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Presented by: VTB Bank, Custody

August 20, 2020 Issue No. 2020/32

Legislation

Russia, Malta agree to raise tax on dividends, interest to 15% On August 14, 2020 Russia’s Finance Ministry said that Russia and Malta agreed to increase tax on dividends and interest to 15%. On August 13, 2020, the authorities of Russia and Malta agreed on a draft protocol to amend the Convention between the two states on prevention of double taxation and tax avoidance concerning income taxes and also agreed to increase tax on dividends and interest to 15%, except for a limited list of institutional investment. Russian President Vladimir Putin suggested in March imposing a 15% tax on dividend yield withdrawn to accounts in foreign jurisdictions, which would require adjustments to agreements on avoidance of double taxation with other countries. Russia will cancel such deals unilaterally if the agreements are not reached. On August 10, an agreement on the Russian terms of new taxation deal was reached with Cyprus.

Company News

Mobile operator MTS buys back 0.075% of its share capital On August 14, 2020 it was reported that Bastion, a wholly-owned subsidiary of major Russian mobile operator MTS, has acquired 1,500,770 MTS shares, including American depositary receipts, representing 0.075% of the operator’s share capital. The shares were acquired under the repurchase plan announced on March 31. Under the Russian law, MTS must disclose any shares acquired by the company or any of its subsidiaries.

Rosneft buys back USD 800,000 securities on August 10–14, 2020 On August 17, 2020 it was announced that Russian oil major Rosneft bought back 155,017 shares and global depositary receipts (GDRs) for USD 800,000 on August 10–14. The company bought 42,070 common shares and 112,947 GDRs. The weighted average price stood at USD 5.1 apiece. Since the launch of USD 2 bln buyback program on March 23, the company bought back 44.816 mln securities for USD 196.2 mln.

TMK applies for delisting from London Stock Exchange On August 17, 2020 it was stated that Russian oil and gas pipe maker TMK sent an application for delisting of its global depositary receipts (GDRs) from the London Stock Exchange (LSE). The delisting is expected to take place on September 16. TMK is to delist the GDRs from the LSE as continuation of a decision of TMK’s board of directors of April 8, 2020 not to consider prolonging the GDR listing on the LSE as strategic priority after completion of a voluntary offer of the Volzhsky Pipe Plant, a 100% affiliate of TMK on the acquisition of TMK shares. It is expected that delisting will be held on September 16, 2020. TMK said in April it would buy back 34.7% in the company for RUB 61 per security and after that delist from the LSE. At the end of July, the shareholders presented about 230 mln shares, or 22.3% of the capital for RUB 14.027 bln.

RUSAL expects switch into Russian jurisdiction until end of September 2020 On August 18, 2020 it was reported that aluminum giant UC expects re-registration from the Jersey Island into the Russian jurisdiction to finish at the end of September 2020. The date of registration depends on the date of approval by regulatory bodies, and may change. Shareholders of RUSAL approved re- registration in August 2019.

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Former deputy minister Ismailov becomes VimpelCom president On August 19, 2020 the board of directors of Russian mobile operator VimpelCom, working as Beeline, appointed former Deputy Digital Development Minister Rashid Ismailov as the company’s president. Ismailov was working at the ministry since 2013 till 2018. VimpelCom’s charter understands the president as the one responsible for management of provision of connection services for certain state authorities. The changes will not impact the current operating activities of the company or the goals set for the general director. General Director Alexander Torbakhov will remain in charge of operating activities.

Dividends/coupons CEO says to raise share of profit it pays as dividends On August 14, 2020 , CEO of Russian independent gas producer Novatek, said that the company’s board of directors would discuss plans to raise the share of profit it pays as dividends on August 25. In July, Novatek’s Deputy CEO Mark Gyetvay said that the company planned to raise the share of dividend payments, and discuss the issue at the next meeting of the board of directors. Currently, the company’s dividend policy says that it should pay at least 30% of the net profit calculated under International Financial Reporting Standards (IFRS) in dividends.

ALROSA to pay no dividends for January–June 2020 over low free cash flow On August 14, 2020 Alexei Filippovsky, Deputy CEO of Russian diamond mining giant ALROSA, said that the company would pay no dividends for January–June 2020 due to a low free cash flow in the period. On June 25, the shareholders approved payment of RUB 19.4 bln in dividends for July–December 2019, which accounted for 100% of the company’s free cash flow for the period, the maximum allowed by the dividend policy. The Russian government owns a 33.03% stake in ALROSA, the Yakutia republic 25% plus one share, districts of the republic 8%, the free float is about 34%.

Rusagro board of directors recommends USD 25.6 mln in interim dividends On August 14, 2020 the board of directors of Russian agricultural holding Rusagro recommended paying USD 25.561 mln in interim dividends. The shareholders are to consider the recommendation at an extraordinary general meeting on September 18. Taking into account that the company owns 2,135,313 own GDRs (global depositary receipts with each GDR accounting for 1 share) that would be excluded from distribution of dividends, the company will pay USD 0.95 per share or USD 0.19 per GDR. Excluding the treasury GDRs, the family of Russian businessman Vadim Moshkovich owns around 71.9% in Rusagro, CEO Maxim Basov holds 7.3%, and free-float accounts for 20.8%.

Detsky Mir board recommends paying RUB 2.5 per share in 2019 dividends On August 17, 2020 the board of directors of Russia’s largest children goods retailer Detsky Mir recommended paying another RUB 2.5 per share, or a total of RUB 1.85 bln, from undistributed profit for October–December 2019 in dividends for 2019. In July, the shareholders approved paying RUB 2.217 bln, or RUB 3 per common share, in final dividends for 2019.

Tatneft board recommends paying RUB 9.94 per share in January–June 2020 dividends On August 18, 2020 the board of directors of Russian oil company Tatneft recommended paying RUB 9.94 per share in dividends for January–June. The shareholders will consider the recommendation at an extraordinary general meeting on September 30. The record date is recommended to be set at October 12.

En+ Group unlikely to pay dividends in 2020 On August 18, 2020 Gregory Barker, executive chairman of the board of En+ Group, stated that the company was unlikely to pay dividends in 2020 and cannot make forecasts for 2021 so far. En+ Group pays dividends at least twice a year in 2017, amounting to 75% of a free cash flow of the energy segment but at least USD 250 mln per year plus 100% of the dividends received from RUSAL. The company decided against dividends for the 2018 financial year due to extraordinary challenges.

Cherkizovo board recommends RUB 48.79 per share in January–June 2020 dividends On August 19, 2020 the board of directors of Russian meat producer Cherkizovo Group recommended paying RUB 48.79 per share in dividends for January–June. The company paid RUB 48.79 per share in dividends for January–June 2019 as well. The record date is recommended to be set at October 5.

Polyus to pay RUB 244.75 per share in final dividends for 2019 On August 19, 2020 shareholders of Russian gold producer approved a decision to pay RUB 244.75 per share in final dividends for 2019. The company paid RUB 162.98 per share in dividends for January–

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March 2019. Previously, the company paid RUB 131.11 per share in dividends for January–June 2018 and RUB 147.12 in final dividends for the year. Tycoon Said Kerimov is the core shareholder of Polyus.

Qiwi’s board approves USD 0.33 per share in dividends for April–June 2020 On August 19, 2020 the board of directors of Russian payment system operator Qiwi approved paying USD 0.33 per share in dividends upon results of April–June. The dividend record date is September 22, 2020, and the company intends to pay the dividend on September 24, 2020. The holders of American depositary shares (ADSs) will receive the dividend shortly thereafter. Qiwi paid USD 0.28 per share in dividends for April–June 2019. Acting Chief Financial Officer Varvara Kiselyova said at a conference call that Qiwi hopes to spend at least 50% of adjusted net profit calculated under International Financial Reporting Standards on dividends in 2021. Qiwi’s board of directors decided in March that dividends in 2020 are to account for at least 50% of adjusted net profit for the period.

Please be advised that the information presented in this newsletter is based on the following sources: National Settlement Depository (NSD); Clearstream Banking; Euroclear Bank; PRIME-TASS information agency; “Kommersant”, "Rossiyskaya Gazeta”, “Izvestiya, "Vedomosti”, “The Times“ newspapers, and others.

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