic substance of the difference in carrying values is attributed to a capital 
transaction with owners.

Borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. 
Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net 
of transaction costs) and the redemption value is recognised over the period of the borrowings 
using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan 
to the extent that it is probable that some or all of the facility will be drawn down. In this case, 
the fee is deferred until draw down occurs. To the extent there is no evidence that it is probable 
that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment 
for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless the Group has an unconditional right 
to defer settlement of the liability for at least twelve months after the balance sheet date.

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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Notes to the consolidated financial statements 
 
 
 
Share capital, share premium and treasury shares

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares are shown in equity 
as a deduction, net of tax, from the proceeds.

Any excess of the fair value of consideration received over the par value of shares issued 
is recognised as share premium. Share premium is the difference between the fair value 
of the consideration receivable for the issue of shares and the nominal value of the shares. Share 
premium account can only be resorted to for limited purposes, which do not include the distribution 
of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law on reduction 
of share capital.

Where any Group company purchases the Company’s equity share capital (treasury shares), 
the consideration paid, including any directly attributable incremental costs (net of income 
taxes) is deducted from equity attributable to the Company’s equity holders within a separate 
reserve ‘treasury shares’ until the shares are cancelled or re-issued. Where such ordinary 
shares are subsequently re-issued, any consideration received, net of any directly attributable 
incremental transaction costs and the related income tax effects, is included in equity attributable 
to the Company’s equity holders within retained earnings. The consideration initially paid 
for treasury shares which are subsequently re-issued is transferred from “treasury shares” 
to retained earnings.

Capital contribution

Capital contribution constitutes contributions made by the Company’s shareholders other than 
for the issue of shares by the Company in their capacity as equity owners of the Company for which 
the Company has no contractual obligation to repay them. Such contributions are recognised 
directly in equity as they constitute transactions with equity owners in their capacity as equity 
owners of the Company.

Provisions and contingent liabilities

Provisions are recognised when the Group has a present legal or constructive obligation as a result 
of past events, it is more likely than not that an outflow of resources will be required to settle 
the obligation, and the amount has been reliably estimated. Provisions are not recognised 
for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required 
in settlement is determined by considering the class of obligations as a whole. A provision 
is recognised even if the likelihood of an outflow with respect to any one item included in the same 
class of obligations may be small.

Provisions are measured at the present value of the expenditure expected to be required to settle 
the obligation using a pre-tax rate that reflects current market assessments of the time value 
of money and the risks specific to the obligation. The increase in the provision due to passage 
of time is recognised as interest expense.

Provisions are only used to cover those expenses which they had been set up for. Other possible 
or present obligations that arise from past events but it is not probable that an outflow of resources 
embodying economic benefit will be required to settle the obligations, or the amount cannot 
be measured with sufficient reliability, are disclosed in the notes to the financial statements 
as contingent liabilities.

ANNUAL REPORT 2023

Financial Statements

178

179

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.

Uncertain tax positions

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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.

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ANNUAL REPORT 2023

Financial Statements

180

181

Russian Value Added Tax (“VAT”)

Prepayments

Russian output value added tax related to sales is payable to tax authorities on the earlier of (a) 
collection of receivables from customers or (b) delivery of goods or services to customers. Input 
VAT is generally recoverable against output VAT upon receipt of the VAT invoice. The tax authorities 
permit the settlement of VAT on a net basis. VAT related to sales and purchases is recognised 
in the balance sheet on a gross basis and disclosed separately as an asset and liability. Where 
provision has been made for the impairment of receivables, the impairment loss is recorded 
for the gross amount of the debtor, including VAT.

Employee benefits

Wages, salaries, contributions to the state pension and social insurance funds, paid annual leave 
and sick leave, bonuses and other benefits (such as health services) are accrued in the year 
in which the associated services are rendered by the employees of the Group. These are included 
in staff costs and the Group has no further obligations once the contributions have been paid.

The Group recognises a liability and an expense for bonuses where contractually obliged or where 
there is a past practice that has created a constructive obligation.

Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal 
retirement date, or when an employee accepts voluntary redundancy in exchange for these 
benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when 
the Group can no longer withdraw the offer of those benefits; and (b) when the Group recognises 
costs for a restructuring that is within the scope of IAS 37 and involves the payment of terminations 
benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits 
are measured based on the number of employees expected to accept the offer. Benefits falling 
due more than 12 months after the end of the reporting period are discounted to present value.

Share based payment transactions

The Group operates a cash-settled share-based compensation plan. In accordance with 
compensation plan, key management personnel and selected employees of the Group are entitled 
to receive cash compensations based on the weighted average market quotations of the fixed 
number of global depository receipts (“GDR”) of the Company. The fair value of the employee 
services received in exchange for the grant of the equivalent GDR instruments is recognised 
as an expense over the vesting period.

At each balance sheet date, if required by the terms of the compensation plan, the Group 
revises its estimates of the monetary equivalent of GDRs that are expected to vest. It recognises 
the impact of the revision of original estimates, including number of instruments expected to vest 
and fair values, in profit or loss, with a corresponding adjustment to share-based payment liability.

Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s 
financial statements in the period in which the dividends are approved and are no longer 
at the discretion of the Company. More specifically, interim dividends are recognised when 
approved by the Board of Directors whereas in case of final dividends, these are recognised 
at the time when they are approved by the Company’s shareholders.

Prepayments are carried at cost less provision for impairment. A prepayment is classified 
as non-current when the goods or services relating to the prepayment are expected 
to be obtained after one year, or when the prepayment relates to an asset which will 
itself be classified as non-current upon initial recognition. Prepayments to acquire assets 
are transferred to the carrying amount of the asset once the Group has obtained control 
of the asset and it is probable that future economic benefits associated with the asset will flow 
to the Group. Other prepayments are written off to profit or loss when the goods or services 
relating to the prepayments are received. If there is an indication that the assets, goods 
or services relating to a prepayment will not be received, the carrying value of the prepayment 
is written down accordingly and a corresponding impairment loss is recognised in the income 
statement.

Other income

Other income generally represents amounts received from transactions that are outside 
the Group’s principal activities. This is recognised in the income statement over the period 
it relates to, based on the terms of the arrangement. Other income that it is not linked 
to the Group’s future performance and/or satisfaction of any future obligations is recognised 
in the period in which the Group is entitled to receive it.

5. New accounting pronouncements

The new standards, interpretations, and amendments to the existing standards effective 
for annual accounting periods commencing on 1 January 2023 are as follows:

IFRS 17 Insurance Contracts – (issued on 18 May 2017 and is effective for annual reporting 
periods beginning on or after 1 January 2023 with earlier application permitted as long as IFRS 9 
is also applied). The IASB completed its project on insurance contracts with the issuance 
of IFRS 17 Insurance Contracts in May 2017. IFRS 17 replaces IFRS 4 and sets out principles 
for the recognition, measurement, presentation and disclosure of insurance contracts within 
the scope of IFRS 17. IFRS 17 requires insurance liabilities to be measured at a current fulfilment 
value and provides a more uniform measurement and presentation approach for all insurance 
contracts. These requirements are designed to achieve the goal of a consistent, principle-based 
accounting for insurance contracts.

Amendments to IFRS 17 Insurance Contracts – (issued on 25 June 2020 and is effective 
for annual reporting periods beginning on or after 1 January 2023). The main changes are:
•  Deferral of the date of initial application of IFRS 17 by two years to annual periods beginning 

on or after 1 January 2023

•  Additional scope exclusion for credit card contracts and similar contracts that provide 
insurance coverage as well as optional scope exclusion for loan contracts that transfer 
significant insurance risk

•  Recognition of insurance acquisition cash flows relating to expected contract renewals, 

including transition provisions and guidance for insurance acquisition cash flows recognised 
in a business acquired in a business combination

•  Clarification of the application of IFRS 17 in interim financial statements allowing 

an accounting policy choice at a reporting entity level

•  Clarification of the application of contractual service margin (“CSM”) attributable 

to investment-return service and investment-related service and changes 
to the corresponding disclosure requirements

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

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183

•  Extension of the risk mitigation option to include reinsurance contracts held and non-financial 

derivatives

•  Amendments to require an entity that at initial recognition recognises losses on onerous 

insurance contracts issued to also recognise a gain on reinsurance contracts held

•  Simplified presentation of insurance contracts in the statement of financial position so that 
entities would present insurance contract assets and liabilities in the statement of financial 
position determined using portfolios of insurance contracts rather than groups of insurance 
contracts

•  Additional transition relief for business combinations and additional transition relief for the date 

of application of the risk mitigation option and the use of the fair value transition approach

–  Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies – 

(issued on 12 February 2021 and is effective for annual reporting periods beginning on or after 
1 January 2023). The IASB concluded that the concept of materiality could be applied 
in making decisions about the disclosure of accounting policies. Therefore, the Board decided 
to amend IAS 1 to replace all instances of the term ‘significant accounting policies’ with 
‘material accounting policy information’. In the Board’s view, accounting policy information 
is material if, when considered together with other information included in an entity’s financial 
statements, it can reasonably be expected to influence decisions that the primary users 
of general purpose financial statements make on the basis of those financial statements. 
The Board concluded that these amendments would help entities reduce immaterial 
accounting policy disclosures in their financial statements.

–  Amendments to IAS 8 – Definition of Accounting Estimates – (issued on 12 February 

2021 and is effective for annual reporting periods beginning on or after 1 January 2023). 
The amendments replace the definition of a change in accounting estimates with a definition 
of accounting estimates. Under the new definition, accounting estimates are “monetary 
amounts in financial statements that are subject to measurement uncertainty”. Entities 
develop accounting estimates if accounting policies require items in financial statements 
to be measured in a way that involves measurement uncertainty. The amendments clarify 
that a change in accounting estimate that results from new information or new developments 
is not the correction of an error.

–  Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single 
Transaction – (issued on 7 May 2021 and is effective for annual reporting periods beginning 
on or after 1 January 2023). The IASB amends IAS 12 to provide a further exception from 
the initial recognition exemption. Under the amendments, an entity does not apply the initial 
recognition exemption for transactions that give rise to equal taxable and deductible 
temporary differences.

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.

Developments in auditing

ISA 600 (Revised 2022) – Audits of Group Financial Statements (Including the Work of Component 
Auditors), effective for audits of group financial statements for periods beginning on or after 
15 December 2023. ISA 600 (Revised) includes new and revised requirements and application 
material that better aligns the standard with recently revised standards such as ISQM 1, ISA220 
(Revised) and ISA 315 (Revised 2019). The new and revised requirements also strengthen 
the auditor’s responsibilities related to professional skepticism, planning and performing a group 
audit, two-way communications between the group auditor and component auditors, and 
documentation.

The changes made to ISA 600 (Revised) are intended to:
•  Encourage proactive management of quality at the group engagement level and 

the component level

•  Keep the standard fit for purpose in a wide range of circumstances and in a developing 

environment

•  Reinforce the need for robust communication and interactions during the group audit
•  Foster an appropriately independent and challenging skeptical mindset of the auditor

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.

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 2023, 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 2023 the Russian Rouble has decreased against the US Dollar 
from 70.3375 as of 31 December 2022 to 89.6883 Russian Roubles (27.5% decrease) and has 
decreased against the Euro from 75.6553 as of 31 December 2022 to 99.1919 Russian Roubles 
(31.1% decrease).

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.

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ANNUAL REPORT 2023

Financial Statements

184

185

The carrying amounts of monetary assets and liabilities denominated in US Dollars 
as at 31 December 2023 and 31 December 2022 are as follows:

Assets

Liabilities

2023

RUB’000

29,478

232

2022

RUB’000

1,046,653

29,070

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 2023, would have increased/decreased by RUB 4,937 thousand (2022: 20% change, 
effect RUB 158,706 thousand) and equity would have increased/decreased by RUB 4,937 thousand 
(2022: 20% change, effect RUB 491,067 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 
2023, would have increased /decreased by RUB NIL thousand (2022: 30% change, effect 
RUB 32,836 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 (2022: RUB NIL 
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 (2022: RUB NIL thousand)).

(b) Cash flow and fair value interest rate risk
The Group’s income and operating cash flows are exposed to changes in market interest rates 
arising mainly from floating rate borrowings. In addition, the Group is exposed to fair value interest 
rate risk through market value fluctuations of borrowings and bank deposits with fixed interest 
rates. However, any potential change in the market rates of interest will not have an impact 
on the carrying amount of the fixed rate financial instruments and hence on the Group’s post tax 
profit or equity as these instruments are carried at amortised cost.

Long-term borrowing contracts of the Group are concluded to finance the purchase of rolling 
stock. While analysing new investment projects and concluding credit facility agreements, loan 
agreements and lease contracts, issues of bonds and various scenarios are developed taking 

into account terms of refinancing and alternative financing sources. Based on these scenarios 
the Group measures the impact of a definite change in interest rate on profit or loss and selects 
the financing model that allows maximizing the estimated future profit.

As at 31 December 2023 and 31 December 2022, 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 78.89% of the Group’s trade receivables as at 31 December 2023 (2022: 78.83%).

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 ‘Baa2’. 
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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ANNUAL REPORT 2023

Financial Statements

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187

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.

internal credit rating

Especially the following indicators are incorporated:
• 
•  external credit rating (as far as available)
•  actual or expected significant adverse changes in business, financial or economic conditions 

that are expected to cause a significant change to the borrower’s/counterparty’s ability to meet 
its obligations

•  actual or expected significant changes in the operating results of the borrower/counterparty
•  significant increases in credit risk on other financial instruments of the same borrower/

counterparty

•  significant changes in the value of the collateral supporting the obligation or in the quality 

of third-party guarantees or credit enhancements

•  significant changes in the expected performance and behaviour of the borrower/counterparty, 

including changes in the payment status of counterparty in the group and changes 
in the operating results of the borrower.

Macroeconomic information (such as market interest rates or growth rates) is incorporated as part 
of the internal rating model. The historical loss rates are adjusted to reflect current and forward-
looking information on macroeconomic factors affecting the ability of the customers to settle 
the receivable balances. Regardless of the analysis above, a significant increase in credit risk 
is presumed if a debtor is more than 30 days past due in making a contractual payment.

Default and credit-impaired. A default on a financial asset is when the financial asset meets one 
or more of the following criteria: (i) the borrower is more than 90 days past due on its contractual 
payments, (ii) the borrower is assessed as unlikely to pay its credit obligations in full without 
realisation of collateral, regardless of the existence of any past-due amount or of the number 
of days past due, (iii) the Group, for economic or contractual reasons relating to the borrower’s 
financial difficulty, granted to the borrower a concession(s) that it would not otherwise consider. 
The Group considers defaulted assets to be credit-impaired so that Stage 3 represents all debt 
financial assets which are considered defaulted.

Write-off. Assets are written-off, in whole or in part, when the Group has concluded that there is no 
reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery 
include, amongst others, the failure of a debtor to engage in a repayment plan with the Group and 
a failure to make contractual payments for a period of greater than 180 days past due. The Group 
may write-off financial assets that are still subject to enforcement activity when the Group seeks 
to recover amounts that are contractually due, however, there is no reasonable expectation 
of recovery. Subsequent recoveries of amounts previously written off are credited against ‘selling 
and marketing costs’ in the income statement.

The Group does not have any material debt financial assets that are subject to the impairment 
requirements of IFRS 9 and their contractual cash flows have been modified.

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 2023

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 2022

Current (not past due)

1-30 days past due

31-90 days past due

more than 90 days past due

Total

Trade  
receivables

Finance lease 
receivables

RUB’000

RUB’000

3,748,020

138,760

678,363

205,866

10,348

-

-

-

4,642,597

138,760

Trade  
receivables

Finance lease 
receivables

RUB’000

RUB’000

3,134,198

589,065

26,111

11,402

149,746

-

-

-

3,760,776

149,746

The gross carrying amounts, as per above, represent the Group’s maximum exposure to credit 
risk on these assets as at 31 December 2023 and as at 31 December 2022 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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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

188

189

The movement in the credit loss allowance for trade receivables during the years 2023 and 2022 
is presented in the table below:

The movement in the credit loss allowance for other receivables during the years 2023 and 
2022 is presented in the table below:

Opening balance as at 1 January

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

2023

RUB’000

(10,343)

(7,490)

135

-

2,498

-

2022

RUB’000

(98,955)

(2,736)

23,874

66,606

868

-

Closing balance as at 31 December

(15,200)

(10,343)

The estimated expected credit loss allowance on finance lease receivables as at 31 December 
2023 and as at 31 December 2022 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 2023 and 2022:

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

2023

RUB’000

261,446

2022

RUB’000

22,155

10,881

9,762

Non-performing 
or Credit-impaired

Stage 3 – Interest and/or principal 
repayments are more than 90 days 
past due

25,632

4,602

The gross carrying amounts, as per above, represent the Group’s maximum exposure to credit risk 
on these assets as at 31 December 2023 and as at 31 December 2022 without taking into account 
any collateral held. The Group does not hold any collateral as security for any loans receivable 
or other receivable balances.

Opening balance as at 1 January

Assets written off during the year as uncollectible

Other

Closing balance as at 31 December

Non-performing

2023

RUB’000

(4,602)

202

(21,232)

(25,632)

2022

RUB’000

(6,141)

1,707

(168)

(4,602)

The estimated expected credit loss allowance on loans receivable as at 31 December 2022 
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 2023 and 2022:

Moody’s1

Moody’s1

Moody’s1

ACRA 2

ACRA 2

Expert RA3

Other external non-rated banks – 
satisfactory credit quality (performing)

Rating

A2 - A1

Baa3 – Baa1

B1

2023

RUB’000

859,279

79,065

-

2022

RUB’000

4,187,545

127,458

1,337

AAA(RU) - A(RU)

41,723,686

11,600,969

BBB+(RU)

ruA+ - ruA

414

114,005

-

-

28,926

95,360

Total cash at bank and bank deposits4

42,776,449

16,041,595

The Group 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 
2023 and as at 31 December 2022 based on the general approach of IFRS 9, was immaterial. 
All cash and cash equivalents were performing (Stage 1) as at 31 December 2023 and 
as at 31 December 2022.

1 

International rating agency Moody’s Investors Service.

2  Russian authorized credit rating agency ACRA.

3  Russian authorized credit rating agency Expert RA.

4  The rest of the balance sheet item ‘cash and cash equivalents’ is cash on hand.

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Notes to the consolidated financial statements 
 
 
 
Liquidity risk

The Group has an excess of current assets over current liabilites of RUB 39,017,720 thousand 
as at 31 December 2023 (2022: excess of current assets over current liabilites 
RUB 4,946,447 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 29,000,000 thousand 
as of 31 December 2023 (2022: RUB 42,783,333 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.

The table below summarises the analysis of financial liabilities of the Group by maturity 
as of 31 December 2023 and 31 December 2022. 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

Trade 
and other 
payables

Other lease 
liabilities

Trade 
and other 
payables

Other lease 
liabilities

286,184

557,783

719,938

950,674

554,005

562,276

1,658

3,632,518

1,857,448

3,267,316

2,806,638

3,947,711

4,762,644

5,141,230

1,658

21,784,645

31 December 2022

Borrowings

1,240,580

3,761,571

2,200,301

5,437,567

6,693,045

3,216,301

402,763

1,210,094

-

-

-

-

-

-

22,549,365

1,612,857

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

Note: statutory liabilities are excluded as the analysis is provided for financial liabilities only.

(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.

ANNUAL REPORT 2023

Financial Statements

190

191

Defining capital, the Group uses the amount of net assets attributable to the Company’s equity 
owners and the Group’s borrowings.

The Group manages the capital based on borrowings to total capitalisation ratio. Borrowings 
include loan liabilities. To maintain or change its equity structure, the Company may vary 
the amount of dividend paid or sell assets in order to reduce debts.

Total capitalisation is calculated as the sum of the total Group borrowings and total equity 
attributable to the equity owners of the Company. The management does not currently have 
any specific target for the rate of borrowings to total capitalisation.

The rate of borrowings to total capitalisation as at 31 December 2023 and 31 December 2022 
are as follows:

Total borrowings

Total capitalisation

2023

RUB’000

2022

RUB’000

15,377,104

20,648,650

115,230,460

88,126,351

Total borrowings to total capitalisation ratio (percentage)

13.34%

23.43%

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 2023 and 2022. Management believes that the Group will be able 
to comply with its external requirements to the capital during the whole term of agreements.

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Fair value is the price that would be received to sell an asset or paid to transfer a liability 
in an orderly transaction between market participants at the measurement date. The best 
evidence of fair value is price in an active market. An active market is one in which transactions 
for the asset or liability take place with sufficient frequency and volume to provide pricing 
information on an ongoing basis.

The estimated fair values of financial instruments have been determined by the Group, using 
available market information, where it exists, appropriate valuation methodologies and 
assistance of experts. However, judgement is necessarily required to interpret market data 
to determine the estimated fair value. The Russian Federation continues to display some 
characteristics of an emerging market and economic conditions continue to limit the volume 
of activity in the financial markets. Market quotations may be outdated or reflect distress sale 
transactions and therefore do not always represent the fair values of financial instruments. 
The Group has used all available market information in estimating the fair value of financial 
instruments.

Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level 
one are measurements at quoted prices (unadjusted) in active markets for identical assets 
or liabilities, (ii) level two measurements are valuations techniques with all material inputs 
observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, 
derived from prices), and (iii) level three measurements are valuations not based on observable 
market data (that is, unobservable inputs). Management applies judgement in categorising 

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31 December 2023

Borrowings

990,107

2,697,528

2,086,700

2,997,037

4,208,639

4,578,954

581,157

12,005

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17,558,965

593,162

Fair value estimation

Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

192

193

financial instruments using the fair value hierarchy. If a fair value measurement uses observable 
inputs that require significant adjustment, that measurement is a Level 3 measurement. 
The significance of a valuation input is assessed against the fair value measurement in its entirety.

The fair values in level 2 and level 3 of fair value hierarchy were estimated using discounted cash 
flows valuation techniques. The fair value of unquoted fixed and floating interest rate instruments 
which are not quoted in an active market was estimated based on estimated future cash flows 
expected to be received discounted at current interest rates for new instruments with similar credit 
risk and remaining maturity.

Financial assets at amortised cost. The fair value of floating rate instruments is normally their 
carrying amount. The estimated fair value of fixed interest rate instruments is based on estimated 
future cash flows expected to be received, discounted at current interest rates for new instruments 
with similar credit risk and remaining maturity. Discount rates used depend on credit risk 
of the counterparty.

The fair values of financial assets do not materially differ from their carrying amounts as the impact 
of discounting is not significant.

Financial liabilities carried at amortised cost. Fair values of borrowings and other liabilities were 
determined using valuation techniques.

As at 31 December 2023 and 31 December 2022 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 2023 and 31 December 2022 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 2023 and 31 December 2022, respectively. The discount 
rate used was 18.5% p.a. (2022: 11.1% p.a.) (Note 28). The fair value as at 31 December 2023 and 
31 December 2022 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:

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 providers of infrastructure tariff, a full service 
is charged by the Group to its customers and the infrastructure 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 infrastructure 
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 infrastructure 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 infrastructure 
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 providers 
of infrastructure tariff, obtains the right to direct them to provide services on its behalf.

Had the infrastructure tariff directly attributable to such services been excluded from 
revenues and cost of sales for the year ended 31 December 2023 both would have decreased 
by RUB 12,963,846 thousand (2022: RUB 10,957,305 thousand).

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

194

195

8. Segmental information

The chief operating decision-maker has been identified as the Board of Directors of the Company. 
The Board reviews the Group’s internal reporting in order to assess performance and allocate 
resources. Management has determined the operating segments based on these reports.

The Board considers the business from two perspectives: by type of activity and by type of rolling 
stock used. From a type of activity perspective, the Board reviews revenues with no further 
analysis of the underlying cost components. From the type of rolling stock used perspective, 
the Board assesses the performance of each type of rolling stock at the level of adjusted revenue. 
In particular, the Board reviews discrete financial information for gondola cars and rail tank cars, 
whereas all other types of rolling stock (such as hopper cars and platforms) are reviewed together.

Adjusted revenue for reportable segments is the measure of profit looked at by the chief operating 
decision-maker and this includes the revenues derived from the relating type of rolling stock 
used less infrastructure tariff paid for the loaded trips of the relevant rolling stock and services 
provided by other transportation organisations. Further, the Board receives information in respect 
of depreciation charges for rolling stock and right-of-use assets relating to rolling stock, 
amortisation charges for customer relationships, impairment charges/reversals of impairment 
in respect of rolling stock, right-of-use assets relating to rolling stock and customer relationships 
and loss on derecognition arising on capital repairs. All other information provided to the Board 
is measured in a manner consistent with that in the financial statements.

The Board also reviews additions to segment assets. Segment assets consist of rolling stock, 
right-of-assets relating to rolling stock and customer relationships. Unallocated assets comprise 
all the assets of the Group except for rolling stock, right-of-assets relating to rolling stock and 
customer relationships, as included within segment assets. Liabilities are not segmented since 
they are not reviewed from that perspective by the chief operating decision maker. Capital 
expenditure comprises additions of rolling stock to property, plant and equipment and additions 
of right-of-use assets relating to rolling stock.

The Group does not have transactions between different business segments.

Gondola cars

Rail tank cars

Other railcars

Total

RUB’000

RUB’000

RUB’000

RUB’000

Year ended 31 December 2023

Total revenue – operator’s services

64,542,462

35,043,375

311

99,586,148

Total revenue – operating lease

282,535

3,414,292

841,363

4,538,190

Revenue (from external customers)

64,824,997

38,457,667

841,674

104,124,338

less Infrastructure and locomotive 
tariffs – loaded trips

less Services provided by other 
transportation organisations

Adjusted revenue for reportable 
segments

(6,283,602)

(6,731,050)

(3,538,931)

(806,446)

-

-

(13,014,652)

(4,345,377)

55,002,464

30,920,171

841,674

86,764,309

Depreciation and amortisation

(8,188,938)

(2,608,828)

(248,909)

(11,046,675)

Impairment of property, plant and 
equipment

Loss on derecognition arising 
on capital repairs

Additions to non-current assets 
(included in reportable segment 
assets)

30,163

(8,111)

-

22,052

(249,618)

(34,822)

(8)

(284,448)

7,039,168

2,393,800

23,924

9,456,892

Reportable segment assets

51,913,859

21,357,916

2,971,154

76,242,929

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

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

Adjusted revenue for reportable 
segments

(4,266,905)

(6,193,899)

(4,091)

(10,464,895)

(2,051,228)

(348,001)

-

(2,399,229)

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

Loss on derecognition arising 
on capital repairs

Additions to non-current assets 
(included in reportable segment 
assets)

(3,814,843)

(74,990)

(43,000)

(3,932,833)

(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

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

196

197

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:

2023

RUB’000

2022

RUB’000

Adjusted revenue for reportable segments

86,764,309

81,046,053

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/(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)

Selling, marketing and administrative expenses (excl. 
depreciation, amortisation and impairments)

623,685

563,855

87,387,994

81,609,908

(29,167,495)

(27,695,998)

(5,600,994)

(4,664,457)

Depreciation and amortisation

(11,298,975)

(9,349,704)

Net impairment losses on trade and other receivables

Reversal of impairment/(impairment) of property, plant and 
equipment

Loss on derecognition arising on capital repairs

Other gains – net

Finance income

Finance costs

Net foreign exchange transaction (losses)/gains on financing 
activities

(50,258)

22,052

(284,448)

3,116,826

(20,535)

(3,932,833)

(309,878)

(1,334,901)

44,124,702

34,301,602

2,173,246

811,588

(2,405,410)

(2,602,339)

3,194,185

641,196

Profit before income tax

47,086,723

33,152,047

2023

2022

Assets

Liabilities

Assets

Liabilities

RUB’000

RUB’000

RUB’000

RUB’000

Segment assets/ liabilities

76,242,929

-

80,447,174

-

Unallocated:

  Deferred tax liabilities

-

8,734,998

-

9,081,239

  Current income tax assets/

149,107

75,280

613,758

1,555,014

liabilities

  Property, plant and equipment

1,166,593

  Right-of-use assets

Intangible assets

  Other assets

  Trade receivables

Loans and other receivables

Inventories

541,070

2,076

3,464,737

4,627,397

272,353

1,142,672

  Cash and cash equivalents

42,776,832

-

-

-

-

-

-

-

-

834,936

162,843

1,760

7,059,141

3,750,433

433,091

798,621

16,052,345

-

-

-

-

-

-

-

-

  Borrowings

  Other lease liabilities

  Trade and other payables

  Contract liabilities

-

-

-

-

15,377,104

3,096,087

2,438,472

810,469

-

-

-

-

20,648,650

4,194,796

6,384,348

827,860

Total

130,385,766

30,532,410

110,154,102

42,691,907

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Geographic information

Revenues from external customers

Revenue

  Russia

  Estonia

  Ukraine

2023

RUB’000

104,714,413

33,610

-

104,748,023

2022

RUB’000

92,677,592

1,701,153

95,287

94,474,032

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:

2023

2022

RUB’000

% revenue

RUB’000

% revenue

Revenue

  Customer A – rail tank cars segment

  Customer B – gondola cars segment

  Customer C – gondola cars segment

21,732,232

20,142,950

11,492,224

21

19

11

21,234,661

15,126,672

11,046,722

22

16

12

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

  Cyprus

2023

RUB’000

76,934,090

1,172,242

9,268

78,115,600

2022

RUB’000

81,174,663

1,175,214

12,105

82,361,982

ANNUAL REPORT 2023

Financial Statements

198

199

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 to providers 
of of infrastructure tariff, 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 2023 and 2022 and 
its reconciliation to Total revenue.

Total revenue

Minus “pass through” items

Infrastructure and locomotive tariffs: 
loaded trips

Services provided by other transportation 
organisations

2023

RUB’000

2022

RUB’000

104,748,023

94,474,032

(13,014,652)

(10,464,895)

(4,345,377)

(2,399,229)

Adjusted Revenue

87,387,994

81,609,908

Total Operating Cash Costs and Non-cash Costs

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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”.

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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”.

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”, “Taxes (other than income 
tax and value added taxes)” and “Other expenses”.

“Pass through” cost items

Infrastructure and locomotive tariffs: loaded trips

2023

RUB’000

2022

RUB’000

(17,360,029)

(12,864,124)

(13,014,652)

(10,464,895)

  Services provided by other transportation organisations

(4,345,377)

(2,399,229)

Total cost of sales, selling and marketing costs and administrative expenses 
(adjusted for “pass through” cost items)

(46,380,118)

(45,973,405)

Total Operating Cash Costs

(35,048,708)

(32,373,079)

Infrastructure and locomotive tariffs – empty runs and other tariffs

(19,489,606)

(18,540,527)

  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 – 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

(4,273,915)

(3,942,968)

(8,173,564)

(6,780,615)

(58,860)

(34,798)

(1,957,931)

(2,016,665)

(93,812)

(1,001,020)

(57,167)

(49,997)

(25,437)

(18,582)

(114,467)

(94,052)

(13,534)

(627,784)

(116,042)

(941,464)

(41,260)

(46,187)

(24,676)

(15,230)

(94,298)

(92,990)

(23,721)

(603,102)

(11,331,410)

(13,600,326)

(8,852,851)

(6,752,811)

(2,445,695)

(2,596,568)

(429)

(284,448)

(50,258)

22,052

280,219

(325)

(309,878)

(20,535)

(3,932,833)

12,624

Total cost of sales, selling and marketing costs and administrative expenses

(63,740,147)

(58,837,529)

ANNUAL REPORT 2023

Financial Statements

200

201

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 2023 and 2022 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)

2023

RUB‘000

2022

RUB‘000

38,617,605

24,919,886

8,469,118

(2,962,021)

3,194,185

429

2,445,695

8,852,851

8,232,161

1,149,555

641,196

325

2,596,568

6,752,811

58,617,862

44,292,502

Loss on derecognition arising on capital repairs

  Net foreign exchange transaction (losses)/gains 

284,448

(3,194,185)

309,878

(641,196)

on financing activities

  Other gains/(losses) – net

  Profit from sale of subsidiaries

  Gain on sale of property, plant and equipment

  Reversal of impairment/(impairment) of property, 

plant and equipment

Adjusted EBITDA

283,221

1,334,901

(3,400,047)

(280,219)

(22,052)

-

(12,624)

3,932,833

52,289,028

49,216,294

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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”.

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Notes to the consolidated financial statements 
 
 
 
 
 
 
 
 
 
 
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”.

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.

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 2023 
and 2022, and its reconciliation to Cash generated from operations.

Cash generated from operations

Tax paid

Interest paid on bank borrowings and non-convertible 
unsecured bonds

2023

RUB’000

49,193,570

(8,267,084)

(2,051,443)

2022

RUB’000

48,630,943

(8,455,068)

(1,938,619)

Interest paid on other lease liabilities

(460,093)

(786,304)

Purchases of property, plant and equipment

(8,259,858)

(11,421,671)

Payment for Rolling stock to disposed subsidiary

Purchases of intangible assets

(6,603,141)

(745)

-

(2,000)

Principal elements of other lease payments

(2,477,780)

(2,402,700)

Cash inflow from disposal of subsidiary undertakings – net 
of cash disposed of

4,771,748

-

Acquisition of non-controlling interest

-

(8,800,000)

Total CAPEX

Total CAPEX adjusted for M&A

Free Cash Flow

Attributable Free Cash Flow

(8,260,603)

(11,423,671)

(10,091,996)

(20,223,671)

25,845,174

25,847,838

14,824,581

15,098,115

ANNUAL REPORT 2023

Financial Statements

202

203

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 2023 and 2022, and reconciliation of Net Debt to Total Debt.

Total debt

Minus

Cash and cash equivalents

Net Debt

Net Debt to Adjusted EBITDA

2023

RUB’000

2022

RUB’000

15,377,104

20,648,650

42,776,832

(27,399,728)

-0.52x

16,052,345

4,596,305

0.09x

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

204

205

10. Revenue

(a) Disaggregation of revenue

Railway transportation – operator’s services (tariff borne 
by the Group)

Railway transportation – operator’s services (tariff borne 
by the client)

Other

Total revenue from contracts with customers recognised 
over time

Operating lease of rolling stock

Total revenue

2023

RUB’000

2022

RUB’000

36,655,751

30,340,686

62,930,397

60,197,311

623,685

100,209,833

563,855

91,101,852

4,538,190

3,372,180

104,748,023

94,474,032

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 
2023 amounting to RUB 13,014,652 thousand (for the year ended 31 December 2022: 
RUB 10,464,895 thousand) and the cost of engaging the fleet from third parties recharged 
to clients of the Group amounting to RUB 4,345,377 thousand (2022: RUB 2,399,229 thousand).

(b) Liabilities related to contracts with customers
The Group has recognised the following liabilities related to contracts with customers 
as of 31 December 2022 and 31 December 2023:

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)

31 December 2023

31 December 2022

1 January 2022

RUB’000

RUB’000

RUB’000

791,215

811,178

1,369,599

1,467

2,228

1,425

792,682

813,406

1,371,024

12,909

9,575

9,140

4,878

4,879

4,879

Total contract liabilities

17,787

810,469

14,454

827,860

14,019

1,385,043

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 2023 includes RUB 810,821 thousand 
that were included in the balance of the contract liability as of 1 January 2023 (year ended 
31 December 2022: RUB 1,346,417 as of 1 January 2022).

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.

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11. Expenses by nature

2023

RUB’000

2022

RUB’000

Cost of sales

Infrastructure and locomotive tariffs: loaded trips

13,014,652

10,464,895

Infrastructure and locomotive tariffs: empty run trips 
and other tariffs

19,489,606

18,540,527

  Services provided by other transportation organisations

4,345,377

2,399,229

  Expense relating to short-term leases (rolling stock)

  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

(Reversal of impairment)/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

58,860

3,381,556

4,273,915

8,788,362

2,320,501

284,448

414

1,957,931

93,812

(275,960)

(22,052)

34,798

2,847,269

3,942,968

6,662,020

2,464,331

309,878

310

2,016,665

116,042

(7,470)

3,932,833

187,775

205,199

57,899,197

53,929,494

64,489

125,194

15

(4,259)

90,791

132,237

15

(5,154)

  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)

50,258

94,052

49,997

114,467

57,167

25,437

18,582

13,534

20,535

92,990

46,187

94,298

41,260

24,676

15,230

23,721

  Other expenses

440,009

397,903

Total selling, marketing and administrative expenses

5,840,950

4,908,035

ANNUAL REPORT 2023

Financial Statements

206

207

2023

RUB’000

2022

RUB’000

Total expenses

  Depreciation of property, plant and equipment 

8,852,851

6,752,811

(Note 17)

  Depreciation of right-of-use assets (Note 18)

Loss on derecognition arising on capital repairs 
(Note 17)

  Amortisation of intangible assets (Note 19)

(Reversal of impairment)/impairment of property, 
plant and equipment (Note 17)

2,445,695

284,448

429

(22,052)

2,596,568

309,878

325

3,932,833

  Gain on sale of property, plant and equipment 

(280,219)

(12,624)

(Note 17)

  Employee benefit expense (Note 13)

8,173,564

6,780,615

  Net impairment losses on trade and other receivables

  Expense relating to short-term leases (rolling stock)

  Expense relating to short-term leases (office)

  Repairs and maintenance

  Fuel and spare parts – locomotives

  Engagement of locomotive crews

Infrastructure and locomotive tariffs: loaded trips

Infrastructure and locomotive tariffs: empty run 
trips and other tariffs

50,258

58,860

94,052

4,273,915

1,957,931

93,812

13,014,652

19,489,606

20,535

34,798

92,990

3,942,968

2,016,665

116,042

10,464,895

18,540,527

  Services provided by other transportation 

4,345,377

2,399,229

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  Auditors’ remuneration

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  Advertising and promotion

  Communication costs

Information services

  Other expenses

49,997

114,467

57,167

25,437

18,582

13,534

627,784

46,187

94,298

41,260

24,676

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Total cost of sales, selling and marketing costs and 
administrative expenses

63,740,147

58,837,529

Note: The auditors’ remuneration stated above includes fees of RUB 11,686 thousand 
(2022: RUB 7,722 thousand) for statutory audit services and 4,308 (2022: RUB 5,398 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 2023 
(RUB NIL thousand for the year 2022) in relation to fees paid to the Company’s statutory audit 
firm for tax consultancy services.

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  Employee benefit expense

4,792,008

3,933,346

  Taxes (other than income tax and value added taxes)

Notes to the consolidated financial statements 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNUAL REPORT 2023

Financial Statements

208

209

12. Other gains/(losses) – net

14. Finance income/(costs) - net

Other gains

Other losses

2023

RUB’000

338,368

(628,581)

2022

RUB’000

320,248

(448,484)

Net foreign exchange (losses) / gains (Note 16)

6,992

(1,187,428)

Gain from sale of subsidiaries (Note 20)

Other impairment

3,400,047

-

-

(19,237)

Total other gains/(losses) – net

3,116,826

(1,334,901)

13. Employee benefit expense

Wages and salaries

Termination benefits

Bonuses

Share based payment expense (Note 21)

Social insurance costs

Total employee benefit expense

Average number of employees during the year

2023

RUB’000

3,282,401

3,397

3,553,688

-

1,334,078

8,173,564

1,771

2022

RUB’000

2,925,075

8,744

2,611,365

125,737

1,109,694

6,780,615

1,781

2023

RUB’000

2022

RUB’000

(1,733,788)

(1,258,143)

(204,879)

(1,938,667)

(561,448)

(1,819,591)

(464,560)

(780,601)

(2,403,227)

(2,600,192)

(2,183)

(2,147)

(2,405,410)

(2,602,339)

1,654,015

492,734

9,666

2,726

520,642

222,453

18,033

-

761,128

1,609

16,531

779,268

32,320

811,588

-

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

  Total interest income calculated using the effective 

2,159,141

interest rate method

  Finance leases – related parties (Note 35)

  Finance leases – third parties

Total interest income

  Other finance income

Total finance income

Net foreign exchange transaction (losses)/gains 
on borrowings and other liabilities

609

13,496

2,173,246

-

2,173,246

(70,925)

Net foreign exchange transaction (losses)/gains on cash 
and cash equivalents and other monetary assets

3,265,110

641,196

Net foreign exchange transaction (losses)/gains 
on financing activities (Note 16)

3,194,185

641,196

Net finance income/(costs)

2,962,021

(1,149,555)

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Notes to the consolidated financial statements 
 
 
 
 
 
ANNUAL REPORT 2023

Financial Statements

210

211

15. Income tax expense

Current tax:

  Corporation tax

  Withholding tax on dividends

  Withholding tax on interest payments

Total current tax

Deferred tax (Note 30):

  Origination and reversal of temporary differences

Total deferred tax

Income tax expense

2023

RUB’000

8,111,952

702,849

558

8,815,359

(346,241)

(346,241)

8,469,118

2022

RUB’000

8,763,224

122,696

11,997

8,897,917

(665,756)

(665,756)

8,232,161

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

Withholding taxes:

2023

RUB’000

47,086,723

10,699,255

(218,447)

132,196

(4,629)

2022

RUB’000

33,152,047

8,940,987

29,216

119,070

(119,649)

  Estonian income tax arising on distribution1

(497,474)

1,772,393

  Dividend tax provision in relation to intended dividend 

(1,744,903)

(2,354,808)

distribution of subsidiaries

  Withholding tax on interest payments

Over provision of current and deferred tax in prior years

Windfall tax

Tax charge

558

(131,004)

233,566

8,469,118

190

(155,238)

-

8,232,161

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 2023 and 2022, the Group incurred taxes on distributions from Estonian subsidiaries.

As of 31 December 2023 the Company was 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)

2023

RUB’000

3,194,185

6,992

3,201,177

2022

RUB’000

641,196

(1,187,428)

(546,232)

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

212

213

17. Property, plant and equipment

Rolling stock

Land and 
buildings

Motor vehicles

Other

Total

Rolling stock

Land and 
buildings

Motor vehicles

Other

Total

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

At 1 January 2022

Cost

125,742,564

410,314

231,770

962,979

127,347,627

At 1 January 2023

Cost

128,806,367

447,195

247,323

1,046,626

130,547,511

Accumulated depreciation

(45,463,304)

(134,186)

(120,121)

(528,832)

(46,246,443)

Accumulated depreciation

(52,034,377)

(149,548)

(143,343)

(613,317)

(52,940,585)

Net book amount

80,279,260

276,128

111,649

434,147

81,101,184

Net book amount

76,771,990

297,647

103,980

433,309

77,606,926

Year ended 31 December 2022

Opening net book amount

Additions

Disposals

Disposed through disposals 
of subsidiaries

80,279,260

11,003,172

(263,571)

276,128

39,063

-

111,649

39,422

(2,942)

434,147

81,101,184

104,841

11,186,498

(2,359)

(268,872)

Year ended 31 December 2023

Opening net book amount

76,771,990

297,647

103,980

433,309

77,606,926

Additions

Disposals

Disposed through disposals 
of subsidiaries

8,566,804

298,653

(368,595)

-

66,086

(9,215)

138,444

9,069,987

(9,637)

(387,447)

(1,135,154)

(12,377)

(15,245)

(1,039)

(1,163,815)

Depreciation charge (Note 11)

(6,594,915)

(16,170)

(40,968)

(100,758)

(6,752,811)

Depreciation charge (Note 11)

(8,729,125)

(16,660)

(20,982)

(86,084)

(8,852,851)

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)

(4,085,365)

-

(87)

-

152,532

(681,394)

(309,878)

Transfers

Impairment charge

Reversal of impairment

Transfer to inventories

Derecognition arising on capital 
repairs

(8,111)

30,163

(800,263)

(284,448)

164

69,399

-

-

(33)

-

18

-

-

-

-

-

21

(69,563)

-

-

-

(8,111)

30,163

(206)

(800,502)

-

77

(284,448)

1,776

Currency translation differences

(2,730,013)

Closing net book amount

76,771,990

(1,374)

297,647

At 31 December 2022

(3,181)

(400)

(2,734,968)

Currency translation differences

1,660

103,980

433,309

77,606,926

Closing net book amount

74,045,085

636,647

124,645

405,301

75,211,678

At 31 December 2023

Cost

128,806,367

447,195

247,323

1,046,626

130,547,511

Cost

130,579,728

795,400

255,216

1,060,247

132,690,591

Accumulated depreciation

(52,034,377)

(149,548)

(143,343)

(613,317)

(52,940,585)

Accumulated depreciation

(56,534,643)

(158,753)

(130,571)

(654,946)

(57,478,913)

Net book amount

76,771,990

297,647

103,980

433,309

77,606,926

Net book amount

74,045,085

636,647

124,645

405,301

75,211,678

Borrowing costs amounting to RUB NIL thousand were capitalised within rolling stock during 
the year 2023 (2022: RUB 4,053 thousand).

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Notes to the consolidated financial statements 
 
 
 
Useful lives of rolling stock
The estimation of the useful lives of items of rolling stock is a matter of judgment based 
on the experience with similar assets. The future economic benefits embodied in the assets 
are consumed principally through use. However, other factors, such as technical or commercial 
obsolescence and wear and tear, often result in the diminution of the economic benefits embodied 
in the assets. The Group assesses the remaining useful lives of its rolling stock as of each balance 
sheet date taking into account the current technical conditions of the assets and estimated 
period during which the assets are expected to earn benefits for the Group. The following primary 
factors are considered: (a) the expected usage of the assets; (b) the expected physical wear and 
tear, which depends on operational factors and maintenance programme; and (c) the technical 
or commercial obsolescence arising from changes in market conditions.

Based on management’s assessment, the useful economic life of the Group’s rolling stock 
as of 31 December 2023 is considered appropriate.

Residual values of rolling stock
The Group reviews and adjusts the residual values of its rolling stock and wheel pairs 
as of each balance sheet date, taking into account, among others, the price of scrap metal 
as of the assessment date. Management has revised the residual value of the Group’s rolling stock 
and wheel pairs as of 1 January 2023, following a significant decrease 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 2023 
is RUB 915,451 thousand higher 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 2023 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.

ANNUAL REPORT 2023

Financial Statements

214

215

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

2023

RUB’000

387,447

280,219

667,666

2022

RUB’000

268,872

12,624

281,496

The consideration from sale of property, plant and equipment is further analysed as follows:

Cash consideration received within year

Movement in advances received for sales of property, 
plant and equipment

2023

RUB’000

626,548

41,118

2022

RUB’000

238,377

43,119

667,666

281,496

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

2023

RUB’000

13,649,738

13,649,738

2022

RUB’000

11,529,299

11,529,299

Depreciation expense of RUB 8,788,362 thousand in 2023 (2022: RUB 6,662,020 thousand) has 
been charged to “cost of sales” and RUB 64,489 thousand in 2023 (2022: RUB 90,791 thousand) 
has been charged to “selling, marketing and administrative expenses” (Note 11).

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

216

217

18. Right-of-use assets

19. Intangible assets

Rolling stock

Land and 
buildings

Other

Total

RUB’000

RUB’000

RUB’000

RUB’000

Computer software

Customer 
relationships

Total

RUB’000

RUB’000

RUB’000

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 2023

3,675,184

162,843

Year ended 31 December 2023

Opening net book amount

Additions

Disposals

Disposals through subleases

Change of terms of leases

3,675,184

890,088

(189,047)

-

139,169

162,843

19,146

-

(38,136)

533,781

Depreciation charge (Note 11)

(2,317,550)

(128,145)

Currency translation differences

Disposed through disposals 
of subsidiaries

-

-

7

(8,426)

As at 31 December 2023

2,197,844

541,070

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,606,845

2,634,631

(1,425,183)

(379,936)

(2,596,568)

(1,762)

3,838,027

3,838,027

909,234

(189,047)

(38,136)

672,950

(2,445,695)

7

(8,426)

2,738,914

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 2022 and 31 December 2023, 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 2023 was RUB 2,937,873 thousand 
(2022: RUB 3,189,004 thousand).

At 1 January 2022

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

Year ended 31 December 2023

Opening net book amount

Additions

Amortisation charge (Note 11)

Closing net book amount

At 31 December 2023

Cost

Accumulated amortisation

Net book amount

10,934

(10,849)

85

85

2,000

(325)

1,760

12,934

(11,174)

1,760

1,760

745

(429)

2,076

2,907

(831)

2,076

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

10,934

(10,849)

85

85

2,000

(325)

1,760

12,934

(11,174)

1,760

1,760

745

(429)

2,076

2,907

(831)

2,076

Amortisation of RUB 414 thousand (2022: RUB 310 thousand) has been charged to “cost 
of sales” in the income statement and RUB 15 thousand (2022: RUB 15 thousand) to “selling, 
marketing and administrative expenses” (Note 11).

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Notes to the consolidated financial statements 
 
 
 
20. Principal subsidiaries

The Company had the following subsidiaries at 31 December 2023 and 31 December 2022:

Name

Place of 
business/ 
country of 
incorporation

Principal 
activities

Proportion of 
ordinary shares held 
by the Company (%)

Proportion of 
ordinary shares held 
by the Group (%)

Proportion of 
ordinary shares held 
by non- controlling 
interest (%)

2023

2022

2023

2022

2023

2022

New Forwarding 
Company, АО

GTI Management, 
OOO

Ural Wagonrepair 
Company, AO

Ukrainian New 
Forwarding 
Company OOO

BaltTransServis, 
OOO

BTS-Locomotive 
Solutions OOO1

Russia

Russia

Russia

Ukraine

Russia

Russia

RemTransServis, 
OOO2

Russia

Spacecom AS

Estonia

Spacecom Trans AS3 Estonia

Railway 
transportation

Railway 
transportation

Repair and 
maintenance 
of rolling stock

Railway 
transportation

Railway 
transportation

Support 
activities 
for locomotive 
traction

Repair and 
maintenance 
of rolling stock

Operating lease 
of rolling stock

Operating lease 
of rolling stock

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

-

-

-

-

-

-

65.25

-

-

100

100

100

100

-

-

65.25

65.25

100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

34.75

34.75

-

GLTR Cyprus 
Limited

Cyprus

Operation 
in Cyprus

100

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.

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.

ANNUAL REPORT 2023

Financial Statements

218

219

The accumulated non-controlling interest as of 31 December 2023 and 31 December 2022 
comprised the following:

Spacecom AS (including Spacecom Trans AS)

Total

2023

RUB’000

-

-

2022

RUB’000

(15,506)

(15,506)

Acquisition of the 40% non-controlling interest in BaltTransServis, OOO
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.

In January 2023 the Group disposed of its shareholding 65.25% in Spacecom 
AS for EUR 65,300,000.

In September 2023 the Group incorporated a new Cyprus company and holds 100% shares.

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.

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ANNUAL REPORT 2023

Financial Statements

220

221

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

2023

RUB’000

Spacecom AS

2022

RUB’000

-

-

-

-

-

-

-

2023

RUB’000

33,610

(7,312)

-

(7,312)

(6,944,213)

(6,951,525)

(2,541)

10,040,495

5,025,524

5,014,971

1,127,303

3,379

1,123,924

6,138,895

Spacecom AS

2022

RUB’000

1,701,153

6,095,012

(1,740,042)

4,354,970

(1,984,219)

2,370,751

1,513,352

Dividends paid to non-controlling interest

-

(2,759,806)

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

2023

RUB’000

921,130

-

921,130

(3,175)

Spacecom AS

2022

RUB’000

(1,170,770)

(368,772)

(1,539,542)

6,671,629

Net cash used in financing activities

(962,408)

(4,978,418)

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

(44,453)

222,442

(1,310)

176,679

153,669

71,069

(2,296)

222,442

The information above includes the amounts before inter-company eliminations.

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.

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The Group recognised an employee benefit expense of RUB NIL thousand in this respect 
for the year ended 31 December 2023 (2022: RUB 125,737 thousand) and the Group’s 
liability in respect of this amounted to RUB NIL thousand as of 31 December 2023 (2022: 
RUB 125,737 thousand).

The share-based payment liability as of 31 December 2023 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

Current portion

2023

RUB’000

4,641,832

765

(15,200)

4,627,397

4,627,397

2022

RUB’000

3,760,501

275

(10,343)

3,750,433

3,750,433

The carrying amounts of the Group’s trade receivables are denominated in the following currencies:

Currency:

  US Dollar

  Russian Roubles

  Euro

2023

RUB’000

-

4,627,397

-

4,627,397

2022

RUB’000

32,859

3,693,691

23,883

3,750,433

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.

ANNUAL REPORT 2023

Financial Statements

222

223

(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

2023

RUB’000

-

297,959

26

(25,632)

272,353

-

-

2022

RUB’000

401,151

36,519

23

(4,602)

433,091

-

-

272,353

433,091

The carrying amounts of the Group’s loans and other receivables are denominated 
in the following currencies:

Currency:

  Russian Roubles

  Euro

2023

RUB’000

272,353

-

272,353

2022

RUB’000

433,089

2

433,091

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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ANNUAL REPORT 2023

Financial Statements

224

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23. Other assets

24. Inventories

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

2023

RUB’000

3,283,283

137,801

959

42,694

3,464,737

33,378

-

162,932

196,310

3,268,427

2022

RUB’000

3,889,771

137,914

11,832

3,019,624

7,059,141

95,748

953

915,269

1,011,970

6,047,171

The Group’s finance leases as at 31 December 2023 and 31 December 2022 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

118,819

(13,437)

50,174

(17,954)

1,179

(21)

170,172

(31,412)

105,382

32,220

1,158

138,760

66,018

(12,973)

98,363

(1,662)

53,045

96,701

-

-

-

164,381

(14,635)

149,746

At 31 December 2023

Minimum lease receivable

Less: Unearned finance 
income

Present value of minimum 
lease receivables

At 31 December 2022

Minimum lease receivable

Less: Unearned finance 
income

Present value of minimum 
lease receivables

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

2023

%

16.05

2022

%

10.43

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

2023

RUB’000

1,142,672

1,142,672

2022

RUB’000

798,621

798,621

2023

RUB’000

42,617,451

159,381

42,776,832

2022

RUB’000

14,997,495

1,054,850

16,052,345

The weighted average effective interest rate on short-term deposits was 10.5-12.87% in 2023 
(2022: 5.18-8.76%) and these deposits have a maturity of 1 to 12 days (2022: 1 to 18 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

2023

RUB’000

42,776,832

42,776,832

Cash and cash equivalents are denominated in the following currencies:

Russian Rouble

US Dollar

Euro

2023

RUB’000

 41,902,714

29,478

844,640

2022

RUB’000

16,052,345

16,052,345

2022

RUB’000

11,616,051

1,013,793

3,422,501

Total cash and cash equivalents

42,776,832

16,052,345

The carrying value of cash and cash equivalents approximates their fair value.

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ANNUAL REPORT 2023

Financial Statements

226

227

26. Share capital, share premium and treasury shares

27. Dividends

Number 
of shares

178,740,916

Share capital

Share premium

USD’000

17,875

USD’000

949,471

Total

USD’000

967,346

At 1 January 2022/31 
December 2022/1 January 
2023

At 31 December 2023

178,318,259

17,832

949,471

967,303

At 1 January 2022/31 
December 2022/1 January 
2023

Cancellation of treasury 
shares

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

(422,657)

(1,222)

-

(1,222)

At 31 December 2023

178,318,259

515,735

27,929,478

28,445,213

The total authorised number of ordinary shares at 31 December 2023 was 233,495,471 shares 
with a par value of US$0.10 per share (31 December 2022: 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 2022 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 2023 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 31 December 2023 the Company didn’t have treasury shares (31 December 2022 – 422,657 
GDRs which were held in treasury for a total consideration of 1.254 thousand US Dollars (equivalent 
to RUB 145,993 thousand).

During the years ended 31 December 2023 and 2022, 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 non-controlling interest

Dividends paid to non-controlling interest

28. Borrowings

Current

  Bank borrowings

  Non-convertible unsecured bonds

Total current borrowings

Non-current

  Bank borrowings

  Non-convertible unsecured bonds

Total non-current borrowings

Total borrowings

Maturity of non-current borrowings

Between 1 and 2 years

Between 2 and 5 years

2023

RUB’000

-

334,268

2023

RUB’000

6,423,132

1,291,000

7,714,132

7,662,972

-

7,662,972

15,377,104

3,559,959

4,103,013

7,662,972

2022

RUB’000

2,759,806

1,728,073

2022

RUB’000

7,690,301

3,905,571

11,595,872

7,802,778

1,250,000

9,052,778

20,648,650

6,165,311

2,887,467

9,052,778

Bank borrowings

Bank borrowings mature by 2028 (2022: by 2027) and bear average interest of 10.2% per annum 
(2022: 7.9% per annum).

There were no defaults or breaches of loan terms during the years ended 31 December 2023 and 
31 December 2022.

The current and non-current bank borrowings amounting to RUB 6,423,132 thousand 
and RUB 7,662,972 thousand respectively (2022: RUB 7,356,968 thousand and 
RUB 5,056,405 thousand respectively) are secured by pledge of rolling stock with a total 
carrying net book value of RUB 13,649,738 thousand (2022: RUB 11,529,299 thousand) 
(Note 17).

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ANNUAL REPORT 2023

Financial Statements

228

229

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

2023

RUB’000

5,204,824

2,509,309

7,662,971

15,377,104

2022

RUB’000

6,700,884

4,894,988

9,052,778

20,648,650

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

Year ended 31 
December 2022

Opening amount 
as at 1 January 
2022

Cash flows:

  Amounts 
advanced

  Repayments 
of borrowings

22,309,598

2,750,000

(9,549,396)

Interest paid

(1,273,870)

Non-cash changes:

Interest charged

1,262,196

  Net foreign 
exchange

  Other lease 
liability

  Change of terms 

of leases

  Other

Closing amount 
as at 31 December 
2022

-

-

(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

Bank 
borrowings and 
loans (excl. 
overdrafts)

Lease 
liabilities 
with financial 
institutions

Other lease 
liabilities

Non-
convertible 
unsecured 
bonds

Total

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

Year ended 31 
December 2023

Opening amount 
as at 1 January 
2023

Cash flows:

  Amounts 
advanced

  Repayments 
of borrowings

15,493,079

8,800,000

(10,188,110)

Interest paid

(1,731,993)

Non-cash changes:

Interest charged

1,733,788

  Net foreign 
exchange

  Other lease 
liability

  Change of terms 

of leases

  Disposed 
through 
disposals 
of subsidiaries

  Other

Closing amount 
as at 31 December 
2023

1

-

-

-

(20,661)

14,086,104

-

-

-

-

-

-

-

-

-

-

-

4,194,796

5,155,571

24,843,446

-

-

8,800,000

(2,477,780)

(3,750,000)

(16,415,890)

(460,093)

(319,450)

(2,511,536)

464,560

204,879

2,403,227

1,440

909,234

472,438

(8,508)

-

-

-

-

-

-

1,441

909,234

472,438

(8,508)

(20,661)

3,096,087

1,291,000

18,473,191

The carrying amount and fair value of current and non-current borrowings are as follows:

Carrying amount

Fair value

2023

2022

2023

2022

RUB’000

RUB’000

RUB’000

RUB’000

Bank borrowings

14,086,104

15,493,079

12,929,168

15,134,443

Non-convertible unsecured 
bonds

1,291,000

5,155,571

1,244,375

5,028,375

15,377,104

20,648,650

14,173,543

20,162,818

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ANNUAL REPORT 2023

Financial Statements

230

231

The fair value as at 31 December 2023 and 31 December 2022 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 2023 and 31 December 2022. The discount rate was 18.5% p.a. 
(2022: 11.1% p.a.). The fair value measurements are within level 2 of the fair value hierarchy (2022: 
level 2). The fair value as at 31 December 2023 and 31 December 2022 of the fixed interest rate 
non-convertible bonds was equal to their quoted price and the resulting fair value measurement 
is within level 1.

The fair value of liabilities repayable on demand or after a notice period (“demandable liabilities”) 
is estimated as the amount payable on demand, discounted from the first date on which the amount 
could be required to be paid.

The carrying amounts of the Group’s borrowings are denominated in the following currencies:

Russian Rouble

The Group has the following undrawn borrowing facilities:

Fixed rate:

Expiring within one year

Expiring beyond one year

2023

RUB’000

15,377,104

15,377,104

2023

RUB’000

1,000,000

28,000,000

29,000,000

2022

RUB’000

20,648,650

20,648,650

2022

RUB’000

10,083,333

32,700,000

42,783,333

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 weighted average effective interest rates at the balance sheet were as follows:

Bank borrowings

Non-convertible unsecured bonds

2023

%

10.2

8.8

2022

%

7.9

8.5

29. Other lease liabilities

Other lease liabilities

Current lease liabilities

Non-current lease liabilities

Total lease liabilities

Maturity of other lease liabilities

Between 1 and 2 years

Between 2 and 5 years

Over 5 years

2023

RUB’000

2,198,502

897,585

3,096,087

450,483

445,578

1,524

897,585

2022

RUB’000

2,400,332

1,794,464

4,194,796

1,694,562

96,970

2,932

1,794,464

30. Deferred income tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset 
current tax assets against current tax liabilities and when the deferred taxes relate to the same 
taxable entity and fiscal authority.

The gross movement on the deferred income tax account is as follows:

Beginning of year

Income statement charge (Note 15)

Exchange differences

End of year

2023

RUB’000

9,081,239

(346,241)

-

8,734,998

2022

RUB’000

9,752,314

(665,756)

(5,319)

9,081,239

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Notes to the consolidated financial statements 
 
 
 
The movement on the deferred tax assets and liabilities during the year, without taking into 
consideration the offsetting of balances within the same tax jurisdiction, is as follows:

Property, plant 
and equipment

Withholding tax 
provision

Intangible 
assets

Right-of-use 
assets

Total

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

Deferred tax 
liabilities

At 1 January 2022

9,082,738

1,123,424

Charged/(credited) 
to:

Income statement 
(Note 15)

Translation 
differences

At 31 December 
2022

Charged/(credited) 
to:

Income statement 
(Note 15)

At 31 December 
2023

(249,779)

(435,460)

-

(5,319)

8,832,959

682,645

76,521

(568,623)

8,909,480

114,022

-

-

-

-

-

-

798,065

11,004,227

(76,425)

(761,664)

-

(5,319)

721,640

10,237,244

(217,794)

(709,896)

503,846

9,527,348

Tax losses

Trade and other 
payables

Other lease 
liabilities and 
Borrowings

Other assets / 
liabilities

Total

Deferred tax assets

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

At 1 January 2022

Charged/(credited) 
to:

Income statement 
(Note 15)

At 31 December 
2022

Charged/(credited) 
to:

Income statement 
(Note 15)

Disposed through 
disposals 
of subsidiaries

At 31 December 
2023

-

-

-

-

-

(227,640)

(848,589)

(175,684)

(1,251,913)

36,420

46,774

12,714

95,908

(191,220)

(801,815)

(162,970)

(1,156,005)

171,909

212,921

(21,175)

363,655

(19,311)

(588,894)

(184,145)

(792,350)

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 Nil thousand (2022: RUB 89,231 thousand) for tax losses 
amounting to RUB Nil thousand (2022: RUB 713,852 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.

ANNUAL REPORT 2023

Financial Statements

232

233

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 2023.

Deferred income tax liabilities of RUB 2,809,390 thousand (2022: RUB 1,683,687 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 55,871,122 thousand as at 31 December 2023 (2022: RUB 32,832,980 thousand).

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)

2023

RUB’000

550,862

154,497

1,485,159

113,874

134,080

2022

RUB’000

338,540

2,036,750

3,441,091

98,140

469,827

2,438,472

6,384,348

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.

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(RUB thousand)

Weighted average number of ordinary shares in issue 
(thousand)

Basic and diluted earnings per share (expressed 
in RUB per share) attributable to the equity holders 
of the Company during the year

2023

2022

38,620,269

25,193,420

178,318

178,382

216.58

141.23

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

234

235

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 2023 
as it is considered as a non-adjusting event.

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 2023 and 2022 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 and Ukraine. 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.

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Notes to the consolidated financial statements 
 
 
 
Compliance with covenants

The Group is subject to certain covenants related primarily to its borrowings. Non-compliance 
with such covenants may result in negative consequences for the Group including claims for early 
repayment. The Group is in compliance with covenants as of 31 December 2023 and 31 December 
2022 (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 2023 and 2022 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.

ANNUAL REPORT 2023

Financial Statements

236

237

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

2023

RUB’000

62,413

2022

RUB’000

879,341

(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

2023

RUB’000

3,367,422

25,397

3,392,819

2022

RUB’000

2,635,180

856,038

3,491,218

There were no contingent-based rents to be recognised in the income statement for the year 
ended 31 December 2023 and 31 December 2022.

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Notes to the consolidated financial statements 
 
 
 
ANNUAL REPORT 2023

Financial Statements

238

239

35. Related party transactions

Litten Investments Ltd, controlled by a Director of the Company, has a shareholding 
in the Company of 5.1% as at 31 December 2023 (31 December 2022: 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 2023 (31 December 2022: 3.1%).

As at 31 December 2023, another 0.1% (2022: 0.1%) of the shares of the Company is controlled 
by Directors and key management of the Company.

For the purposes of these financial statements, parties are considered to be related if one party 
has the ability to control the other party or exercise significant influence over the other party 
in making financial and operational decisions as defined by IAS 24 “Related Party Disclosures”. 
In considering each possible related party relationship, attention is directed to the substance 
of the relationship, not merely the legal form. Related parties may enter into transactions, which 
unrelated parties might not, and transactions between related parties may not be effected 
on the same terms, conditions and amounts as transactions between unrelated parties.

The following transactions were carried out with related parties:

(a) Key management compensation

Key management salaries and other short-term employee 
benefits

Share based compensation (Note 21)

2023

RUB’000

3,334,479

-

3,334,479

2022

RUB’000

2,702,399

125,737

2,828,136

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 1,076,241 thousand (2022: RUB 776,827 thousand) 
and analysed as follows:

Non-executive directors’ fees

Emoluments in their executive capacity

Share based compensation in their executive capacity

2023

RUB’000

20,537

1,055,704

-

1,076,241

2022

RUB’000

20,793

738,450

17,584

776,827

(b) Sale of goods and services

Revenue from entity under control of member of key 
management:

  Operating lease of rolling stock

  Other

(c) Other gains

Other gains from entity under control of member of key 
management:

  Other gains

2023

RUB’000

832,175

673

832,848

2023

RUB’000

112,567

112,567

2022

RUB’000

813,750

880

814,630

2022

RUB’000

96,722

96,722

(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

2023

RUB’000

2022

RUB’000

765

765

26

26

275

275

23

23

Key management remuneration – current (Note 31):

  Accrued salaries and other short-term employee 

134,080

344,088

benefits

  Share based payment liability (Note 21)

-

134,080

125,737

469,825

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Notes to the consolidated financial statements 
 
 
 
(e) Interest income

(h) Finance leases

Finance leases (Note 14):

  Entity under control of members of key management

Loans (Note 14):
 Entity under control of members of key management

  Entity under control of members of key management

(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

2023

RUB’000

2022

RUB’000

609

609

9,666

9,666

1,609

1,609

18,033

18,033

2023

RUB’000

2022

RUB’000

1,467

1,467

4,878

4,878

2023

RUB’000

-

-

401,151

-

(400,000)

9,666

(10,817)

-

2,228

2,228

4,879

4,879

2022

RUB’000

401,151

401,151

-

800,000

(400,000)

18,033

(16,882)

401,151

ANNUAL REPORT 2023

Financial Statements

240

241

2023

RUB’000

2022

RUB’000

959

959

-

-

2023

RUB’000

856,038

-

10,879

10,879

953

953

2022

RUB’000

836,960

856,038

856,038

1,692,998

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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

(i) Operating lease commitments – Group as lessor

Entity under control of member of key management

  Not later than 1 year

Later than 1 year not later than 5 years

36. Business combinations

Disposal of subsidiary

In January 2023 the Group disposed of its 65.25% shareholding in Spacecom AS, 
Estonia for EUR 65,300,000 (RUB 4,948,427 thousand) realising a profit from sale 
of RUB 3,400,047 thousand.

37. Events after the balance sheet date

On 26 February 2024 the Company has completed redomiciliation to ADGM, UAE with 
the registered address: Office Unit 3, Floor 6, Al Sila Tower, Abu Dhabi Global Market Square, 
Al Maryah Island, Abu Dhabi, UAE.

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 148 to 151.

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Notes to the consolidated financial statements 
 
 
 
 
Management Report 
and Parent Company 
Financial Statements 
for the year ended 
31 December 2023

Board of Directors and other officers .................................................................................................................................................................................. 243

Management Report ......................................................................................................................................................................................................................... 244

Directors’ responsibility ................................................................................................................................................................................................................ 256

Auditors report ..................................................................................................................................................................................................................................... 258

Income statement .............................................................................................................................................................................................................................. 262

Statement of comprehensive income .................................................................................................................................................................................. 263

Statement of financial position ................................................................................................................................................................................................ 264

Statement of changes in equity ............................................................................................................................................................................................... 266

Cash flow statement ........................................................................................................................................................................................................................ 268

Notes to the parent company financial statements ..................................................................................................................................................270

1. General information ....................................................................270

16. Property, plant and equipment .......................................299

2. Basis of preparation ...................................................................270

17. Right-of-use assets ................................................................. 300

3. Adoption of new or revised standards and 
interpretations ......................................................................................271

18. Investments in subsidiary undertakings ..................301

19. Loans and other receivables .............................................303

4. Summary of significant accounting policies.............271

20. Other assets ................................................................................ 304

5. New accounting pronouncements ..................................282

21. Cash and cash equivalents ................................................ 304

6. Financial risk management ................................................. 284

7. Critical accounting estimate and judgements ........295

22. Share capital, share premium 
and treasury shares .........................................................................305

8. Revenue ..............................................................................................295

23. Borrowings .................................................................................... 306

9. Other losses/(gains) – net ....................................................295

24. Other lease liabilities ............................................................ 309

10. Expenses by nature .................................................................296

25. Payables and accrued expenses ................................... 309

11. Employee benefit expense ..................................................296

26. Related party transactions ................................................310

12. Finance income and costs ..................................................297

27. Contingencies .............................................................................. 314

13. Income tax expense.................................................................297

28. Business combinations ........................................................ 316

14. Net foreign exchange gains/(losses) .........................298

29. Events after the balance sheet date........................... 316

15. Dividends .........................................................................................298

242

243

Board of Directors and other officers

Board of Directors as of 5 April 2024

Mr. Jaafar Borhan

Mr. Yerzhan Niyazaliyev

Board support

The Company Secretary 
is available to advise all Directors 
to ensure compliance with 
the Board procedures. Also 
a procedure is in place to enable 
Directors, if they so wish, to seek 
independent professional advice 
at the Company’s expense.

Company Secretary

Mr. Aleksandr Lavrentjev

Registered office

Office Unit 3, Floor 6, Al Sila Tower
Abu Dhabi Global Market Square
Al Maryah Island, Abu Dhabi, UAE

Senior Independent Non-Executive 
Director
Appointed on 4 April 2024, 
(Senior Independent Director 
since 5 April 2024)
Chairman of Remuneration Committee 
(since 5 April 2024)
Chairman of Nomination Committee 
(since 5 April 2024)
Member of ESG Committee 
(since 5 April 2024)

Ms. Jouslin Khairallah

Independent Non-Executive Director
Appointed on 4 April 2024
Chairperson of the Audit Committee 
(since 5 April 2024)
Chairperson of ESG Committee 
(since 5 April 2024)

Chairman of the Board of Directors
Executive Director

Mr. Kairat Itemgenov

Executive Director

Mr. Anton Gazizov

Executive Director

Mr. Alexander Storozhev

Executive Director

Mr. Viacheslav Stanislavskiy

Executive Director

Mr. Abdulla Belobaida

Independent Non-Executive Director
Member of the Audit Committee 
(since 5 April 2024)
Member of Remuneration Committee 
(since 5 April 2024)
Member of Nomination Committee 
(since 5 April 2024)

Mr. Ruslan Izatov

Non-Executive Director

Mr. Stefan Henrich

Non-Executive Director

Mr. Abdultaiyab Bahrainwala

Mr. Yousef Abu Laban

Non-Executive Director

Non-Executive Director

Ms. Albina Amangeldinova

Non-Executive Director

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationManagement Report

The Board of Directors presents its report together with the audited parent company financial 
statements for the year ended 31 December 2023. 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 16,438,208 thousand compared 
to RUB 5,705,759 thousand for the year ended 31 December 2022. This was mainly the result 
of the increase in the dividend income earned from the subsidiaries from RUB 7,064,907 thousand 
during the year ended 31 December 2022 to RUB 13,597,095 thousand in the current year.

The net asset position of the Company has increased as of 31 December 2023 
compared to 31 December 2022, with net assets as of 31 December 2023 amounting 
to RUB 64,710,823 thousand compared to RUB 48,272,615 thousand as of 31 December 2022.

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 
2023 other than sale of 65.25% in Spacecom AS and incorporation of GLTR Cyprus Ltd.

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.

ESG Committee of the Board analyses and oversees 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.

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245

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.

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 2023; 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. 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 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, 

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information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 61% 
of the Group’s Net Revenue from the Operation of Rolling Stock in 2023 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, NSD 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.

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, 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.

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. 

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247

The Group monitors FAS initiatives with the aim of detecting possible changes in tariff-setting 
methodology and tries to reflect respective changes in contracts with customers. Among 
the Group’s key objectives are to increase operational efficiency and to focus on control and 
reduction of costs. The Group continuously monitors its costs to maintain efficiency.

The Human Resource function regularly monitors salary levels and other benefits offered 
by competitors to ensure that the Group’s remuneration packages are adequate. Customer 
satisfaction is one of the key metrics that the Group’s management monitors, with customer 
feedback being analysed and appropriate follow-up actions being taken. Due to recent 
sanctions imposed by US, European Union and number of other countries, number 
of IT solutions will no longer be maintained by US and European Union suppliers. Local 
IT specialists have introduced alternative solutions to maintain the availability of IT services, 
continuity of business processes and ensure their recovery in case of disruption. The IT function 
and Internal Audit function monitor all IT-related activities and performance for compliance with 
IT policies and procedures.

Further the Group permanently monitors any disruptive events and applies a Business 
Continuity Policy to ensure the safety of employees and human life; maintain continuity of time-
critical services; minimise disruptions to clients and partners; and minimise operational, 
financial and reputational impact.

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 attracts external consultants.

Financial risks

The Company’s activities exposed it to a variety of financial risks: market risk (including 
foreign exchange risk, cash flow and fair value interest rate risk), credit risk and liquidity risk. 
The Company’s overall risk management programme focuses on the unpredictability of financial 
markets and seeks to minimise potential adverse effects on the Company’s financial results.

Management ReportOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information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 2023, the Company has an excess of current assets over current liabilities 
of RUB 12.491.384 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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249

Results

The Company’s results for the year are set out on pages 16 and 17. 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 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.

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 final dividends.

Share capital

As of 31 December 2023, the issued share capital of the Company comprised 178,318,259 
ordinary shares with a par value of US$0.10 per share (31 December 2022 comprised 
178,740,916 ordinary shares with a par value of US$0.10 per share).

Treasury shares

As of 31 December 2023, the Company didn’t have treasury shares (31 December 2022: 422 657 
treasury shares).

Future developments

Research and development activities

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.

The Company has not undertaken any research and development activities during the year 
ended 31 December 2023.

Events after the balance sheet date

The events after the balance sheet date are disclosed in Note 28 to the financial statements.

Management ReportOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationBranches

The Company does not operate through any branches.

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.

Going concern

Members of the Board of Directors

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251

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 2024, 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

Following the completion of redomiciliation of Globaltrans Investment Plc from Cyprus to UAE, 
ADGM effective from 26 February 2024, the Independent Auditor, GAC Auditors Ltd will be replaced 
by RAI LLP, who has license in AGM for the audit of public companies. A resolution giving authority 
to the Board of Directors to fix the remuneration of RAI LLP 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.

The role of the Board of Directors

The Company is managed by the Board of Directors which is collectively responsible 
to the shareholders for the success of the Group. The Board sets the strategic objectives and 
ensures that the necessary resources are in place to enable these objectives to be met. The Board 
is fully involved in decision making in the most important areas of business and conducts 

As at 31 December 2023, the Board comprises of 14 members (2022: 14 members), 10 
(2022: 10 members) of whom are non-executive directors. Three (2022: three) 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 the date of this report are shown on page 243, 
the members of the Board of Directors as of 31 December 2023 are shown in the table below, 
all of them were members of the Board throughout the year 2023.

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 2023 amounted to RUB 447,627 thousand (2022: RUB 319,844 thousand).

Board performance

The Board held 24 meetings in 2023. The Directors’ attendance is presented in the table below.

Eligible

Attended

John Carroll Colley

George Papaioannou

Alexander Eliseev

Melina Pyrgou

Konstantin Shirokov

Alexander Storozhev

Marios Tofaros

Elia Nicolaou

Sergey Tolmachev

Sergey Maltsev (Chairman)

Andrey Gomon

Sergey Foliforov

Vasilis Hadjivassiliou

Michalakis Thomaides

24

24

24

24

24

24

24

24

24

24

24

24

24

24

24

24

23

24

23

24

24

24

24

24

24

24

24

24

Management ReportOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationThe Board Committees

During 2023 the Board had four committees: the Audit Committee, the Nomination Committee, 
the Remuneration Committee and the ESG Committee. 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 2023 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. 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 2023 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 2023, 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.

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253

ESG Committee

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 was comprised of two Board members: Elia Nicolaou, Non-executive Director, 
who served 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 21 April 2023.

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

The Articles of Association of the Company may be amended from time to time by special 
resolution at the General Meeting of the Shareholders.

Management ReportOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationCompany’s internal control and risk management systems in relation 
to the financial reporting process

The Board of Directors is responsible for the preparation of the financial statements that give 
a true and fair view in accordance with International Financial Reporting Standards as adopted 
by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such 
internal control as the Board of Directors determines is necessary to enable the preparation 
of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing 
the Company’s ability to continue as a going concern, disclosing, as applicable, matters related 
to going concern and using the going concern basis of accounting unless the Board of Directors 
either intends to liquidate the Company or to cease operations, or has no realistic alternative but 
to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting 
process.

The Board is primarily responsible for establishing a framework of prudent and effective controls 
that enables risks to be assessed and managed.

The Audit Committee assists the Board in this task by reviewing and assessing the Group’s internal 
control and risk management processes in relation to Group’s financial reporting process.

The system of controls is designed to manage rather than eliminate the risks relevant 
to the Group’s operations and, therefore, can only provide reasonable, and not absolute, assurance 
against material errors, losses, fraud or breaches of laws and regulations.

At Globaltrans, the body responsible for internal audit is the Internal Audit Service (“IAS”). It tests 
the Group’s systems of risk management, internal control and corporate governance to obtain 
a reasonable assurance that:
•  The risk management system functions efficiently;
•  Material financial, management and operating information is accurate, reliable and up-to-date;
•  The actions of employees and management bodies are in compliance with the Group’s policies, 

standards and procedures and the applicable laws;

•  Resources are procured reasonably and used efficiently and their safekeeping is fully 

guaranteed; and

•  Group companies conduct their business in compliance with applicable laws.

Each year, the Audit Committee approves an internal audit plan, which is developed by identifying 
the audit universe, performing a risk analysis and obtaining input from management relative 
to risks, controls and governance processes. The internal auditor regularly reports to the Audit 
Committee on the progress of planned audits. If any material internal control deficiencies 
are identified, they are communicated to the Audit Committee, and consequently to the Board, 
at once.

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255

Significant direct or indirect holdings (including indirect shareholding 
though structures or cross shareholdings)

The issued share capital of the Company consists of 178,318,259 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 56.9% of the issued share capital. 
The Company’s depositary bank for the GDR programme is Citibank N.A.

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 2023 and 31 December 2022 
are shown below:

Name

Type of holding

2023

2022

Alexander Eliseev

Indirect holding of ordinary 
shares and GDRs

9,065,790

9,065,790

Sergey V. Maltsev

Indirect holding of GDRs

5,490,149

5,490,149

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

Alexander Storozhev

Director

Abu Dhabi, ADGM, 5 April 2024

Management ReportOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationDirectors’ responsibility

The Company’s Board of Directors is responsible for the preparation of financial statements that 
give a true and fair view in accordance with International Financial Reporting Standards as adopted 
by the European Union and the requirements of the Cyprus Companies Law, Cap.113, and for such 
internal control as the Board of Directors determines is necessary to enable the preparation 
of financial statements that are free from material misstatement, whether due to fraud or error.

As the Company has completed redomiciliation to ADGM, UAE on 26 February 2024, the Company’s 
Board of directors must ensure that all legal and financial aspects are properly addressed, 
including compliance with any new requirements in the new jurisdiction. From 1 January 2024, 
International Financial Reporting Standards as adopted by the European Union and 
the requirements of the Cyprus Companies Law, Cap.113 will no longer be applicable and 
International Financial Reporting Standards will be applied.

This responsibility includes selecting appropriate accounting policies and applying them 
consistently; and making accounting estimates and judgements that are reasonable 
in the circumstances.

In preparing the financial statements, the Board of Directors is also responsible for assessing 
the Company’s ability to continue as a going concern, disclosing, as applicable, matters related 
to going concern and using the going concern basis of accounting unless the Board of Directors 
either intends to liquidate the Company or to cease operations, or has no realistic alternative but 
to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting 
process.

256

257

Directors’ confirmations

Each of the directors, whose names and functions are listed in page 243 confirms that, 
to the best of his or her knowledge:
(a)  the financial statements, which are presented on pages 262 to 316, which have been 
prepared in accordance with International Financial Reporting Standards as adopted 
by the European Union and the requirements of the Cyprus Companies Law, Cap.113, 
give a true and fair view of the assets, liabilities, financial position and profit or loss 
of the Company; and

(b)  the Management Report includes a fair review of the development and performance 

of the business and the position of the Company, together with a description 
of the principal risks and uncertainties that it faces.

Further, each of the Directors confirms that, to the best of their knowledge:
(i)  adequate accounting records have been maintained which disclose with reasonable 

accuracy the financial position of the Company and explain its transactions;

(ii)  all information of which they are aware that is relevant to the preparation of the financial 

statements, such as accounting records and all other relevant records and documentation, 
has been made available to the Company’s auditors;

(iii)  the financial statements disclose the information required by the Cyprus Companies Law, 

Cap.113 in the manner so required; and

(iv)  the Management Report has been prepared in accordance with the requirements 

of the Cyprus Companies Law, Cap.113, and the information given therein is consistent with 
the financial statements.

By order of the Board

Alexander Storozhev

Director

Abu Dhabi ADGM, 5 April 2024

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationAuditors 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 2023, 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 2023, 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.

258

259

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.

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information260

261

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 2023.

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, 5 April 2024

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.

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.

Auditors reportOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationIncome statement

for the year ended 31 December 2023

Revenue

Marketing costs

Administrative expenses

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

8

9

12

12

12

12

13

2023

RUB’000

13,597,095

(1,063)

(891,881)

1,567,356

14,271,507

230,352

(305,416)

2,953,515

2,878,451

17,149,958

(711,750)

16,438,208

2022

RUB’000

7,067,043

(1,512)

(677,369)

(8,661)

6,379,501

100,851

(1,391,809)

752,089

(538,869)

5,840,632

(134,873)

5,705,759

262

263

Statement of comprehensive income

for the year ended 31 December 2023

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

2023

RUB’000

16,438,208

2022

RUB’000

5,705,759

-

-

-

-

-

-

-

Total comprehensive income for the year

16,438,208

5,705,759

The notes on pages 270 to 316 are an integral part of these financial statements.

The notes on pages 270 to 316 are an integral part of these financial statements.

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationStatement of financial position

at 31 December 2023

Assets

Non-current assets

Investments in subsidiary undertakings

Property, plant and equipment

Right-of-use assets

Other assets

Total non-current assets

Current assets

Loans and other receivables

Other assets

Cash and cash equivalents

Total current assets

Total assets

Equity and liabilities

Capital and reserves

Share capital

Share premium

Capital contribution

Treasury shares

Retained earnings

Total equity

Note

31 December 2023

31 December 2022

RUB’000

RUB’000

18

16

17

20

19

20

21

22

22

52,210,171

53,951,099

6,373

2,895

-

5,400

5,790

915

52,219,439

53,963,204

11,617,329

2,330,277

9,838

948,271

12,575,438

64,794,877

515,735

27,929,478

2,694,851

-

33,570,759

64,710,823

692

4,687,835

7,018,804

60,982,008

516,957

27,929,478

2,694,851

(145,993)

17,277,322

48,272,615

264

265

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 2023

31 December 2022

RUB’000

RUB’000

23

24

23

24

25

-

-

-

-

3,553

80,501

84,054

84,054

10,531,377

2,488

10,533,865

2,057,319

2,826

115,383

2,175,528

12,709,393

64,794,877

60,982,008

On 5 April 2024, the Board of Directors of Globaltrans Investment PLC authorised these financial 
statements for issue.

Alexander Storozhev

Director

Yerzhan Niyazaliyev

Director

The notes on pages 270 to 316 are an integral part of these financial statements.

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationStatement of changes in equity

for the year ended 31 December 2023

Balance at 1 January 2022

Comprehensive income

 ɜ

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

Comprehensive income

 ɜ

Profit for the year

Other comprehensive income

 ɜ

 ɜ

Losses on cash flow hedging instrument

Reclassification adjustment to the income statement

Total comprehensive income for 2023

Transactions with owners

Dividend to owners of the Company

Total distributions to owners of the Company

Cancellation of treasury shares

Total transactions with owners

Balance at 31 December 2023

266

267

Total

RUB’000

42,681,353

Note

Share capital

Share premium

Capital contribution

Treasury shares

Cash flow hedge reserve

Retained earnings

RUB’000

516,957

RUB’000

27,929,478

RUB’000

2,694,851

RUB’000

(31,496)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

516,957

27,929,478

2,694,851

-

-

-

-

-

-

(1,222)

(1,222)

515,735

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

27,929,478

2,694,851

-

-

-

-

-

-

(114,497)

(114,497)

(145,993)

-

-

-

-

-

-

145,993

145,993

-

15

22

15

22

RUB’000

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

RUB’000

11,571,563

5,705,759

5,705,759

-

-

-

-

5,705,759

5,705,759

-

-

-

-

-

-

(114,497)

(114,497)

17,277,322

48,272,615

16,438,208

16,438,208

-

-

-

-

16,438,208

16,438,208

-

-

(144,771)

(144,771)

-

-

-

-

33,570,759

64,710,823

The notes on pages 270 to 316 are an integral part of these financial statements.

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationCash flow statement

for the year ended 31 December 2023

Cash flows from operating activities

Profit before tax

Adjustments for:

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

Depreciation of property, plant and 
equipment

Depreciation of right-of-use assets

Interest on loans to related parties

Bank interest income

Interest expense

Gain from sale of subsidiaries

 ɜ Net foreign exchange transaction losses/

(gains) on financing activities

Operating cash flows before working capital 
changes

Changes in working capital:

 ɜ

Dividend income not received

 ɜ Other assets

 ɜ

Payables and accrued expenses

Net cash generated from operations

Interest received from loans from related 
parties

Tax paid

Net cash generated from operating activities

Cash flows from investing activities

Note

2023

RUB’000

2022

RUB’000

17,149,958

5,840,632

16

17

8

12

12

9

12

3,450

2,895

-

(230,352)

305,416

(1,574,173)

(2,953,515)

2,639

2,895

(2,136)

(100,851)

1,391,809

-

(752,089)

12,703,679

6,382,899

(8,231)

649,530

(64,466)

13,280,512

-

(703,408)

12,577,104

20

(1,624,666)

(50,192)

4,708,061

1,267

(134,692)

4,574,636

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

Proceeds from sale of subsidiary

Acquisition of non-controlling interest

Purchases of property, plant and equipment

Loans granted to related parties

Loan repayments received from related 
parties

18

18/20

16

26

26

4,948,427

-

-

(8,800,000)

(4,423)

(11,436,444)

-

(915)

(6,858)

174,633

Bank interest received

230,352

100,851

Net cash generated from investing activities

(6,262,088)

(8,532,289)

268

269

Cash flows from financing activities

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

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

Net cash used in financing activities

Net (decrease)/increase in cash and cash 
equivalents

 ɜ

Exchange gains on cash and cash 
equivalents

Cash and cash equivalents at beginning 
of year

Note

23

23

23

23

23

22

2023

RUB’000

2022

RUB’000

(8,706,600)

8,706,600

(3,134,921)

(1,865,079)

(3,193)

(1,040,861)

(199)

-

(12,885,774)

(6,570,758)

(2,328)

(297,378)

(253)

(114,497)

6,427,065

2,469,412

2,831,194

241,232

4,687,835

1,977,191

Cash and cash equivalents at end of year

21

948,271

4,687,835

The notes on pages 270 to 316 are an integral part of these financial statements.

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationNotes to the parent company financial statements

1. General information

Country of incorporation

Globaltrans Investment Plc (“the Company”) is incorporated and domiciled in Cyprus as a limited 
liability company in accordance with the provisions of the Cyprus Companies Law, Cap. 113 
and converted into a public company on 15 April 2008. Until 26 February 2024 the address 
of its registered office was 20 Omirou Street, CY-3095 Limassol, Cyprus. On 26 February 2024 
the Company has completed redomiciliation to ADGM, UAE with the registered address: Office Unit 3, 
Floor 6, Al Sila Tower, Abu Dhabi Global Market Square, Al Maryah Island, Abu Dhabi, UAE.

Approval of the parent company financial statements

These parent company financial statements were authorised by the Board of Directors 
of the Company on 5 April 2024.

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 2023 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.

270

271

The Company has prepared these parent company financial statements for compliance with 
the requirements of the Cyprus Companies Law, Cap. 113 and disclosure rules as issued 
by the Financial Conduct Authority of the United Kingdom.

Users of these parent company financial statements should read them together with 
the Company’s consolidated financial statements as at and for the year ended 31 December 
2023 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 2023. None of these had a significant impact on these financial 
statements.

4. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements 
are set out below. These policies have been consistently applied to all the years presented, 
unless otherwise stated.

Foreign currency translation

(a) Functional and presentation currency

Items included in the Company’s financial statements are measured using the currency 
of the primary economic environment in which the entity operates (“the functional currency”). 
The Company’s functional currency is the Russian Rouble. The financial statements are also 
presented in Russian Roubles (“the presentation currency”) because this is the currency better 
understood by the principal users of the financial statements.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot 
exchange rates prevailing at the dates of the transactions or valuations where items 
are re-measured. Foreign exchange gains and losses resulting from the settlement of such 
transactions and from the translation at year-end exchange rates of monetary assets and 
liabilities denominated in foreign currencies are recognised in the income statement, with 
the exception of foreign exchange differences that relate to qualifying cash flow hedges which 
are deferred in equity.

Net foreign exchange differences arising from borrowings and other liabilities and from cash 
and cash equivalents and other monetary assets are presented on the face of the income 
statement in the line “net foreign transaction gains/(losses) on financing activities”, with 
the appropriate disclosure of the split between the two in the note “Finance costs – net”.

OverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationAll other foreign exchange gains and losses are presented in the income statement within 
“Other gains – net”.

Hedging activities

The Company is exposed to foreign exchange risk arising from dividends declared in Russian 
Roubles and paid in US Dollar at the rate set at the date of the declaration. The Company uses 
foreign currency cash deposits denominated in US Dollars to hedge this foreign exchange risk 
exposure.

In particular, the US Dollar denominated cash deposits are designated by the Company as hedging 
instruments in hedging the foreign exchange risk associated with the highly probable dividend 
payment and the resulting payable. At inception of the hedge relationship, the Company 
documents, amongst others, the economic relationship between the hedging instrument and 
hedged item, including whether changes in the cash flows of the hedging instrument are expected 
to offset changes in the cash flows of the hedged item. The Company documents its risk 
management objective and strategy for undertaking its hedge transactions.

As a result of the application of hedge accounting the foreign exchange difference on the hedging 
instrument is recognised in other comprehensive income in the “Cash flow hedge reserve” within 
equity. Amounts recognised in equity are reclassified to the income statement, within “Finance 
income and costs”, in the same period or periods during which the hedged item impacts the income 
statement, being once foreign exchange differences are recognised on the hedged item.

Accordingly, in the cash flow statement “Dividends paid to the Company’s shareholders” 
are disclosed net-off foreign exchange differences on the relevant cash deposits (i.e., 
at the amounts declared) and the “Exchange gains on cash and cash equivalents” do not include 
the impact from the relevant cash deposits used for hedging. In the income statement the amounts 
included in “Finance income and costs” (Note 12) within “Net foreign exchange transaction gains/
(losses) on cash and cash equivalents, loans and other receivables and dividends receivable” 
are disclosed after application of hedge accounting (i.e., excluding the foreign currency gains/
losses arising for the hedging).

Dividend income

Dividend income is recognised when the right to receive payment is established.

Employee benefits

Wages, salaries, contributions to the state pension, the national health system and social 
insurance funds, paid annual leave and sick leave, bonuses and other benefits (such as health 
services) are accrued in the year in which the associated services are rendered by the employees 
of the Company. These are included in staff costs and the Company has no further obligations once 
the contributions have been paid.

The Company recognises a liability and an expense for bonuses where contractually obliged 
or where there is a past practice that has created a constructive obligation.

Share based payment transactions

The Company operates a cash-settled share-based compensation plan. In accordance with 
compensation plan, key management personnel of the Company are entitled to receive cash 
compensations based on the weighted average market quotations of the fixed number of global 

272

273

depository receipts (“GDR”) of the Company. The fair value of the employee services received 
in exchange for the grant of the equivalent GDR instruments is recognised as an expense over 
the vesting period.

At each balance sheet date, if required by the terms of the compensation plan, the Company 
revises its estimates of the monetary equivalent of GDRs that are expected to vest. 
It recognises the impact of the revision of original estimates, including number of instruments 
expected to vest and fair value in the income statement with a corresponding adjustment 
to share-based payment liability.

Current and deferred income tax

The tax expense for the period comprises of current and deferred tax. Tax is recognised 
in the income statement, except to the extent that it relates to items recognised in other 
comprehensive income or directly in equity. In this case, the tax is also recognised in other 
comprehensive income or directly in equity respectively.

Current income tax liabilities and assets for the current and prior periods are measured 
at the amount expected to be paid to or recovered from the taxation authorities using the tax 
rates and laws that have been enacted or substantively enacted by the balance sheet date. 
Management periodically evaluates positions taken in tax returns with respect to situations 
in which applicable tax regulations is subject to interpretations and establishes provisions 
where appropriate on the basis of amounts expected to be paid to tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences 
arising between the tax bases of assets and liabilities and their carrying amounts 
in the financial statements. Deferred tax is determined using tax rates and laws that have been 
enacted or substantially enacted by the balance sheet date and are expected to apply when 
the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future 
taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries 
except where the Company can control the timing of the reversal and it is probable that 
the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right 
to offset current tax assets against current tax liabilities, when the income tax assets and 
liabilities relate to income taxes levied by the same taxation authority on either the taxable 
entity or different taxable entities when there is an intention to settle the balances on a net 
basis.

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 

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Informationincome tax positions, other than interest and fines, are recorded within the income tax charge. 
Adjustments for uncertain income tax positions in respect of interest and fines are recorded within 
finance costs and other gains/(losses), net, respectively.

Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s 
financial statements in the period in which the dividends are approved and are no longer 
at the discretion of the Company. More specifically, interim dividends are recognised when 
approved by the Board of Directors whereas in case of final dividends, these are recognised 
at the time when they are approved by the Company’s shareholders.

Leases

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which 
the leased asset is available for use by the Company, with limited exceptions as set out below. 
Assets and liabilities arising from a lease are initially measured on a present value basis. 
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot 
be determined, the Company’s incremental borrowing rate is used, being the rate that the Company 
would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar 
economic environment with similar terms and conditions.

Each lease payment is allocated between the liability and finance cost. The finance cost is charged 
to the income statement over the lease period so as to produce a constant periodic rate of interest 
on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost. Any remeasurement of the lease liability arising 
if the cash flows change based on the original terms and conditions of the lease results 
in a corresponding adjustment to the right-of-use asset. The adjustment can be positive 
or negative. Right-of-use assets are reviewed for impairment in accordance with the Company’s 
accounting policy for impairment of non-financial assets.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and 
the lease term on a straight-line basis. In determining the lease term, the Company considers all 
facts and circumstances that create an economic incentive to exercise an extension option, or not 
exercise a termination option. Extension options (or periods after termination options) are only 
included in the lease term if the lease is reasonably certain to be extended (or not terminated).

As an exception to the above, the Company accounts for short-term leases and leases of low value 
assets by recognising the lease payments as an expense on a straight-line basis in the interim 
income statement. Short-term leases are leases with a lease term of 12 months or less.

Right-of-use assets and associated lease liabilities are presented as separate lines on the face 
of the balance sheet.

Property, plant and equipment

Property, plant and equipment are recorded at purchase cost less depreciation. Historical cost 
includes expenditure that is directly attributable to the acquisition of the items. Depreciation 
on property, plant and equipment is calculated using the straight-line method to allocate their cost, 
less residual value, over their estimated useful lives, as follows:

Motor vehicles

Number of years

3-5

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The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each 
balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s 
carrying amount is greater than its estimated recoverable amount.

Expenditure for repairs and maintenance of property, plant and equipment is charged 
to the income statement of the year in which they are incurred. The cost of major renovations 
and other subsequent expenditure are included in the carrying amount of the asset 
or recognised as a separate asset, as appropriate, only when it is probable that future economic 
benefits associated with the item will flow to the Company and the cost of the item can 
be measured reliably.

Gains and losses on disposal of property, plant and equipment are determined by comparing 
the proceeds with carrying amount and these are included within operating profit as part 
of administrative expenses.

Investments in subsidiary undertakings

Subsidiaries are all entities (including structured entities) over which the Company has control. 
The Company controls an entity when the Company is exposed to, or has rights to variable 
returns from its involvement with the entity and has the ability to affect those returns through 
its power over the entity.

The Company carries the investments in subsidiaries at cost less any impairment 
in its separate financial statements. Investments in subsidiaries are reviewed for impairment 
whenever events or changes in circumstances indicate that the carrying amount may not 
be recoverable. An impairment loss is recognised through income statement for the amount 
by which the asset’s carrying amount exceeds its recoverable amount. The recoverable 
amount is the higher of an asset’s fair value less costs to sell and value in use. An impairment 
loss recognised in prior years is reversed where appropriate if there has been a change 
in the estimates used to determine the recoverable amount.

The cost of investments in subsidiaries includes the fair value of any asset or liability arising 
from a contingent consideration arrangement. The subsequent remeasurement of any asset/
liability arising from a contingent consideration arrangement is adjusted against the cost 
of the investment in subsidiary.

In cases of acquisitions of subsidiaries from entities under common control or subsidiaries 
of the Company, the cost of acquisition is determined to be the fair value of the investment 
acquired as opposed to the transaction price. Any differences between the transaction price 
and the fair value of the investment acquired reflect notional contributions/distributions 
from entities under common control or subsidiaries and are recognised as such, i.e., directly 
in equity in cases of transactions with common control entities and as an additional contribution 
to or distribution from the subsidiary transferring the investment to the Company.

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.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationDeferred consideration

Deferred consideration arises when settlement of all or any part of the cost of an acquisition 
is deferred. Deferred consideration is stated at fair value at the date of acquisition, which 
is determined by discounting the amounts due to present value using market interest rates 
at the date of initial recognition. Interest is accrued on the fair value of deferred consideration 
at the original effective interest rate and is recognised in finance costs.

Impairment of non-financial assets

Assets that have indefinite useful life and goodwill are not subject to amortisation and are tested 
annually for impairment.

Assets that are subject to depreciation or amortisation are reviewed for impairment whenever 
events or changes in circumstances indicate that the carrying amount may not be recoverable. 
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds 
its recoverable amount. The recoverable amount is the higher of an asset’s fair value less 
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped 
at the lowest levels for which there are separately identifiable cash flows (cash-generating units). 
Non-financial assets, other than goodwill, that have suffered impairment are reviewed for possible 
reversal of impairment whenever there is an indication that an impairment recognised in prior 
periods may no longer exist or may have decreased.

Financial assets

Recognition and derecognition. All purchases and sales of financial assets that require delivery 
within the time frame established by regulation or market convention (“regular way” purchases 
and sales) are recorded at trade-date; being the date on which the Company commits to purchase 
or sell the asset. All other purchases and sales are recognised when the entity becomes a party 
to the contractual provisions of the instrument.

Financial assets are derecognised when the rights to receive cash flows from the financial assets 
have expired or have been transferred and the Company has transferred substantially all the risks 
and rewards of ownership. Any gain or loss arising upon their derecognition is recognised directly 
in the income statement.

Classification. The Company classifies its financial assets at amortised cost. The classification 
depends on the Company’s business model for managing the financial assets and the contractual 
cash flow characteristics of the assets. Management determines the classification of financial 
assets at initial recognition.

Financial assets at amortised cost are held for collection of contractual cash flows and their cash 
flows represent solely payments of principal and interest. They are included in current assets, 
except for maturities greater than twelve months after the balance sheet date. These are classified 
as non-current assets. The Company’s financial assets at amortised cost comprise of loans and 
other receivables and cash and cash equivalents on the balance sheet.

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 financial assets. Subsequently, these are measured at amortised cost.

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Interest income. Interest income on financial assets at amortised cost is recognised using 
the effective interest rate method. Interest income on loans granted to related parties 
is recognised within “Revenue” in the income statement. All other interest income recognised 
on debt financial assets carried at amortised cost is included within “finance income” 
in the income statement. Interest income is calculated by applying the effective interest rate 
to the gross carrying amount of a financial asset except for financial assets that subsequently 
become credit-impaired. For credit-impaired financial assets, the effective interest rate 
is applied to the net carrying amount of the financial asset; that is after deduction of the loss 
allowance. The Company’s definition of credit-impaired assets is explained in Note 6, Credit risk 
section.

Impairment. The Company assesses on each reporting date, and on a forward-looking basis, 
the expected credit losses (“ECL”) associated with its debt financial assets carried at amortised 
cost. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that 
is determined by evaluating a range of possible outcomes, (ii) time value of money, and (iii) 
all reasonable and supportable information that is available without undue cost and effort 
at the end of each reporting period about past events, current conditions and forecasts 
of future conditions.

The carrying amount of the financial assets is reduced through the use of an allowance account, 
and the amount of the loss is recognised on the face of the income statement. Subsequent 
recoveries of amounts for which loss allowance was previously recognised are credited against 
the same line item.

For all its debt financial assets carried at amortised cost, the Company applies the general 
approach. In particular, the Company applies the three stage model for calculating impairment, 
which is based on changes in the credit quality of the financial asset since initial recognition. 
A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1. 
The ECL of financial assets in Stage 1 is measured at an amount equal to the portion of lifetime 
ECL that results from default events possible within the next 12 months or until contractual 
maturity, if shorter. If the Company identifies a significant increase in credit risk since initial 
recognition (“SICR”), the asset is transferred to Stage 2 and its ECL is measured based 
on ECL on a lifetime basis, that is, up until its contractual maturity but considering expected 
prepayments, if any. Refer to Note 6, Credit risk section for a description of how the Company 
determines when a SICR has occurred. If the Company determines that a financial asset 
is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime 
ECL. The Company’s definition of credit impaired assets and definition of default is explained 
in Note 6, Credit risk section.

Write-off. Financial assets are written-off, in whole or in part, when the Company has 
concluded that there is no reasonable expectation of recovery. Indicators that there 
is no reasonable expectation of recovery include, amongst others, the failure of a debtor 
to engage in a repayment plan with the Company and a failure to make contractual payments 
for a period of greater than 180 days past due. The Company may write-off financial assets 
that are still subject to enforcement activity when the Company seeks to recover amounts that 
are contractually due, however, there is no reasonable expectation of recovery. Subsequent 
recoveries of amounts previously written off are recognised directly on the face of the income 
statement.

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 

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Informationreturn), significant change in interest rate, change in the currency denomination, new collateral 
or credit enhancement that significantly affects the credit risk associated with the asset 
or a significant extension of a loan when the borrower is not in financial difficulties.

If the modified terms are substantially different, the rights to cash flows from the original asset 
expire and the Company derecognises the original financial asset and recognises a new asset 
at its fair value. The date of renegotiation is considered to be the date of initial recognition 
for subsequent impairment calculation purposes, including determining whether a SICR has 
occurred. The Company also assesses whether the new loan or debt instrument meets the SPPI 
criterion.

Any difference between the carrying amount of the original asset derecognised and fair 
value of the new substantially modified asset is recognised in the income statement, unless 
the substance of the difference is attributed to a capital transaction with owners.

In a situation where the renegotiation was driven by financial difficulties of the counterparty and 
inability to make the originally agreed payments, the Company compares the original and revised 
expected cash flows to assess whether the risks and rewards of the asset are substantially 
different because of the contractual modification. If the risks and rewards do not change, 
the modified asset is not substantially different from the original asset and the modification does 
not result in derecognition. The Company recalculates the gross carrying amount by discounting 
the modified contractual cash flows by the original effective interest rate (or credit-adjusted 
effective interest rate for purchased or originated credit-impaired financial assets) and recognises 
a modification gain or loss in the income statement.

Following a renegotiation or otherwise modification of the contractual cash flows of a financial 
asset, the Company assesses whether the financial asset ceased to meet the definition 
of credit-impaired and, in such case, should be transferred out of Stage 3. In a situation where 
the modification involved only the deferral of the contractual payments (rather than waiver) and 
interest accrues on the unpaid deferred amounts, with the result that there is not a detrimental 
impact on the estimated future cash flows of the loan, the borrower has demonstrated 
consistently good payment behaviour over a period of time and there are no significant concerns 
regarding the repayment of the exposure, the Company considers that the financial asset is not 
credit-impaired.

At the time the financial asset exits Stage 3, the Company compares the risk of default occurring 
on the asset to that at origination. If the risk of default is lower than or equal to the risk of default 
as at the date of initial recognition it is transferred to Stage 1, otherwise it is transferred to Stage 2.

Classification as loans and other receivables. These amounts are held with the objective to collect 
their contractual cash flows and their contractual cash flows represent solely payments of principal 
and interest. Accordingly, these are measured at amortised cost using the effective interest 
method, less provision for impairment. Loans and other receivables are classified as current assets 
if they are due within one year or less (or in the normal operating cycle of the business if longer). If 
not, they are presented as non-current assets.

Classification as cash and cash equivalents. In the cash flow statement, cash and cash equivalents 
include cash in hand and deposits held at call with banks or with original maturity of three months 
or less, less bank overdrafts, if any. Cash and cash equivalents are carried at amortised cost using 
the effective interest method, less provision for impairment. Bank overdrafts are shown within 
borrowings in the current liabilities on the balance sheet.

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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.

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.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationBorrowings are removed from the balance sheet when the obligation specified in the contract 
is extinguished (i.e., when the obligation specified in the contract is discharged, cancelled 
or expires). The difference between the carrying amount of a financial liability that has been 
extinguished or transferred to another party and the consideration paid, including any non-cash 
assets transferred or liabilities assumed, is recognised in the income statement within “finance 
costs-net”.

Other payables. Other payables are classified as current liabilities if payment is due within one 
year or less (or in the normal operating cycle of the business if longer). If not, they are presented 
as non-current liabilities. Other payables are recognised initially at fair value and subsequently 
measured at amortised cost using the effective interest method.

Financial guarantees. Financial guarantee contracts are contracts that require the Company 
to make specified payments to reimburse the holder of the guarantee for a loss it incurs because 
a specified debtor fails to make payment when due in accordance with the terms of debt 
instrument. Financial guarantees are recognised, when material, as a financial liability at the time 
the guarantee is issued. Financial guarantees are initially recognised at their fair value, which 
is normally evidenced by the amount of fees received. This amount is amortised on a straight line 
basis over the life of the guarantee in “other gains – net” in the income statement.

At the end of each reporting period, the guarantee is measured at the higher of (i) the amount 
of the loss allowance determined in accordance with the expected credit loss model under IFRS 9 
and (ii) the amount initially recognised less, where appropriate, the cumulative amount of income 
recognised in accordance with the principles of IFRS 15 “Revenue from Contracts with Customers”.

The fair values of financial guarantees issued in relation to obligations of subsidiaries, where 
such guarantees are provided for no compensation, are accounted for as contributions and 
are recognised as part of the cost of the investment in the respective subsidiary in the financial 
statements of the Company.

Share capital, share premium and treasury shares

Ordinary shares are classified as equity.

Incremental costs directly related to the issue of new shares are shown as a deduction, net of tax, 
from the proceeds.

Any excess of the fair value of consideration received over the par value of shares issued 
is recognised as share premium. Share premium is the difference between the fair value 
of the consideration receivable for the issue of shares and the nominal value of the shares. Share 
premium account can only be resorted to for limited purposes, which do not include the distribution 
of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law on reduction 
of share capital.

Where the Company purchases its own equity share capital (treasury shares), the consideration 
paid, including any directly attributable incremental costs (net of income taxes) is deducted from 
equity within a separate reserve “treasury shares” until the shares are cancelled or re-issued. 
Where such ordinary shares are subsequently re-issued, any consideration received, net 
of any directly attributable incremental transaction costs and the related income tax effects, 
is included in equity within retained earnings. The consideration initially paid for treasury shares 
which are subsequently re-issued is transferred from “treasury shares” to retained earnings.

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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”.

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 

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information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.

5. New accounting pronouncements

The new standards, interpretations, and amendments to the existing standards effective for annual 
accounting periods commencing on 1 January 2023 are as follows:
•  IFRS 17 Insurance Contracts – (issued on 18 May 2017 and is effective for annual reporting 

periods beginning on or after 1 January 2023 with earlier application permitted as long as IFRS 9 
is also applied). The IASB completed its project on insurance contracts with the issuance 
of IFRS 17 Insurance Contracts in May 2017. IFRS 17 replaces IFRS 4 and sets out principles 
for the recognition, measurement, presentation and disclosure of insurance contracts within 
the scope of IFRS 17. IFRS 17 requires insurance liabilities to be measured at a current fulfilment 
value and provides a more uniform measurement and presentation approach for all insurance 
contracts. These requirements are designed to achieve the goal of a consistent, principle-based 
accounting for insurance contracts.

Amendments to IFRS 17 Insurance Contracts – (issued on 25 June 2020 and is effective for annual 
reporting periods beginning on or after 1 January 2023). The main changes are:

–  Deferral of the date of initial application of IFRS 17 by two years to annual periods beginning 

on or after 1 January 2023

–  Additional scope exclusion for credit card contracts and similar contracts that provide 
insurance coverage as well as optional scope exclusion for loan contracts that transfer 
significant insurance risk

–  Recognition of insurance acquisition cash flows relating to expected contract renewals, 

including transition provisions and guidance for insurance acquisition cash flows recognised 
in a business acquired in a business combination

–  Clarification of the application of IFRS 17 in interim financial statements allowing 

an accounting policy choice at a reporting entity level

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–  Clarification of the application of contractual service margin (“CSM”) attributable 

to investment-return service and investment-related service and changes 
to the corresponding disclosure requirements

–  Extension of the risk mitigation option to include reinsurance contracts held and non-

financial derivatives

–  Amendments to require an entity that at initial recognition recognises losses on onerous 

insurance contracts issued to also recognise a gain on reinsurance contracts held

–  Simplified presentation of insurance contracts in the statement of financial position so 
that entities would present insurance contract assets and liabilities in the statement 
of financial position determined using portfolios of insurance contracts rather than groups 
of insurance contracts

–  Additional transition relief for business combinations and additional transition relief 
for the date of application of the risk mitigation option and the use of the fair value 
transition approach

•  Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies 
– (issued on 12 February 2021 and is effective for annual reporting periods beginning 
on or after 1 January 2023). The IASB concluded that the concept of materiality could 
be applied in making decisions about the disclosure of accounting policies. Therefore, 
the Board decided to amend IAS 1 to replace all instances of the term ‘significant accounting 
policies’ with ‘material accounting policy information’. In the Board’s view, accounting 
policy information is material if, when considered together with other information included 
in an entity’s financial statements, it can reasonably be expected to influence decisions 
that the primary users of general purpose financial statements make on the basis of those 
financial statements. The Board concluded that these amendments would help entities 
reduce immaterial accounting policy disclosures in their financial statements.

•  Amendments to IAS 8 – Definition of Accounting Estimates – (issued on 12 February 

2021 and is effective for annual reporting periods beginning on or after 1 January 2023). 
The amendments replace the definition of a change in accounting estimates with a definition 
of accounting estimates. Under the new definition, accounting estimates are “monetary 
amounts in financial statements that are subject to measurement uncertainty”. Entities 
develop accounting estimates if accounting policies require items in financial statements 
to be measured in a way that involves measurement uncertainty. The amendments clarify 
that a change in accounting estimate that results from new information or new developments 
is not the correction of an error.

•  Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single 
Transaction – (issued on 7 May 2021 and is effective for annual reporting periods beginning 
on or after 1 January 2023). The IASB amends IAS 12 to provide a further exception from 
the initial recognition exemption. Under the amendments, an entity does not apply the initial 
recognition exemption for transactions that give rise to equal taxable and deductible 
temporary differences.

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.

Developments in auditing

ISA 600 (Revised 2022) – Audits of Group Financial Statements (Including the Work 
of Component Auditors), effective for audits of group financial statements for periods beginning 
on or after 15 December 2023. ISA 600 (Revised) includes new and revised requirements and 
application material that better aligns the standard with recently revised standards such 

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Informationas ISQM 1, ISA220 (Revised) and ISA 315 (Revised 2019). The new and revised requirements 
also strengthen the auditor’s responsibilities related to professional skepticism, planning and 
performing a group audit, two-way communications between the group auditor and component 
auditors, and documentation.

The changes made to ISA 600 (Revised) are intended to:
•  Encourage proactive management of quality at the group engagement level and the component 

level

•  Keep the standard fit for purpose in a wide range of circumstances and in a developing 

environment

•  Reinforce the need for robust communication and interactions during the group audit
•  Foster an appropriately independent and challenging skeptical mindset of the auditor

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.

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 2023 the Russian Rouble has decreased against the US Dollar from 
70.3375 as of 31 December 2022 to 89.6883 Russian Roubles (27.5% decrease) and has decreased 
against the Euro from 75.6553 as of 31 December 2022 to 99.1919 Russian Roubles (31.1% 
decrease).

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 2023 and 
31 December 2022 are as follows:

Assets

Liabilities

2023

RUB’000

17,154

-

2022

RUB’000

902,670

8,962

284

285

The carrying amounts of monetary assets and liabilities denominated in Euro as at 31 December 
2023 and 31 December 2022 are as follows:

Assets

Liabilities

2023

RUB’000

843,889

80,503

2022

RUB’000

5,527,389

49,967

Had US Dollar exchange rate strengthened/weakened by 30% (2022: 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 2023 would have increased/decreased 
by RUB 4,503 thousand (2022: RUB 156,399 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 2023 and as of 31 December 2022.

Had Euro exchange rate strengthened/weakened by 30% (2022: 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 2023 would have increased/decreased 
by RUB 200,389 thousand (2022: by RUB 1,437,823 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 2023 and as of 31 December 2022.

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 (2022: RUB NIL) 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 
(2022: RUB NIL)).

(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 2023 
and 31 December 2022 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 2023 and 31 December 2022, 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.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information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.

(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.

internal credit rating

Especially the following indicators are incorporated:
• 
•  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

286

287

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.

The Company’s exposure to credit risk for each class of financial instruments subject 
to the expected 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.

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.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationThe gross carrying amounts below represent the Company’s maximum exposure to credit risk 
on these assets as at 31 December 2022:

The movement in the credit loss allowance for loans receivable during the years 2023 and 2022 
is presented in the table below:

288

289

Company definition of category

Gross carrying amount

Internal credit risk 
rating grade

Performing

Underperforming

Internal credit risk 
rating grade

Performing

Underperforming

Loans 
receivable

Other 
receivables

RUB’000

RUB’000

-

-

-

2,243,297

-

-

Loans 
receivable

Other 
receivables

RUB’000

RUB’000

11,555,856

50,983

-

-

-

10,490

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

The gross carrying amounts below represent the Company’s maximum exposure to credit risk 
on these assets as at 31 December 2023:

Company definition of category

Gross carrying amount

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

The gross carrying amounts, as per above, represent the Company’s maximum exposure to credit 
risk on these assets as at 31 December 2023 and 31 December 2022, without taking account 
of any collateral held. The Company does not hold any collateral as security for any loans 
receivable or other receivable balances.

Opening balance

Reversals

Impairment

Foreign exchange difference

Closing balance

Loans Receivable

Non-performing

2023

RUB’000

2022

RUB’000

(1,862,872)

(1,476,783)

-

-

1,862,872

(386,089)

-

-

-

(1,862,872)

During the year 2022, 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 2023 and 31 December 2022 was not material.

During the years 2023 and 2022, the contractual cash flows of the Company’s credit-impaired 
loans receivable as at 1 January 2023 and 1 January 2022, 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 statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information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 2023 and 31 December 2022:

ACRA1

ACRA1

RAEX1

Moody’s2

Moody’s2

Moody’s2

Moody’s2

Moody’s2

Total

Rating

AAA(RU)

AA+(RU)

RuA

A1

A2

B1

Baa2

Baa3

Gross carrying amount

2023

RUB’000

-

36

9,891

859,279

-

-

77,309

1,756

948,271

2022

RUB’000

498,924

29

-

-

4,187,545

1,337

-

-

4,687,835

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 
2023 and 31 December 2022, based on the general approach of IFRS 9, was immaterial. All cash and 
cash equivalents were performing (Stage 1) as at 31 December 2023 and 31 December 2022.

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 2023 and 31 December 2022, none of the Company’s subsidiaries had defaulted 
on or breached any covenants on their borrowings/bonds.

1  Russian rating agencies ACRA and RAEX.

2 

International rating agency Moody’s Investors Service.

290

291

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 2023 and 31 December 2022.

 ɜ

Performing

 ɜ Underperforming

 ɜ Non-performing

Stage 1

2023

RUB’000

3,201,395

-

-

2022

RUB’000

10,818,511

-

-

Total unrecognised gross amount

3,201,395

10,818,511

The amounts, as per above, represent the Company’s maximum exposure to credit risk on these 
financial instruments as at 31 December 2023 and 31 December 2022, 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 2023 and 31 December 2022 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 2023 and 31 December 2022 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 2023, the Company has an excess of current assets over current 
liabilities of RUB 12,491,384 thousand (2022: 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.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationThe table below summarizes the analysis of financial liabilities of the Company by maturity as of 31 December 
2023 and 31 December 2022. 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

Between 
one month 
and three 
months

Between 
three and six 
months

Between 
6 months 
to 1 year

Between 
1 and 2 years

Between 2 
and 5 years

Total

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

RUB’000

31 December 2023

 ɜ

 ɜ

Payables 
and accrued 
expenses1

Borrowings

 ɜ Other lease 
liabilities

 ɜ

Financial 
guarantee 
contracts2

31 December 2022

Payables 
and accrued 
expenses1

 ɜ

 ɜ

-

-

296

12,005

-

592

-

-

-

-

888

1,777

-

-

-

-

1,582,029

1,266,320

-

353,047

296

1,594,626

1,267,208

1,777

353,047

-

16,517

-

-

-

-

-

-

-

-

-

12,005

-

3,553

3,201,395

3,216,953

16,517

Borrowings

382,148

-

1,324,737

733,958

2,067,258

11,485,758

15,993,859

 ɜ Other lease 
liabilities

 ɜ

Financial 
guarantee 
contracts2

236

471

707

1,413

2,488

5,662,940

5,155,571

-

-

-

-

-

5,314

10,818,511

6,045,324

5,172,559

1,325,444

735,371

2,069,746

11,485,758

26,834,201

Capital risk management

The Company’s main objective when managing capital is to maintain the ability to continue as a going concern in order 
to ensure the required profitability of the Company, maintain optimum equity structure and reduce its cost of capital.

For defining capital, the Company uses the amount of net assets attributable to the Company’s shareholders and 
the Company’s borrowings. The Company manages the capital based on borrowings to total capitalization ratio. 
Borrowings include loan liabilities.

To maintain or change capital structure the Company may vary the amount of dividend paid in order to reduce 
debts. Management believes that the current equity is sufficient to fund current projects and further development 
of the Company.

Total capitalisation is calculated as the sum of the total borrowings and net assets at the date of calculation. 
The management does not currently have any specific target on the rate of borrowings to total capitalization.

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.

292

293

The rate of borrowings to total capitalisation as at 31 December 2023 and 31 December 2022 
are as follows:

Total borrowings

Total capitalisation

Total borrowings to total capitalisation ratio (percentage)

2023

RUB’000

-

64,710,823

0.00%

2022

RUB’000

12,588,696

48,272,615

26.08%

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 2023 and 2022. 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.

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.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information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 2023 and 31 December 2022 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 2023 
was Nil (31 December 2022: Nil) and for Russian Rouble denominated loans to related parties 
as at 31 December 2023 was Nil (31 December 2022: Nil). The fair value measurements of loans 
to related parties as at 31 December 2023 and 31 December 2022 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 2023 and 
31 December 2022 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 2023, 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 2023.

The discount rate used for Russian Rouble denominated bank borrowings as at 31 December 2023 
was 11.0% (Note 23). There were no US Dollar denominated borrowings as at 31 December 2023 
and 31 December 2022. The fair value measurements of bank borrowings as at 31 December 2023 
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.

294

295

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 28)

Other losses/(gains) – net

2023

RUB’000

-

13,597,095

13,597,095

2023

RUB’000

(6,817)

1,574,173

1,567,356

2022

RUB’000

2,136

7,064,907

7,067,043

2022

RUB’000

(8,661)

-

(8,661)

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information10. Expenses by nature

12. Finance income and costs

296

297

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)

2023

RUB’000

11,686

4,308

1,063

899

3,450

2,895

2022

RUB’000

7,722

5,398

1,512

331

2,639

2,895

Employee benefit expense (Note 11)

744,373

558,370

Legal, consulting and other professional services1

Bank charges

Non-executive directors’ fees (Note 26)

Travel expenses

Stock exchange and financial regulator fees

Taxes other than on income

Other expenses

Total marketing costs and administrative expenses

11. Employee benefit expense

Salaries

Bonuses

Share based compensation

Social security costs

Total employee benefit expense

Average number of staff employed during the year

67,837

2,364

20,537

7,277

4,438

254

21,563

892,944

2023

RUB’000

323,885

397,602

-

22,886

744,373

11

32,014

14,565

20,793

4,906

7,151

9,710

10,874

678,881

2022

RUB’000

204,413

316,782

21,954

15,221

558,370

9

1 

Includes RUB NIL for the year 2023 (RUB NIL for the year 2022) in fees paid to the Company’s statutory audit firm for tax consultancy services.

Included in finance costs:

 ɜ

 ɜ

Interest expense on bank borrowings (Note 23)

Interest expenses on loans – Related parties (Note 26)

Total interest expense calculated using the effective 
interest rate method

 ɜ

 ɜ

Interest expense on other lease liabilities (Note 23)

Impairment of loans receivable

Total finance costs

Included in finance income:

 ɜ

Interest income on bank balances

Total interest income calculated using the effective 
interest rate method

Total finance income

 ɜ Net foreign exchange transaction (losses)/gains 
on cash and cash equivalents, loans and other 
receivables and dividends receivable

Net foreign exchange transactions (losses)/gains from 
financing activities (Note 14)

2023

RUB’000

(102,877)

(190,809)

(293,686)

(199)

(11,531)

2023

RUB’000

(291,615)

(713,852)

(1,005,467)

(253)

(386,089)

(305,416)

(1,391,809)

230,352

230,352

230,352

2,953,515

100,851

100,851

100,851

752,089

2,953,515

752,089

Finance costs – net

2,878,451

(538,869)

13. Income tax expense

Current tax:

 ɜ

Corporation tax

 ɜ Withholding tax on dividends receivable

 ɜ Withholding tax on bank interest

Total tax expense

2023

RUB’000

8,343

702,849

558

711,750

2022

RUB’000

180

122,886

11,807

134,873

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationThe tax on the Company’s results before tax differs from the theoretical amount that would arise 
using the applicable tax rates as follows:

16. Property, plant and equipment

Profit before tax

 ɜ

 ɜ

 ɜ

 ɜ

Tax charge

Tax calculated at the applicable tax rate

Tax effect of expenses not deductible for tax purposes

Tax effect of allowances and income not subject to tax

(1,878,683)

Foreign withholding tax on dividends receivable

2023

RUB’000

17,149,958

2,143,745

(256,719)

703,407

711,750

2022

RUB’000

5,840,632

730,079

(8,068)

(710,024)

122,886

134,873

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

2023

RUB’000

2,953,515

(6,817)

2,946,698

2022

RUB’000

752,089

(8,661)

743,428

During the years ended 31 December 2023 and 31 December 2022, the Company didn’t declare and 
paid dividends.

At 1 January 2022

 ɜ

 ɜ

Cost

Accumulated depreciation

Net book amount

Year ended 31 December 2022

 ɜ

Depreciation charge (Note 10)

Closing net book amount

At 31 December 2022/1 January 2023

 ɜ

 ɜ

Cost

Accumulated depreciation

Net book amount

Year ended 31 December 2023

 ɜ

 ɜ

Additions

Depreciation charge (Note 10)

Closing net book amount

At 31 December 2023

 ɜ

 ɜ

Cost

Accumulated depreciation

Net book amount

298

299

Motor vehicles

RUB’000

Total

RUB’000

13,193

(5,154)

8,039

(2,639)

5,400

13,193

(7,793)

5,400

4,423

(3,450)

6,373

17,616

(11,243)

6,373

13,193

(5,154)

8,039

(2,639)

5,400

13,193

(7,793)

5,400

4,423

(3,450)

6,373

17,616

(11,243)

6,373

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information17. Right-of-use assets

At 1 January 2022

 ɜ

 ɜ

Cost

Accumulated depreciation

Net book amount

Year ended 31 December 2022

 ɜ

 ɜ

Additions

Depreciation charge (Note 10)

Closing net book amount

At 31 December 2022/1 January 2023

 ɜ

 ɜ

Cost

Accumulated depreciation

Net book amount

Year ended 31 December 2023

 ɜ

Depreciation charge (Note 10)

Closing net book amount

At 31 December 2023

 ɜ

 ɜ

Cost

Accumulated depreciation

Net book amount

18. Investments in subsidiary undertakings

At beginning of year

Disposals

Incorporation of subsidiaries

Acquisition of subsidiaries

At end of year

Offices

RUB’000

Total

RUB’000

15,977

(7,292)

8,685

8,685

(2,895)

5,790

15,977

(10,187)

5,790

(2,895)

(2,895)

15,977

(13,082)

(2,895)

15,977

(7,292)

8,685

8,685

(2,895)

5,790

15,977

(10,187)

5,790

(2,895)

(2,895)

15,977

(13,082)

(2,895)

2023

RUB’000

53,951,099

(1,767,247)

26,319

-

2022

RUB’000

44,851,099

-

-

9,100,000

52,210,171

53,951,099

300

301

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 (%)

2023

2022

2023

2022

2023

2022

New Forwarding 
Company, АО

Russia

GTI Management, 
OOO

Russia

Ural Wagonrepair 
Company, AO

Russia

Ukrainian New 
Forwarding 
Company OOO

Ukraine

BaltTransServis, 
OOO

Russia

RemTransServis, 
OOO1

Russia

BTS-Locomotive 
Solutions OOO2

Russia

Spacecom AS

Estonia

Spacecom Trans 
AS3

Estonia

GLTR Cyprus 
Limited

Cyprus

Railway 
transportation

Railway 
transportation

Repair and 
maintenance 
of rolling 
stock

Railway 
transportation

Railway 
transportation

Repair and 
maintenance 
of rolling 
stock

Support 
activities 
for locomotive 
traction

Operating 
lease 
of rolling 
stock

Operating 
lease 
of rolling 
stock

Operation 
in Cyprus

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

-

-

-

-

100

100

100

100

-

65.25

-

65.25

-

100

-

-

-

65.25

100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

34.75

34.75

-

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 was 100% subsidiary of Spacecom AS as of 31.12.2022 and disposed during 2023.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationAcquisition of non-controlling interest in BaltTransServis, OOO

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.

In January 2023 the Group disposed of its shareholding 65.25% in Spacecom AS for EUR 65,300,000.

In September 2023, the Company incorporated a new Cyprus company and holds 100% shares.

The following amounts are included in the statement of cash flows in relation to acquisitions and 
disposals of subsidiaries:

Proceeds from sale of SC

Acquisition of non-controlling interest in BaltTransServis, 
OOO

2023

RUB’000

4,948,427

2022

RUB’000

-

-

(8,800,000)

Total net cash inflow

4,948,427

(8,800,000)

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.

Based on assessment performed by management as of 31 December 2023, no indicators 
of impairment of the Company’s investments in subsidiary undertakings were identified.

302

303

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:

 ɜ

Loans to related parties (Note 26)

Total non-current portion

Current portion

2023

RUB’000

11,555,856

-

11,555,856

-

61,473

11,617,329

-

-

2022

RUB’000

-

-

-

2,122

2,328,155

2,330,277

-

-

11,617,329

2,330,277

The weighted average contractual interest rate on loans receivable from related parties 
was 0.0% at 31 December 2023. The weighted average effective interest rate on loans 
receivables from related parties was 0.0% at the 31 December 2023.

The other receivables from related parties at 31 December 2023 and at 31 December 2022 carry 
no contractual interest.

The carrying value of loans and other receivables at the reporting date approximates their fair 
value. As at 31 December 2023, the fair values of US Dollar denominated loans to related parties 
are based on cash flows discounted using a rate of Nil (31 December 2022: Nil). The discount 
rate used for Russian Rouble denominated loans to related parties as at 31 December 2023 
was Nil (31 December 2022: Nil). The fair value measurements of loans to related parties and 
other receivables from related parties as at 31 December 2023 and 31 December 2022 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

2023

RUB’000

-

61,473

11,555,856

11,617,329

2022

RUB’000

-

89,102

2,241,175

2,330,277

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information20. Other assets

22. Share capital, share premium and treasury shares

304

305

Prepayments – third parties

Total other assets

Less non-current portion:

Prepayments – third parties (Note 18)

Total non-current portion

Current portion

21. Cash and cash equivalents

Cash at bank

Total cash and cash equivalents

2023

RUB’000

9,838

9,838

-

-

9,838

2023

RUB’000

948,271

948,271

2022

RUB’000

1,607

1,607

915

915

692

2022

RUB’000

4,687,835

4,687,835

Cash and cash equivalents include the following for the purposes of the cash flow statement:

Cash and cash equivalents

2023

RUB’000

948,271

948,271

Cash and cash equivalents are denominated in the following currencies:

US Dollars

Russian Roubles

Euro

Total cash and cash equivalents

2023

RUB’000

17,154

87,228

843,889

948,271

The carrying value of cash and cash equivalents approximates their fair value.

2022

RUB’000

4,687,835

4,687,835

2022

RUB’000

902,670

498,951

3,286,214

4,687,835

Number 
of shares

Share capital

Share premium

Total

USD’000

USD’000

USD’000

178,740,916

17,875

949,471

967,346

At 1 January 2022/31 
December 2022/1 January 
2023

31 December 2023

178,318,259

17,832

949,471

967,303

At 1 January 2022/ 
31 December 2022/ 
1 January 2023

 ɜ

Cancellation of treasury 
shares

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

(422,657)

(1,222)

-

-

At 31 December 2023

178,318,259

515,735

27,929,478

28,445,213

The total authorised number of ordinary shares at 31 December 2023 was 233,495,471 shares 
with a par value of US$0.10 per share (31 December 2022: 233,918,128 shares with a par value 
of US$0.10 per share). All issued shares are fully paid.

As of 31 December 2023, the Company didn’t have treasury shares (31 December 2022 – 
422,657 GDRs which were held in treasury for a total consideration of 1.254 thousand US 
Dollars (equivalent to RUB 145,993 thousand).

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information23. Borrowings

Current

 ɜ

 ɜ

Bank borrowings

Loans from related parties

Total current borrowings

Non-current

 ɜ

 ɜ

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

2023

RUB’000

-

-

-

-

-

-

-

2023

RUB’000

-

-

-

2022

RUB’000

1,343,467

713,852

2,057,319

1,824,777

8,706,600

10,531,377

12,588,696

2022

RUB’000

1,182,851

9,348,526

10,531,377

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

2023

RUB’000

-

-

-

-

2022

RUB’000

696,486

646,981

11,245,229

12,588,696

фNote: 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.

306

307

The weighted average effective interest rates at the balance sheet are as follows:

Bank borrowings

Loans from related parties

2023

%

-

-

2022

%

7.34

9.00

The carrying amount and fair value of current and non-current borrowings are as follows:

Bank borrowings

Loans from related parties

Carrying amount

Fair value

2023

2022

2023

2022

RUB’000

RUB’000

RUB’000

RUB’000

-

-

-

3,168,244

9,420,452

12,588,696

-

-

-

3,048,328

8,695,882

11,744,210

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.

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:

 ɜ

Expiring beyond one year

2023

RUB’000

-

-

2022

RUB’000

12,588,696

12,588,696

2023

RUB’000

2022

RUB’000

-

 -

16,293,400

16,293,400

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.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationReconciliation of liabilities arising from financing activities:

Bank 
borrowing

Other lease 
liabilities

Total liabilities 
from financing 
activities

RUB’000

RUB’000

RUB’000

Opening balance 1 January 2023

12,588,696

5,314

12,594,010

Cash flows:

 ɜ

 ɜ

 ɜ

Amounts advanced

Repayment of principal

Interest paid

Non-cash changes:

 ɜ

 ɜ

Interest expense

Foreign exchange gains

At end of year

-

(11,841,521)

(1,040,861)

293,686

-

-

-

(3,193)

(199)

199

1,432

3,553

Bank 
borrowings

Other lease 
liabilities

RUB’000

RUB’000

Opening balance 1 January 2022

5,039,086

8,685

Cash flows:

 ɜ

 ɜ

 ɜ

Amounts advanced

Repayment of principal

Interest paid

Non-cash changes:

 ɜ

 ɜ

Interest expense

Foreign exchange losses

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

-

(11,844,714)

(1,041,060)

293,885

1,432

3,553

Total liabilities 
from financing 
activities

RUB’000

5,047,771

8,706,600

(1,867,407)

(297,631)

1,005,720

(1,043)

12,594,010

308

309

24. Other lease liabilities

Current lease liabilities

Non-current lease liabilities

Total lease liabilities

Maturity of other lease liabilities

 ɜ

 ɜ

Between 1 and 2 years

Between 2 and 5 years

25. Payables and accrued expenses

Current

 ɜ

 ɜ

Accrued key management personnel compensation, 
including share based payment (Note 26)

Accrued expenses

 ɜ Other payables to third parties

 ɜ Other payables to related parties

Total current trade and other payables

2023

RUB’000

3,553

-

3,553

-

-

-

2023

RUB’000

32,626

11,685

12,005

24,185

80,501

2022

RUB’000

2,826

2,488

5,314

2,488

-

2,488

2022

RUB’000

93,195

5,671

16,517

-

115,383

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

Total payables and accrued expenses

2023

RUB’000

80,501

-

-

80,501

2022

RUB’000

49,967

56,454

8,962

115,383

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information26. Related party transactions

Litten Investments Ltd, controlled by a Director of the Company, has a shareholding 
in the Company of 5.1% as at 31 December 2023 (31 December 2022: 5.1%).

Goldriver Resources Ltd, which has a shareholding in the Company of 3.1% as at 31 December 2023 
(2022: 3.1%), is controlled by a Director of the Company.

As at 31 December 2023, another 0.1% (2022: 0.1%) 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:

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

 ɜ

At beginning of year

Loan advances

Interest charged (Note 8)

Loan repaid during the year

Interest repaid during the year

Impairment

Reversal of impairment

 ɜ Net foreign exchange

At end of year

Consists of:

 ɜ Non-current portion

 ɜ

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

2023

RUB’000

-

11,436,444

-

-

-

(11,531)

-

130,943

11,555,856

-

11,555,856

11,555,856

11,555,856

-

11,555,856

2022

RUB’000

506,351

6,858

2,136

(174,633)

(1,267)

(386,089)

-

46,644

-

-

-

-

-

-

-

The balances at the 31 December 2023 carry a weighted average contractual interest rate of 0.0% 
per annum.

310

311

2023

RUB’000

9,420,452

(8,706,600)

 190,809

 (904,661)

-

-

-

-

2022

RUB’000

-

8,706,600

713,852

-

9,420,452

8,706,600

713,852

9,420,452

(b) Loans from related parties

Loans from subsidiaries:

 ɜ

 ɜ

 ɜ

 ɜ

At beginning of year

Loan advances

Interest charged (Note 8)

Interest charged (Note 8)

At end of year

Consists of:

 ɜ Non-current portion

 ɜ

Current portion

At end of year

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)

 ɜ

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:

 ɜ

Subsidiaries (Note 8)

Total

2023

RUB’000

61,473

61,473

-

61,473

61,473

2023

RUB’000

13,597,095

13,597,095

2022

RUB’000

2,328,155

2,328,155

-

2,328,155

2,328,155

2022

RUB’000

7,064,907

7,064,907

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information(e) Interest income

Interest income:

 ɜ

Interest on loans to subsidiaries (Note 8)

Total interest income calculated using the effective 
interest rate method

(f) Interest expenses

Interest expenses:

 ɜ

Interest on loans from subsidiaries (Note 12)

Total interest expenses calculated using the effective 
interest rate method

(g) Guarantees in favour of subsidiaries

2023

RUB’000

-

-

2023

RUB’000

(190,809)

(190,809)

2022

RUB’000

2,136

2,136

2022

RUB’000

(713,852)

(713,852)

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

2023

RUB’000

3,201,395

3,201,395

2022

RUB’000

10,818,511

10,818,511

During the years ended 31 December 2023 and 31 December 2022 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 2023 and 31 December 
2022 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 2023 and 
31 December 2022 of guarantees issued by the Company for obligations of its subsidiaries in accordance 
with loan agreements with financial institutions and quoted bonds issued by subsidiaries were estimated 
using a probability adjusted discounted cash flow analysis, using probability of default, as implied 
by the market rate of the borrowings obtained by the subsidiaries and loss given default.

The loss given default for the financial guarantees issued by the Company for the obligations 
of its subsidiaries in accordance with loan agreements with financial institutions where such 
obligations are also secured by a pledge of property, plant and equipment and the distressed sale 
value of such pledge exceeds the amount of the obligation of the respective subsidiary has been 
estimated at RUB Nil, since, in case of default, the Company will be able to recover its losses under 
the issued guarantees from respective subsidiaries in full.

312

313

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

Impairment losses of loans to subsidiaries (Note 19)

(i) Key management personnel compensation

Key management salaries and other short-term employee 
benefits2

Share based compensation

(j) Directors’ remuneration

Directors’ fees (Note 10)

Emoluments in their executive capacity

Total directors’ remuneration

2023

RUB’000

(11,531)

2023

RUB’000

610,056

-

610,056

2023

RUB’000

20,537

427,090

447,627

(i) Year-end balances arising from payables to key management

Accrued key management remuneration (Note 25):

 ɜ

 ɜ

Accrued salaries and other short-term employee benefits

Share based payment liability

2023

RUB’000

32,626

-

32,626

2022

RUB’000

(386,089)

2022

RUB’000

532,643

21,954

554,597

2022

RUB’000

20,793

299,051

319,844

2022

RUB’000

71,241

21,954

93,195

(j) Loan commitments under borrowings from subsidiaries

As at 31 December 2023, the Company had undrawn facilities amounting to RUB 6,293,400 
(at 31 December 2022 – RUB 6,293,400) thousand under borrowings agreements with subsidiary 
undertakings. These mature within 2026.

1  Represents the maximum amount of obligation under each contract, being the contractual undiscounted cash flows under the loan 

2  Key management salaries and other short term employee benefits’ include directors’ remuneration amounting to RUB 447,627 thousand 

agreements as at 31 December 2023 and 2022.

(2022: RUB 319,844 thousand), analysed as per below.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information(k) Guarantees from subsidiaries

Borrowings with a carrying amount of RUB 3,168,245 thousand 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 3,640,452 thousand.

(l) Other payables to related parties

2023 

RUB’000

24,185

24,185

2022

RUB’000

-

-

Accrued key management remuneration (Note 25):

 ɜ Other payables to related parties

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.

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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 
2023 as it is considered as a non-adjusting event.

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 2023 and 2022 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 

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional Information316

317

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.

28. Business combinations

Disposal of subsidiary

In January 2023 the Company disposed of 65.25% of Spacecom AS, Estonia for EUR 65,300,000 
(RUB 4,948,427 thousand) realising a profit from sale of RUB 1,574,173 thousand.

29. Events after the balance sheet date

On 26 February 2024, the Company has completed redomiciliation to ADGM, 
UAE with the registered address: Office Unit 3, Floor 6, Al Sila Tower, Abu Dhabi Global Market 
Square, Al Maryah Island, Abu Dhabi, UAE.

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 258 to 261.

Notes to the parent company financial statementsOverviewANNUAL REPORT 2023Financial StatementsStrategic ReportSustainability ReportGovernanceFinancial StatementsAdditional InformationANNUAL REPORT 2023

Additional Information

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Additional 
Information

p. 320

Selected Operational 
Information

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Definitions

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p. 326

Presentation of Financial 
and Other Information

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p. 328

Contacts

Read more →

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Additional Information

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321

31.12.2022

31.12.2023

Change

Change, %

Leased-out Fleet

Selected Operational 
Information for the year 
ended 31 December 2023

Fleet

Owned Fleet

  Gondola cars

  Rail tank cars

Locomotives

  Other railcars

Total

Owned Fleet as % of Total Fleet

Leased-in Fleet

  Gondola cars

  Rail tank cars

Locomotives

Total

Leased-in Fleet as % of Total Fleet

Total Fleet (Owned Fleet and Leased-in Fleet)

  Gondola cars

  Rail tank cars

Locomotives

  Other railcars

Total

Total Fleet by type, %

  Gondola cars

  Rail tank cars

Locomotives

  Other railcars

Total

42,292

18,454

71

1,537

62,354

94%

3,419

342

0

3,761

6%

45,711

18,796

71

1,537

66,115

69%

28%

0.1%

2%

100%

42,267

17,973

65

1,508

61,813

94%

3,419

411

1

3,831

6%

45,686

18,384

66

1,508

65,644

70%

28%

0.1%

2%

100%

(25)

(481)

(6)

(29)

(541)

-

0

69

1

70

-

(25)

(412)

(5)

(29)

(471)

-

-

-

-

-

0%

-3%

-8%

-2%

-1%

-

0%

20%

0%

2%

-

0%

-2%

-7%

-2%

-1%

-

-

-

-

-

Leased-out Fleet as % of Total Fleet

Average age of Owned Fleet

  Gondola cars

  Rail tank cars

Locomotives

  Other railcars

Total

Operation of rolling stock

31.12.2022

31.12.2023

7,474

11%

13.7

17.3

15.0

4.1

14.5

6,164

9%

14.5

17.7

15.9

4.9

15.2

Change

(1,310)

Change, %

-18%

-

-

-

-

-

-

-

-

-

-

-

-

2022

2023

Change

Change, %

Freight Rail Turnover (excluding Engaged Fleet), billion tonnes-km

  Gondola cars

  Rail tank cars

Total

114.5

20.4

134.9

Freight Rail Turnover (excluding Engaged Fleet) by fleet type, %

  Gondola cars

  Rail tank cars

Total

85%

15%

100%

Transportation Volume (excluding Engaged Fleet), million tonnes

  Gondola cars

  Rail tank cars

Total

Freight Rail Turnover (including 
Engaged Fleet), billion tonnes-km

Transportation Volume (including 
Engaged Fleet), million tonnes

Average Rolling Stock Operated, units

  Gondola cars

  Rail tank cars

Locomotives

Total

58.1

18.9

77.0

141.4

80.4

44,240

12,332

49

56,637

109.5

19.6

129.0

85%

15%

100%

55.5

18.1

73.5

138.8

78.6

44,663

12,446

42

57,153

(5.1)

(0.8)

(5.9)

-

-

-

(2.7)

(0.8)

(3.5)

(2.7)

(1.8)

423

115

(7)

517

-4%

-4%

-4%

-

-

-

-5%

-4%

-5%

-2%

-2%

1%

1%

-15%

1%

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Selected operational information 
for the year ended 31 December 2023

Definitions

2022

2023

Change

Change, %

Average Number of Loaded Trips per Railcar

  Gondola cars

  Rail tank cars

Total

Average Distance of Loaded Trip, km

  Gondola cars

  Rail tank cars

Total

Average Price per Trip, RUB

Net Revenue from Operation of Rolling 
Stock, RUB million

19.8

25.6

21.0

1,968

1,079

1,733

64,553

76,798*

18.8

24.2

20.0

1,978

1,082

1,741

71,125

81,102*

Net Revenue from Operation of Rolling Stock by clients (incl. their affiliates and suppliers)

  Top-10 clients

  Other (including small and medium 

enterprises)

67%

33%

Net Revenue from Operation of Rolling Stock by contract type, %

  Service Contracts

  Other contracts (including ad-hoc 

transportation)

Net Revenue from Engaged Fleet, 
RUB million

Empty Run Ratio, %

  Gondola cars

  Rail tank cars and other railcars

Total Empty Run Ratio, %

Empty Run Costs, RUB million

Share of Empty Run Kilometres Paid 
by Globaltrans, %

Employees

59%

41%

876*

41%

94%

50%

17,283*

99%

(1.0)

(1.3)

(1.1)

10

3

8

6,572

4,304

-

-

-

-

-5%

-5%

-5%

0%

0%

0%

10%

6%

-

-

-

-

68%

32%

61%

39%

1,124*

248

28%

36%

92%

45%

18,297*

99%

-

-

-

1,014

-

-

-

-

6%

-

Total employees

1,768

1,802

34

2%

31.12.2022

31.12.2023

Change

Change, %

Terms that require definitions are marked with capital letters in this 
announcement and their definitions are provided below in alphabetical order.

Adjusted EBITDA (a non-IFRS financial measure) 
represents EBITDA excluding “Net foreign exchange 
transaction (gains)/losses on financing activities”, 
“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”, 
“Reversal of impairment of intangible assets” and 
“Profit from sale of subsidiary”.

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/
(reversal 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 and Engaged 
Fleet).

EBITDA (a non-IFRS financial measure) represents 
“Profit for the period” before “Income tax expense”, 
“Finance costs – net” (excluding “Net foreign 
exchange transaction (gains)/losses on financing 
activities”), “Depreciation of property, plant and 
equipment”, “Amortisation of intangible assets” and 
“Depreciation of right-of-use assets”.

Empty Run or Empty Runs means the movement 
of railcars without cargo for the whole 
or a substantial part of the journey.

Empty Run Costs (a non-IFRS financial measure 
meaning costs payable to the rail infrastructure 
provider 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 and 
Engaged Fleet.

Empty Run Ratio is calculated as the total of empty 
trips in kilometres by respective rolling stock type 
divided by total loaded trips in kilometres of such 
rolling stock type. Empty trips are only applicable 
to rolling stock operated (not including rolling stock 

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Definitions

in maintenance, purchased rolling stock in transition 
to its first place of commercial utilisation, rolling stock 
leased out and Engaged Fleet).

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”, “Payment for acquisition 
of non-controlling interest”, “Payment for rolling stock 
to disposed subsidiary” plus “Proceeds from sale 
of subsidiaries – 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).

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 and locomotives.
Leased-out Fleet is defined as fleet leased out to third 
parties under operating leases.

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.

Net Debt (a non-IFRS financial measure) is defined 
as the sum of total borrowings (including interest 
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 (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 
(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 (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 and locomotives, and 
excludes Engaged Fleet.

Service Contracts are contracts with an initial term 
greater than one-year that stipulates an obligation 
to transport a specified amount of cargoes for the client.

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 and Engaged Fleet 
in the relevant period.

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” 
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 and Engaged Fleet 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 and 
locomotives, 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).

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ANNUAL REPORT 2023

Additional Information

326

327

Presentation 
of Financial and Other 
Information

Financial information

All financial information presented in this Annual Report 
is derived from the Consolidated Management Report 
and Consolidated Financial Statements of Globaltrans 
Investment PLC (the “Company” and, together with 
its subsidiaries, “Globaltrans” or the “Group”) and 
prepared in accordance with International Financial 
Reporting Standards as adopted by the European 
Union and the requirements of Cyprus Companies 
Law, Cap. 113 (“EU IFRS”). The Group’s Consolidated 
Management Report and Consolidated Financial 
Statements and the parent company financial 
statements for the year ended 31 December 2023 
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 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.

Operational and market information

Globaltrans reports certain operational information 
to illustrate the changes in the Group’s operational 
and financial performance during the reporting 
periods. This operational information is derived 
from management accounts. The Group’s selected 
operational information for the year ended 31 
December 2023 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 and 
market information that is presented in this Annual 
Report from the third-party sources. 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.

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

GRI standard

Disclosure

Location

Explanation

General disclosures

GRI 2: General 
Disclosures 2021

2-1 Organisational details

Corporate Structure

At a Glance

Corporate Structure

2-2 Entities included in the 
organisation’s sustainability 
reporting

2-3 Reporting period, frequency 
and contact point

2-4 Restatements of information

2-5 External assurance

Sustainability Report

•  1 January – 31 December 

p. 64

Contacts

2023, annual.

•  Financial reporting and 
sustainability reporting 
are aligned
Investor Relations

• 

Phone: +971 50 8867452

Email: irteam@globaltrans.com

No restatements in the 
reporting period.

External assurance for the 
Group’s Sustainability Report 
was not conducted in the 
reporting period.

2-6 Activities, value chain and 
other business relationships

At a Glance

Our Assets

2-7 Employees

Sustainability Report

2-9 Governance structure and 
composition

Corporate 
Governance Report

2-10 Nomination and selection of 
the highest governance body

Corporate 
Governance Report

2-11 Chair of the highest 
governance body

2-12 Role of the highest 
governance body in overseeing 
the management of impacts

Corporate 
Governance Report

Corporate 
Governance Report

2-13 Delegation of responsibility 
for managing impacts

Corporate 
Governance Report

2-14 Role of the highest 
governance body in sustainability 
reporting

Sustainability Report

2-15 Conflicts of interest

Sustainability Report Please see the Group’s 

p. 72

Code of Ethics and 
Conduct which is available 
on the corporate website.

Annual 
Report page

p. 125

p. 6-9

p. 125

p. 336

p. 6-9

p. 10-11

p. 74

p. 98

p. 98

p. 98

p. 98

p. 98

p. 64

ANNUAL REPORT 2023

Additional Information

328

329

GRI standard

Disclosure

Location

Explanation

Please see the following 
policies of the Group which 
are available on the corporate 
website:
•  Anti-fraud Policy
•  The Code of Ethics and 

Conduct

•  Policy on Reporting 
and Investigating 
Allegations of Suspected 
Improper Activities 
(Whistleblowing Policy).

For further information 
on the remuneration paid 
to the Board and key 
executives in 2023, please 
see Note 35a of the Group’s 
Consolidated Management 
Report and Consolidated 
Financial Statements included 
in the Financial Statements 
section of this Annual Report.

For further information 
on the remuneration paid 
to the Board and key 
executives in 2023, please 
see Note 35a of the Group’s 
Consolidated Management 
Report and Consolidated 
Financial Statements included 
in the Financial Statements 
section of this Annual Report.

2-16 Communication of critical 
concerns

Sustainability 
Report

2-18 Evaluation of the 
performance of the highest 
governance body

2-19 Remuneration policies

Corporate 
Governance Report

Corporate 
Governance Report

2-20 Process to determine 
remuneration

Corporate 
Governance Report

2-21 Annual total 
compensation ratio

Corporate 
Governance Report

2-22 Statement on sustainable 
development strategy

Sustainability 
Report

Message from 
the Board

Message from 
the CEO

Annual 
Report page

p. 72

p. 98

p. 98

p. 98

p. 98

p. 64

p. 16

p.18

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GRI Content Index

GRI standard

Disclosure

Location

Explanation

2-23 Policy commitments

Sustainability Report

Corporate 
Governance Report

Sustainability Report

Corporate 
Governance Report

Sustainability Report

Corporate 
Governance Report

2-24 Embedding policy 
commitments

2-25 Processes to remediate 
negative impacts

2-26 Mechanisms for seeking 
advice and raising concerns

Annual 
Report page

p. 72

p. 114-115

p. 72

p. 114-115

p. 72

p. 114-115

Sustainability Report Please see the following 

p. 72

policies of the Group 
which are available 
on the corporate website:

•  Anti-fraud Policy
•  The Code of Ethics and 

Conduct

•  Policy on Reporting 
and Investigating 
Allegations of Suspected 
Improper Activities 
(Whistleblowing Policy)

2-27 Compliance with laws and 
regulations

Sustainability Report There were no instances 
of non-compliance with 
laws and regulations during 
the reporting period.

p. 72

2-28 Membership associations

Sustainability Report Union of Railway Transport 

2-29 Approach to stakeholder 
engagement

Sustainability Report

2-30 Collective bargaining 
agreements

Sustainability Report

Material topics

GRI 3: Material 
Topics 2021

3-1 Process to determine material 
topics

Sustainability Report

3-2 List of material topics

Sustainability Report

Operators - SOZHT (New 
Forwarding Company) Council 
of Transport Workers - STR 
(New Forwarding Company) 
Railway Engineering 
Association – OPZHT (Ural 
Wagonrepair Company)

In 2023, there were no 
collective bargaining 
agreements in the Group 
companies.

p. 70

p. 73

p. 65

p. 65

ANNUAL REPORT 2023

Additional Information

330

331

GRI standard

Disclosure

Location

Explanation

Annual 
Report page

Economic performance

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 201: Economic 
Performance 2016

201-1 Direct economic value 
generated and distributed

Sustainability 
Report

201-2 Financial implications 
and other risks and 
opportunities due to climate 
change

Sustainability 
Report

Anti-corruption

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 205: Anti-
corruption 2016

205-1 Operations assessed for 
risks related to corruption

Sustainability 
Report

Please see the Group’s Anti-
fraud Policy which is available 
on the corporate website.

205-2 Communication and 
training about anti-corruption 
policies and procedures

Sustainability 
Report

Please see the Group’s Anti-
fraud Policy which is available 
on the corporate website.

205-3 Confirmed incidents of 
corruption and actions taken

Sustainability 
Report

No incidents of corruption in 
the reporting period.

Please see the Group’s 
Code of Ethics and Conduct 
which is available on the 
corporate website.

Please see the Group’s 
Code of Ethics and Conduct 
which is available on the 
corporate website.

Anti-competitive behavior

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 206: Anti-
competitive 
Behavior 2016

206-1 Legal actions for anti-
competitive behavior, anti-
trust, and monopoly practices

Sustainability 
Report

Energy

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 302: Energy 
2016

302-1 Energy consumption 
within the organization

Sustainability 
Report

Water and effluents

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

303-5 Water consumption

Sustainability 
Report

p. 84

p. 84

p. 92

p. 72

p. 72

p. 72

p. 72

p. 72

p. 72

p. 86-87

p. 87

p. 88

p. 88

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Additional Information

332

333

GRI Content Index

GRI standard

Disclosure

Location

Explanation

Emissions

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability Report

GRI 305: 
Emissions 2016

305-1 Direct (Scope 1) GHG 
emissions

Sustainability Report

305-2 Energy indirect (Scope 2) 
GHG emissions

Sustainability Report

Annual 
Report page

p. 90-91

p. 97

p. 90-91

p. 97

p. 90-91

p. 97

305-3 Other indirect (Scope 3) 
GHG emissions

Sustainability Report At this stage the Group does 

p. 90-91

not calculate other indirect 
emissions (Scope 3).

p. 97

305-4 GHG emissions intensity

Sustainability Report

305-5 Reduction of GHG 
emissions

Sustainability Report

Waste

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability Report

GRI 306: Waste 
2020

306-1 Waste generation and 
significant waste-related impacts

Sustainability Report

306-2 Management of significant 
waste-related impacts

Sustainability Report

306-3 Waste generated

Sustainability Report

306-4 Waste diverted from 
disposal

Sustainability Report

306-5 Waste directed to disposal

Sustainability Report

Supplier environmental assessment

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability Report

GRI 308: Supplier 
Environmental 
Assessment 2016

308-1 New suppliers that were 
screened using environmental 
criteria

Sustainability Report

308-2 Negative environmental 
impacts in the supply chain and 
actions taken

Sustainability Report

p. 90-91

p. 97

p. 90-91

p. 97

p. 89

p. 89

p. 89

p. 89

p. 89

p. 89

p. 72-73

p. 72-73

p. 72-73

GRI standard

Disclosure

Location

Explanation

Employment

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 401: 
Employment 2016

401-1 New employee hires and 
employee turnover

Sustainability 
Report

401-2 Benefits provided 
to full-time employees that 
are not provided to temporary 
or part-time employees

Sustainability 
Report

401-3 Parental leave

Sustainability 
Report

Occupational health and safety

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 403: 
Occupational 
Health and Safety 
2018

403-1 Occupational health and 
safety management system

Sustainability 
Report

403-2 Hazard identification, 
risk assessment, and incident 
investigation

Sustainability 
Report

403-4 Worker participation, 
consultation, and 
communication 
on occupational health and 
safety

Sustainability 
Report

403-5 Worker training on 
occupational health and 
safety

Sustainability 
Report

403-6 Promotion of worker 
health

Sustainability 
Report

403-9 Work-related injuries

Sustainability 
Report

Training and education

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 404: Training 
and Education 
2016

404-1 Average hours of 
training per year per employee

Sustainability 
Report

404-2 Programs for upgrading 
employee skills and transition 
assistance programs

Sustainability 
Report

404-3 Percentage of 
employees receiving regular 
performance and career 
development reviews

Sustainability 
Report

Annual 
Report page

p. 74-76

p. 74-76

p. 81-82

p. 81

p. 83

p. 83

p. 83

p. 83

p. 83

p. 83

p. 83

p. 80-81

p. 80-81

p. 80-81

p. 80-81

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ANNUAL REPORT 2023

Additional Information

334

335

GRI Content Index

GRI standard

Disclosure

Location

Explanation

Diversity and equal opportunity

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 405: Diversity 
and Equal 
Opportunity 2016

Non-discrimination

405-1 Diversity of governance 
bodies and employees

Sustainability 
Report

Corporate 
Governance Report

405-2 Ratio of basic salary and 
remuneration of women to men

Sustainability 
Report

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

Annual 
Report page

p. 77-79

p. 77-79

p. 116

p. 77-79

p. 77-79

GRI 406: Non-
discrimination 2016

406-1 Incidents of discrimination 
and corrective actions taken

Sustainability 
Report

No incidents of discrimination 
occurred in the reporting period.

p. 77-79

Freedom of association and collective bargaining

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 407: Freedom 
of Association 
and Collective 
Bargaining 2016

407-1 Operations and suppliers 
in which the right to freedom 
of association and collective 
bargaining may be at risk

Sustainability 
Report

Local communities

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 413: Local 
Communities 2016

413-1 Operations with local 
community engagement, impact 
assessments, and development 
programs

Sustainability 
Report

Supplier social assessment

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

414-1 New suppliers that were 
screened using social criteria

Sustainability 
Report

GRI 414: 
Supplier Social 
Assessment 2016

Customer privacy

GRI 3: Material 
Topics 2021

3-3 Management of material 
topics

Sustainability 
Report

GRI 418: Customer 
Privacy 2016

418-1 Substantiated complaints 
concerning breaches of customer 
privacy and losses of customer data

Sustainability 
Report

No breaches of customer 
privacy in the reporting period.

p. 72-73

p. 72-73

p. 84-85

p. 84-85

p. 72

p. 72

p. 73

p. 73

TCFD Index

Code

Governance: 
TCFD 1 (a)

TCFD 1 (b)

Strategy: 
TCFD 2 (a)

TCFD 2 (b)

TCFD 2 (c)

Risk Management: 
TCFD 3 (a)

Targets & Metrics:
TCFD 4 (a)

TCFD 4 (b)

TCFD 4 (c)

TCFD Recommended Disclosures

Describe the Board’s oversight of climate-
related risks and opportunities.

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.

Comments

p. 92-93

p. 92-93

p. 94-96

Describe the impact of climate-related risks 
and opportunities on the organisation’s 
business, strategy and financial planning.

p. 94-96

Describe the resilience of the organisation’s 
strategy, taking into consideration different 
climate-related scenarios.

p. 96

Describe the organisation’s processes 
for identifying and assessing 
climate-related risks.

p. 96-97

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 targets.

p. 97

p. 97

Going forward, the Group will 
work to demonstrate its progress 
in addressing climate change.

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Contacts

General contacts

Stock exchanges

Globaltrans Investment PLC 

London Stock Exchange PLC

Unit 3, Floor 6, Al Sila Tower, Abu Dhabi Global 
Market Square, Al Maryah Island, Abu Dhabi, UAE.

Phone: +971 50 886 7452

Website: www.globaltrans.com

10 Paternoster Square, London EC4M 7LS, UK

Phone: +44 20 7797 1000

Website: www.londonstockexchange.com

For investors and shareholders

Investor Relations

Mikhail Perestyuk

Daria Plotnikova

Phone: +971 50 886 7452

E-mail: irteam@globaltrans.com

ESG

Daria Plotnikova

Phone: +971 50 886 7452

E-mail: esg@globaltrans.com

Depositary bank

Citibank, N.A.

Phone: +1 212 723 5435 / +44 207 500 2030

Email: citiadr@citi.com

Website: www.citi.com/adr

Moscow Exchange

125009 Moscow, Vozdvizhenka Str, 4/7, Bld 1

Phone: +7 (495) 363-3232, +7 (495) 232-3363

Website: www.moex.com

Auditors

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

Anna Vostrukhova
Head of Media Relations

Phone: +971 50 886 7452

Email: media@globaltrans.com

Laura Gilbert
Lightship Consulting

Phone: +44 7799 413351

Email: laura.gilbert@lightshipconsulting.co.uk

ANNUAL REPORT 2023

Additional Information

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