TCS : Interim Condensed Consolidated IFRS Results for 3Q and 9M 2020

November 12, 2020 at 03:19 am EST

TCS Group Holding PLC

International Financial Reporting Standards Consolidated Condensed Interim Financial Information (Unaudited)

30 September 2020

TCS Group Holding PLC

CONTENTS
CONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION
Consolidated Condensed Interim Statement of Financial Position..............................................................................	1
Consolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income.............................	2
Consolidated Condensed Interim Statement of Changes in Equity.............................................................................	3
Consolidated Condensed Interim Statement of Cash Flows.......................................................................................	4
NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION
1	Introduction......................................................................................................................................................	5
2	Operating Environment of the Group ...............................................................................................................	7
3	Significant Accounting Policies...........................................................................................................................	9
4	Critical Accounting Estimates and Judgements in Applying Accounting Policies ................................................	11
5	Adoption of New or Revised Standards and Interpretations ..........................................................................	12
6	New Accounting Pronouncements.................................................................................................................	13
7	Cash and Cash Equivalents ..........................................................................................................................	14
8	Loans and Advances to Customers...............................................................................................................	14
9	Investments in Securities...............................................................................................................................	33
10	Repurchase Receivables...............................................................................................................................	34
11	Due to Banks .................................................................................................................................................	35
12	Customer Accounts .......................................................................................................................................	35
13	Share Capital, Share Premium and Treasury Shares....................................................................................	36
14	Net Margin .....................................................................................................................................................	37
15	Fee and Commission Income and Expense ..................................................................................................	38
16	Customer Acquisition Expense......................................................................................................................	39
17	Administrative and Other Operating Expenses..............................................................................................	39
18	Dividends.......................................................................................................................................................	40
19	Segment Analysis ..........................................................................................................................................	41
20	Management of Capital ...................................................................................................................................	48
21	Contingencies and Commitments ....................................................................................................................	49
22	Fair Value of Financial Instruments ..................................................................................................................	53
23	Related Party Transactions..............................................................................................................................	57
24	Events after the End of the Reporting Period....................................................................................................	59

Report on review of Consolidated Condensed Interim Financial Information

To TCS Group Holding PLC

Introduction

We have reviewed the accompanying consolidated condensed interim statement of financial position of TCS Group Holding PLC and its subsidiaries (the 'Group') as at 30 September 2020 and the related consolidated condensed interim statement of profit or loss and other comprehensive income for the three-month and nine-month periods then ended, and consolidated condensed interim statements of changes in equity and cash flows for the nine- month period then ended, and notes, comprising a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and presentation of this consolidated condensed interim financial information in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated condensed interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated condensed interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union.

PricewaterhouseCoopers Limited

Certified Public Accountants and Registered Auditors

11 November 2020

Nicosia

Cyprus

PricewaterhouseCoopers Ltd, PwC Central, 43 Demostheni Severi Avenue, CY-1080 Nicosia, Cyprus P O Box 21612, CY-1591 Nicosia, Cyprus

T: +357 22 - 555 000, F:+357 - 22 555 001, www.pwc.com.cy

PricewaterhouseCoopers Ltd is a private company registered in Cyprus (Reg. No.143594). Its registered office is at 3 Themistocles Dervis Street, CY-1066, Nicosia. A list of the company's directors, including for individuals the present and former (if any) name and surname and nationality, if not Cypriot and for legal entities the corporate name, is kept by the Secretary of the company at its registered office. PwC refers to the Cyprus member firm, PricewaterhouseCoopers Ltd and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Financial Position

		30 September 2020	31 December
In millions of RR	Note	(Unaudited)	2019
ASSETS
Cash and cash equivalents	7	73,481	57,796
Mandatory cash balances with the CBRF		4,793	3,448
Due from other banks		1,882	2,084
Loans and advances to customers	8	346,313	329,175
Financial derivatives		7,343	390
Investments in securities	9	233,091	135,178
Repurchase receivables	10	5,048	-
Guarantee deposits with payment systems		11,488	8,877
Current income tax assets		4,332	815
Deferred income tax assets		959	1,517
Tangible fixed assets and right-of-use assets		10,720	10,560
Intangible assets		6,070	5,435
Other financial assets		16,464	21,673
Other non-financial assets		3,590	2,510

TOTAL ASSETS		725,574	579,458

LIABILITIES
Due to banks	11	14,108	663
Customer accounts	12	513,426	411,614
Debt securities in issue		25,446	26,078
Financial derivatives		153	590
Deferred income tax liabilities		-	142
Subordinated debt		22,367	18,487
Insurance provisions		5,969	6,280
Other financial liabilities		18,236	14,648
Other non-financial liabilities		9,382	4,874

TOTAL LIABILITIES		609,087	483,376

EQUITY
Share capital	13	230	230
Share premium	13	26,998	26,998
Treasury shares	13	(3,238)	(3,164)
Share-based payment reserve	13,23	905	1,039
Retained earnings		90,980	66,880
Revaluation reserve for investments in debt securities		495	3,996

Equity attributable to shareholders of the Company		116,370	95,979
Non-controlling interest		117	103

TOTAL EQUITY		116,487	96,082

TOTAL LIABILITIES AND EQUITY		725,574	579,458

Approved for issue and signed on behalf of the Board of Directors on 11 November 2020.

_____________________	____________________
Constantinos Economides	Mary Trimithiotou
Director	Director

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income

			Unaudited
		Nine months	Three months	Nine months	Three months
		ended	ended	ended	ended
	Note	30 September	30 September	30 September	30 September
In millions of RR	2020	2020	2019	2019
Interest income calculated using the effective	14	93,987	30,205	80,644	29,465
interest rate method
Other similar income	14	13	2	118	-
Interest expense calculated using the effective	14	(16,430)	(5,277)	(15,406)	(5,531)
interest rate method
Other similar expense	14	(110)	(36)	(107)	(39)
Expenses on deposit insurance	14	(1,258)	(457)	(1,331)	(487)

Net margin	14	76,202	24,437	63,918	23,408

Credit loss allowance for loans and advances to	8	(34,613)	(6,586)	(19,603)	(7,952)
customers and credit related commitments
Credit loss allowance (charge)/reversal for debt		(360)	(99)	225	83
securities at FVOCI

Total credit loss allowance for debt financial		(34,973)	(6,685)	(19,378)	(7,869)
instruments

Net margin after сredit loss allowance		41,229	17,752	44,540	15,539

Fee and commission income	15	33,393	12,973	25,696	9,359
Fee and commission expense	15	(14,699)	(5,688)	(10,636)	(3,974)
Customer acquisition expense	16	(13,591)	(5,473)	(13,888)	(4,049)
Net gains/(losses) from derivatives revaluation		6,678	3,720	(1,407)	(11)
Net (losses)/gains from foreign exchange translation		(8,743)	(4,242)	1,236	(451)
Net gains/(losses) from operations with foreign		1,211	291	(684)	(15)
currencies
Net gains from disposals of debt securities at FVOCI		6,787	538	277	137
Net gains from debt instruments at FVTPL		75	65	390	-
Insurance premiums earned		13,932	4,546	9,520	4,262
Insurance claims incurred		(2,904)	(795)	(3,282)	(1,374)
Administrative and other operating expenses	17	(25,244)	(8,859)	(20,461)	(7,394)
Net gains from repurchase of subordinated debt		168	18	-	-
Other operating income		2,405	1,087	866	435

Profit before tax		40,697	15,933	32,167	12,464
Income tax expense		(8,806)	(3,296)	(7,045)	(2,730)

Profit for the period		31,891	12,637	25,122	9,734

Other comprehensive (loss)/income
Items that may be reclassified to profit or loss
Debt securities at FVOCI and Repurchase
receivables:
- Net gains/(losses) arising during the period, net		1,929	(1,121)	3,760	1,126
of tax
- Net gains reclassified to profit or loss upon		(5,430)	(431)	(222)	(110)
disposal, net of tax

Other comprehensive (loss)/income for the		(3,501)	(1,552)	3,538	1,016
period, net of tax

Total comprehensive income for the period		28,390	11,085	28,660	10,750

Profit is attributable to:
- Shareholders of the Company		31,877	12,631	25,119	9,730
- Non-controlling interest		14	6	3	4
Total comprehensive income is attributable to:		28,376	11,079	28,657	10,746
- Shareholders of the Company
- Non-controlling interest		14	6	3	4

Earnings per share for profit attributable to the
Shareholders of the Company, basic		162.76	64.35	136.76	49.96
(expressed in RR per share)
Earnings per share for profit attributable to the
Shareholders of the Company, diluted		160.85	63.49	134.37	49.14
(expressed in RR per share)

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Changes in Equity

					Attributable to shareholders of the Company	Non-	Total
		Share	Share	Share-	Revaluation	Treasury	Retained	Total
		capital	premium	based	reserve for	shares	earnings		control-	equity
	Note			payment	investments in				ling
In millions of RR			reserve	debt securities				Interest
Balance at 1 January 2019		188	8,623	1,232	(1,144)	(3,670)	36,785	42,014	236	42,250

Profit for the period		-	-	-	-	-	25,119	25,119	3	25,122
Other comprehensive income:
Investments in debt securities at FVOCI and Repurchase receivables		-	-	-	3,538	-	-	3,538	-	3,538

Total comprehensive income for the period (Unaudited)		-	-	-	3,538	-	25,119	28,657	3	28,660

Shares issued	13	42	18,874	-	-	-	-	18,916	-	18,916
Secondary public offering costs	13	-	(499)	-	-	-	-	(499)	-	(499)
Acquisition of non-controlling interest in subsidiaries		-	-	-	-	-	(376)	(376)	(71)	(447)
Share-based payment reserve	13,23	-	-	(282)	-	506	156	380	-	380
Dividends declared	18	-	-	-	-	-	(5,870)	(5,870)	-	(5,870)

Balance at 30 September 2019 (Unaudited)		230	26,998	950	2,394	(3,164)	55,814	83,222	168	83,390

Balance at 1 January 2020		230	26,998	1,039	3,996	(3,164)	66,880	95,979	103	96,082

Profit for the period		-	-	-	-	-	31,877	31,877	14	31,891
Other comprehensive loss:
Investments in debt securities at FVOCI and Repurchase receivables		-	-	-	(3,501)	-	-	(3,501)	-	(3,501)

Total comprehensive (loss)/income for the period (Unaudited)		-	-	-	(3,501)	-	31,877	28,376	14	28,390

GDRs buy-back	13	-	-	-	-	(661)	-	(661)	-	(661)
Share-based payment reserve	13,23	-	-	(134)	-	587	(4)	449	-	449
Dividends declared	18	-	-	-	-	-	(7,773)	(7,773)	-	(7,773)

Balance at 30 September 2020 (Unaudited)		230	26,998	905	495	(3,238)	90,980	116,370	117	116,487

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Cash Flows

		Unaudited
		Nine months	Nine months
		ended	ended
	Note	30 September	30 September
In millions of RR	2020	2019
Cash flows from operating activities		95,007	77,132
Interest income received calculated using the effective interest rate method
Other similar income received		11	175
Interest expense paid calculated using the effective interest rate method	8	(16,201)	(15,162)
Recoveries from written-off loans	2,777	2,440
Expenses on deposits insurance paid		(1,192)	(1,185)
Fees and commissions received		33,395	25,540
Fees and commissions paid		(14,444)	(11,016)
Customer acquisition expense paid		(12,305)	(14,771)
Gains/(losses) from operations with foreign currencies received/(paid)		103	(684)
Losses from operations with derivatives paid		(689)	(452)
Insurance premiums received		13,582	11,389
Insurance claims paid		(2,488)	(2,837)
Other operating income received		1,975	1,084
Administrative and other operating expenses paid		(19,953)	(17,681)
Income tax paid		(10,913)	(10,991)

Cash flows from operating activities before changes in operating		68,665	42,981
assets and liabilities

Changes in operating assets and liabilities
Net increase in CBRF mandatory reserves		(1,345)	(820)
Net decrease/(increase) in due from banks		202	(1,075)
Net increase in loans and advances to customers		(45,926)	(135,570)
Net (increase)/decrease in debt securities measured at FVTPL		(1,076)	5,781
Net decrease/(increase) in guarantee deposits with payment systems		125	(4,702)
Net decrease in other financial assets		4,612	4,053
Net (increase)/decrease in other non-financial assets		(582)	1,183
Net increase/(decrease) in due to banks		12,991	(1,835)
Net increase in customer accounts		80,814	68,933
Net (decrease)/increase in other financial liabilities		(641)	3,557
Net decrease in non-financial liabilities		(291)	(524)

Net cash from/(used in) operating activities		117,548	(18,038)

Cash flows (used in)/from investing activities		(1,118)	(1,526)
Acquisition of tangible fixed assets
Acquisition of intangible assets		(2,077)	(1,870)
Acquisition of investments in securities, repurchase receivables and other
investments		(362,000)	(64,221)
Proceeds from sale and redemption of investments in securities		269,327	64,614

Net cash used in investing activities		(95,868)	(3,003)

Cash flows (used in)/from financing activities	18	(8,076)	(5,618)
Dividends paid
Repayment of subordinated debt		(1,937)	-
Repayment of debt securities in issue	13	(813)	(3,200)
GDR's buy-back	(661)	-
Repayment of principal of lease liabilities		(563)	(987)
Proceeds of perpetual loan participation notes		710	46
Proceeds from debt securities in issue		-	21,615
Proceeds from secondary public offering		-	18,916
Secondary public offering costs paid		-	(451)

Net cash (used in)/from financing activities		(11,340)	30,321

Effect of exchange rate changes on cash and cash equivalents		5,345	(726)

Net increase in cash and cash equivalents		15,685	8,554

Cash and cash equivalents at the beginning of the period	7	57,796	33,802

Cash and cash equivalents at the end of the period	7	73,481	42,356

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

1 Introduction

This consolidated condensed interim financial information for the nine months ended 30 September 2020 for TCS Group Holding PLC (the "Company") and its subsidiaries (together referred to as the "Group" or "TCS Group Holding PLC") has been prepared in accordance with International Accounting Standard 34 (IAS 34) "Interim Financial Reporting" as adopted by the European Union.

The Company was incorporated, and is domiciled, in Cyprus in accordance with the provisions of the Companies Law, Cap.113.

The Board of Directors of the Company at the date of authorisation of this consolidated condensed interim financial information consists of: Constantinos Economides, Alexios Ioannides, Mary Trimithiotou, Jacques Der Megreditchian and Martin Robert Cocker.

The Company Secretary is Caelion Secretarial Limited, 25 Spyrou Araouzou, 25 Berengaria, 5th floor, Limassol 3036, Cyprus.

At 30 September 2020 and 31 December 2019 the share capital of the Company is comprised of "class A" shares and "class B" shares. A "class A" share is an ordinary share with a nominal value of USD 0.04 per share and carrying one vote. A "class B" share is an ordinary share with a nominal value of USD 0.04 per share and carrying 10 votes. As at 30 September 2020 the number of issued "class A" shares is 119,291,268 and issued "class B" shares is 80,014,224 (31 December 2019: the same). Refer to Note 13 for further information on the share capital. On 25 October 2013 the Group completed an initial public offering of its "Class A" ordinary shares in the form of global depositary receipts (GDRs) listed on the London Stock Exchange plc. On 2 July 2019 the Group completed a secondary public offering (SPO) of its "class A" shares in the form of GDRs. Refer to Note 13 for the information about SPO. On 28 October 2019 the Group's GDRs started trading also on the Moscow Exchange.

As at 30 September 2020 and 31 December 2019 the entities and the individuals holding either Class A or Class B shares of the Company were:

	Class of	30 September	31 December	Country of
	shares	2020	2019	Incorporation
		(Unaudited)
Guaranty Nominees Limited
(JP Morgan Chase Bank NA)	Class A	59.85%	59.85%	United Kingdom
Virtue Trustees (Switzerland) AG as Trustee
of the Bernina Trust	Class B	18.47%	-	Switzerland
Virtue Trustees (Switzerland) AG as Trustee
of the Rigi Trust	Class B	21.68%	-	Switzerland
Ioanna Georgiou	Class A	0.00%	0.00%	Cyprus
Panagiota Charalambous	Class A	0.00%	0.00%	Cyprus
Maria Vyra	Class A	0.00%	0.00%	Cyprus
Marios Panayides	Class A	0.00%	0.00%	Cyprus
Chloi Panagiotou	Class A	0.00%	0.00%	Cyprus
Leonora Chagianni	Class A	0.00%	0.00%	Cyprus
Altoville Holdings Limited	Class B	-	18.47%	Cyprus
Nemorenti Limited	Class B	-	21.68%	Cyprus

Total		100.00%	100.00%

Guaranty Nominees Limited is a company holding class A shares of the Company for which global depositary receipts are issued under a deposit agreement made between the Company and JP Morgan Chase Bank NA signed in October 2013.

On 19 March 2020 Altoville Holdings Limited and Nemorenti Limited transferred all of the Company's Class B shares owned by them to two Tinkov family trusts. Russian entrepreneur Mr. Oleg Tinkov, who was the beneficial owner of Altoville Holdings Limited and Nemorenti Limited at 31 December 2019, remains the ultimate beneficiary of these shares, and thus his voting rights are unaffected by this change. This change also has no consequences for or impact on the operations of the Company and its subsidiaries.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

1 Introduction (Continued)

As at 30 September 2020 the six individuals listed above each hold one share. The individuals hold them as nominees of Mr. Oleg Tinkov (31 December 2019: as nominees of Altoville Holdings Limited).

As at 30 September 2020 and 31 December 2019 the ultimate controlling party of the Company is Mr. Oleg Tinkov. Mr. Oleg Tinkov controls approximately 87.03% of the aggregated voting rights attached to the Class A and B shares as at 30 September 2020 (31 December 2019: 87.03%) excluding voting rights attached to GDRs in TCS Group Holding PLC he holds, if any.

The subsidiaries of the Group are set out below. Except where stated the Group owns 100% of shares and has 100% of voting rights of each of these subsidiaries as at 30 September 2020 and 31 December 2019.

JSC "Tinkoff Bank" (the "Bank") provides on-line retail banking services in Russia. The Bank specialises in issuing credit cards and other credit products.

JSC "Tinkoff Insurance" (the "Insurance Company") provides insurance services such as accident, property, travellers, financial risks and auto insurance.

LLC "Microfinance company "Т-Finans" provides micro-finance services.

TCS Finance D.A.C. is a structured entity which issued debt securities including subordinated perpetual bonds for the Group. The Group neither owns shares nor has voting rights in this company. However, this entity was consolidated as it was specifically set up for the purposes of the Group, and the Group has exposure to substantially all risks and rewards through outstanding guarantees of the entity's obligations.

LLC "TCS" provides printing, distribution and other services to the Group.

LLC "Phoenix" is a debt collection agency.

LLC "Tinkoff Software DC" and LLC "Fintech DC" provide software development services. In August 2020 the Group disposed of LLC "Fintech DC" in exchange of 22.15% shareholding in Incantus Holding Limited (refer to Note 23).

LLC "Tinkoff Mobile" is a mobile virtual network operator set up in 2017 to provide mobile services.

LLC "CloudPayments" is a developer of online payment solutions whose core business is online merchant acquiring in Russia. As at 30 September 2020 and 31 December 2019 the Group held 95% of the shares of LLC "CloudPayments".

ANO "Tinkoff Education" is a non-commercial organization set up by the Bank as the sole founder.

LLC "Tinkoff Capital" is an asset management company established in June 2019 to manage investment funds, mutual funds and non-state pension funds.

LLC "Tinkoff Invest Lab" is an infrastructure company created for supporting and optimizing of the Group's investment services.

EBT is a special purpose trust which has been specifically created for the long-term incentive programme for Management of the Group (MLTIP). The Group neither owns shares nor has voting rights in EBT.

Principal activity. The Group's principal business activities are retail banking to private individuals, individual entrepreneurs' ("IE") and small and medium enterprises' ("SME") accounts and banking services, brokerage services and insurance operations within the Russian Federation through the Bank and the Insurance Company. The Bank operates under general banking license No. 2673 issued by the Central Bank of the Russian Federation ("CBRF") on 8 December 2006. The Insurance Company operates under an insurance license issued by the CBRF.

The Bank participates in the state deposit insurance scheme, which was introduced by Federal Law No. 177-FZ "Deposits insurance in banks of the Russian Federation" dated 23 December 2003.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

1 Introduction (Continued)

The State Deposit Insurance Agency guarantees repayment of insurance compensation up to

1.4 million per individual, individual entrepreneur and small enterprise deposits in case of the withdrawal of a license of a bank or a CBRF-imposed moratorium on payments.

Registered address and place of business. The Company's registered address is 25 Spyrou Araouzou, Berengaria 25, 5th floor, Limassol, Cyprus, and place of business is Office 403, Lophitis Business Centre I, Corner of 28th October/Emiliou Chourmouziou Streets, Limassol 3035 Cyprus. The Bank's registered address is 1-st Volokolamsky proezd, 10, building 1, 123060, Moscow, Russian Federation. The Insurance Company's registered address is 2-nd Khutorskaya Street, building 38A, 127287, Moscow, Russian Federation. The Group's principal place of business is the Russian Federation.

Presentation currency. This consolidated condensed interim financial information is presented in millions of Russian Rubles (RR).

2 Operating Environment of the Group

Russian Federation. The Group operates mainly within the Russian Federation. There were a number of significant changes in the operating and economic environment during the first half of 2020, which had an impact on the Group's business including:

In March 2020 the World Health Organization (WHO) announced that the spread of the COVID-19 virus across the globe is a pandemic. Significant restrictions on travel and movement of individuals and the closure of non-essential businesses have either been imposed in most countries or have happened as a result of the pandemic. This has led to significant declines in GDP in most if not all large economically strong countries. Russia has not been immune to the negative personal and economic hardships arising from this virus and from the response to it trying to limit its spread.
Oil prices have decreased significantly due to the significant reduction in oil consumption in the current economic climate but demonstrated stable growth during the second quarter of 2020. This in turn has led to significant volatility and depreciation of the Russian Rouble exchange rate against the US dollar and the Euro.
Further, the capital markets (equities and bonds) have seen a substantial volatility in prices in many sectors.

As of the reporting date and subsequently some of the restrictions imposed by government authorities in the Russian Federation due to the COVID-19 pandemic have been lifted and the Group observes that business activity in the Russian Federation is recovering. However, the level of ongoing uncertainty in relation to further negative developments around the COVID-19 pandemic and possible impact on the Group remains high. Hence it is practically impossible to make a comprehensive quantitative assessment with a high degree of certainty of the impact of these changes to the economic environment on the Group's financial position, and in particular in considering credit loss allowances on the loan portfolio which requires to consider the probability of default of most borrowers in the next 12 months and for others over the life of their loan. Some other factors impacting on this are set out below.

The Government of the Russian Federation has implemented various support measures for individuals and corporates impacted by the COVID-19 pandemic including their right in certain circumstances to obtain repayment holidays on their loans for up to 6 months and reduced rates of interest in this period.

The Group has itself implemented several measures to support its clients, especially those who face financial difficulties and a significant decrease of current income due to the situation, including the below:

proposing internally developed loan restructuring programs as an alternative to the State announced programs which will result in either deferral or decrease in the minimal payments of outstanding loan balance for one or more months;
broadened cashback offers for debit cards more tailored to customer individual needs and spending behaviour;

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

2 Operating Environment of the Group (Continued)

provided several educational resources on its mobile app and website for borrowers to learn how to deal with potential unemployment or income decline, and how to request and obtain the most suitable debt restructuring program;
supported its small and medium-sized entities client base during the pandemic by lowering acquiring and account fees, offering payment holidays, helping SMEs to move online and launching 0% loans to pay salaries in partnership with the Russian Bank for SME support.

According to IFRS 9 "Financial Instruments", the Group uses forecast information in the expected credit loss models, including forecasts of macroeconomic indicators. For the purpose of calculating credit loss allowances as at 30 September 2020, the Group took into account expectations regarding the following macro-factors and allocated higher weight to the pessimistic macroeconomic scenario:

Russian stock market index MOEX;
Moscow Prime Offered Rate;
Debt load of Russian population based on statistics from bureaus of credit history.

In order to reflect appropriately the uncertainty associated with the COVID-19 pandemic the Group has made the following changes to their ECL model:

the macro-adjustment calculation approach was refined to reflect the most recent impact of economic developments;
an adjustment to the loss given default was made to address lower expected recoveries during the upcoming quarters;
higher probabilities of default were applied to the loans which have been restructured.

More detailed information about the changes and their impact on the results of the Group's operations for the nine months ended 30 September 2020 is disclosed in Note 4.

The management of the Group considers that the Group has demonstrated over the years and during the current COVID-crisis its ability to withstand shocks and retains its positive long-term outlook in particular due to the following advantages of the Group's business model:

using flexible business structure, the Group swiftly shifted some of its resources from businesses that were needed to run more conservatively to businesses with higher growth prospects;
the Group has a highly liquid, diversified, foreign exchange hedged, and well-capitalized balance sheet;
the Group's digital model is exactly what is needed in the current environment and this can be seen in the ongoing increased online payment volumes as well as increased take up of its mobile lifestyle app, current accounts, and brokerage business;
by mid-March 2020 over 95% of the Group's office-based employees had successfully moved to remote working, and remain so, without any major disruption to its business model and customer service. Approximately 2,500 smart couriers continue to deliver the Group's products all over Russia.

The Group regularly stress tests its business to assess the sustainability of its liquidity and capital positions. These tests demonstrate that Group's current levels of capital and liquidity are more than sufficient to absorb potential economic and operational shocks related to a second wave of the COVID-19 pandemic. The Group has a proven ability to organically replenish capital and liquidity buffers by slowing down Group's lending and customer acquisition activities, although it currently does not expect to do this for the rest of 2020.

While the number of positive COVID-19 cases continues to rise in Russia, the Group is not aware of any government intentions to re-impose extensive lockdown measures. But some extra measures are being implemented. For example, Moscow's mayor announced that it will limit, among other activities, operations of restaurants, entertainment venues, and public events.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

2 Operating Environment of the Group (Continued)

Although such measures may have a negative impact on the Group's business, the management of the Group considers that the Group is well equipped to deal with such eventualities.

3 Significant Accounting Policies

Basis of preparation. This consolidated condensed interim financial information has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union (EU) and should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2019 which have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the requirements of the Cyprus Companies Law, Cap. 113.

Except as described below, the same accounting policies and methods of computation were followed in the preparation of this consolidated condensed interim financial information as compared with the annual consolidated financial statements for the year ended 31 December 2019.

Cash-settled share-basedprogram. The expense is recognized gradually over the vesting period and is measured at the fair value of the liability at each end of the reporting period. The fair value of the liability reflects all vesting conditions, except for the requirement of the employee to stay in service which is reflected through the amortization schedule.

The liability is measured, initially and at the end of each reporting period until settled, at fair value, taking into account the terms and conditions on which the instruments were granted and the extent to which the employees have rendered service to date.

Interim period tax measurement. Interim period income tax expense is accrued using the effective tax rate that would be applicable to expected total annual earnings, that is, the estimated weighted average annual effective income tax rate applied to the pre-tax income of the interim period.

Seasonality. Management does not consider that the Group's business exhibits material differences due to seasonality.

Foreign currency translation. At 30 September 2020 the rate of exchange used for translating foreign currency balances was USD 1 = RR 79.6845 (31 December 2019: USD 1 = RR 61.9057), and the average rate of exchange was USD 1 = RR 70.7778 for the nine months ended 30 September 2020 and USD 1 = RR 73.5598 for the three months ended 30 September 2020 (nine months ended 30 September 2019: USD 1 = RR 65.0789, three months ended 30 September 2019: USD 1 = RR 64.5685).

Changes in presentation. In September 2020 as a result of a detailed review of the marketing agreements with the payment systems the Group changed its accounting policy in relation to income received under these agreements by reclassifying it from Other operating income to reduce the Payment System fees accounted for in Interest income and Fee and commission expenses. Part of the net payment system fees which relates to the borrowers' transactions is included in the effective interest income of the loans. Another part which relates to the customer's transactions was reclassified to Fee and commission expenses and presented on a net basis within the payment systems. Management considers that this reclassification results in a more reliable and relevant presentation of the substance of these agreements since such income from payment systems primarily represents volume rebates, hence it could be offset against related expenses. The net effect of this change in accounting policy on net income for prior periods was not significant and was adjusted in the consolidated condensed interim statement of profit or loss and other comprehensive income for the three months ended 30 September 2020.

In December 2019 the management of the Group made a detailed review of the components that make up interest income and identified one type of fee (payment channels fee) which now has more characteristics of being a service fee than being part of the effective interest income of the loans. The management considers that the reclassification of this fee to Fee and commission expense will result in a more reliable and relevant presentation of the financial information and is more consistent with the market practice of many other banks.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

3 Significant Accounting Policies (Continued)

In 2019 the management of the Group improved the presentation of the results of operations with foreign currencies, derivatives revaluation and foreign exchange translation and disclosed separately in the consolidated condensed interim statement of profit or loss and other comprehensive income the following line items: Net gains/(losses) from derivatives revaluation, Net (losses)/gains from foreign exchange translation and Net gains/(losses) from operations with foreign currencies. Improvements were also made to the presentation of the cash flows from the insurance operations by disclosing separately in the consolidated condensed interim statement of cash flows the following line items: Gains/(losses) from operations with foreign currencies received/(paid), Losses from operations with derivatives paid, Premiums received from insurance operations and Claims paid from insurance operations.

Management considers that such improved and more detailed disclosure provides users of this consolidated condensed interim financial information with more relevant information.

The effect of changes described above on the consolidated condensed interim statement of profit or loss and other comprehensive income for the six months ended 30 June 2020 is as follows:

		Unaudited
	As	Reclassification	As
	originally		reclassified
In millions of RR	presented
Six months ended 30 June 2020:
Interest income calculated using the effective interest rate
method	63,399	383	63,782
Fee and commission expense	(10,260)	1,249	(9,011)
Other operating income	2,950	(1,632)	1,318

The effect of changes described above on the consolidated condensed interim statement of profit or loss and other comprehensive income for the nine and three months ended 30 September 2019 is as follows:

		Unaudited
	As	Reclassification	As
	originally		reclassified
In millions of RR	presented
Nine months ended 30 September 2019:
Interest income calculated using the effective interest rate
method	78,982	1,662	80,644
Fee and commission expense	(11,276)	640	(10,636)
Other operating income	3,168	(2,302)	866
Net gains/(losses) from derivatives revaluation	-	(1,407)	(1,407)
Net (losses)/gains from foreign exchange translation	-	1,236	1,236
Net gains/(losses) from operations with foreign currencies	(855)	171	(684)

Three months ended 30 September 2019:
Interest income calculated using the effective interest rate
method	28,841	624	29,465
Interest expense calculated using the effective interest rate method	(5,426)	(105)	(5,531)
Fee and commission expense	(4,040)	66	(3,974)
Customer acquisition expense	(4,154)	105	(4,049)
Other operating income	1,125	(690)	435
Net gains/(losses) from derivatives revaluation	-	(11)	(11)
Net (losses)/gains from foreign exchange translation	-	(451)	(451)
Net gains/(losses) from operations with foreign currencies	(477)	462	(15)

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

3 Significant Accounting Policies (Continued)

The effect of changes described above on the consolidated condensed interim statement of cash flows for the nine months ended 30 September 2019 is as follows:

		Unaudited
	As originally	Reclassification	As reclassified
In millions of RR	presented
Interest income received calculated using the effective
interest rate method	75,550	1,582	77,132
Fees and commissions paid	(11,425)	409	(11,016)
Other operating income received	3,075	(1,991)	1,084
Gains/(losses) from operations with foreign currencies
received/(paid)	(1,136)	452	(684)
Losses from operations with derivatives paid	-	(452)	(452)
Insurance premiums received	-	11,389	11,389
Insurance claims paid	-	(2,837)	(2,837)
Cash received from insurance operations	8,552	(8,552)	-

4 Critical Accounting Estimates and Judgements in Applying Accounting Policies

The Group makes estimates and assumptions that affect the amounts recognized in the consolidated condensed interim financial information and the carrying amounts of assets and liabilities within the next financial year. 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.

Management 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 recognized in the consolidated condensed interim financial information and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include:

ECL measurement. Calculation and measurement of ECLs is an area of significant judgement and involves the use of complex models and data inputs. The following components of ECL calculation have a major impact on credit loss allowance: probability of default ("PD") (impacted by definition of default, SICR, forward-looking scenarios and their weights) and loss given default ("LGD").

The Group makes estimates and judgments, which are constantly analyzed based on statistical data, actual and forecast information, as well as management experience, including expectations regarding future events that are considered reasonable in the current circumstances.

In order to address rising credit risks the Group adjusted the main approaches to assessing the level of expected credit losses that have the most significant effect on the amounts recognised in the consolidated condensed interim financial information:

the macroeconomic model has become more conservative, based on different scenarios: base, optimistic and pessimistic, and higher weight is assigned to the pessimistic scenario;
for instruments in default the Group has applied increased coefficients of LGD;
the Group has estimated the volume of loans to individuals which were restructured as of the reporting date and applied higher PDs to such loans for the purposes of estimation of expected credit losses.

The impact of the changed macroeconomic conditions assessed using the approaches described above was approximately RR 5.4 billion of additional credit loss allowance charge for nine months ended 30 September 2020 and was the main driver of increased cost of risk. Given the unpredictability of current economic environment and uncertainty regarding its development the Group made a decision to keep macro-adjustment at current level.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)

Also in the second quarter of 2020 for the purposes of LGD estimation the Group has refined the approach to calculation of the rate used for discounting expected cash flows from defaulted loans. The refined approach is that the Group uses more disaggregated and specific discount rates for each credit product in the overall loan portfolio of the Group rather than one generic rate, which makes the estimate more precise. The impact of this change comprised RR 0.9 billion of additional credit loss allowance charge.

In 2020 the Group has refined its approach to calculation of the impact of modification of original cash flows without derecognition on stage 3 loans credit loss allowance and gross carrying amount (refer to Note 8). In particular the Group refined the approach to estimation of timing of receipt of expected cash flows and related discounting effect. This refinement has not affected either amounts recognised in the consolidated condensed interim statement of profit or loss and other comprehensive income or the amounts recognised in consolidated condensed interim statement of financial position.

An increase or decrease in PDs by 2% compared to PDs used in the ECL estimates calculated at 30 September 2020 would result in an increase or decrease in credit loss allowances of RR 5.1 billion (31 December 2019: by 1% and RR 2.1 billion).

An increase or decrease in LGDs by 2% compared to LGDs used in the ECL estimates calculated at 30 September 2020 would result in an increase or decrease in credit loss allowances of RR 1.5 billion (31 December 2019: by 1% and RR 0.5 billion).

5 Adoption of New or Revised Standards and Interpretations

The following amended standards became effective from 1 January 2020, but did not have any material impact on the Group:

Interest rate benchmark reform - Amendments to IFRS 9, IAS 39 and IFRS 7 (issued on 26 September 2019 and effective for annual periods beginning on or after 1 January 2020).
Amendments to the Conceptual Framework for Financial Reporting (issued on 29 March 2018 and effective for annual periods beginning on or after 1 January 2020).
Definition of materiality - Amendments to IAS 1 and IAS 8 (issued on 31 October 2018 and effective for annual periods beginning on or after 1 January 2020).
Definition of a business - Amendments to IFRS 3 (issued on 22 October 2018 and effective for acquisitions from the beginning of annual reporting period that starts on or after 1 January 2020).

The following amendments became effective from 1 June 2020, but did not have any material impact on the Group:

Covid-19-Related Rent Concessions - Amendments to IFRS 16 (issued on 28 May 2020 and effective for annual periods beginning on or after 1 June 2020).

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

6 New Accounting Pronouncements

Certain new amendments have been issued that are mandatory for annual periods beginning on or after

1 January 2021:

IFRS 17 "Insurance Contracts"(issued on 18 May 2017 and effective for annual periods beginning on or after 1 January 2023)*. IFRS 17 replaces IFRS 4, which has given companies dispensation to carry on accounting for insurance contracts using existing practices. As a consequence, it was difficult for investors to compare and contrast the financial performance of otherwise similar insurance companies. IFRS 17 is a single principle-basedstandard to account for all types of insurance contracts, including reinsurance contracts that an insurer holds. The standard requires recognition and measurement of groups of insurance contracts at: (i) a risk-adjustedpresent value of the future cash flows (the fulfilment cash flows) that incorporates all of the available information about the fulfilment cash flows in a way that is consistent with observable market information; plus (if this value is a liability) or minus (if this value is an asset) (ii) an amount representing the unearned profit in the group of contracts (the contractual service margin). Insurers will be recognising the profit from a group of insurance contracts over the period they provide insurance coverage, and as they are released from risk. If a group of contracts is or becomes loss-making,an entity will be recognising the loss immediately. The Group is currently assessing the impact of IFRS 17 on the insurance contracts issued by the Insurance Company as well as the impact for credit cards and similar loan products which may include insurance component.

Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020 and effective for annual periods beginning on or after 1 January 2023)*. The amendments relate to eight areas of IFRS 17, and they are not intended to change the fundamental principles of the standard. The following amendments to IFRS 17 were made: effective date, expected recovery of insurance acquisition cash flows, contractual service margin attributable to investment services, reinsurance contracts held - recovery of losses and other amendments.

The following other new pronouncements are not expected to have any material impact on the Group when adopted:

Classification of liabilities as current or non-current, deferral of effective date - Amendments to IAS 1 (issued on 15 July 2020 and effective for annual periods beginning on or after 1 January 2023)*.
Sale or contribution of assets between an Investor and its associate or joint venture - Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after a date to be determined by the IASB)*.
Annual Improvements to IFRSs 2018-2020 - amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 and narrow scope amendments to IAS 16, IAS 37 and IFRS 3 (issued on 14 May 2020 and effective for annual periods beginning on or after 1 January 2022)*.
Interest rate benchmark (IBOR) reform - phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (issued on 27 August 2020 and effective for annual periods beginning on or after 1 January 2021)*.

Denotes standards, interpretations and amendments which have not yet been endorsed by the European Union.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

7 Cash and Cash Equivalents

	30 September	31 December
	2020	2019
In millions of RR	(Unaudited)
Cash on hand	15,201	11,118
Cash balances with the CBRF (other than mandatory reserve deposits)	18,424	16,599
Placements with other banks and non-bank credit organizations with
original maturities of less than three months	39,856	30,079

Total cash and cash equivalents	73,481	57,796

Cash on hand includes cash balances in ATMs and cash balances in transit. Placements with other banks and organizations with original maturities of less than three months include placements under reverse sale and repurchase agreements in the amount of RR 24,063 million as at 30 September 2020 (31 December 2019: RR 20,681 million). The Group has a right to sell or repledge securities received under reverse sale and repurchase agreements.

The carrying amount of cash and cash equivalents at 30 September 2020 and 31 December 2019 also represents the Group's maximum exposure to credit risk on these assets.

For the purpose of ECL measurement cash and cash equivalents balances are included in Stage 1. The ECL for these balances represents an immaterial amount, therefore the Group did not recognise any credit loss allowance for cash and cash equivalents. Except for reverse sale and repurchase agreements, amounts of cash and cash equivalents are not collateralised. As at 30 September 2020 the fair value of collateral under reverse sale and repurchase agreements was RR 24,031 million (31 December 2019:

22,369 million). There is no material impact of collateral on credit loss allowance for cash and cash equivalents. Refer to Note 22 for the disclosure of the fair value of cash and cash equivalents.

8	Loans and Advances to Customers
		30 September	31 December
		2020	2019
In millions of RR	(Unaudited)
Gross carrying amount of loans and advances to customers at AC	415,253	383,912
Less credit loss allowance	(70,374)	(54,737)

Total carrying amount of loans and advances to customers at AC	344,879	329,175

Loans and advances to customers at FVTPL	1,434	-

Total loans and advances to customers	346,313	329,175

Loans and advances to customers at FVTPL represent a loan that does not meet SPPI requirement and that was issued to related party (refer to Note 23).

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Gross carrying amount and credit loss allowance amount for loans and advances to customers at AC by classes at 30 September 2020 and 31 December 2019 are disclosed in the table below:

	30 September 2020 (Unaudited)	31 December 2019
	Gross	Credit	Carrying	Gross	Credit	Carrying
	carrying	loss	amount	carrying	loss	amount
In millions of RR	amount	allowance		amount	allowance
Credit card loans	262,228	(55,512)	206,716	244,937	(44,129)	200,808
Cash loans	59,175	(10,149)	49,026	62,265	(8,029)	54,236
Other loans	93,850	(4,713)	89,137	76,710	(2,579)	74,131
- Secured loans	36,431	(977)	35,454	29,601	(496)	29,105
- POS loans	26,384	(1,487)	24,897	25,940	(1,057)	24,883
- Car loans	28,963	(1,853)	27,110	20,156	(913)	19,243
- Loans to IE and SME	2,072	(396)	1,676	1,013	(113)	900

Total loans and advances to
customers at AC	415,253	(70,374)	344,879	383,912	(54,737)	329,175

Credit cards are issued to customers for cash withdrawals or payment for goods or services, within the range of limits established by the Bank. These limits may be increased or decreased from time-to-time based on management decision. Credit card loans are not collateralized.

Cash loans represent a product for the borrowers who have a positive credit history and who do not have overdue loans in other banks. Cash loans are loans provided to customers via the Bank's debit cards. These loans are available for withdrawal without commission.

Secured loans represent loans secured with a car or real estate.

POS ("Point of sale") loans represent loans to fund online and offline purchases through internet and offline shops for individual borrowers.

Car loans represent loans for the purchase of a vehicle which is used as collateral under the loan.

Loans to IE and SME represent loans provided by the Bank to individual entrepreneurs and small and medium businesses for the purpose of working capital management.

The credit loss allowance for loans and advances to customers recognised in the period is impacted by a variety of factors. The main movements in the tables presented below are described as follows:

new originated or purchased category represents the gross carrying amounts and the related ECL of purchased loans and loans issued during the reporting period (and withdrawals of limits of new credit card borrowers) as at the end of the reporting period or as at the date of transfer of loan out of stage 1 (whichever date is earlier);
transfers between Stage 1, 2 and 3 due to balances experiencing significant increases (or decreases) of credit risk or becoming credit-impaired in the period, and the consequent "step up" (or "step down") between 12-month and lifetime ECL. Transfers present the amount of credit loss allowance charged or recovered at the moment of transfer of a loan among the respective stages;
changes to ECL measurement model assumptions and estimates represent movements due to changes in PDs, EADs and LGDs models during the period;
movements other than transfers and new originated or purchased loans category represent all other movements of ECL in particular related to changes in gross carrying amounts (including drawdowns, repayments, and accrued interest), as well as updates of inputs to ECL model in the period;
write-offsof allowances are related to assets that were written-off during the period;

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

unwinding of discount (for Stage 3) category represents adjustment to credit loss allowance and gross carrying amount for Stage 3 loans to increase it to discounted amount of the expected cash shortfalls to the reporting date using the effective interest rate.

The following tables disclose the changes in the credit loss allowance and gross carrying amount for loans and advances to customers between the beginning and the end of the reporting and comparative periods:

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit		ECL)	SICR)	credit	impaired
In millions of RR			impaired)				impaired)
Credit card loans
At 31 December 2019	11,704	6,853	25,572	44,129	197,796	11,432	35,373	336	244,937
Movements with impact
on credit loss allowance
charge for nine months
ended 30 September
2020
New originated or
purchased	2,760	-	-	2,760	31,786	-	-	161	31,947
Transfers:
- to lifetime (from Stage 1
to Stage 2)	(3,136)	6,662	-	3,526	(14,042)	14,042	-	-	-

to credit-impaired (from Stage 1 and Stage 2 to

Stage 3)

(4,018) (6,556)

23,159

12,585

(20,196) (9,399)

29,595

recovered (from Stage 3 to Stage 2 and from Stage

2 to Stage 1)	342	(779)	(26)	(463)	1,446	(1,415)	(31)	-	-
Changes to ECL
measurement model
assumptions and
estimates	2,840	300	1,336	4,476	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	5,823	1,963	(3,169)	4,617	5,485	(4)	(3,717)	(168)	1,596

Total movements with
impact on credit loss
allowance charge for
nine months ended
30 September 2020	4,611	1,590	21,300	27,501	4,479	3,224	25,847	(7)	33,543

Movements without
impact on credit loss
allowance charge for the
period
Unwinding of discount (for
Stage 3)	-	-	4,410	4,410	-	-	4,410	-	4,410
Write-offs	-	-	(10,036)	(10,036)	-	-	(10,036)	-	(10,036)
Sales	-	-	(1,017)	(1,017)	-	-	(1,151)	-	(1,151)
Modification of original
cash flows without
derecognition	-	-	(9,475)	(9,475)	-	-	(9,475)	-	(9,475)

At 30 September 2020	16,315	8,443	30,754	55,512	202,275	14,656	44,968	329	262,228

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12- (lifetime (lifetime originated
	months	ECL)	ECL)		months	ECL)	ECL)	credit
In millions of RR	ECL)				ECL)			impaired
Credit card loans
At 30 June 2020	14,710	11,831	29,483	56,024	190,815	20,878	41,747	361	253,801
Movements with impact on
credit loss allowance
charge for three months
ended 30 September 2020
New originated or
purchased	786	-	-	786	12,022	-	-	23	12,045
Transfers:
- to lifetime (from Stage 1 to
Stage 2)	(2,087)	4,375	-	2,288	(9,057)	9,057	-	-	-

to credit-impaired (from Stage 1 and Stage 2 to

Stage 3)

(168)

(7,412)

8,464

884

(642) (10,050)

10,692

recovered (from Stage 3 to Stage 2 and from Stage 2 to

Stage 1)	1,332	(2,365)	(67)	(1,100)	5,033	(4,950)	(83)	-	-
Changes to ECL
measurement model
assumptions and estimates	(144)	14	61	(69)	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	1,886	2,000	(1,242)	2,644	4,104	(279)	(1,402)	(55)	2,368

Total movements with
impact on credit loss
allowance charge for
three months ended	1,605	(3,388)	7,216	5,433	11,460	(6,222)	9,207	(32)	14,413
30 September 2020

Movements without impact
on credit loss allowance
charge for the period
Unwinding of discount (for
Stage 3)	-	-	1,276	1,276	-	-	1,276	-	1,276
Write-offs	-	-	(3,652)	(3,652)	-	-	(3,652)	-	(3,652)
Sales	-	-	(232)	(232)	-	-	(273)	-	(273)
Modification of original cash
flows without derecognition	-	-	(3,337)	(3,337)	-	-	(3,337)	-	(3,337)

At 30 September 2020	16,315	8,443	30,754	55,512	202,275	14,656	44,968	329	262,228

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
	Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR) credit im-		ECL)	SICR) credit im-	impaired
In millions of RR			paired)				paired)
Credit card loans
At 31 December 2018	9,266	4,708	19,322	33,296	145,732	6,654	25,497	107	177,990
Movements with impact on
credit loss allowance
charge for nine months
ended 30 September 2019
New originated or
purchased	3,994	-	-	3,994	48,653	-	-	128	48,781
Transfers:
- to lifetime (from Stage 1 to
Stage 2)	(2,512)	6,221	-	3,709	(10,515)	10,515	-	-	-

to credit-impaired (from Stage 1 and Stage 2 to

Stage 3)

(2,988)

(3,994) 15,042

8,060

(13,303)

(5,140) 18,443

recovered (from Stage 3 to Stage 2 and from Stage 2 to

Stage 1)	251	(794)	(15)	(558)	1,167	(1,149)	(18)	-	-
Changes to ECL
measurement model
assumptions and estimates	(387)	-	-	(387)	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	3,595	916	(3,407)	1,104	24,048	257	(4,025)	(8)	20,272

Total movements with
impact on credit loss
allowance charge for nine
months ended	1,953	2,349	11,620	15,922	50,050	4,483	14,400	120	69,053
30 September 2019

Movements without impact
on credit loss allowance
charge for the period
Unwinding of discount (for
Stage 3)	-	-	2,175	2,175	-	-	2,175	-	2,175
Write-offs	-	-	(8,656)	(8,656)	-	-	(8,656)	-	(8,656)
Sales	-	-	(739)	(739)	-	-	(843)	-	(843)
Modification of original cash
flows without derecognition	-	-	(1,559)	(1,559)	-	-	(1,559)	-	(1,559)

At 30 September 2019	11,219	7,057	22,163	40,439	195,782	11,137	31,014	227	238,160

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
	Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit		ECL)	SICR)	credit	impaired
			im-				im-
In millions of RR			paired)				paired)
Credit card loans
At 30 June 2019	10,392	6,489	19,479	36,360	185,036	9,767	27,211	221	222,235
Movements with impact on
credit loss allowance
charge for three months
ended 30 September 2019
New originated or
purchased	551	-	-	551	10,567	-	-	45	10,612
Transfers:
- to lifetime (from Stage 1 to
Stage 2)	(2,144)	5,370	-	3,226	(9,094)	9,094	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(259)	(4,878)	6,054	917	(1,109)	(6,428)	7,537	-	-
- recovered (from Stage 3
to Stage 2 and from Stage
2 to Stage 1)	367	(1,097)	(33)	(763)	1,778	(1,738)	(40)	-	-
Changes to ECL
measurement model
assumptions and estimates	-	-	-	-	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	2,312	1,173	(1,111)	2,374	8,604	442	(1,431)	(39)	7,576

Total movements with
impact on credit loss
allowance charge for
three months ended	827	568	4,910	6,305	10,746	1,370	6,066	6	18,188
30 September 2019

Movements without impact
on credit loss allowance
charge for the period
Unwinding of discount (for
Stage 3)	-	-	932	932	-	-	932	-	932
Write-offs	-	-	(2,385)	(2,385)	-	-	(2,385)	-	(2,385)
Sales	-	-	(222)	(222)	-	-	(259)	-	(259)
Modification of original cash
flows without derecognition	-	-	(551)	(551)	-	-	(551)	-	(551)

At 30 September 2019	11,219	7,057	22,163	40,439	195,782	11,137	31,014	227	238,160

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit		ECL)	SICR)	credit	impaired
In millions of RR			impaired)				impaired)
Cash loans
At 31 December 2019	2,358	1,882	3,789	8,029	51,925	5,034	4,670	636	62,265
Movements with impact on
credit loss allowance
charge for nine months
ended 30 September 2020
New originated or
purchased	1,589	-	-	1,589	24,061	-	-	35	24,096
Transfers:
- to lifetime (from Stage 1
to Stage 2)	(736)	3,125	-	2,389	(5,177)	5,177	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(1,042)	(1,705)	4,703	1,956	(3,084)	(2,178)	5,262	-	-
- recovered (from Stage 3
to Stage 2 and from Stage
2 to Stage 1)	64	(262)	(3)	(201)	1,046	(1,043)	(3)	-	-
Changes to ECL
measurement model
assumptions and
estimates	813	110	176	1,099	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	238	(885)	(612)	(1,259)	(21,755)	(1,543)	(143)	(268)	(23,709)

Total movements with
impact on credit loss
allowance charge for
nine months ended
30 September 2020	926	383	4,264	5,573	(4,909)	413	5,116	(233)	387

Movements without impact
on credit loss allowance
charge for the period
Unwinding of discount (for
Stage 3)	-	-	366	366	-	-	366	-	366
Write-offs	-	-	(1,638)	(1,638)	-	-	(1,638)	-	(1,638)
Sales	-	-	(315)	(315)	-	-	(339)	-	(339)
Modification of original
cash flows without
derecognition	-	-	(1,866)	(1,866)	-	-	(1,866)	-	(1,866)

At 30 September 2020	3,284	2,265	4,600	10,149	47,016	5,447	6,309	403	59,175

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL)	ECL)		months	ECL)	ECL)	credit
In millions of RR	ECL)				ECL)			impaired
Cash loans
At 30 June 2020	3,315	2,828	4,204	10,347	46,489	6,592	5,663	607	59,351
Movements with impact on
credit loss allowance
charge for three months
ended 30 September 2020
New originated or
purchased	653	-	-	653	11,380	-	-	31	11,411
Transfers:
- to lifetime (from Stage 1
to Stage 2)	(386)	1,567	-	1,181	(2,557)	2,557	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(96)	(1,348)	1,556	112	(198)	(1,574)	1,772	-	-
- recovered (from Stage 3
to Stage 2 and from Stage
2 to Stage 1)	96	(364)	(14)	(282)	1,358	(1,343)	(15)	-	-
Changes to ECL
measurement model
assumptions and
estimates	(17)	(5)	35	13	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	(281)	(413)	(117)	(811)	(9,456)	(785)	(40)	(235)	(10,516)

Total movements with
impact on credit loss
allowance charge for
three months ended	(31)	(563)	1,460	866	527	(1,145)	1,717	(204)	895
30 September 2020

Movements without impact
on credit loss allowance
charge for the period
Unwinding of discount (for
Stage 3)	-	-	149	149	-	-	149	-	149
Write-offs	-	-	(664)	(664)	-	-	(664)	-	(664)
Sales	-	-	(86)	(86)	-	-	(93)	-	(93)
Modification of original
cash flows without
derecognition	-	-	(463)	(463)	-	-	(463)	-	(463)

At 30 September 2020	3,284	2,265	4,600	10,149	47,016	5,447	6,309	403	59,175

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit im-		ECL)	SICR)	credit im-	impaired
In millions of RR			paired)				paired)
Cash loans
At 31 December 2018	1,116	545	670	2,331	32,651	1,776	767	301	35,495
Movements with impact
on credit loss allowance
charge for nine months
ended 30 September
2019
New originated or
purchased loans	2,091	-	-	2,091	42,027	-	-	154	42,181
Transfers:
- to lifetime (from Stage 1
to Stage 2)	(487)	2,543	-	2,056	(5,038)	5,038	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(547)	(496)	2,583	1,540	(2,126)	(640)	2,766	-	-
- recovered (from Stage 3
to Stage 2 and from Stage
2 to Stage 1)	14	(76)	-	(62)	419	(419)	-	-	-
Changes to ECL
measurement model
assumptions and
estimates	(22)	-	-	(22)	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	56	(745)	86	(603)	(13,203)	(993)	340	(123)	(13,979)

Total movements with
impact on credit loss
allowance charge for
nine months ended
30 September 2019	1,105	1,226	2,669	5,000	22,079	2,986	3,106	31	28,202

Movements without
impact on credit loss
allowance charge for the
period
Unwinding of discount (for
Stage 3)	-	-	91	91	-	-	91	-	91
Write-offs	-	-	(305)	(305)	-	-	(305)	-	(305)
Sales	-	-	(83)	(83)	-	-	(89)	-	(89)
Modification of original
cash flows without
derecognition	-	-	(327)	(327)	-	-	(327)	-	(327)

At 30 September 2019	2,221	1,771	2,715	6,707	54,730	4,762	3,243	332	63,067

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)credit im-		ECL)	SICR)	credit im-	impaired
In millions of RR			paired)				paired)
Cash loans
At 30 June 2019	1,922	1,450	1,675	5,047	54,396	4,229	1,984	283	60,892
Movements with impact
on credit loss allowance
charge for three months
ended 30 September
2019
New originated or
purchased loans	465	-	-	465	11,741	-	-	90	11,831
Transfers:
- to lifetime (from Stage 1
to Stage 2)	(389)	1,648	-	1,259	(3,121)	3,121	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(119)	(870)	1,331	342	(336)	(1,100)	1,436	-	-
- recovered (from Stage 3
to Stage 2 and from Stage
2 to Stage 1)	33	(164)	(2)	(133)	960	(958)	(2)	-	-
Movements other than
transfers and new
originated or purchased
loans	309	(293)	(31)	(15)	(8,910)	(530)	85	(41)	(9,396)

Total movements with
impact on credit loss
allowance charge for
three months ended
30 September 2019	299	321	1,298	1,918	334	533	1,519	49	2,435

Movements without
impact on credit loss
allowance charge for the
period
Unwinding of discount (for
Stage 3)	-	-	39	39	-	-	39	-	39
Write-offs	-	-	(137)	(137)	-	-	(137)	-	(137)
Sales	-	-	(24)	(24)	-	-	(26)	-	(26)
Modification of original
cash flows without
derecognition	-	-	(136)	(136)	-	-	(136)	-	(136)

At 30 September 2019	2,221	1,771	2,715	6,707	54,730	4,762	3,243	332	63,067

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

The following table discloses the changes in the credit loss allowance and gross carrying amount between the beginning and the end of the reporting periods for secured loans, POS loans, car loans and loans to IE and SME combined as the amount of such changes for these products is not significant.

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12- (lifetime (lifetime originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit		ECL)	SICR)	credit	impaired
In millions of RR			impaired)				impaired)
Other loans
At 31 December 2019	873	749	957	2,579	71,062	4,171	1,279	198	76,710
Movements with impact
on credit loss allowance
charge for nine months
ended 30 September
2020
New originated or
purchased	803	-	-	803	50,720	-	-	58	50,778
Transfers:
- to lifetime (from Stage 1
to Stage 2)	(260)	2,182	-	1,922	(6,964)	6,964	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(247)	(568)	1,779	964	(1,497)	(970)	2,467	-	-
- recovered (from Stage 3
to Stage 2 and from
Stage 2 to Stage 1)	15	(101)	(4)	(90)	1,040	(1,031)	(9)	-	-
Changes to ECL
measurement model
assumptions and
estimates	242	15	22	279	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	122	(1,067)	(208)	(1,153)	(30,591)	(2,189)	(219)	(46)	(33,045)

Total movements with
impact on credit loss
allowance charge for
nine months ended
30 September 2020	675	461	1,589	2,725	12,708	2,774	2,239	12	17,733

Movements without
impact on credit loss
allowance charge for the
period
Unwinding of discount (for
Stage 3)	-	-	119	119	-	-	119	-	119
Write-offs	-	-	(281)	(281)	-	-	(281)	-	(281)
Sales	-	-	(37)	(37)	-	-	(39)	-	(39)
Modification of original
cash flows without
derecognition	-	-	(392)	(392)	-	-	(392)	-	(392)

At 30 September 2020	1,548	1,210	1,955	4,713	83,770	6,945	2,925	210	93,850

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
		Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-	(lifetime	(lifetime		(12-	(lifetime	(lifetime	originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit		ECL)	SICR)	credit	impaired
In millions of RR			impaired)				impaired)
Other loans
At 30 June 2020	1,392	1,363	1,640	4,395	71,803	7,408	2,419	210	81,840
Movements with impact
on credit loss allowance
charge for nine months
ended 30 September
2020
New originated or
purchased	419	-	-	419	27,250	-	-	41	27,291
Transfers:
- to lifetime (from Stage 1
to Stage 2)	(109)	972	-	863	(3,072)	3,072	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(24)	(481)	620	115	(104)	(758)	862	-	-
- recovered (from Stage 3
to Stage 2 and from
Stage 2 to Stage 1)	24	(175)	(12)	(163)	1,750	(1,724)	(26)	-	-
Changes to ECL
measurement model
assumptions and
estimates	(8)	(7)	(5)	(20)	-	-	-	-	-
Movements other than
transfers and new
originated or purchased
loans	(146)	(462)	(89)	(697)	(13,857)	(1,053)	(131)	(41)	(15,082)

Total movements with
impact on credit loss
allowance charge for
nine months ended
30 September 2020	156	(153)	514	517	11,967	(463)	705	-	12,209

Movements without
impact on credit loss
allowance charge for the
period
Unwinding of discount (for
Stage 3)	-	-	53	53	-	-	53	-	53
Write-offs	-	-	(135)	(135)	-	-	(135)	-	(135)
Sales	-	-	(10)	(10)	-	-	(10)	-	(10)
Modification of original
cash flows without
derecognition	-	-	(107)	(107)	-	-	(107)	-	(107)

At 30 September 2020	1,548	1,210	1,955	4,713	83,770	6,945	2,925	210	93,850

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
	Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3 Purchased/	Total
	(12-	(lifetime	(lifetime		(12- (lifetime (lifetime originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit		ECL)	SICR)	credit	impaired
In millions of RR			impaired)				impaired)
Other loans
At 31 December 2018	274	117	203	594	20,287	607	226	105	21,225
Movements with impact on
credit loss allowance charge
for nine months ended 30
September 2019
New originated or purchased	687	-	-	687	49,792	-	-	37	49,829
Transfers:
- to lifetime (from Stage 1 to
Stage 2)	(120)	997	-	877	(3,368)	3,368	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(97)	(116)	639	426	(612)	(166)	778	-	-
- recovered (from Stage 3 to
Stage 2 and from Stage 2 to
Stage 1)	1	(10)	-	(9)	141	(141)	-	-	-
Changes to ECL
measurement model
assumptions and estimates	(4)	-	-	(4)	-	-	-	-	-
Movements other than
transfers and new originated
or purchased loans	(20)	(444)	(67)	(531)	(2,238)	(877)	(51)	(43)	(3,209)

Total movements with
impact on credit loss
allowance charge for nine
months ended
30 September 2019	447	427	572	1,446	43,715	2,184	727	(6)	46,620

Movements without impact
on credit loss allowance
charge for the period
Unwinding of discount (for
Stage 3)	-	-	28	28	-	-	28	-	28
Write-offs	-	-	(89)	(89)	-	-	(89)	-	(89)
Sales	-	-	(16)	(16)	-	-	(18)	-	(18)
Modification of original cash
flows without derecognition	-	-	(35)	(35)	-	-	(35)	-	(35)

At 30 September 2019	721	544	663	1,928	64,002	2,791	839	99	67,731

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

					Unaudited
	Credit loss allowance			Gross carrying amount
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3 Purchased/	Total
	(12-	(lifetime	(lifetime		(12- (lifetime (lifetime originated
	months	ECL for	ECL for		months	ECL for	ECL for	credit
	ECL)	SICR)	credit		ECL)	SICR)	credit	impaired
In millions of RR			impaired)				impaired)
Other loans
At 30 June 2019	547	377	420	1,344	47,263	2,059	499	101	49,922
Movements with impact on
credit loss allowance charge
for three months ended 30
September 2019
New originated or purchased	312	-	-	312	26,913	-	-	25	26,938
Transfers:
- to lifetime (from Stage 1 to
Stage 2)	(90)	651	-	561	(2,139)	2,139	-	-	-
- to credit-impaired (from
Stage 1 and Stage 2 to
Stage 3)	(20)	(206)	317	91	(105)	(300)	405	-	-
- recovered (from Stage 3 to
Stage 2 and from Stage 2 to
Stage 1)	5	(39)	(1)	(35)	548	(544)	(4)	-	-
Movements other than
transfers and new originated
or purchased loans	(33)	(239)	(36)	(308)	(8,478)	(563)	(23)	(27)	(9,091)

Total movements with
impact on credit loss
allowance charge for three
months ended
30 September 2019	174	167	280	621	16,739	732	378	(2)	17,847

Movements without impact
on credit loss allowance
charge for the period
Unwinding of discount (for
Stage 3)	-	-	15	15	-	-	15	-	15
Write-offs	-	-	(39)	(39)	-	-	(39)	-	(39)
Sales	-	-	(4)	(4)	-	-	(5)	-	(5)
Modification of original cash
flows without derecognition	-	-	(9)	(9)	-	-	(9)	-	(9)

At 30 September 2019	721	544	663	1,928	64,002	2,791	839	99	67,731

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

The credit loss allowance charge during the nine months ended 30 September 2020 presented in the tables above differs from the amount presented in the consolidated condensed interim statement of profit or loss and other comprehensive income for the period due to RR 2,777 million recovery of amounts previously written-off as uncollectible (three months ended 30 September 2020: RR 988 million), and due to

1,591 million charge of ECL for credit related commitments, including RR 443 million of charge due to changes to ECL measurement model assumptions and estimates (three months ended 30 September 2020: due to RR 758 million charge of ECL for credit related commitments).

The credit loss allowance charge during the nine months ended 30 September 2019 presented in the tables above differs from the amount presented in the consolidated condensed interim statement of profit or loss and other comprehensive income for the period due to RR 2,440 million recovery of amounts previously written-off as uncollectible (three months ended 30 September 2019: recovery of RR 838 million), and due to RR 325 million release of ECL for credit related commitments (three months ended 30 September 2019: release of RR 54 million).

The amount of the recovery from written-off loans received during the period was credited directly to the credit loss allowance line in the consolidated condensed interim statement of profit or loss and other comprehensive income.

The contractual amounts outstanding of loans and advances to customers which were written off during the nine and three months ended 30 September 2020 and are still subject to enforcement activity are equal to RR 10,017 million and RR 3,597 million, respectively (RR 7,853 million during the nine months ended 30 September 2019 and RR 2,213 million during the three months ended 30 September 2019).

The amount of the ECL for credit related commitments is accounted for separately from ECL for credit cards loans and is included in other financial liabilities in the consolidated condensed interim statement of financial position.

During the nine months ended 30 September 2020 the Group sold credit-impaired loans to third parties (external debt collection agencies) with a gross amount of RR 1,529 million (three months ended 30 September 2020: RR 376 million) and credit loss allowance of RR 1,369 million (three months ended 30 September 2020: RR 328 million). The difference between the carrying amount of these loans and the consideration received was recognised as losses in the amount of RR 134 million within credit loss allowance for loans and advances to customers and credit related commitments for the nine months ended 30 September 2020 (three months ended 30 September 2020: RR 41 million as losses).

During the nine months ended 30 September 2019 the Group sold credit-impaired loans to third parties (external debt collection agencies) with a gross amount of RR 950 million (three months ended 30 September 2019: RR 290 million) and credit loss allowance of RR 838 million (three months ended 30 September 2019: RR 250 million). The difference between the carrying amount of these loans and the consideration received was recognised as losses in the amount of RR 53 million within credit loss allowance for loans and advances to customers for the nine months ended 30 September 2019 (three months ended 30 September 2019: RR 18 million as losses).

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Presented below is an analysis of issued, activated and utilised cards based on their credit card limits as at the end of the reporting period:

	30 September 2020
In units	(Unaudited)	31 December 2019
Credit card limits
Up to RR 20 thousand	970,459	781,128
RR 20-40 thousand	513,501	482,343
RR 40-60 thousand	474,160	451,425
RR 60-80 thousand	472,860	455,978
RR 80-100 thousand	449,227	440,139
RR 100-120 thousand	306,386	322,726
RR 120-140 thousand	344,376	365,750
RR 140-200 thousand	827,486	772,992
More than RR 200 thousand	207,017	180,731

Total number of cards (in units)	4,565,472	4,253,212

Table above only includes credit cards less than 180 days overdue.

The following table contains an analysis of the credit risk exposure of loans and advances to customers measured at AC and for which an ECL allowance is recognised. The carrying amount of loans and advances to customers below also represents the Group's maximum exposure to credit risk on these loans.

Loans and advances to customers at 30 September 2020 are disclosed as follows:

	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-months	(lifetime ECL	(lifetime ECL	originated
	ECL)	for SICR)	for credit	credit
In millions of RR			impaired)	impaired
Credit card loans
- Excellent	67,692	-	-	-	67,692
- Good	125,945	3,874	-	-	129,819
- Monitor	8,638	4,610	-	-	13,248
- Sub-standard	-	6,172	8,214	-	14,386
- NPL	-	-	36,754	329	37,083

Gross carrying amount	202,275	14,656	44,968	329	262,228

Credit loss allowance	(16,315)	(8,443)	(30,754)	-	(55,512)

Carrying amount	185,960	6,213	14,214	329	206,716

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-months	(lifetime ECL	(lifetime ECL	originated
	ECL)	for SICR)	for credit	credit
In millions of RR			impaired)	impaired
Cash loans
- Excellent	27,183	-	-	-	27,183
- Good	19,523	3,696	-	-	23,219
- Monitor	310	790	-	-	1,100
- Sub-standard	-	961	924	-	1,885
- NPL	-	-	5,385	403	5,788

Gross carrying amount	47,016	5,447	6,309	403	59,175

Credit loss allowance	(3,284)	(2,265)	(4,600)	-	(10,149)

Carrying amount	43,732	3,182	1,709	403	49,026

Secured Loans
- Excellent	18,986	-	-	-	18,986
- Good	12,612	3,013	-	-	15,625
- Monitor	162	598	-	-	760
- Sub-standard	-	311	-	-	311
- NPL	-	-	749	-	749

Gross carrying amount	31,760	3,922	749	-	36,431

Credit loss allowance	(201)	(478)	(298)	-	(977)

Carrying amount	31,559	3,444	451	-	35,454

POS loans
- Excellent	19,620	-	-	-	19,620
- Good	4,390	729	-	-	5,119
- Monitor	130	143	-	-	273
- Sub-standard	-	135	28	-	163
- NPL	-	-	999	210	1,209

Gross carrying amount	24,140	1,007	1,027	210	26,384

Credit loss allowance	(432)	(200)	(855)	-	(1,487)

Carrying amount	23,708	807	172	210	24,897

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-months	(lifetime	(lifetime ECL	originated
	ECL)	ECL for	for credit	credit
In millions of RR		SICR)	impaired)	impaired
Car loans
- Excellent	19,055	-	-	-	19,055
- Good	6,765	1,393	-	-	8,158
- Monitor	132	334	-	-	466
- Sub-standard	-	261	-	-	261
- NPL	-	-	1,023	-	1,023

Gross carrying amount	25,952	1,988	1,023	-	28,963

Credit loss allowance	(638)	(521)	(694)	-	(1,853)

Carrying amount	25,314	1,467	329	-	27,110

Loans to IE and SME
- Excellent	1,131	-	-	-	1,131
- Good	782	10	-	-	792
- Monitor	5	11	-	-	16
- Sub-standard	-	7	-	-	7
- NPL	-	-	126	-	126

Gross carrying amount	1,918	28	126	-	2,072

Credit loss allowance	(277)	(11)	(108)	-	(396)

Carrying amount	1,641	17	18	-	1,676

Loans and advances to customers at 31 December 2019 are disclosed as follows:

	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-months	(lifetime ECL	(lifetime ECL	originated
	ECL)	for SICR)	for credit	credit
In millions of RR			impaired)	impaired
Credit card loans
- Excellent	87,716	-	-	-	87,716
- Good	102,020	1,582	-	-	103,602
- Monitor	8,060	3,722	-	-	11,782
- Sub-standard	-	6,128	6,661	-	12,789
- NPL	-	-	28,712	336	29,048

Gross carrying amount	197,796	11,432	35,373	336	244,937

Credit loss allowance	(11,704)	(6,853)	(25,572)	-	(44,129)

Carrying amount	186,092	4,579	9,801	336	200,808

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-months	(lifetime ECL	(lifetime ECL	originated
	ECL)	for SICR)	for credit	credit
In millions of RR			impaired)	impaired
Cash loans
- Excellent	34,258	-	-	-	34,258
- Good	17,321	3,315	-	-	20,636
- Monitor	346	585	-	-	931
- Sub-standard	-	1,134	758	-	1,892
- NPL	-	-	3,912	636	4,548

Gross carrying amount	51,925	5,034	4,670	636	62,265

Credit loss allowance	(2,358)	(1,882)	(3,789)	-	(8,029)

Carrying amount	49,567	3,152	881	636	54,236

Secured Loans
- Excellent	19,941	-	-	-	19,941
- Good	7,319	1,496	-	-	8,815
- Monitor	106	322	-	-	428
- Sub-standard	-	219	-	-	219
- NPL	-	-	198	-	198

Gross carrying amount	27,366	2,037	198	-	29,601

Credit loss allowance	(150)	(264)	(82)	-	(496)

Carrying amount	27,216	1,773	116	-	29,105

POS loans
- Excellent	19,525	-	-	-	19,525
- Good	4,406	763	-	-	5,169
- Monitor	100	117	-	-	217
- Sub-standard	-	173	26	-	199
- NPL	-	-	632	198	830

Gross carrying amount	24,031	1,053	658	198	25,940

Credit loss allowance	(298)	(190)	(569)	-	(1,057)

Carrying amount	23,733	863	89	198	24,883

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

	Stage 1	Stage 2	Stage 3	Purchased/	Total
	(12-months	(lifetime ECL	(lifetime ECL	originated
	ECL)	for SICR)	for credit	credit
In millions of RR			impaired)	impaired
Car loans
- Excellent	15,581	-	-	-	15,581
- Good	3,051	702	-	-	3,753
- Monitor	93	157	-	-	250
- Sub-standard	-	201	-	-	201
- NPL	-	-	371	-	371

Gross carrying amount	18,725	1,060	371	-	20,156

Credit loss allowance	(368)	(285)	(260)	-	(913)

Carrying amount	18,357	775	111	-	19,243

Loans to IE and SME
- Excellent	622	-	-	-	622
- Good	314	6	-	-	320
- Monitor	4	6	-	-	10
- Sub-standard	-	9	-	-	9
- NPL	-	-	52	-	52

Gross carrying amount	940	21	52	-	1,013

Credit loss allowance	(57)	(10)	(46)	-	(113)

Carrying amount	883	11	6	-	900

Stage 3 includes restructured loans that are less than 90 days overdue which are not considered as NPL according to the Group's credit risk grading master scale.

Loans in courts are included in Stage 3 and are loans to delinquent borrowers, against which the Group has filed claims to courts in order to recover outstanding balances. As at 30 September 2020 the gross carrying amount of the loans in courts was RR 29,463 million (31 December 2019: RR 22,228 million).

Refer to Note 22 for the disclosure of the fair value of loans and advances to customers. Information on related party balances is disclosed in Note 23.

9	Investments in Securities
			30 September 2020	31 December
	In millions of RR	(Unaudited)	2019
	Debt securities measured at fair value through other comprehensive	231,636	134,765
	income
	Securities measured at fair value through profit or loss	1,455	413

	Total investments in securities	233,091	135,178

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

9 Investments in Securities (Continued)

Debt securities measured at fair value through other comprehensive income

The table below discloses investments in debt securities measured at FVOCI by classes:

	30 September 2020	31 December
In millions of RR	(Unaudited)	2019
Russian government bonds	118,697	56,382
Corporate bonds	100,274	72,032
Municipal bonds	8,110	6,351
Foreign government bonds	4,555	-

Total debt securities measured at FVOCI	231,636	134,765

Including credit loss allowance	694	345

The debt securities measured at FVOCI are not collateralised.

Securities measured at fair value through profit or loss

The table below discloses investments in debt securities measured at FVTPL by classes:

	30 September 2020	31 December
In millions of RR	(Unaudited)	2019
Perpetual corporate bonds	1,455	-
Other securities	-	413

Total securities measured at FVTPL	1,455	413

At 31 December 2019 the other securities were represented by assets of the mutual funds which were controlled by the Group and managed by LLC "Tinkoff Capital". These assets were sold at 30 September 2020.

Investments in securities measured at FVTPL are carried at fair value, which also reflects any credit risk related write-downs and best represents Group's maximum exposure to credit risk. The securities measured at FVTPL are not collateralized. Refer to Note 22 for the disclosure of the fair value of investments in securities.

10 Repurchase Receivables

Repurchase receivables represent securities sold under sale and repurchase agreements which the counterparty has the right, by contract or custom, to sell or repledge. As at 30 September 2020 the sale and repurchase agreements are short-term and mature in October 2020. Repurchase receivables represent securities at FVOCI sold under sale and repurchase agreements:

	30 September 2020
In millions of RR	(Unaudited)
Russian government bonds	5,048

Total debt securities measured at FVOCI	5,048

Including Credit loss allowance	11

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

10 Repurchase Receivables (Continued)

At 31 December 2019 there were no repurchase receivables. Refer to Note 11 for the related liabilities. Refer to Note 22 for the disclosure of the fair value of each class of repurchase receivables. Securities at FVOCI reclassified to repurchase receivables continue to be carried at fair value in accordance with accounting policies for these categories of assets.

11	Due to Banks
		30 September 2020	31 December
In millions of RR	(Unaudited)	2019
Sale and repurchase agreements with other banks	7,160	640
Correspondent accounts and overnight placements of other banks	6,948	23

Total due to banks	14,108	663

At 30 September 2020, included in the amounts due to other banks are liabilities of RR 4,797 million (31 December 2019: nil) arising from sale and repurchase agreements with debt securities at FVOCI. Refer to Note 10.

At 30 September 2020, included in the amounts due to other banks are liabilities of RR 2,363 million (31 December 2019: RR 640 million) arising from sale and repurchase agreements with securities of clients.

Refer to Note 22 for the disclosure of the fair value of amounts due to banks.

12	Customer Accounts
		30 September 2020	31 December
In millions of RR	(Unaudited)	2019
Individuals
- Current/demand accounts	302,182	211,661
- Term deposits	138,649	137,292
IE and SME
- Current/demand accounts	69,278	60,174
- Term deposits	1,764	1,880
Other legal entities
- Current/demand accounts	1,409	495
- Term deposits	144	112

Total customer accounts	513,426	411,614

Refer to Note 22 for the disclosure of the fair value of customer accounts. Information on related party balances is disclosed in Note 23.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

13 Share Capital, Share Premium and Treasury Shares

	Number of	Number of	Ordinary	Share	Treasury	Total
In millions of RR except for	authorised	outstanding	shares	premium	shares
the number of shares	shares	shares
At 1 January 2019	191,770,766	182,638,825	188	8,623	(3,670)	5,141

Shares issued	18,263,882	16,666,667	42	18,874	-	18,916
Secondary public offering
(SPO) costs	-	-	-	(499)	-	(499)
GDRs and shares
transferred under MLTIP	-	-	-	-	506	506

At 31 December 2019	210,034,648	199,305,492	230	26,998	(3,164)	24,064

GDRs buy-back	-	-	-	-	(661)	(661)
GDRs and shares
transferred under MLTIP	-	-	-	-	587	587

At 30 September 2020
(Unaudited)	210,034,648	199,305,492	230	26,998	(3,238)	23,990

At 30 September 2020 the total number of outstanding shares is 199,305,492 shares (31 December 2019: 199,305,492 shares) with a par value of USD 0.04 per share (31 December 2019: USD 0.04 per share).

At 30 September 2020 and 31 December 2019 treasury shares represent GDRs of the Group repurchased from the market for the purposes permitted by Cyprus law including contribution to MLTIP. Refer to Note 23.

At 30 September 2020 the total number of treasury shares is 3,013,379 (31 December 2019: 4,185,166).

During the nine months ended 30 September 2020 the Group repurchased 650,000 GDRs at market price for RR 661 million (nine months ended 30 September 2019: no GDRs were repurchased by the Group).

During the three months ended 31 March 2019 Altoville Holdings Limited converted 6,385,310 Class B shares into Class A (on a one-to-one basis), which was 3.49% of its share, and then sold them to the market.

In June 2019 the Company's shareholders approved a resolution to increase the authorised share capital to USD 8,401,385.92 by the creation of 18,263,882 new undesignated ordinary shares of nominal value USD 0.04 each. At 30 September 2020 the total number of authorised shares is 210,034,648 shares

(31 December 2019: 210,034,648 shares) with a par value of USD 0.04 per share (31 December 2019: USD 0.04 per share).

On 2 July 2019 the Group completed a SPO on the London Stock Exchange plc and issued 16,666,667 "Class A" shares of the Company in the form of GDRs at a price of USD 18.00 per GDR, raising aggregate gross proceeds of USD 300 million (RR 18,916 million). All issued ordinary shares are fully paid.

All the incurred SPO costs were primary direct expenses accounted within share premium.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

14 Net Margin

		Unaudited
	Nine months Three months	Nine months Three months
	ended	ended	ended	ended
	30 September 30 September 30 September 30 September
In millions of RR	2020	2020	2019	2019
Interest income calculated using the
effective interest rate method
Loans and advances to customers, including:	67,784	21,298	62,189	22,197
Credit card loans
Cash loans	8,658	2,554	8,529	3,364
Secured loans	3,544	1,263	1,346	733
POS loans	3,247	1,091	2,363	925
Car loans	2,329	835	856	475
Loans to IE and SME	334	78	214	87
Debt securities and repurchase receivables at
FVOCI	7,589	2,988	4,835	1,556
Placements with other banks and non-bank
credit organizations with original maturities of
less than three months	502	98	312	128

Total interest income calculated using the
effective interest rate method	93,987	30,205	80,644	29,465

Other similar income
Debt securities and repurchase receivables at
FVTPL and loans and advances to customers
at FVTPL	13	2	118	-

Total interest income	94,000	30,207	80,762	29,465

Interest expense calculated using the
effective interest rate method
Customer accounts, including:
Individuals
- Current/demand accounts	7,134	2,345	6,365	2,419
- Term deposits	5,184	1,548	5,078	1,923
IE and SME	777	258	1,110	325
Other legal entities	18	4	33	8
RR denominated bonds	1,522	514	769	316
Subordinated debt	1,434	486	1,388	465
Due to banks	334	113	587	49
Euro-Commercial Paper	27	9	76	26

Total interest expense calculated using the
effective interest rate method	16,430	5,277	15,406	5,531

Other similar expense
Lease liabilities	110	36	107	39

Total interest expense	16,540	5,313	15,513	5,570

Expenses on deposit insurance	1,258	457	1,331	487

Net margin	76,202	24,437	63,918	23,408

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

15 Fee and Commission Income and Expense

		Unaudited
	Nine months	Three months	Nine months	Three months
	ended	ended	ended	ended
	30 September	30 September	30 September	30 September
In millions of RR	2020	2020	2019	2019
Fee and commission income
IE and SME current accounts commission	7,058	2,696	6,007	2,193
Acquiring commission	5,456	2,002	4,627	1,539
Brokerage operations	4,272	2,065	447	239
Fee for selling credit protection	3,519	1,120	4,364	1,252
SMS fee	2,881	994	2,347	843
Foreign currency exchange transactions fee	2,801	897	2,084	869
Interchange fee	2,349	1,233	2,555	1,016
Card to card commission	2,078	829	1,348	589
Income from MVNO services	1,271	495	551	258
Cash withdrawal fee	521	201	519	192
Marketing services fee	242	46	207	103
Placement fee	97	35	87	48
Other fees receivable	848	360	553	218

Total fee and commission income	33,393	12,973	25,696	9,359

IE and SME current accounts commission represents commission for services to individual entrepreneurs and small to medium businesses. Fee for selling credit protection represents fee which the Bank receives for selling voluntary credit insurance to borrowers of the Group. Acquiring commission represents commission for processing card payments from online and offline points of sale. Income from MVNO services represents income from providing mobile services such as full coverage across Russia and international roaming, offering a number of value-added options such as virtual numbers, music and video streaming services, etc.

		Unaudited
	Nine months	Three months	Nine months	Three months
	ended	ended	ended	ended
	30 September	30 September	30 September	30 September
In millions of RR	2020	2020	2019	2019
Fee and commission expense
Payment systems	9,894	3,926	7,442	2,768
Service fees	1,532	554	1,345	470
Banking and other fees	1,413	550	301	74
Payment channels	990	324	941	363
Costs of MVNO services	870	334	607	299

Total fee and commission expense	14,699	5,688	10,636	3,974

Payment systems fees represent fees for MasterCard, Visa and other payment systems' services. Service fees represent fees for statement printing, mailing service, sms services and others. Payment channels represent fees paid to third parties through whom borrowers make loan repayments. Costs of MVNO services represent expenses for the traffic, telecommunications service and roaming.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

16 Customer Acquisition Expense

		Unaudited
	Nine months	Three months	Nine months	Three months
	ended	ended	ended	ended
	30 September	30 September	30 September	30 September
In millions of RR	2020	2020	2019	2019
Marketing and advertising	5,525	2,460	6,279	1,665
Staff costs	4,672	1,696	4,558	1,391
Taxes other than income tax	959	407	1,090	297
Partnership expenses	812	286	688	270
Credit bureaux	671	228	501	159
Cards issuing expenses	543	250	309	185
Telecommunication expenses	206	75	256	75
Other acquisition	203	71	207	7

Total customer acquisition expenses	13,591	5,473	13,888	4,049

Customer acquisition expenses represent expenses paid by the Group on services related to origination of customers which are not directly attributable to the recognised assets and are not incremental. The Group uses a variety of different channels for the acquisition of new customers.

Staff costs represent salary expenses and related costs of employees directly involved in customer acquisition. Included in staff costs are statutory social contributions to the state non-budgetary funds in the amount of RR 1,169 million for the nine months and RR 400 million for the three months ended 30 September 2020 (RR 1,185 million for the nine months and RR 362 million for the three months ended 30 September 2019).

17	Administrative and Other Operating Expenses
			Unaudited
		Nine months	Three months	Nine months	Three months
		ended	ended	ended	ended
		30 September	30 September	30 September	30 September
In millions of RR	2020	2020	2019	2019
Staff costs	17,519	6,226	14,355	5,270
Amortization of intangible assets	1,399	505	899	313
Depreciation of fixed assets	1,196	381	902	355
Taxes other than income tax	995	366	1,183	465
Information services	881	318	535	183
Other provisions	730	78	42	14
Depreciation of right-of-use assets	528	210	666	234
Professional services	440	219	586	139
Operating lease expense	382	129	311	103
Collection expenses	316	117	112	46
Office maintenance and office supplies	264	104	292	96
Communication services	192	69	215	67
Security expenses	145	48	129	53
Other administrative expenses	257	89	234	56

Total administrative and other operating
expenses	25,244	8,859	20,461	7,394

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

17 Administrative and Other Operating Expenses (Continued)

Included in staff costs are statutory social contributions to the non-budget funds and share-based remuneration:

		Unaudited
	Nine months	Three months	Nine months	Three months
	ended	ended	ended	ended
	30 September	30 September	30 September	30 September
In millions of RR	2020	2020	2019	2019
Statutory social contribution to the
non-budget funds	3,168	1,039	2,544	885
Share-based remuneration	449	254	380	98

18 Dividends

The movements in dividends during nine months ended 30 September 2020 and 2019 are as follows:

	Unaudited
In millions of RR	2020	2019
Dividends payable at 1 January	582	760
Dividends declared	7,773	5,870
Dividends paid	(8,076)	(5,618)
Dividends paid under MLTIP after vesting date	(291)	(524)
Foreign exchange loss/(gains) on dividends payable	678	(7)

Dividends payable at 30 September	666	481

Dividends per share declared (in USD)	0.55	0.49

The movements in dividends during three months ended 30 September 2020 and 2019 are as follows:

	Unaudited
In millions of RR	2020	2019
Dividends payable at 30 June	656	471
Dividends declared during the period	2,915	-
Dividends paid during the period	(2,944)	-
Dividends paid under MLTIP after vesting date	(116)	-
Foreign exchange loss on dividends payable	155	10

Dividends payable at 30 September	666	481

Dividends per share declared (in USD)	0.20	-

Dividends declared in the tables above represent dividends declared by the Board of Directors reduced by

39 million for the nine months and by RR 10 million for the three months ended 30 September 2020 for dividends on GDRs acquired by the Company from the market not for the immediate purposes of the

existing MLTIP (nine months ended 30 September 2019: RR 11 million, three months ended

30 September 2019: nil).

On 5 August 2020 the Board of Directors declared an interim dividend in line with the current dividend policy of USD 0.20 (RR 14.68) per share/per GDR with a total amount allocated for dividend payment of around USD 39.9 million (RR 2,925 million). Declared dividends were paid in USD on 24 August 2020.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

18 Dividends (Continued)

On 11 May 2020 the Board of Directors declared an interim dividend in line with the current dividend policy of USD 0.14 (RR 10.34) per share/per GDR with a total amount allocated for dividend payment of around USD 28 million (RR 2,061 million). Declared dividends were paid in USD on 1 and 2 June 2020.

On 10 March 2020 the Board of Directors declared an interim dividend of USD 0.21 (RR 14.18) per share/per GDR with a total amount allocated for dividend payment of around USD 41.9 million (RR 2,826 million). Declared dividends were paid in USD on 30 March and 1 April 2020.

On 13 May 2019 the Board of Directors declared an interim dividend of USD 0.17 (RR 11.09) per share/per GDR amounting to USD 31.05 million (RR 2,026 million). Declared dividends were paid in USD on 28 and 30 May 2019.

On 11 March 2019 the Board of Directors declared an interim dividend of USD 0.32 (RR 21.11) per share/per GDR amounting to USD 58.4 million (RR 3,855 million). Declared dividends were paid in USD on 25 and 27 March 2019.

The above dividends were declared and paid in USD. Dividends payable at 30 September 2020 related to treasury shares acquired under MLTIP amounting to RR 666 million are included in other non-financial liabilities (31 December 2019: RR 582 million).

19 Segment Analysis

Operating segments are components that engage in business activities that may earn revenues or incur expenses, whose operating results are regularly reviewed by the chief operating decision maker (CODM) and for which discrete financial information is available. The CODM is the person or group of persons who allocates resources and assesses the performance for the Group. The functions of CODM are performed by the Management of the Bank and the Management of the Insurance Company.

Description of products and services from which each reportable segment derives its revenue

The Group is organised on the basis of 4 main business segments:

Retail banking - representing customer current accounts, savings, deposits, investment savings products, custody, credit and debit cards, consumer loans, car loans, secured loans and brokerage services to individuals.

IE and SME accounts services - representing customer current accounts, savings, deposits services and providing loans to individual entrepreneurs and small to medium businesses.

Insurance operations - representing insurance services provided to individuals, such as personal accident insurance, personal property insurance, travel insurance and vehicle insurance.

MVNO services - providing full coverage across Russia and international roaming, offering a number of value-added options such as virtual numbers, music and video streaming services, etc.

The Management of the Group has refined the presentation of the Group's revenue structure in Segments analysis in order to present within revenues only those items of income which are not presented on a net basis. The comparative information was amended accordingly.

Factors that management used to identify the reportable segments

The Group's segments are strategic business units that focus on different services to the customers of the Group. They are managed separately because each business unit requires different marketing strategies and represents different types of businesses.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Measurement of operating segment profit or loss, assets and liabilities

The CODM reviews financial information prepared based on International financial reporting standards adjusted to meet the requirements of internal reporting. The CODM evaluates performance of each segment based on profit before tax.

Information about reportable segment profit or loss, assets and liabilities

Segment reporting of the Group's assets and liabilities as at 30 September 2020 is set out below:

			Unaudited
	Retail	SME	Insurance	MVNO	Elimina-	Total
	banking	accounts	operations	services	tions
In millions of RR		services
Cash and cash equivalents	49,681	23,366	2,634	53	(2,253)	73,481
Mandatory cash balances with the
CBRF	4,793	-	-	-	-	4,793
Due from other banks	-	-	1,882	-	-	1,882
Loans and advances to customers	345,903	3,110	-	-	(2,700)	346,313
Financial derivatives	7,343	-	-	-	-	7,343
Investments in securities	176,675	50,510	5,906	-	-	233,091
Repurchase receivables	5,048	-	-	-	-	5,048
Guarantee deposits with payment
systems	11,488	-	-	-	-	11,488
Current income tax assets	4,332	-	-	-	-	4,332
Deferred income tax assets	959	-	-	-	-	959
Tangible fixed assets and right-of-
use assets	10,639	-	-	81	-	10,720
Intangible assets	4,676	921	164	309	-	6,070
Other financial assets	15,096	579	1,628	280	(1,119)	16,464
Other non-financial assets	2,825	-	737	28	-	3,590

Total reportable segment assets	639,458	78,486	12,951	751	(6,072)	725,574

Due to banks	14,108	-	-	2,700	(2,700)	14,108
Customer accounts	444,623	71,042	-	-	(2,239)	513,426
Debt securities in issue	25,446	-	-	-	-	25,446
Financial derivatives	153	-	-	-	-	153
Subordinated debt	22,367	-	-	-	-	22,367
Insurance provisions	-	-	6,001	-	(32)	5,969
Other financial liabilities	17,802	-	1,126	500	(1,192)	18,236
Other non-financial liabilities	9,036	-	133	228	(15)	9,382

Total reportable segment
liabilities	533,535	71,042	7,260	3,428	(6,178)	609,087

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's income and expenses for the nine months ended 30 September 2020 is set out below:

			Unaudited
	Retail	SME	Insurance	MVNO	Elimina-	Total
	banking	accounts	operations	services	tions
In millions of RR		services
Nine months ended 30 September 2020
Revenues
Interest income calculated using the effective
interest rate method	91,496	2,335	351	1	(196)	93,987
Other similar income	11	2	-	-	-	13
Fee and commission income	-	7,058	-	-	-	7,058
- IE and SME current accounts commission
- Acquiring commission	5,129	391	-	-	(64)	5,456
- Brokerage operations	4,272	-	-	-	-	4,272
- Fee for selling credit protection	3,519	-	-	-	-	3,519
- SMS fee	2,881	-	-	-	-	2,881
- Foreign currency exchange transactions fee	2,494	307	-	-	-	2,801
- Interchange fee	1,523	826	-	-	-	2,349
- Card to card commission	2,078	-	-	-	-	2,078
- Income from MVNO services	-	-	-	1,271	-	1,271
- Cash withdrawal fee	521	-	-	-	-	521
- Marketing services fee	242	-	-	-	-	242
- Placement fee	97	-	-	-	-	97
- Other fees receivable	848	-	-	281	(281)	848

Timing of fee and commission income recognition:
- At point in time	20,723	8,567	-	1,552	(345)	30,497
- Over time	2,881	15	-	-	-	2,896

Total fee and commission income	23,604	8,582	-	1,552	(345)	33,393

Insurance premiums earned	178	-	13,981	-	(227)	13,932
Other operating income	2,326	39	156	-	(116)	2,405

Total revenues	117,615	10,958	14,488	1,553	(884)	143,730

Interest expense calculated using the effective
interest rate method	(15,697)	(777)	-	(152)	196	(16,430)
Other similar expense	(104)	-	-	(6)	-	(110)
Expenses on deposit insurance	(1,105)	(153)	-	-	-	(1,258)
Credit loss allowance for loans and advances to
customers and credit related commitments	(34,333)	(280)	-	-	-	(34,613)
Credit loss allowance charge for debt securities at
FVOCI	(350)	-	(10)	-	-	(360)
Fee and commission expense	(12,220)	(1,870)	-	(863)	254	(14,699)
Customer acquisition expense	(11,759)	(906)	(751)	(568)	393	(13,591)
Net gains from derivatives revaluation	6,678	-	-	-	-	6,678
Net losses from foreign exchange translation	(8,741)	-	-	(2)	-	(8,743)
Net gains from operations with foreign currencies	900	-	311	-	-	1,211
Net gains from disposals of debt securities at
FVOCI	6,787	-	-	-	-	6,787
Net gains/(losses) from debt instruments at
FVTPL	(20)	-	95	-	-	75
Insurance claims incurred	-	-	(2,935)	-	31	(2,904)
Administrative and other operating expenses	(21,075)	(2,513)	(1,084)	(686)	114	(25,244)
Net gains from repurchase of subordinated debt	168	-	-	-	-	168

Segment result	26,744	4,459	10,114	(724)	104	40,697

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's income and expenses for the three months ended 30 September 2020 is set out below:

			Unaudited
	Retail	SME	Insurance	MVNO	Elimina-	Total
	banking	accounts	operations	services	tions
In millions of RR		services
Three months ended 30 September 2020
Revenues
Interest income calculated using the effective
interest rate method	29,492	664	114	1	(66)	30,205
Other similar income	-	2	-	-	-	2
Fee and commission income	-	2,696	-	-	-	2,696
- IE and SME current accounts commission
- Acquiring commission	1,828	198	-	-	(24)	2,002
- Brokerage operations	2,065	-	-	-	-	2,065
- Fee for selling credit protection	1,120	-	-	-	-	1,120
- SMS fee	994	-	-	-	-	994
- Foreign currency exchange transactions fee	783	114	-	-	-	897
- Interchange fee	892	341	-	-	-	1,233
- Card to card commission	829	-	-	-	-	829
- Income from MVNO services	-	-	-	495	-	495
- Cash withdrawal fee	201	-	-	-	-	201
- Marketing services fee	46	-	-	-	-	46
- Placement fee	35	-	-	-	-	35
- Other fees receivable	327	-	-	113	(80)	360

Timing of fee and commission
income recognition:
- At point in time	8,126	3,342	-	608	(104)	11,972
- Over time	994	7	-	-	-	1,001

Total fee and commission income	9,120	3,349	-	608	(104)	12,973

Insurance premiums earned	73	-	4,555	-	(82)	4,546
Other operating income	1,103	-	59	-	(75)	1,087

Total revenues	39,788	4,015	4,728	609	(327)	48,813

Interest expense calculated using the effective
interest rate method	(5,033)	(258)	-	(51)	65	(5,277)
Other similar expense	(36)	-	-	-	-	(36)
Expenses on deposit insurance	(396)	(61)	-	-	-	(457)
Credit loss allowance for loans and advances to
customers and credit related commitments	(6,604)	18	-	-	-	(6,586)
Credit loss allowance charge for debt securities at
FVOCI	(99)	-	-	-	-	(99)
Fee and commission expense	(4,902)	(607)	-	(313)	134	(5,688)
Customer acquisition expense	(4,819)	(340)	(271)	(198)	155	(5,473)
Net gains from derivatives revaluation	3,720	-	-	-	-	3,720
Net losses from foreign exchange translation	(4,242)	-	-	-	-	(4,242)
Net gains from operations with foreign currencies	48	-	243	-	-	291
Net gains from disposals of debt securities at
FVOCI	538	-	-	-	-	538
Net (losses)/gains from debt instruments at FVTPL	(9)	-	74	-	-	65
Insurance claims incurred	-	-	(782)	-	(13)	(795)
Administrative and other operating expenses	(7,600)	(670)	(399)	(229)	39	(8,859)
Net gains from repurchase of subordinated debt	18	-	-	-	-	18

Segment result	10,372	2,097	3,593	(182)	53	15,933

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's assets and liabilities as at 31 December 2019 is set out below:

	Retail	SME	Insurance	MVNO	Elimina-	Total
	banking	accounts	operations	services	tions
In millions of RR		services
Cash and cash equivalents	31,098	25,524	3,851	43	(2,720)	57,796
Mandatory cash balances with the
CBRF	3,448	-	-	-	-	3,448
Due from other banks	250	-	1,834	-	-	2,084
Loans and advances to customers	330,905	900	-	-	(2,630)	329,175
Financial derivatives	390	-	-	-	-	390
Investments in securities	90,566	41,950	2,662	-	-	135,178
Guarantee deposits with payment
systems	8,877	-	-	-	-	8,877
Current income tax assets	807	-	8	-	-	815
Deferred income tax assets	1,517	-	-	-	-	1,517
Tangible fixed assets and right-of-
use assets	10,454	-	-	106	-	10,560
Intangible assets	4,105	823	196	311	-	5,435
Other financial assets	20,429	444	1,768	87	(1,055)	21,673
Other non-financial assets	2,034	-	592	187	(303)	2,510

Total reportable segment assets	504,880	69,641	10,911	734	(6,708)	579,458

Due to banks	663	-	-	2,630	(2,630)	663
Customer accounts	352,280	62,054	-	-	(2,720)	411,614
Debt securities in issue	26,078	-	-	-	-	26,078
Financial derivatives	590	-	-	-	-	590
Deferred income tax liabilities	142	-	-	-	-	142
Subordinated debt	18,487	-	-	-	-	18,487
Insurance provisions	-	-	6,280	-	-	6,280
Other financial liabilities	14,091	-	700	912	(1,055)	14,648
Other non-financial liabilities	5,067	-	52	58	(303)	4,874

Total reportable segment
liabilities	417,398	62,054	7,032	3,600	(6,708)	483,376

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's income and expenses for the nine months ended 30 September 2019 is set out below:

			Unaudited
	Retail	SME	Insurance	MVNO	Elimina-	Total
	banking	accounts	operations	services	tions
In millions of RR		services
Nine months ended 30 September 2019
Revenues
Interest income calculated using the effective
interest rate method	78,619	1,901	292	-	(168)	80,644
Other similar income	118	-	-	-	-	118
Fee and commission income	-	6,007	-	-	-	6,007
- IE and SME current accounts commission
- Acquiring commission	4,554	141	-	-	(68)	4,627
- Fee for selling credit protection	4,364	-	-	-	-	4,364
- Interchange fee	2,031	524	-	-	-	2,555
- SMS fee	2,347	-	-	-	-	2,347
- Foreign currency exchange transactions fee	1,871	213	-	-	-	2,084
- Card to card commission	1,348	-	-	-	-	1,348
- Income from MVNO services	-	-	-	551	-	551
- Cash withdrawal fee	519	-	-	-	-	519
- Brokerage operations	447	-	-	-	-	447
- Marketing services fee	207	-	-	-	-	207
- Placement fee	87	-	-	-	-	87
- Other fees receivable	613	-	-	189	(249)	553

Timing of fee and commission income
recognition:
- At point in time	16,041	6,820	-	740	(317)	23,284
- Over time	2,347	65	-	-	-	2,412

Total fee and commission income	18,388	6,885	-	740	(317)	25,696

Insurance premiums earned	223	-	9,581	-	(284)	9,520
Other operating income	670	46	212	1	(63)	866

Total revenues	98,018	8,832	10,085	741	(832)	116,844

Interest expense calculated using the effective
interest rate method	(14,359)	(1,110)	-	(100)	163	(15,406)
Other similar expense	(103)	-	-	(4)	-	(107)
Expenses on deposit insurance	(1,177)	(154)	-	-	-	(1,331)
Credit loss allowance for loans and advances to
customers and credit related commitments	(19,541)	(62)	-	-	-	(19,603)
Credit loss allowance reversal for debt securities at
FVOCI	225	-	-	-	-	225
Fee and commission expense	(8,852)	(1,359)	(9)	(607)	191	(10,636)
Customer acquisition expense	(11,406)	(1,243)	(837)	(812)	410	(13,888)
Net losses from derivatives revaluation	(1,407)	-	-	-	-	(1,407)
Net gains from foreign exchange translation	1,236	-	-	-	-	1,236
Net losses from operations with foreign currencies	(677)	-	(7)	-	-	(684)
Net gains from disposals of debt securities at
FVOCI	277	-	-	-	-	277
Net gains from debt instruments at FVTPL	390	-	-	-	-	390
Insurance claims incurred	-	-	(3,282)	-	-	(3,282)
Administrative and other operating expenses	(16,992)	(2,060)	(830)	(621)	42	(20,461)

Segment result	25,632	2,844	5,120	(1,403)	(26)	32,167

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's income and expenses for the three months ended 30 September 2019 is set out below:

			Unaudited
	Retail	SME	Insurance	MVNO	Elimina-	Total
	banking	accounts	operations	services	tions
In millions of RR		services
Three months ended 30 September 2019
Revenues
Interest income calculated using the effective
interest rate method	28,762	654	117	-	(68)	29,465
Other similar income	-	-	-	-		-
Fee and commission income	-	2,193	-	-	-	2,193
- IE and SME current accounts commission
- Acquiring commission	1,510	51	-	-	(22)	1,539
- Fee for selling credit protection	1,252	-	-	-	-	1,252
- Interchange fee	803	213	-	-	-	1,016
- SMS fee	843	-	-	-	-	843
- Foreign currency exchange transactions fee	788	81	-	-	-	869
- Card to card commission	589	-	-	-	-	589
- Income from MVNO services	-	-	-	258	-	258
- Cash withdrawal fee	192	-	-	-	-	192
- Brokerage operations	239	-	-	-	-	239
- Marketing services fee	103	-	-	-	-	103
- Placement fee	48	-	-	-	-	48
- Other fees receivable	251	-	-	95	(128)	218

Timing of fee and commission income recognition:
- At point in time	5,775	2,523	-	353	(150)	8,501
- Over time	843	15	-	-	-	858

Total fee and commission income	6,618	2,538	-	353	(150)	9,359

Insurance premiums earned	77	-	4,283	-	(98)	4,262
Other operating income	382	15	83	1	(46)	435

Total revenues	35,839	3,207	4,483	354	(362)	43,521

Interest expense calculated using the effective
interest rate method	(5,228)	(325)	-	(41)	63	(5,531)
Other similar expense	(35)	-	-	(4)	-	(39)
Expenses on deposit insurance	(433)	(54)	-	-	-	(487)
Credit loss allowance for loans and advances to
customers and credit related commitments	(7,947)	(5)	-	-	-	(7,952)
Credit loss allowance reversal for debt securities at
FVOCI	83	-	-	-	-	83
Fee and commission expense	(3,183)	(586)	(3)	(299)	97	(3,974)
Customer acquisition expense	(3,076)	(457)	(330)	(337)	151	(4,049)
Net losses from derivatives revaluation	(11)	-	-	-	-	(11)
Net losses from foreign exchange translation	(451)	-	-	-	-	(451)
Net losses from operations with foreign currencies	(14)	-	(1)	-	-	(15)
Net gains from disposals of debt securities at
FVOCI	137	-	-	-	-	137
Insurance claims incurred	-	-	(1,374)	-	-	(1,374)
Administrative and other operating expenses	(6,374)	(524)	(237)	(284)	25	(7,394)

Segment result	9,307	1,256	2,538	(611)	(26)	12,464

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

For the nine months ended 30 September 2020 intersegment revenues amounted to RR 884 million (for the nine months ended 30 September 2019: RR 832 million).

For the three months ended 30 September 2020 intersegment revenues amounted to RR 327 million (for the three months ended 30 September 2019: RR 362 million).

20 Management of Capital

The Group's objectives when managing capital are (i) for the Bank to comply with the capital requirements set by the Central Bank of the Russian Federation (CBRF), (ii) for the Insurance Company to comply with the capital requirements set by the legislation of the Russian Federation, (iii) for the Group to comply with the financial covenants set by the terms of securities issued; (iv) to safeguard the Group's ability to continue as a going concern.

The Group considers total capital under management to be equity attributable to the shareholders of the Company as shown in the consolidated condensed interim statement of financial position. The amount of capital that the Group managed as of 30 September 2020 was RR 116,370 million (31 December 2019: RR 95,979 million).

Compliance with capital adequacy ratios set by the CBRF is monitored daily and submitted to the CBRF monthly with reports outlining their calculation reviewed and signed by the Bank's Chief Executive Officer and Chief Accountant. Other objectives of capital management are evaluated annually. The amount of regulatory capital of Tinkoff Bank calculated in accordance with the methodology set by CBRF as at 30 September 2020 was RR 123,966 million, and the equity capital adequacy ratio (N1.0) was 13.92% (31 December 2019: RR 99,731 million and 12.12%). Minimum required statutory equity capital adequacy ratio (N1.0) was 8% as at 30 September 2020 (31 December 2019: 8%).

In addition to the minimum 8% requirement for N1.0 the CBRF has the right to require banks to maintain an additional Capital Conservation Buffer which throughout 2020 has been 2.5% (2019: from 1.875% to 2.25%). Banks who do not maintain this buffer have some restrictions imposed on them including being unable to distribute their current period profits without limitation.

The Group also monitors capital requirements including capital adequacy ratio under the Basel III methodology of the Basel Committee on Banking Supervision: global regulatory framework for more resilient banks and banking systems (hereinafter "Basel III").

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

20 Management of Capital (Continued)

The composition of the Group's capital calculated in accordance with the methodology set by Basel Committee with capital adjustments as set out in Basel III is as follows:

	30 September 2020	31 December
In millions of RR	(Unaudited)	2019
Share capital	230	230
Share premium	26,998	26,998
Treasury shares	(3,238)	(3,164)
Share-based payment reserve	905	1,039
Retained earnings	90,980	66,880
Revaluation reserve for investments in debt securities	495	3,996
Less intangible assets	(6,070)	(5,435)
Non-controlling interest	117	103

Common Equity Tier 1 (CET1)	110,417	90,647

Additional Tier 1	22,367	18,487

Tier 1 capital	132,784	109,134

Total capital	132,784	109,134

Risk weighted assets (RWA)
Credit risk	504,012	412,741
Operational risk	152,881	152,881
Market risk	16,167	4,603

Total risk weighted assets (RWA)	673,060	570,225

Common equity Tier 1 capital adequacy ratio (CET1/ Total RWA), %	16.41%	15.90%
Tier 1 capital adequacy ratio (Tier 1 capital / Total RWA), %	19.73%	19.14%
Total capital adequacy ratio (Total capital / Total RWA), %	19.73%	19.14%

The Group and the Bank have complied with all externally imposed capital requirements throughout the nine months ended 30 September 2020 and the year ended 31 December 2019.

The Insurance Company has complied with all capital requirements set by the legislation of the Russian Federation throughout the nine months ended 30 September 2020 and the year ended 31 December 2019.

21 Contingencies and Commitments

Legal proceedings. From time to time and in the normal course of business, claims against the Group may be received. On the basis of its own estimates and internal professional advice, management is of the opinion that no material unprovided losses will be incurred in respect of claims.

Tax contingencies. Russian tax 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 by the 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 decision about 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), although it has specific features. This legislation provides for the possibility of additional tax assessment for controlled transactions (transactions between related parties and certain transactions between unrelated parties), if such transactions are not on an arm's length.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

21 Contingencies and Commitments (Continued)

Tax liabilities arising from controlled transactions are determined based on their actual transaction prices. It is possible, with the evolution of the interpretation of 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 outside of Russia. The tax liabilities of the Group are determined on the assumption that these companies are not subject to Russian profits tax, because they do not have a permanent establishment in Russia. The Company is a tax resident of Cyprus only and full beneficial owner of the Bank and Insurance Company. 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.

The Controlled Foreign Company (CFC) legislation introduced Russian taxation of profits of foreign companies and non-corporate structures (including trusts) controlled by Russian tax residents (controlling parties). The CFC income is subject to a 20% tax rate if the CFC is controlled by a legal entity and a rate of 13% if it is controlled by an individual. As a result, management reassessed the Group's tax positions and recognised current tax expense as well as deferred taxes that arose from the expected taxable manner of recovery of the relevant Group's operations to which the CFC legislation applies to and to the extent that the Group (rather than its owners) is obliged to settle such taxes.

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 outflow of resources will be required should such tax positions and interpretations be challenged by the tax 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. As at 30 September 2020 and 31 December 2019 no material tax risks were identified.

Compliance with covenants. The Group is subject to certain non-financial covenants related primarily to its subordinated perpetual debt. Non-compliance with such covenants may result in negative consequences for the Group. Management believes that the Group was in compliance with all such covenants as at 30 September 2020 and 31 December 2019.

Future lease payments related to leases where leased asset is of low value. The future cash outflows to which the Group is exposed and which are not reflected in the lease liabilities amounted to RR 217 million at 30 September 2020 and relate primarily to leases of assets which are of low value (31 December 2019: RR 268 million).

Credit related commitments and performance guarantees issued. The primary purpose of these instruments is to ensure that funds are available to a customer as required. Commitments to extend credit represent unused portions of authorizations to extend credit in the form of credit card loans, guarantees. With respect to credit risk on commitments to extend credit, the Group is potentially exposed to loss in an amount equal to the total unused commitments, if the unused amounts were to be drawn down.

Most commitments to extend credit are contingent upon customers maintaining specific credit standards. The Group monitors the term to maturity of credit related commitments because longer-term commitments generally have a greater degree of credit risk than shorter-term commitments.

Performance guarantees are contracts that provide compensation if another party fails to perform a contractual obligation. Such contracts do not transfer credit risk. The risk under performance guarantee contracts is the possibility that the insured event (i.e. the failure to perform the contractual obligation by another party) occurs. The key risks the Group faces are significant fluctuations in the frequency and severity of payments incurred on such contracts relative to expectations. The Group uses a scoring model to predict levels of such payments. Claims must be made before the contract matures and most claims are settled within short term. This allows the Group to achieve a high degree of certainty about the estimated payments and therefore future cash flows.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

21 Contingencies and Commitments (Continued)

Outstanding credit related commitments and performance guarantees are as follows:

	30 September 2020	31 December
In millions of RR	(Unaudited)	2019
Unused limits on credit card loans	187,451	168,059
Credit loss allowance	(3,833)	(2,242)

Total credit related commitments, net of сredit loss allowance	183,618	165,817

Performance guarantees issued	367	660
Provisions	(2)	(3)

Total performance guarantees issued, net of provisions	365	657

The total outstanding contractual amount of unused limits on contingencies and commitments liability does not necessarily represent future cash requirements, as these financial instruments may expire or terminate without being funded. In accordance with credit card service conditions the Group has a right to refuse the issuance, activation, reissuing or unblocking of a credit card, and is providing a credit card limit at its own discretion and without explaining its reasons.

The following table contains an analysis of credit related commitments by credit quality at 30 September 2020 based on credit risk grades.

		Unaudited
	Stage 1	Stage 2	Stage 3	Total
	(12-months ECL)	(lifetime ECL for	(lifetime ECL
		SICR)	for credit
In millions of RR			impaired)
Credit related commitments
- Excellent	161,672	-	-	161,672
- Good	16,307	171	-	16,478
- Monitor	9,062	239	-	9,301

Unrecognised gross amount	187,041	410	-	187,451

Credit loss allowance	(3,805)	(28)	-	(3,833)

Unrecognised net amount	183,236	382	-	183,618

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

21 Contingencies and Commitments (Continued)

The following table contains	an analysis of credit related commitments by credit	quality at
31 December 2019 based on credit risk grades.
	Stage 1	Stage 2	Stage 3	Total
	(12-months ECL)	(lifetime ECL for	(lifetime ECL for
In millions of RR		SICR)	credit impaired)
Credit related commitments
- Excellent	145,154	-	-	145,154
- Good	12,285	84	-	12,369
- Monitor	10,360	176	-	10,536

Unrecognised gross amount	167,799	260	-	168,059

Credit loss allowance	(2,228)	(14)	-	(2,242)

Unrecognised net amount	165,571	246	-	165,817

Also, the Group may decide to increase or decrease a credit card limit using a scoring model, which is based on the client's behaviour model. Therefore, the fair value of the contractual amount of revocable unused limits on contingencies and commitments is close to zero. Credit related commitments are denominated in RR.

The following table contains an analysis of performance guarantees issued by credit quality based on credit risk grades.

	30 September 2020	31 December
	(Unaudited)	2019
	Stage 1	Stage 1
In millions of RR	(12-months ECL)	(12-months ECL)
Performance guarantees issued
- Excellent	219	415
- Good	148	245

Unrecognised gross amount	367	660

Provisions	(2)	(3)

Unrecognised net amount	365	657

Mandatory cash balances with the CBRF of RR 4,793 million as at 30 September 2020 (31 December 2019: RR 3,448 million) represent mandatory reserve deposits which are not available to finance the Bank's day to day operations.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

22 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 valuation 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).

Recurring fair value measurements

Recurring fair value measurements are those that the accounting standards require or permit in the consolidated condensed interim statement of financial position at the end of each reporting period. The levels in the fair value hierarchy into which the recurring fair value measurements are categorised are as follows:

	30 September 2020 (Unaudited)		31 December 2019
In millions of RR	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
ASSETS AT FAIR
VALUE
Loans and advances to
customers	-	-	1,434	1,434	-	-	-	-
Financial derivatives	-	7,343	-	7,343	-	390	-	390
Investments in securities	229,754	3,337	-	233,091	133,239	1,939	-	135,178
Repurchase receivables	5,048	-	-	5,048	-	-	-	-

Total assets recurring
fair value
measurements	234,802	10,680	1,434	246,916	133,239	2,329	-	135,568

LIABILITIES AT FAIR
VALUE
Other financial liabilities	-	-	-	-	161	-	-	161
Financial derivatives	-	153	-	153	-	590	-	590

Total liabilities
recurring fair value
measurements	-	153	-	153	161	590	-	751

Investments in securities categorised in level 2 are represented by liquid debt securities classified in "Good" credit risk grade.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

22 Fair Value of Financial Instruments (Continued)

The description of valuation techniques and the description of the inputs used in the fair value measurement for level 2 measurements at 30 September 2020 are as follows:

In millions of RR

Fair value Valuation technique

Inputs used

ASSETS AT FAIR VALUE	Observable quotes for

	comparable securities adjusted by
	multiplicator depending on the
Investments in securities	3,337 degree of the market activity

Foreign exchange swaps and	Discounted cash flows adjusted
forwards	7,343 for counterparty credit risk

Quotes from the automated fair value system for financial instruments of NSD Price Center*

Russian rouble curve. USD Dollar Swaps Curve. EUR Swaps Curve.

CDS quotes assessment of counterparty credit risk or reference entities.

Total recurring fair value
measurements at level 2
(Unaudited)	10,680

LIABILITIES AT FAIR VALUE			Russian rouble curve.

			USD Dollar Swaps Curve.
			EUR Swaps Curve.
Foreign exchange swaps and		Discounted cash flows adjusted	CDS quotes assessment of
	counterparty credit risk or
forwards	153	for counterparty credit risk	reference entities.

Total recurring fair value
measurements at level 2
(Unaudited)	153

The description of valuation techniques and the description of the inputs used in the fair value measurement for level 2 measurements at 31 December 2019 are as follows:

In millions of RR	Fair value	Valuation technique	Inputs used
ASSETS AT FAIR VALUE		Observable quotes for	Quotes from the automated fair

		comparable securities adjusted by	value system for financial
		multiplicator depending on the	instruments of NSD Price
Investments in securities	1,939	degree of the market activity	Center*
			Russian rouble curve.
			USD Dollar Swaps Curve.
Foreign exchange swaps and		Discounted cash flows adjusted	CDS quotes assessment of
	counterparty credit risk or
forwards	390	for counterparty credit risk	reference entities.

Total recurring fair value
measurements at level 2	2,329

LIABILITIES AT FAIR VALUE			Russian rouble curve.

			USD Dollar Swaps Curve.
Foreign exchange swaps and		Discounted cash flows adjusted	CDS quotes assessment of
	counterparty credit risk or
forwards	590	for counterparty credit risk	reference entities.

Total recurring fair value
measurements at level 2	590

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

22 Fair Value of Financial Instruments (Continued)
NSD Valuation Center is a fair value measurement service for bonds and other financial instruments, accredited by the CBRF.

There were no changes in the valuation techniques for level 2 recurring fair value measurements during the nine months ended 30 September 2020. Level 2 derivatives comprise foreign exchange forwards and swaps.

The foreign exchange forwards have been fair valued using forward exchange rates that are quoted in an active market. Foreign exchange swaps are fair valued using forward interest rates extracted from observable yield curves. The effects of discounting are generally insignificant for level 2 derivatives.

Assets and liabilities not measured at fair value but for which fair value is disclosed

Fair values analysed by level in the fair value hierarchy and carrying value of assets not measured at fair value are as follows:

	30 September 2020 (Unaudited)		31 December 2019
	Level 1	Level 2	Level 3	Carrying	Level 1	Level 2	Level 3	Carrying
In millions of RR				value				value
FINANCIAL ASSETS CARRIED AT AMORTISED COST
Cash and cash
equivalents
- Cash on hand	15,201	-	-	15,201	11,118	-	-	11,118
- Cash balances with the
CBRF (other than
mandatory reserve
deposits)	-	18,424	-	18,424	-	16,599	-	16,599
- Placements with other
banks and non-bank
credit organizations with
original maturities of less
than three months	-	39,856	-	39,856	-	30,079	-	30,079
Mandatory cash
balances with the CBRF	-	4,793	-	4,793	-	3,448	-	3,448
Due from other banks	-	1,882	-	1,882	-	2,084	-	2,084
Loans and advances to
customers	-	-	345,181	344,879	-	-	329,340	329,175
Guarantee deposits with
payment systems	-	-	11,488	11,488	-	-	8,877	8,877
Other financial assets
Settlement of operations
with plastic cards
receivable	-	11,167	-	11,167	-	16,384	-	16,384
Other receivables	-	5,297	-	5,297	-	5,289	-	5,289

Total financial assets
carried at amortised
cost	15,201	81,419	356,669	452,987	11,118	73,883	338,217	423,053

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

22 Fair Value of Financial Instruments (Continued)

Fair values analysed by level in the fair value hierarchy and carrying value of liabilities not measured at fair value are as follows:

	30 September 2020 (Unaudited)		31 December 2019
	Level 1	Level 2	Level 3	Carrying	Level 1	Level 2	Level 3	Carrying
In millions of RR				value				value
FINANCIAL LIABILITIES CARRIED AT AMORTISED COST
Due to banks	-	14,108	-	14,108	-	663	-	663
Customer accounts
Individuals
-Current/demand accounts	-	302,182	-	302,182	-	211,661	-	211,661
-Term deposits	-	141,391	-	138,649	-	139,114	-	137,292
SME
-Current/demand accounts	-	69,278	-	69,278	-	60,174	-	60,174
-Term deposits	-	1,757	-	1,764	-	1,879	-	1,880
Other legal entities
-Current/demand accounts	-	1,409	-	1,409	-	495	-	495
-Term deposits	-	144	-	144	-	112	-	112
Debt securities in issue
RR Bonds issued on
domestic market	24,181	-	-	23,260	24,442	-	-	23,618
Euro-Commercial Paper	-	2,186	-	2,186	-	2,460	-	2,460
Subordinated debt
Perpetual subordinated
bonds	23,818	-	-	22,367	19,604	-	-	18,487
Other financial liabilities
Settlement of operations
with plastic cards	-	6,097	-	6,097	-	6,427	-	6,427
Trade payables	-	6,711	-	6,711	-	4,621	-	4,621
Credit related commitments	-	-	-	3,859	-	-	-	2,242
Other financial liabilities	-	1,569	-	1,569	-	1,197	-	1,197

Total financial liabilities
carried at amortised cost	47,999	546,832	-	593,583	44,046	428,803	-	471,329

Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by an active quoted market price. Where quoted market prices are not available, the Group used valuation techniques. The fair value of floating rate instruments that are not quoted in an active market was estimated to be equal to their carrying amount. The fair value of unquoted fixed interest rate instruments 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.

As at 30 September 2020 and 31 December 2019 the fair value of the debt securities in issue and subordinated debt has been calculated based on quoted prices from the Moscow Exchange MICEX-RTS and Global Exchange Market, where the Group's debt securities are listed and traded.

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

22 Fair Value of Financial Instruments (Continued)

Weighted average discount rates used in determining fair	value as of 30 September 2020 and
31 December 2019 are disclosed below:
	30 September 2020	31 December
In % p.a.	(Unaudited)	2019
Assets
Cash and cash equivalents	0.0	0.0
Due from other banks	3.2	5.2
Loans and advances to customers	34.3	37.2
Investments in securities	2.8	4.9
Repurchase receivables	5.6	-

Liabilities
Due to banks	2.6	0.2
Customer accounts	2.6	3.9
Debt securities in issue	6.3	7.5
Subordinated debt	6.1	6.8

23 Related Party Transactions

Parties are generally considered to be related if the parties are under common control or one party has the ability to control the other party or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form. Other related parties (excluding associates and joint ventures) in the tables below are represented by entities which are under the control of the Group's ultimate controlling party Oleg Tinkov. The outstanding balances with related parties were as follows:

	30 September 2020	31 December 2019
	(Unaudited)

	Key	Associates,	Key	Associates,
	management	joint ventures	management	joint ventures
	personnel	and other	personnel	and other
In millions of RR		related parties		related parties
ASSETS
Gross amounts of loans and advances to
customers(contractual interest rate: 1.7-16.5% p.a.
(31 December 2019: 11.7-25.7% p.a.))	436	1,706	437	150
Other financial assets	-	686	-	843

TOTAL ASSETS	436	2,392	437	993

LIABILITIES
Customer accounts (contractual interest rate: 0.8-
3.7% p.a. (31 December 2019: 0.5-7.2% p.a.))	891	1,202	1,779	227
Debt securities in issue (yield: 1.0-3.6% p.a.
(31 December 2019: 1.0-3.6% p.a.))	-	2,186	-	2,460
Other non-financial liabilities	1,072	-	521	-

TOTAL LIABILITIES	1,963	3,388	2,300	2,687

EQUITY
Share-based payment reserve
- Management long-term incentive program	806	-	930	-

TOTAL EQUITY	806	-	930	-

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

23 Related Party Transactions (Continued)

At 31 August 2020 the Group acquired 22.15% shareholding in Incantus Holding Limited, which is a group of fintech start-ups launched in 2020 to provide a range of services to retail customers in Europe (excluding CIS). The investment in Incantus Holding Limited was classified as an investment in associate. Also the Group provided a convertible loan to Incantus Holding Limited in the amount of EUR 15.4 million (RR 1,434 million) at 1.7% p.a. with a maturity date of 31 August 2025. The convertible loan agreement implies that the Group may convert the loan into the borrower's shares at the price of initial acquisition of shares of Incantus Holding Limited by the Group subject to compliance with a number of conversion requirements including a cap in relation to overall shareholding of the Group in Incantus Holding Limited of 24.5%.

The income and expense items with related parties were as follows:

				Unaudited
	Nine months ended	Three months	Nine months ended	Three months
	ended	ended
	30 September 2020	30 September 2019
	30 September 2020	30 September 2019

	Key	Associa-	Key	Associa-	Key	Associa-	Key	Associa-
	manage-	tes, joint	manage-	tes, joint	manage-	tes, joint	manage-	tes, joint
	ment	ventures	ment	ventures	ment	ventures	ment	ventures
	person-	and other	person-	and other	person-	and other	person-	and other
	nel	related	nel	related	nel	related	nel	related
In millions of RR		parties		parties		parties		parties
Interest income calculated using
the effective interest rate method	18	24	6	8	2	19	1	12
Other similar income	-	2	-	2	-	-	-	-
Interest expense calculated
using effective interest rate
method	(22)	(27)	-	(8)	(53)	(76)	(23)	(76)
Net (losses)/gains from foreign
exchange translation	-	(59)	-	(52)	-	24	-	8
Administrative and other
operating expenses	(1,474)	(76)	(581)	(28)	(1,523)	-	(598)	-
Other operating income	-	447	-	447	-	(2)	-	(26)

Key management compensation is presented below:

		Unaudited
	Nine months	Three months	Nine months	Three months
	ended	ended	ended	ended
	30 September	30 September	30 September	30 September
In millions of RR	2020	2020	2019	2019
Short-term benefits:
- Salaries	703	246	651	220
- Short-term bonuses	439	146	531	290
Long-term benefits:
- Management long-term incentive programme	315	180	341	88
- Key employees retention plan	17	9	-	-

Total	1,474	581	1,523	598

Key employees retention plan (KERP). On 14 April 2020 the Group launched a new long term incentive program for 250 senior and middle management level employees. The purpose of the program is to retain and motivate key employees with high potential. This is a performance-basedcash-settled program linked to the market price of GDRs. The expenses related to those participants who are considered to be key management personnel are disclosed in the table above.

Management long-termincentive program. On 31 March 2016 the Group introduced a MLTIP as both a long-term incentive and a retention tool for the management of the Group. Total number of GDRs attributable to the management is 11,940 thousand as at 30 September 2020 (31 December 2019: 9,940 thousand).

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

23 Related Party Transactions (Continued)

Participants of the program receive the vested parts of their grants provided that they remain employed by the Group throughout the vesting period. Participants are entitled to the dividends, if any. Participants who leave the Group lose their right for the unvested parts of the grants.

The fair value of the awards as at grant dates (31 March 2016, 8 February 2017, 22 February 2018, 15 January 2019 and 5 June 2020) is determined on the basis of market quotes of GDRs as at those dates.

Each grant is divided into 4 equal awards. Each award vests over 4 years in equal tranches. The delivery dates as of which the GDRs are allowed to be sold by the participants correspond to the vesting dates

31 March and each subsequent 31 March (with the exception of 2019 when the vesting date for all participants was 31 January 2019) until 2022 for participants joining in 2016, until 2023 for participants joining in 2017, until 2024 for participants joining in 2018, until 2025 for participants joining in 2019 and until 2027 for participants joining in 2020.

The following table discloses the changes in the numbers of GDRs attributable to the MLTIP:

	Number of GDRs
In thousands	attributable to the MLTIP
At 31 December 2018	6,178

Granted	91
Vested	(2,419)
Forfeited	(68)

At 31 December 2019	3,782

Vested	(1,810)
Granted	2,000
Forfeited	(17)

At 30 September 2020 (Unaudited)	3,955

24 Events after the End of the Reporting Period

On 11 November 2020 the Board of Directors declared an interim dividend in line with the current dividend policy of USD 0.25 per share/per GDR with a total amount allocated for dividend payment of approximately USD 49.8 million.

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TCS Group Holding plc published this content on 12 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2020 08:18:06 UTC

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