X5 Retail Group. Годовой отчет за 2022 год (на английском) - часть 14

210

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

Income tax

Deferred income tax

Deferred tax assets and liabilities and the deferred tax 
charge in the consolidated statement of profit or loss 
were attributable to the following items for the year ended 
31 December 2022:

1 January  

2022 

Credited / 

(debited) 

to profit  

and loss

Deferred tax 

on business 

combinations 

(Note 7)

31 December 

2022

TAX EFFECTS OF DEDUCTIBLE TEMPORARY DIFFERENCES AND TAX LOSS CARRY FORWARDS

Tax losses available for carry forward

 5,369 

 (2,675)

–

 2,694 

Right-of-use assets and lease 
liabilities

 20,115 

697

 128 

20,940 

Property, plant and equipment and 
investment property

 333 

309

–

642

Other intangible assets

 53 

111

–

164

Inventories

 2,426 

 133 

 20 

 2,579 

Accounts receivable

 31 

 239 

–

270

Accounts payable

 10,487 

 2,802 

 103 

13,392 

Other

 437 

261

 5 

703

Gross deferred tax assets

 39,251 

1,877 

 256 

41,384 

Less offsetting with deferred tax 
liabilities

 (16,204)

 2,430 

 (128)

(13,902)

Recognised deferred tax assets

 23,047 

4,307 

 128 

27,482 

1 January  

2022 

Credited / 

(debited) 

to profit  

and loss

Deferred tax 

on business 

combinations 

(Note 7)

31 December 

2022

TAX EFFECTS OF TAXABLE TEMPORARY DIFFERENCES

Right-of-use assets and lease 
liabilities

 (53)

 3 

 (29)

 (79)

Property, plant and equipment and 
investment property

 (8,404)

 (3,233)

 (217)

(11,854)

Investments into subsidiary

–

 – 

–

–

Other intangible assets

 (6,806)

397

 (288)

(6,697)

Inventories

–

 (10)

 – 

 (10)

Accounts receivable

 (1,698)

 (50)

 (18)

 (1,766)

Accounts payable

 (2)

(338)

 – 

(340)

Other

 (169)

 59 

 – 

 (110)

Gross deferred tax liabilities

 (17,132)

 (3,172)

 (552)

 (20,856)

Less offsetting with deferred 
tax assets

 16,204 

(2,430)

 128 

13,902 

Recognised deferred tax liabilities

 (928)

 (5,602)

 (424)

(6,954)

211

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

Deferred income tax (continued)

The temporary differences associated with investments in 
the Group’s subsidiaries, for which a deferred tax liability 
was not recognised at 31 December 2022 amounted to 
RUB 35,252 (2021: Nil).

Management believes that the future taxable profits in tax 
jurisdictions that suffered a loss in the current or preceding 
years will be available to utilise the deferred tax asset of 
RUB 2,694 recognised at 31 December 2022 for the carry 
forward of unused tax losses (31 December 2021: RUB 
5,369). 

The Group estimated unrecognised potential deferred 
tax assets in respect of unused tax loss carry forwards 
at 31 December 2022 of RUB 7,984 (31 December 2021: 
RUB 3,206). At 31 December 2022 and 31 December 2021 
unused tax losses had no time restrictions for carry forward. 

Income tax

1 January  

2021 

Credited / 

(debited) 

to profit  

and loss

Deferred tax 

on business 

combinations 

(Note 7)

31 December 

2021

TAX EFFECTS OF DEDUCTIBLE TEMPORARY DIFFERENCES AND TAX LOSS CARRY FORWARDS

Tax losses available for carry forward

5,487

(118)

−

5,369

Right-of-use assets  
and lease liabilities

18,506

1,365

244

20,115

Property, plant and equipment  
and investment property

276

57

–

333

Other intangible assets

52

1

−

53

Inventories

2,293

133

−

2,426

Accounts receivable

27

4

−

31

Accounts payable

7,997

2,490

−

10,487

Other

396

41

−

437

Gross deferred tax assets

35,034

3,973

244

39,251

Less offsetting with deferred  
tax liabilities

(14,576)

(1,628)

−

(16,204)

Recognised deferred tax assets

20,458

2,345

244

23,047

1 January  

2021 

Credited / 

(debited) 

to profit  

and loss

Deferred tax 

on business 

combinations 

(Note 7)

31 December 

2021

TAX EFFECTS OF TAXABLE TEMPORARY DIFFERENCES

Right-of-use assets  
and lease liabilities

(11)

(42)

−

(53)

Property, plant and equipment  
and investment property

(9,559)

1,155

–

(8,404)

Investments into subsidiary

(1,580)

1,580

−

−

Other intangible assets

(4,880)

(1,926)

−

(6,806)

Accounts receivable

(1,149)

(549)

−

(1,698)

Accounts payable

(4)

2

−

(2)

Other

(162)

(7)

−

(169)

Gross deferred tax liabilities

(17,345)

213

−

(17,132)

Less offsetting with deferred 
tax assets

14,576

1,628

−

16,204

Recognised deferred tax liabilities

(2,769)

1,841

−

(928)

Deferred tax assets and liabilities and the deferred tax charge in the consolidated statement of profit or loss 
were attributable to the following items for the year ended 31 December 2021:

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

212

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31

Financial risk 

management

Financial risk management is a part of integrated risk 
management and internal control framework described in 
“Corporate Governance” section of this Annual Report. The 
primary objectives of the financial risk management are to 
establish risk limits, and then ensure that exposure to risks 
stays within these limits.

Financial risk management is carried out by the Group’s 
centralised Finance Department. The Finance Department 
monitors and measures financial risks and undertakes steps 
to limit their influence on the Group’s performance.

(a)

  Market risk

Currency risk

Group is exposed to foreign exchange risk arising from 
foreign currency denominated assets and liabilities with 
respect to import purchases and lease liabilities mainly 
in USD and EUR. As at 31 December 2022 the Group had 
trade accounts payable denominated in USD in the amount 
of RUB 8,140, in EUR in the amount of RUB  2,307  and 
in CNY in the amount of RUB  354  (31 December 2021: 
denominated in USD in the amount of RUB 7,351 and in 
EUR in the amount of RUB 2,101) and leases denominated 
in USD in the amount of RUB 4,523 and in EUR in the 
amount of RUB 2,532 (31 December 2021: denominated 
in USD in the amount of RUB 7,028 and in EUR in the 
amount of RUB 3,506). As at 31 December 2022 the Group 
did not have any other significant assets and liabilities 
denominated in foreign currency and the exposure for the 
Group was estimated as not significant.

Interest rates risk

Interest rate risk is the risk that the fair value or future cash 
flows of a financial instrument will fluctuate because of 
changes in market interest rates.

As at 31 December 2022 the Group had no floating interest-
bearing assets (31 December 2021: Nil), but had 4% 
(31 December 2021: 16%) share of borrowings with floating 
interest rates based on the Key rate of the Central Bank of 
the Russian Federation. 

If the Key rate had been 100 b.p. higher the profit before 
tax for the year ended 31 December 2022 would have been 
RUB 85 lower. If the Key rate had been 100 b.p. lower the 
profit before tax for the year ended 31 December 2022 
would have been RUB 85 higher. The Group’s income 
and operating cash inflows were largely independent of 
changes in market interest rates but part of The Group’s 
interest expenses was marginally exposed to changes in 
market interest rates.

(b)

  Credit risk

Financial assets, which are potentially subject to credit risk, 
consisted principally of cash and cash equivalents and 
short-term financial investments held in banks, trade and 
other receivables (Note 9 and Note 17). Due to the nature 
of its main activities (retail sales to individual customers) the 
Group had no significant concentration of credit risk. Cash 
was placed in financial institutions which were considered 
at the time of deposit to have low risk of default (Note 9). 

The Group has policies in place to ensure that in case 
of credit sales of products and services to wholesale 
customers and reverse franchise schemes only those 
counteragents with an appropriate credit history are 
selected. Although collection of receivables could be 
influenced by economic factors, management believes 
that there was no significant risk of loss to the Group 
beyond the allowance already recorded. In accordance with 
the Group treasury policies and exposure management 
practices, counterparty credit exposure limits were 
continually monitored and no individual exposure was 
considered significant.

(c)

   Liquidity risk

Liquidity risk is defined as the risk that an entity will 
encounter difficulty in meeting obligations associated 
with financial liabilities. Liquidity risk is managed by the 
Corporate Finance Department.

The Group finances its operations by a combination of cash 
flows from operating activities and long-term and short-
term debt. The objective is to ensure continuity of funding 
on the best available market terms. The policy is to keep 
the Group’s credit portfolio diversified structure, continue 
to improve the debt maturity profile, to arrange funding 
ahead of requirements and to maintain sufficient undrawn 
available bank lines/limits, and a strong credit rating so that 
maturing debt may be refinanced as it falls due.

213

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

Financial risk 

management

YEAR ENDED 31 DECEMBER 2022

During 1 year

In 1 to 5 years

Over 5 years

Lease liabilities

 122,886

418,196

318,224

Borrowings

 104,323

 157,776

−

Trade payables

238,641

−

−

Other financial liabilities

80,086

 5,655

−

Total

 545,936

581,627

318,224

YEAR ENDED 31 DECEMBER 2021

During 1 year

In 1 to 5 years

Over 5 years

Lease liabilities

111,953

389,062

289,176

Borrowings

107,339

223,397

−

Trade payables

212,949

−

−

Other financial liabilities

75,683

1,442

−

Total

507,924

613,901

289,176

The following is an analysis of the contractual undiscounted cash flows payable under financial 
liabilities as at the reporting date at spot foreign exchange rates:

(c)   Liquidity risk (continued)

At 31 December 2022 the Group had net current liabilities 
of RUB 198,625 (31 December 2021: RUB 206,373) 
including short-term borrowings of RUB 87,146 (31 
December 2021: RUB 87,767). At 31 December 2022 the 
Group had available bank credit lines of RUB 475,020 (31 
December 2021: RUB 482,263). At 31 December 2022 the 
Group had RUB registered bonds programme available for 
issue on MOEX of RUB 156,000 (31 December 2021: RUB 
190,000).

Management regularly monitors the Group’s operating cash 
flows and available credit lines/limits to ensure that these 
are adequate to meet the Group’s ongoing obligations 
and its expansion programmes. Part of the existing lines 
is provided on rolling basis which is closely monitored 
by detailed cash flow forecasts and are managed by the 
Corporate Finance Department.

The Group’s capital expenditure programme is highly 
discretionary. The Group optimises its cash outflows by 
managing the speed of execution of current capex projects 
and by delaying future capital extensive programmes, 
if required.

The Group is carefully monitoring its liquidity profile by 
optimizing the cost of funding and the drawdown periods 
within revolving credit facilities as well as extending 
existing credit facilities or obtaining new credit lines. The 
Group manages liquidity requirements by the use of both 
short-term and long-term projections and maintaining the 
availability of funding. Based on the review of the current 
liquidity position of the Group management considers that 
the available credit lines and expected cash flows are more 
than sufficient to finance the Group’s current operations.

The Group has assessed the impact of climate related 
matters on its financial statements as not material.

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

214

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

32

Operating environment 

of the Group

Since late February 2022 the aggravation of geopolitical 
tensions and the conflict related to Ukraine had a negative 
impact on the economy of the Russian Federation. 
The European Union, the United States and a number of 
other countries imposed new sanctions against certain 
entities and individuals in Russia. Some international 
companies announced the suspension of activities in 
Russia or the termination of the supply of products to 
Russia. This led to increased volatility in the stock and 
currency markets. In response to increased volatility in 
financial markets and rising inflation risks, the Central Bank 
of Russian Federation raised its key rate to 20% at an 
extraordinary meeting in February 2022. Subsequently, the 
key rate was gradually lowered to 7.5%.

The future stability of the Russian economy is largely 
dependent upon the impact of the sanctions being 
imposed. Should the economy be in a long-term recession 
after the sanctions, that may affect the Group’s financial 
position, cash flows and results of operations. 

Management believes it is taking appropriate measures to 
support the sustainability of the Group’s business in the 
current circumstances.

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

215

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

33

Capital risk  

management

The Group’s objectives when managing capital are to 
safeguard the Group’s ability to continue as a going 
concern in order to provide returns for shareholders 
and benefits for other stakeholders and to maintain an 
optimal capital structure to reduce the cost of capital. The 
Group manages total equity attributable to equity holders 
recognised under IFRS requirements. The Group is in 
compliance with externally imposed capital requirements.

In accordance with a few loan facilities the Group 
maintains an optimal leverage ratio by tracking covenant: 
the maximum level of Net Debt/EBITDA pre-IFRS 16 
(4.00/4.25 during two quarters after acquisition). Net debt 
is calculated as the sum of short-term and long-term 
borrowings less cash and cash equivalents. Reconciliation 
of EBITDA pre-IFRS 16 to operating profit is presented 
in Note 5. This ratio is included as covenants into some 
of Group’s loan agreements (Note 21). At 31 December 
2022 and 31 December 2021 the Group complied with the 
requirements under the loan facilities.

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

216

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34

Fair value of financial 

instruments

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, and appropriate valuation 
methodologies. However, judgement is necessarily required 
to interpret market data to determine the estimated fair 
value. 

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 credit risk of the 
counterparty. 

The carrying amount of cash and cash equivalents and 
trade and other financial receivables approximates their fair 
value.

Liabilities carried at amortised cost

The fair value of bonds is based on quoted market prices. 
Fair values of other liabilities are determined using valuation 
techniques.

The fair value of bonds traded on the MOEX and the 
SE is determined based on active market quotations 
and amounted to RUB 53,831 at 31 December 2022 
(31 December 2021: RUB 77,366). The measurement 
is classified in level 1 of the fair value hierarchy. The 
carrying value of these bonds amounted to RUB 54,074 
at 31 December 2022 (31 December 2021: RUB 78,484) 
(Note 21). The fair value of long-term borrowings amounted 
to RUB 101,279 at 31 December 2022 (31 December 2021: 
RUB 179,255). The measurement is classified in level 3 
of the fair value hierarchy and is determined based on 
expected cash flows discounted using interest rate of 
similar instruments available on the market. The sensitivity 
analysis shows that the increase/decrease of the market 
interest rate by 10% leads to the decrease/increase 
of fair value of long-term borrowings by RUB 1,304 at 
31 December 2022 (31 December 2021: RUB 2,470). The fair 
value of short-term borrowings was not materially different 
from their carrying amounts.

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

217

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

35

Commitments 

and contingencies

Capital expenditure commitments

At 31 December 2022 the Group contracted for capital 
expenditure for the acquisition of property, plant and 
equipment and intangible assets of RUB 4,540 (net of VAT) 
(31 December 2021: RUB 7,659).

Legal contingencies

The Group has been and continues to be the subject of 
legal proceedings and adjudications from time to time. 
Management believes that there are no current legal 
proceedings or other claims outstanding, which could have 
a material effect on the result of operations or financial 
position of the Group and which have not been accrued at 
31 December 2022.

Tax contingencies, commitments and risks 

Russian tax, customs, and currency legislation allows 
for various interpretations and is subject to frequent 
amendments. Relevant regional and federal authorities 
can challenge the Group management interpretation 
of legislation provisions in the context of the Group’s 
transactions and operations. The Group includes 
companies incorporated outside Russia. These companies 
are subject to tax at the rates prescribed by the legislation 
of the jurisdiction where the companies are tax residents. 
According to the Russian legislation, foreign companies 
of the Group are not subject to profit tax except for cases 
of withholding tax (i.e. dividends, interest, capital gain, 
etc.), since tax obligations of the foreign companies of the 
Group are determined on the assumption that the foreign 
companies of the Group are not Russian tax residents.

The Russian transfer pricing legislation is to the large 
extent aligned with the international transfer pricing 
principles developed by the Organisation for Economic 
Cooperation and Development. Starting from 1 January 
2019, a significant number of domestic transactions 
was excluded from the transfer pricing control in Russia. 
Only transactions between Russian companies that 
apply different tax rates on profits or special tax regimes 
are subject to the rules, and only if income from those 
transactions exceeds RUB 1 billion per year. Moreover, 
starting from 1 January 2022, a threshold of RUB 120 million 
applies for cross-border transactions to be classified as 
controlled for transfer pricing purposes. 

Recent trends of interpretation and application of particular 
provisions of the Russian tax legislation highlight the 
fact that tax authorities can enter the more rigid position 
with regards to the interpretation of the legislation and 
tax calculations. Therefore, tax authorities can dispute 
lawfulness of transactions and accounting methods 
that were previously out of question. As a result, material 
additional taxes, penalties and fines can be charged. It 
is impossible to forecast the amount of potential claims 
and to evaluate the probability of an unfavourable 
outcome. Generally, tax audits can cover three calendar 
years preceding the year in which the decision on the 
performance of audit is adopted. In certain circumstances 
a tax audit can cover earlier tax periods.

In May 2021 the Federal Law on denunciation of the Double 
Tax Treaty (DTT) with the Netherlands was adopted, as 
a result respective DTT expired starting from 2022. These 
changes do not apply retrospectively to income paid prior 
to 2022.

MLI standards came into effect on 1 January 2021. The MLI 
requires the setting of minimum standards – rules that must 
be observed in order to benefit from reduced rates under 
a tax treaty. The Russian Federation adopted the following 
standards:

• 

The principal purpose test (PPT); and

• 

Simplified limitation on benefits (sLoB).

The principal purpose test means that tax treaty benefits 
may not be applied if obtaining them was the principal 
purpose of a transaction.

The simplified limitation on benefits means that reduced 
rates under a tax treaty may be enjoyed only by “qualified 
persons” (individuals, a state or political subdivision thereof, 
public companies, pension funds, non-profit organizations, 
etc.) and other persons who are not “qualified persons” if 
they carry on “active business” and the income received 
is connected to that business. The term “active business” 
does not include activities of holding companies, intra-
group financing, making or managing investments (except 
for professional participants in the market), etc.

It follows from the above that where income is paid to 
a foreign company which qualifies for reduced rates or 
exemption from taxation only on the basis of the provisions 
of a tax treaty with a specific state, it is essential to ensure 
compliance both with local law and with the provisions of 
the MLI as a document that regulates the application of 
DTTs between specific countries.

218

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

35

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

Commitments 

and contingencies

Tax contingencies, commitments and risks 
(continued)

In the first half of 2022 the Russian authorities took an 
array of measures meant to support the population and 
businesses due to the impact of economic sanctions 
imposed on the Russian Federation in response to the 
military operation initiated on 24 February 2022, including 
a number of tax initiatives which are aimed to shield the 
business and relevant to the Group:

• 

Right to make income tax instalment payment for March 
2022 one month later, i.e. on April 28, 2022;

• 

Right to pay contributions to social funds for second and 
third quarters of 2022 one year later (in 2023 for 2022);

• 

Reducing of late tax payment interest rate (1/300 instead 
of 1/150 of the Central Bank of the Russian Federation 
refinancing rate applied for each day of late tax payment 
during the period from 9 March 2022 to 31 December 
2023);

• 

Availability of accelerated (before desk tax audit is 
ended) VAT refund without presenting a bank guarantee;

Management regularly reviews the Group’s taxation 
compliance with applicable legislation, laws and decrees 
and current interpretations published by the authorities 
in the jurisdictions in which the Group has operations. 
Furthermore, management regularly assesses the potential 
financial exposure relating to tax contingencies not only 
for the periods open for tax audit but also for which the 
three years’ tax inspection right has expired but which, 
under certain circumstances, may be challenged by the 
regulatory bodies. From time to time potential exposures 
and contingencies are identified and at any point in time 
a number of open matters may exist.

Management estimates that possible exposure in relation 
to the aforementioned risks, as well as other profits tax 
and non-profits tax risks (e.g. imposition of additional VAT 
liabilities), that are more than remote, but for which no 
liability is required to be recognised under IFRS, could be 
several times more than accrued liabilities and provisions 
reflected on the statement of financial position at that date. 
This estimation is provided for the IFRS requirement for 
disclosure of possible taxes and should not be considered 
as an estimate of the Group’s future tax liability.

Notes to the сonsolidated 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

219

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

36

Subsequent events 

for the Group 

In April 2023 the Group acquired 100% of LLC Tamerlan 
operating 295 retail stores in the Southern Federal District 
and the Stavropol Territory of Russia.

220

FINANCIAL STATEMENTS

COMPANY FINANCIAL STATEMENTS

X5 Retail Group N.V.

Company 

Statement 

of Financial 

Position  

 
at 31 December 2022 
Before appropriation of profit

expressed in millions of Russian Roubles, unless otherwise stated

Note

31 December 

2022

31 December 

2021

ASSETS

Non-current assets

Financial fixed assets

38

 172,552 

75,516

Other non-current assets

 6 

9

Deferred tax assets

43

 − 

379

 172,558 

75,904

Current assets

Amounts due from group companies

 3,339 

3,549

Prepaid expenses

 20 

8

Other receivables

  20  

50,627

•  Short-term financial investments

9

 − 

50,092

•  Other

  20 

535

Cash and cash equivalents

 1,378 

5

 4,757 

54,189

Total assets

 177,315 

130,093

EQUITY AND LIABILITIES

Paid up and called up share capital

39

 5,136 

5,707

Share premium account

39

 46,127 

46,127

Share-based payment reserve

39, 41

 − 

118

Translation reserve

39

 (2,678)

(3,249)

Other capital reserve

39

 (2,166) 

−

Retained earnings, excluding 
undistributed profit for the year

39

 38,926 

−

Undistributed profit for the year

39

 45,199 

38,926

Total equity

 130,544 

87,629

Igor 

Shekhterman

CHIEF EXECUTIVE OFFICER

31 May 2023

Note

31 December 

2022

31 December 

2021

Non-current liabilities

Loans from group companies

40

−

1,829

Other non-current liabilities

   21 

−

 21 

1,829

Current liabilities

Loans from group companies

40

−

446

Amounts due to group companies

 46,006 

 39,698 

Accrued expenses 
and other liabilities

 459 

 491 

Current income tax

 285 

−

 46,750 

40,635

Total liabilities

  46,771  

42,464

Total equity and liabilities

 177,315 

130,093

The financial statements are unaudited

221

FINANCIAL STATEMENTS

COMPANY FINANCIAL STATEMENTS

X5 Retail Group N.V.

Company 

Statement 

of Profit 

or Loss 

 
for the year ended 31 December 2022

expressed in millions of Russian Roubles, unless otherwise stated

Note

 

31 December 2022

31 December 2021

Other income

 203 

877

General and administrative expenses

42

 (594)

(817)

Operating (loss)/profit

 (391)

60

Finance income

 2,788 

885

Finance costs

 (64)

(347)

Net foreign exchange loss

 (674)

(5)

Profit before tax

 1,659 

593

Withholding tax

43

−

(4,097)

Income tax (expense)/benefit

43

 (635)

1,967

Share of income on participating interest after tax

38

 44,175 

44,275

Profit for the year

 45,199 

42,738

Igor 

Shekhterman

CHIEF EXECUTIVE OFFICER

31 May 2023

The financial statements are unaudited

222

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

37

Notes to the Company 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

37

Accounting principles

The Company was incorporated as a limited liability 
Company under the laws of The Netherlands on 13 August 
1975 and has its statutory seat in Amsterdam. The Company 
is publicly owned. The principal activity of the Company is 
to act as holding company for retail chains operating mainly 
in Russia. The Company is registered with the Amsterdam 
Chamber of Commerce under number 33143036.

Basis of presentation

The Company’s financial statements have been prepared 
in accordance with the provisions of Part 9 of Book 2 of 
the Dutch Civil Code. The Company uses the option of 
Article 362.8 of Part 9, Book 2, of the Dutch Civil Code 
to prepare the Company financial statements, using the 
same accounting policies as in the consolidated financial 
statements. Valuation is based on recognition and 
measurement requirements of IFRS as adopted by the 
EU as explained in the notes to the consolidated financial 
statements.

Accounting principles

Unless stated otherwise below, the accounting principles 
applied for the Company accounts are similar to those 
used in the IFRS Consolidated Financial Statements (refer 
to Note 2 in the Consolidated Financial Statements). The 
consolidated accounts of companies publicly listed in the 
European Union must be prepared in accordance with 
International Financial Reporting Standards (IFRS) as issued 
by the IASB and adopted by the European Commission. 

As the Company mainly exploits Russian grocery stores, the 
functional currency of the Company is the Russian Rouble 
as this is the currency of its primary business environment 
and reflects the economic reality. Unless stated otherwise 
all amounts are in millions of Russian Rouble (“RUB”).

Investments in group companies 

Investments in group companies are entities (including 
intermediate subsidiaries and special purpose entities) over 
which the Company has control, because the Company 
(i) has power to direct relevant activities of the investees 
that significantly affect their returns, (ii) has exposure, or 

rights, to variable returns from its involvement with the 
investees, and (iii) has the ability to use its power over the 
investees to affect the amount of investor’s returns. Group 
companies are recognised from the date on which control 
is transferred to the Company or its intermediate holding 
entities. They are derecognised from the date that control 
ceases.

The Company applies the acquisition method to 
account for acquired group companies, consistent with 
the approach identified in the consolidated financial 
statements. Investments in group companies are presented 
in accordance with the net asset value method. When 
an acquisition of an investment in a group company is 
achieved in stages, any previously held equity interest is 
remeasured to fair value on the date of acquisition. The 
measurement against the book value is accounted for in 
the statement of profit or loss. 

When the Company ceases to have control over a group 
company, any retained interest is remeasured to its fair 
value, with the change in carrying amount to be accounted 
for in the statement of profit or loss. When parts of 
investments in group companies are bought or sold, and 
such transaction does not result in the loss of control, the 
difference between the consideration paid or received and 
the carrying amount of the net assets acquired or sold, is 
directly recognised in equity. 

When the Company’s share of losses in an investment 
in a group company equals or exceeds its interest in the 
investment (including separately presented goodwill or 
any other unsecured non-current receivables being part of 
the net investment), the Company does not recognise any 
further losses, unless it has incurred legal or constructive 
obligations or made payments on behalf of the investment. 
In such case the Company recognises a provision.

Amounts due from group companies 

Amounts due from group companies are stated initially at 
fair value and subsequently at amortised cost. Amortised 
cost is determined using the effective interest rate.

To avoid the difference between equity in the Consolidated 
and the Company’s Financial Statements any expected 
credit losses on intercompany receivables recognised in 
the Company’s statement of Profit or Loss are eliminated 
(reversed) through the respective intercompany receivable 
account.

Financial guarantee

At initial recognition the financial guarantees contracts are 
measured at the fair value.

On subsequent measurement financial guarantees 
contracts are measured at the ‘higher of’: The expected 
credit losses allowance as defined above, and the amount 
initially recognised (i.e. fair value) less any cumulative 
amount of income amortisation recognised.

For intercompany financial guarantees issued by the 
Company, the expected default is not significant and 
therefore the financial guarantees are not recognised.

Shareholders’ equity

Issued and paid-up share capital, which is denominated 
in Euro, is restated into Russian Rouble (“RUB”) at the 
official exchange rate of the Central Bank of the Russian 
Federation as at reporting date in accordance with section 
2:373.5 of the Dutch Civil Code. The difference is settled in 
the translation reserve.

223

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

38

Notes to the Company 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

Financial fixed 

assets

38

During 2022 the government of the Russian Federation imposed temporary restrictions 
on cross-border payment of dividends or similar capital distributions to a number of 
countries including the Netherlands. Under these restrictions such payments are subject 
to a preliminary government authorisation, leading to significant uncertainties with respect 
to future dividend distributions if and when declared and, as a consequence, impact on 
the valuation of investments into Russian subsidiaries. Based on its current assessment the 
Company believes that no impairment or derecognition of investments in group companies is 
needed.

The list of significant group companies was disclosed in the consolidated financial 
statements (please refer to Note 6 of the consolidated financial statements). 

31 December 

2022

31 December 

2021

Interests in group companies

 172,223

74,954

Loans to group companies

329

562

Total financial fixed assets

 172,552 

75,516

A. MOVEMENTS IN THE INTERESTS IN GROUP COMPANIES HAVE BEEN AS FOLLOWS 

Balance as at 1 January

 74,954 

114,141

Acquisitions / capital contribution

 56,065 

9,002

Deinvestment of Group company

−

(404)

Change in equity of a subsidiary related to options  
for non- controlling interests’ shares

 (2,204)

−

Change in equity of a subsidiary as part of common control 
transaction

 (767)

(6,583)

Change in equity of a subsidiary in the course of merge  
with parent

−

18,824

Change in equity of a subsidiary due to dividend distributions

−

(104,301)

Share of income on participating interest after tax

 44,175 

44,275

Balance as at 31 December

 172,223 

74,954

31 December 

2022

31 December 

2021

B. MOVEMENTS IN THE LOANS TO GROUP COMPANIES WERE AS FOLLOWS

Balance as at 1 January

 562 

11,090

Additions

 58 

287

Settlement/repayment

 (291)

(395)

Offset as a part of merge with subsidiary

1

−

(10,404)

Foreign exchange differences

−

(16)

Balance as at 31 December

 329 

562

1  In October 2021 the Company merged with its subsidiary Perekrestok Holdings B.V.

224

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

38

Notes to the Company 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

Financial fixed 

assets

The total amount of loans provided to group companies was RUB 329 (2021: RUB 562) 
and it approximated the fair value. The loans have not been secured.

31 December 2022

Carrying value

Interest rate, % p.a.

Maturity date

LOANS TO GROUP COMPANIES

RUB loans to group companies

7

6.50%

December 2025

RUB loans to group companies

105

7%

December 2024

RUB loans to group companies

216

8.5%

December 2025

RUB loans to group companies

1

10.50%

December 2024

Total loans to group companies

329

31 December 2021

Carrying value

Interest rate, % p.a.

Maturity date

LOANS TO GROUP COMPANIES

RUB loans to group companies

105

7%

December 2024

RUB loans to group companies

283

8.5%

December 2024

RUB loans to group companies

1

10.50%

December 2023

RUB loans to group companies

173

10.50%

December 2024

Total loans to group companies

562

225

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

39

Notes to the Company 

financial statements

for the year ended 31 December 2022

(expressed in millions of Russian Roubles, 
unless otherwise stated)

39

Shareholders’ 

equity 

Share

capital

1

Share 

premium

Share-based 

payment (equity)

Other capital 

reserves

Translation 

reserve

Retained 

earnings

Undistributed 

profit for the year 

Total

COST

Balance as at 1 January 2021

6,156

46,086

104

−

(3,698)

17,850

28,344

94,842

Value of employee services

−

−

89

−

−

−

−

89

Transfer

−

−

−

−

−

28,344

(28,344)

−

Currency translation

(449)

−

−

−

449

−

−

−

Transfer of vested and waived equity rights 
(Note 29)

−

41

(75)

−

−

−

−

(34)

Profit for the year

−

−

−

−

−

−

42,738

42,738

Dividends

−

−

−

−

−

(46,194)

(3,812)

(50,006)

Balance as at 1 January 2022

5,707

46,127

118

−

(3,249)

−

38,926

87,629

Value of employee services

−

−

 (3)

−

−

−

−

 (3)

Transfer

−

−

−

−

−

 38,926 

 (38,926)

−

Currency translation

 (571)

−

−

−

 571 

−

−

  −   

Purchase commitments for non-controlling 
interests' shares (Note 7)

−

−

−

 (2,204)

−

−

−

 (2,204)

Transfer to Other capital reserves

−

−

 (38)

 38 

−

−

−

−

Modification of share-based payments

−

−

 (77)

−

−

−

−

 (77)

Profit for the year

−

−

−

−

−

−

 45,199 

 45,199 

Balance as at 31 December 2022

 5,136 

 46,127 

  −   

 (2,166)

 (2,678)

 38,926 

 45,199 

 130,544 

1  Share capital translated at the year-end exchange rate EUR/RUB of 75.6553 (2021: 84.0695).