Sistema Public Joint Stock Financial : Annual Report 2021 (Materials for AGM)

2021

SISTEMA PUBLIC JOINT STOCK FINANCIAL CORPORATION

Annual Report

sistema.ru

3

About the report

This annual report contains information about the activities of Sistema Public Joint Stock Financial Corporation and its portfolio companies (hereinafter, "Sistema", "Sistema PJSFC" "the Corporation" or, together with its subsidiaries and affiliates, "the Group"or "Sistema Group") in 2021.

The annual report of Sistema PJSFC for the year 2021 has been prepared in compliance with Federal Law on Joint Stock Companies, Federal Law on Securities Market, Bank of Russia Regulation on Disclosure by Issuers as amended.

Unless otherwise stated, the financial results presented in this annual report are based on IFRS consolidated financial statements. The audit of Sistema's 2021 consolidated financial statements in accordance with IFRS was performed by CJSC Deloitte and Touche CIS. The report also provides information about the Corporation's environmental, social and governance effectiveness.

The annual report may contain minor inaccuracies in the estimation of shares, percentages and amounts due to the rounding of numbers. There may be insignificant discrepancies between the data contained in this annual report and the data disclosed earlier due to the rounding differences.

For other annual reports of the Corporation please go to Investors and Shareholders sections on the company's website (www.sistema.ru).

Disclaimer

Some of the statements in this annual report may contain assumptions or forecasts concerning the forthcoming or expected events at Sistema or its portfolio companies. Such forward-looking statements contain phrases like "expected", "estimated", "intended", "will", "could", negatives of such statements and other similar expressions. Such statements are assumptions only and the actual course of events and their results may differ significantly from those implied in the forward-looking statements. Sistema expressly disclaims any obligation to revise any forward-looking statements whether as a result of new events and circumstances that may arise in the future or to reflect any events that are not expected

at the time of compiling this report. The actual results of Sistema and its portfolio companies could differ materially from those expressed in the assumptions and forecasts of this annual report due to a number of factors.

Such factors may include general economic conditions, competitive environment, risks associated with the deterioration of the geopolitical situation and business operations in Russia, fast technological and market changes in the segments where Sistema and its portfolio companies operate, the impact of various unforeseen events on the macroeconomic situation in the markets where Sistema and its portfolio companies operate and on their financial results, as well as many other risks that are directly related to Sistema or its activities.

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CONTENT

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1. COMPANY OVERVIEW
2. Sistema today

1. Investment portfolio

1. Key highlights

1. Awards & recognition

2

	17	PERFORMANCE
		OF THE CORPORATION
	18	Strategy and governance
		model
	30	Key events of 2021 and after
2021		the reporting date
40	Financial overview
REPORT
44	Securities and share capital
SISTEMA PJSFC / ANNUAL

SISTEMA.RU

3

1. RESULTS OF KEY ASSETS
2. MTS

66 Ozon

1. Segezha Group

1. Etalon Group

1. Medsi

1. Steppe AgroHolding

1. Binnopharm Group

1. Other consolidated assets

1. Venture capital funds

5

4

1. CORPORATE GOVERNANCE
2. Corporate governance system

1. Remuneration policy

1. Risk management

6

215 ANNEXES

5

1. SUSTAINABILITY MANAGEMENT
2. Management system

1. Responsible investment

1. Key ESG areas

1. Social investments

6

SISTEMA.RU

7

COMPANY

OVERVIEW

SISTEMA TODAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

INVESTMENT PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

KEY HIGHLIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

AWARDS & RECOGNITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

SISTEMA PJSFC / ANNUAL REPORT 2021

8

COMPANY OVERVIEW SISTEMA TODAY

SISTEMA.RU

SISTEMA TODAY

TOP

25

9

TOP	0.6%
20

Sistema Public Joint Stock Financial Corporation is Russia's largest public investment company and one of the country's systemically important companies. Founded in 1993, Sistema is today represented across over 20 high-potential sectors of the Russian economy, including telecommunications, forestry, agriculture, pharmaceuticals, healthcare, real estate and e-commerce. The Corporation's investment portfolio is made up mostly of Russian companies operating across Russia and in more than

25 other countries.

AFKS	SSA
MOEX	LSE

The Corporation's shares trade on Moscow Exchange (ticker: AFKS) and on London Stock Exchange in the form of global depositary receipts (ticker: SSA). One GDR represents 20 ordinary shares.

LARGEST RUSSIAN COMPANIES BY REVENUE (RBC)

INVESTMENT

PORTFOLIO

Public assets

MTS

PUBLIC RUSSIAN COMPANIES	CONTRIBUTION TO RUSSIA'S
IN FORBES GLOBAL 2000 RATING	GROSS DOMESTIC PRODUCT

12.1

LOW ESG RISK

SISTEMA'S STRATEGIC GOAL

Is to ensure long-term growth of shareholder value

by boosting return on investments in the existing assets and reinvesting available cash in new investment projects to diversify its portfolio and increase return on investments.

SISTEMA'S SUSTAINABILITY GOAL

Is to build competitive businesses with high added value that meet the principles of social and environmental responsibility and contribute to the sustainable development of industries and regions of operations and to the steady growth of socioeconomic and technological potential, human capital, quality of life and social well-being.

+16.0 %	802.4 RUB
BN

REVENUE

2020 2021

251.9 RUB	1.8 RUB
BN	TN
ADJUSTED OIBDA	ASSETS
1.4 RUB	134.1 PEOPLE
BN	THSD
SOCIAL INVESTMENTS	HEADCOUNT

NYSE: MBT, MOEX: MTSS

OZON

NASDAQ and MOEX: OZON

SEGEZHA GROUP

MOEX: SGZH

ETALON GROUP

LSE and MOEX: ETLN

› 25 COUNTRIES

Sustainalytics 

Sustainability BB management MSCI ESG

50%

INDEPENDENT

DIRECTORS

TOP

5

2021	BB	BB	RUAA-
REPORT	FITCH CREDIT	S&P CREDIT	RAEX CREDIT
RATING 1	RATING 1	RATING 1
SISTEMA PJSFC / ANNUAL
1 As of the end of 2021.

› 20 SECTORS

› 25 COMPANIES

1 As of the end of 2021.

INTERNATIONAL INVESTMENT COMPANIES

ESG Reporting Award