Monopolistic position on railway passenger long- distance transportation market in Russia

Low competition on domestic railway passenger transportation market among international companies due to challenges in entering the Russian market

High social and strategic importance of the Company for the state as the main transport operator for long and middle distance covering the majority of Russia; including regions with extreme climatic and natural conditions and absence of road and air transport infrastructure

Strategic importance in implementation of long- term objectives of RZD state holding

Tariff regulation for long-distance passenger transportation by state and income loss compensation paid by the state

Conservative finance policy and low debt ratio

The Company has remained true to the mission, vision and core values it adopted in 2012 as part of its Development Strategy. Committed to maintaining the same core strategy in the long run, the Company keeps its business on course and stable, responding to a changing external environment through management’s short and mid-term tactical efforts

The macro-level changes that the year 2014 brought, such as economic fluctuations, developments in relationships with governmental bodies and further advancement of the strategic management system within RZD Holding, all had a major impact on FPC’s efforts to achieve the targets set by the strategy and implement strategically important projects

A new system of key performance indicators (KPIs) were introduced in 2015 in order to in order to align the Company’s system of KPIs with the KPIs proposed by RZD Holding as a result of recent developments, has become a significant event in the Company’s strategic development

71,629

employees

22,136

cars

31

depots

16.9 RUB bn

EBITDA

48.2%

share of railway transport on the domestic passenger rail service market

90.1%

share of JSC FPC on the domestic railway passenger service market

3.3 p.p.

was the amount that the share of railway transport in domestic and international passenger service declined by in 2014

Company’s major risks

Loss of passenger traffic market share

Decline in amount of federal subsidies

Not stable loss compensation from the state

25%

share of digital tickets in total ticket sales

+8.6%

growth in number of grateful reviews of train personnel work

98%

passenger traffic schedule accuracy

55.8%

share of cars equipped with air conditioning

Execution of Anti-crisis program resulted in a reduction of the Company’s budgeted costs of

15.3 RUB billion

Income from all actiities amounted to

185.6 RUB billion

Passenger turnover
amounted to

94.6

billion passenger-kilometres

Total amount of investment under the Investment programme amounted to

24.5 RUB billion

274

coach cars were acquired

50

double-decker cars were placed in operation

JSC FPC carries out transportation services to the CIS countries, the Baltic States and to the following 17 European and Asian countries along 24 international routes: Austria, Bulgaria, Hungary, Germany, Italy, China, North Korea, Mongolia, Monaco, Poland, Romania, Slovenia, Slovakia, Finland, France, Croatia and the Czech Republic.

The reporting year saw

3

General Shareholders Meetings;
1 Annual General Shareholders Meeting;
2 Extraordinary General Shareholders Meetings

During the last year,

18

sessions
of the JPC FPC Board of Directors were held:
16 sessions in absentia;
2 sessions in person;

169

issues were examined by JSC FPC Board of Directors

By the end of 2014, headcount at FPC amounted to

73,935

people,
5% less than in 2013

Women account for

65 %

of Company’s personnel

Corporate Training Centre is the main facility for continued and professional education of employees

Company’s major risks

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