Sistema PublicFinancial : Payments to Governments for the year 2020

Sistema PJSFC

Report on Payments to Governments for the year 2020

Table of Contents

1 INTRODUCTION	3
2 REPORTING PRINCIPLES	4
Legislation	4
Scope and Reporting entities	4
Government	5
Project definition 5
Reporting currency and materiality	5
Payment types	6

3 CONSOLIDATED OVERVIEW OF PAYMENTS TO GOVERNMENTS 7

3.1 - Payments per government 7

3.2a - Payments per project 8

3.2b - Payments per entity level 10

CONTACT INFO 11

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1 Introduction

This Report provides an overview of the payments to governments made by subsidiary undertakings of Sistema PJSFC (hereinafter referred to as 'Sistema'), represented by Segezha Group PJSFC and its subsidiaries (together hereinafter referred to as 'Segezha Group'), for the year 2020 as required under the "Disclosure Rules and Transparency Rules" of the United Kingdom.

The "Disclosure Rules and Transparency Rules" were introduced by the Financial Conduct Authority of the United Kingdom to increase transparency in the extractive and logging sectors. The Rules are applicable for the companies in the extraction and logging of primary forest industries whose transferable securities are admitted to trading on the London Stock Exchange. Sistema is required to be compliant with these Rules since its subsidiary undertakings (Segezha Group) are involved in logging of primary forest activities and its global depositary receipts are listed on the London Stock Exchange.

The Report is to be prepared in accordance with the UK's Report on Payments to Governments Regulations 2014 (SI 2014/3209) and Chapter 10 of the Directive 2013/34/EU (the EU Accounting Directive (2013)).

A primary goal of the enacted transparency regulation is to help empower citizens of the resource- rich countries to hold their governments accountable for the wealth generated by those resources.

This Report is available for download from www.sistema.com

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2 Reporting principles

Legislation

This Report is prepared in accordance with the Reports on Payments to Governments Regulations 2014 as enacted in the UK in December 2014 and as amended in December 2015.

Scope and Reporting entities

Sistema has prepared a consolidated report on payments to governments for activities related to logging of primary forest (hereinafter referred to as 'logging activities'). In this Report, we only disclose payments to governments made by legal entities of Segezha Group involved in logging activities.

Segezha Group carries out logging activities only in Russia, the legal entities active in logging activities operate in five Russian regions - republic of Karelia, Arkhangelsk, Kirov, Vologda and Krasnoyarsk region (please see the map of Segezha Group logging operations as of 31 December 2020).

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Government

In the context of this Report, government means any national, regional or local authority of a country. It includes a department, agency or entity that is a subsidiary of a government controlled by that authority.

Project definition

Payments are reported at project level except that payments that are not attributable to a specific project are reported at entity level. Project is defined as operational activities which are governed by a single contract, license, lease, concession or similar legal agreement, and form the basis for payment liabilities with a government. If such agreements are substantially interconnected, those agreements are to be treated as a single project. According to the regulation, 'substantially interconnected' means that the agreements are governed by a single overarching agreement, that the agreements have substantially similar terms, and that the agreements are geographically and operationally integrated.

Reporting currency and materiality

All payments to governments in this Report are presented in thousands of Russian Roubles (RUB).

For each payment type, total payments below GBP 86,000 to a government whether made as a single payment or as a series of related payments need not to be disclosed. For the purposes of this Report a threshold of RUB 8,603,655 (approx. GBP 86,000) was applied to exclude payments from the scope of disclosure.

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