«Тинькофф Банк». Консолидированная финансовая информация (2019 год) - часть 1

TCS Group Holding PLC

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

31 March 2019

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

Introduction ......................................................................................................................................................... 5

Operating Environment of the Group .................................................................................................................. 7

Significant Accounting Policies ........................................................................................................................... 7

Critical Accounting Estimates and Judgements in Applying Accounting Policies ............................................... 9

Adoption of New or Revised Standards and Interpretations ............................................................................... 9

New Accounting Pronouncements .................................................................................................................... 10

Cash and Cash Equivalents ............................................................................................................................. 10

Loans and Advances to Customers .................................................................................................................. 11

Investments in Debt Securities ......................................................................................................................... 23

Repurchase Receivables .................................................................................................................................. 23

Customer Accounts .......................................................................................................................................... 24

Share Capital .................................................................................................................................................... 24

Net margin ........................................................................................................................................................ 25

Fee and Commission Income and Expense ..................................................................................................... 26

Customer Acquisition Expense ......................................................................................................................... 27

Administrative and Other Operating Expenses ................................................................................................. 27

Dividends .......................................................................................................................................................... 28

Segment Analysis ............................................................................................................................................. 28

Management of Capital ..................................................................................................................................... 33

Contingencies and Commitments ..................................................................................................................... 34

Fair Value of Financial Instruments .................................................................................................................. 36

Related Party Transactions .............................................................................................................................. 39

Events after the End of the Reporting Period ................................................................................................... 40

TCS Group Holding PLC
Consolidated Condensed Interim Statement of Financial Position

The notes № 1-23 are an integral part of this Consolidated Condensed Interim Financial Information.

In millions of RR

Note

31 March 2019

(Unaudited)

31 December

2018

ASSETS

Cash and cash equivalents

31,217

33,802

Mandatory cash balances with the CBRF

2,616

2,435

Due from other banks

571

776

Loans and advances to customers

241,125

198,489

Financial derivatives

947

1,710

Investments in debt securities

70,374

100,140

Repurchase receivables

24,812

1,182

Guarantee deposits with payment systems

4,477

4,603

Current income tax assets

1,104

Deferred income tax assets

736

Tangible fixed assets and right-of-use assets

10,364

8,369

Intangible assets

4,478

4,223

Other financial assets

14,397

15,642

Other non-financial assets

2,769

3,024

TOTAL ASSETS

408,893

375,499

LIABILITIES

Due to banks

24,482

2,708

Customer accounts

281,762

280,916

Debt securities in issue

10,337

9,605

Financial derivatives

Current income tax liabilities

2,831

Deferred income tax liabilities

1,821

Subordinated debt

19,287

20,644

Insurance provisions

3,195

2,859

Other financial liabilities

14,393

11,201

Other non-financial liabilities

5,626

3,441

TOTAL LIABILITIES

361,949

333,249

EQUITY

Share capital

188

Share premium

8,623

Treasury shares

(3,164)

(3,670)

Share-based payment reserve

756

1,232

Retained earnings

40,231

36,785

Revaluation reserve for investments in debt securities

(1,144)

Equity attributable to shareholders of the Company

46,707

42,014

Non-controlling interest

237

236

TOTAL EQUITY

46,944

42,250

TOTAL LIABILITIES AND EQUITY

408,893

375,499

Approved for issue and signed on behalf of the Board of Directors on 13 May 2019.

_____________________

____________________

Constantinos Economides

Mary Trimithiotou

Director

TCS Group Holding PLC
Consolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income

The notes № 1-23 are an integral part of this Consolidated Condensed Interim Financial Information.

Unaudited

In millions of RR

Note

Three months

ended

31 March 2019

Three months

ended

31 March 2018

Interest income calculated using the effective interest rate method

22,718

17,609

Other similar income

103

Interest expense calculated using the effective interest rate method

(4,287)

(3,425)

Other similar expense

(33)

Expenses on deposit insurance

(402)

(241)

Net margin

18,099

14,046

Credit loss allowance for loans and advances to customers

(4,851)

(3,221)

Credit loss allowance for debt securities at FVOCI

(20)

Total credit loss allowance for debt financial instruments

(4,812)

(3,241)

Net margin after сredit loss allowance

13,287

10,805

Fee and commission income

7,769

5,785

Fee and commission expense

(3,374)

(2,007)

Customer acquisition expense

(4,657)

(3,481)

Net losses from operations with foreign currencies

(251)

(461)

Net gains from disposals of debt securities at FVOCI

271

Net gains/(losses) from debt instruments at FVTPL

387

(18)

Insurance premiums earned

2,310

1,158

Insurance claims incurred

(822)

(341)

Administrative and other operating expenses

(6,413)

(4,817)

Other operating income

1,021

506

Profit before tax

9,265

7,400

Income tax expense

(2,085)

(1,672)

Profit for the period

7,180

5,728

Other comprehensive income/(loss):

Items that may be reclassified to profit or loss

Debt securities at FVOCI and Repurchase receivables:

- Net gains arising during the period, net of tax

1,224

169

- Net gains reclassified to profit or loss upon disposal, net of tax

(7)

(217)

Other comprehensive income/(loss) for the period, net of tax

1,217

(48)

Total comprehensive income for the period

8,397

5,680

Profit/(loss) is attributable to:

- Shareholders of the Company

7,179

5,732

- Non-controlling interest

(4)

Total comprehensive income/(loss) is attributable to:

- Shareholders of the Company

8,396

5,684

- Non-controlling interest

(4)

Earnings per share for profit attributable to the Shareholders of

the Company, basic (expressed in RR per share)

40.42

32.48

Earnings per share for profit attributable to the Shareholders of

the Company, diluted (expressed in RR per share)

39.77

31.54

TCS Group Holding

Consolidated Conden

Inter

atement of

Cha

nges in Equit

№

-23

are a

teg

ral par

t of

Con

sol

idat

ed C

onden

sed

Int

rim

l I

nformation.

ttr

ibutable to shar

eholder

of the Compan

In m

illions of R

Note

Share capital

Share

mium

Share- based

yment

ser

Rev

aluation

ser

inv

estments

in debt

secur

ities

easur

shar

ine

ear

nings

Total

Non-

contr

ling

Inter

est

Total equit

alance at 31 D

ecember

201

188

8,623

1,286

1,436

(1,587)

31,797

41,743

202

41,945

Effect of initial ap

plicat

ion of IF

– EC

L remeasurement,

net of tax

292

(10,108)

(9,816)

Effect of initial ap

plicat

ion of IF

– other, net of tax

(39)

estated balance at 1 Januar

2018

188

8,623

1,286

1,767

(1,587)

21,650

31,927

202

32,129

Profit/(loss) for the period

5,732

(4)

5,728

ther comprehensiv

e los

Inv

estments in d

ebt securities at

FVO

I and

epurchase

recei

vab

les

(48)

Total compr

ehensiv

e income/(loss) for

the per

iod (Unaudi

ted)

(48)

5,732

5,684

(4)

5,680

Share-based pay

ment reserv

(477)

373

312

208

idends declared

(3,216)

alance at 31 Mar

ch 2018 (U

naudited)

188

8,623

809

1,719

(1,214)

24,478

34,603

198

34,801

alance at 1 Januar

y 2019

188

8,623

1,232

(1,144)

(3,670)

36,785

42,014

236

42,250

Profit for the period

7,179

7,180

ther comprehensiv

e inc

ome:

Inv

estments in d

ebt securities at

FVO

I and

epurchase

recei

vab

les

1,217

Total compr

ehensiv

e income for

the per

iod (Unaudited)

1,217

7,179

8,396

8,397

Share-based pay

ment reserv

(476)

506

115

145

idends declared

(3,848)

alance at 31 Mar

ch 2019 (U

naudited)

188

8,623

756

(3,164)

40,231

46,707

237

46,944

TCS Group Holding PLC
Consolidated Condensed Interim Statement of Cash Flows

The notes № 1-23 are an integral part of this Consolidated Condensed Interim Financial Information.

Unaudited

In millions of RR

Note

Three months

ended

31 March 2019

Three months

ended

31 March 2018

Cash flows from operating activities

Interest income received calculated using the effective interest rate

method

21,173

15,564

Other similar income received

144

Interest expense paid calculated using the effective interest rate

method received

(3,827)

(2,861)

Recoveries from written-off loans

727

571

Expenses on deposits insurance paid

(344)

(181)

Fees and commissions received

7,674

5,331

Fees and commissions paid

(3,569)

(2,033)

Customers acquisition expense paid

(4,410)

(3,550)

Cash paid from trading in foreign currencies and operations with

financial derivatives

(89)

(134)

Cash received from insurance operations

1,741

905

Other operating income received

369

902

Administrative and other operating expenses paid

(5,590)

(3,941)

Income tax paid

(1,082)

(1,476)

Cash flows from operating activities before changes in

operating assets and liabilities

12,917

9,136

Changes in operating assets and liabilities

Net increase in CBRF mandatory reserves

(181)

(118)

Net decrease/(increase) in due from banks

205

(512)

Net increase in loans and advances to customers

(46,102)

(11,986)

Net decrease in debt securities measured at FVTPL

4,578

121

Net increase in guarantee deposits with payment systems

(145)

Net decrease in other financial assets

1,553

4,577

Net increase in other non-financial assets

(27)

(1,180)

Net increase/(decrease) in due to banks

21,774

(379)

Net increase in customer accounts

4,321

3,192

Net increase/(decrease) in other financial liabilities

2,611

(2,596)

Net decrease in non-financial liabilities

(373)

(119)

Net cash from operating activities

1,131

136

Cash flows used in investing activities

Acquisition of tangible fixed assets

(591)

(101)

Acquisition of intangible assets

(502)

(353)

Acquisition of debt securities at FVOCI and repurchase receivables

(30,277)

(23,997)

Proceeds from sale and redemption of debt securities at FVOCI

31,383

13,386

Net cash from/(used in) investing activities

(11,065)

Cash flows used in financing activities

Proceeds from debt securities in issue

888

Proceeds of perpetual loan participation notes

Dividends paid

(3,654)

Cash outflow for lease liabilities

(313)

Repayment of debt securities in issue

(551)

Repayment of subordinated loan

(16)

Net cash used in financing activities

(3,033)

(567)

Effect of exchange rate changes on cash and cash equivalents

(696)

Net decrease in cash and cash equivalents

(2,585)

(11,471)

Cash and cash equivalents at the beginning of the period

33,802

23,850

Cash and cash equivalents at the end of the period

31,217

12,379

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Introduction

This consolidated condensed interim financial information for the three months ended 31 March 2019 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, Philippe
Delpal, Jacques Der Megreditchian and Martin Robert Cocker.

The Company Secretary is Caelion Secretarial Limited, 25 Spyrou Araouzou, 25 Berengaria, 5

floor,

Limassol 3036, Cyprus.

At 31 March 2019 and 31 December 2018 the share capital of the Group 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 31 March 2019 the number of issued “class A” shares is 102,624,601 and
issued “class B” shares is 80,014,224 (31 December 2018: the number of issued “class A” shares is
96,239,291 and issued “class B” shares is 86,399,534).

On 25 October 2013 the Group completed an initial public offering of its “Class A” ordinary shares in the
form of global depository receipts (GDRs) listed on the London Stock Exchange plc.

As at 31 March 2019 and 31 December 2018 the entities and the individuals holding either Class A or Class
B shares of the Company were:

Class of

shares

31 March 2019

(Unaudited)

31 December

2018

Country of

Incorporation

Guaranty Nominees Limited
(JP Morgan Chase Bank NA)

Class A

56.19%

52.70% United Kingdom

Altoville Holdings Limited

Class B

20.16%

23.65%

Cyprus

Nemorenti Limited

Class B

23.65%

Cyprus

Ioanna Georgiou

Class A

0.00%

Cyprus

Panagiota Charalambous

Class A

0.00%

Cyprus

Maria Vyra

Class A

0.00%

Cyprus

Marios Panayides

Class A

0.00%

Cyprus

Chloi Panagiotou

Class A

0.00%

Cyprus

Leonora Chagianni

Class A

0.00%

Cyprus

Total

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.

As at 31 March 2019 and 31 December 2018 the beneficial owner of Altoville Holdings Limited and
Nemorenti Limited was Russian entrepreneur Mr. Oleg Tinkov. The six individuals listed above each hold
one share. The individuals hold them as nominees of Altoville Holdings Limited.

As at 31 March 2019 and 31 December 2018 the ultimate controlling party of the Company is
Mr. Oleg Tinkov. Mr. Oleg Tinkov controls approximately 88.63% of the aggregated voting rights attaching
to the Class A and B shares as at 31 March 2019 (31 December 2018: 89.98%) excluding voting rights
attaching to TCS Group Holding PLC GDRs he holds, if any.

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Introduction (Continued)

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 31 March 2019 and 31 December 2018.

JSC “Tinkoff Bank” (the “Bank”) provides on-line retail banking services in Russia. The Bank specialises in
issuing credit cards.

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 and distribution services to the Group.

Goward Group Ltd is an investment holding company which manages part of the Group’s assets. Since February
2018 Goward Group Ltd was in liquidation process, and on 16 April 2019 the company was liquidated.

LLC “Phoenix” is a debt collection agency.

Tinkoff Software DC provides software development services to the Group.

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. The Group owns a 55% shareholding in LLC CloudPayments.

ANO “Tinkoff Education” is a non-commercial organization set up by the Bank with no share capital. This
entity is in the process of receiving of educational license.

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, 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 of individuals insurance in the Russian Federation” dated 23 December 2003. The
State Deposit Insurance Agency guarantees repayment of 100% of individual deposits up to RR 1.4 million
per individual 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, 5

floor, Limassol, Cyprus, and place of business is Office 403, Lophitis Business Centre,

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).

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Operating Environment of the Group

Russian Federation.

The Russian Federation displays certain characteristics of an emerging market. Its

economy is particularly sensitive to oil and gas prices. The legal, tax and regulatory frameworks continue
to develop and are subject to frequent changes and varying interpretations (Note 20).

In recent years, the Russian economy has been negatively impacted by ongoing political tension in the
region and international sanctions against certain Russian companies and individuals.

The financial markets continue to be volatile. This operating environment has a significant impact on the
Group’s operations and financial position. Management regularly takes necessary measures to maximize
the stability of the Group’s operations. However, the future effects of the current economic situation are
difficult to predict and management’s current expectations and estimates could differ from actual results.

With respect of Rouble interest rates, CBRF “key rate” amounted to 7.75% per annum as at 31 March 2019
(1 January 2018: 7.75%).

The Group actively monitors the situation in the Russian banking sector, and the activity of CBRF in
response to current and newly developed requirements and any sanctions against the participants who
breach them. Management of the Group believes it is highly important to participate in the discussion of
legislation development in the banking sphere and supports the intention of the CBRF to make the finance
market more transparent and disciplined.

For the purpose of measurement of expected credit losses (“ECL”) the Group uses supportable forward-
looking  information,  including  forecasts  of  macroeconomic  variables.  As  with  any  economic  forecast,
however,  the  projections  and  likelihoods  of  their  occurrence  are  subject  to  a  high  degree  of  inherent
uncertainty and therefore the actual outcomes may be significantly different from those projected.

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 2018 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 2018.

Right-of-use assets and lease liabilities.

From 1 January 2019, leases, where the Group is the lessee,

are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group. Each lease payment is allocated between the liability and finance cost. The
finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over
the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:

fixed payments (including in-substance fixed payments), less any lease incentives receivable under
cancellable and non-cancellable operating leases;

variable lease payments that are based on an index or a rate;

amounts expected to be payable by the lessee under residual value guarantees;

the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and

payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Significant Accounting Policies (Continued)

The lease term includes any non-cancellable and optional extension periods which have been assessed
as reasonably certain to be exercised under IFRS 16. The lease payments are discounted using the interest
rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used,
being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar
value in a similar economic environment with similar terms and conditions. Right-of-use assets are
measured at cost comprising the following:

the amount of the initial measurement of lease liability;

any lease payments made at or before the commencement date less any lease incentives received;

any initial direct costs; and

restoration costs.

Right-of-use  assets  are  included  in  tangible  fixed  assets,  lease  liabilities  are  included  in  other  non-financial
liabilities  in  the  consolidated  condensed  interim  statement  of  financial  position.  Depreciation  of  right-of-use
assets are recognised in administrative and other operating expenses in the consolidated condensed interim
statement of profit or loss and other comprehensive income. Finance cost is recognised within other similar
expense line of the consolidated condensed interim statement of profit or loss and other comprehensive income.
Cash  outlow  for  lease  liabilities  is  disclosed  within  cash  flows  from  financing  activities  of  the  consolidated
condensed interim statement of cash flows.

Other similar expense.

Other similar expense represents finance cost related to the discounted lease

payments using the incremental borrowing rate.

Forward-looking information incorporated in the ECL models.

The calculation of ECLs incorporates

forward-looking information. The Group has updated the key economic variables impacting credit risk and
ECLs for each portfolio, which resulted in a decrease in credit loss allowances by RR 73 million as at

31 March 2019

. The list of key variables is as follows:

Russian stock market index MOEX;

Indicative offered interest rate on the Russian money market MosPrime Rate;

Debt load of Russian population based on statistics from bureaus of credit history.

The impact of these economic variables on the ECL has been determined by performing statistical regression
analysis in order to understand the way how changes in these variables historically impacted default rates. Three
different scenarios are used: base, optimistic and pessimistic. The scenarios are weighted accordingly with base
scenario having the highest weight and with optimistic and pessimistic scenarios having approximately equal
weights. If a 100% weight is applied to any of the scenarios the effect on the ECL is not material.

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.

The management does not consider that the Group’s business exhibits material differences due

to seasonality.

Foreign currency translation.

At 31 March 2019 the rate of exchange used for translating foreign currency

balances was USD 1 = RR 64.7347 (31 December 2018: USD 1 = RR 69.4706), and the average rate of
exchange was USD 1 = RR 66.1271 for the three months ended 31 March 2019 (three months ended
31 March 2018: USD 1 = RR 56.8803).

Changes in presentation.

From 1 January 2019 the management of the Group made a detailed review of

the VAT expenses recognised in administrative and other operating expenses and using improved technical
reports identified the part of VAT expenses which are related to the customer acquisition expenses. The
management concluded it was appropriate to reclassify these expenses from Administrative and other
operating expenses to Customer acquisition expense.

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Significant Accounting Policies (Continued)

The effect of changes on the consolidated condensed interim statement of profit or loss and other
comprehensive income for the three months ended 31 March 2018 is as follows:

Unaudited

In millions of RR

As originally

presented

Reclassification

As reclassified

Customer acquisition expense

(3,149)

(332)

(3,481)

Administrative and other operating expenses

(5,149)

332

(4,817)

The effect of changes on the consolidated condensed interim statement of cash flows for the three months
ended 31 March 2018 is as follows:

Unaudited

In millions of RR

As originally

presented

Reclassification

As reclassified

Customer acquisition expense paid

(3,218)

(332)

(3,550)

Administrative and other operating expenses paid

(4,273)

332

(3,941)

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 are consistent with those disclosed in the annual consolidated financial statements for the
year ended 31 December 2018 except for the changes in ECL measurement models described in Note 3.

Adoption of New or Revised Standards and Interpretations

Certain new standards, interpretations and amendments to the existing standards, as disclosed in the
consolidated financial statements for the year ended 31 December 2018, became effective for the Group
from 1 January 2019.

Adoption of IFRS 16, Leases (issued on 13 January 2016 and effective for annual periods beginning
on or after 1 January 2019).

The Group has adopted IFRS 16 with a date of transition of 1 January 2019

and applied the standard using the modified retrospective method, without restatement of comparatives.
The Group recognised a right of use asset of RR 1,684 million against a corresponding lease liability on
1 January 2019. Right-of-use assets are mainly represented by office premises.

A reconciliation of the operating lease commitments to this liability is as follows:

In millions of RR

31 March 2019

(Unaudited)

1 January

2019

Future lease payments under operating lease

2,005

1,892

Future lease payments that are due in the periods subject to lease
extension options that are reasonably certain to be excercised

Effect of discounting to present value (the incremental borrowing rate
used 7.35% (weighted average))

(207)

(217)

Total lease liabilities

1,808

1,684

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Adoption of New or Revised Standards and Interpretations (Continued)

The following amended standards and interpretations became effective for the Group from 1 January 2019,
but did not have any material impact on the Group:

IFRIC 23 "Uncertainty over Income Tax Treatments" (issued on 7 June 2017 and effective for annual
periods beginning on or after 1 January 2019).

Prepayment Features with Negative Compensation – Amendments to IFRS 9 (issued on 12 October
2017 and effective for annual periods beginning on or after 1 January 2019).

Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures” (issued on 12 October
2017 and effective for annual periods beginning on or after 1 January 2019).

Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement” (issued on 7 February 2018
and effective for annual periods beginning on or after 1 January 2019).

Annual Improvements to IFRSs 2015-2017 cycle – amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23
(issued on 12 December 2017 and effective for annual periods beginning on or after 1 January 2019).

New Accounting Pronouncements

Since the issuance of the 2018 annual consolidated financial statements no new standards and interpretations
have been issued that are mandatory for the annual periods beginning on or after 1 January 2019 or later, and
which the Group has not early adopted.

Cash and Cash Equivalents

In millions of RR

31 March 2019

(Unaudited)

31 December

2018

Cash on hand

4,632

5,839

Cash balances with the CBRF (other than mandatory reserve deposits)

7,830

11,158

Placements with other banks and non-bank credit organizations with
original maturities of less than three months

18,755

16,805

Total Cash and Cash Equivalents

31,217

33,802

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 5,468 million as at 31 March 2019 (31 December 2018:
RR 11,147 million). The Group has a right to sell or repledge securities received under reverse sale and
repurchase agreements.

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 31 March 2019 the fair value of collateral under reverse sale
and repurchase agreements was RR 5,938 million (31 December 2018: RR 12,389 million). There is no material
impact of collateral on credit loss allowance for cash and cash equivalents. Refer to Note 21 for the disclosure
of the fair value of cash and cash equivalents.

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Loans and Advances to Customers

31 March 2019 (Unaudited)

31 December 2018

In millions of RR

Gross

carrying

amount

Credit loss

allowance

Carrying

amount

Gross

carrying

amount

Credit loss

allowance

Carrying

amount

Credit card loans

199,259

(34,354)

164,905

178,396

(33,296)

145,100

Cash loans

47,631

(3,358)

44,273

35,194

(2,331)

32,863

POS loans

17,653

(574)

17,079

15,275

(460)

14,815

Other loans

15,184

(316)

14,868

5,845

(134)

5,711

- Car loans

5,947

(189)

5,758

2,838

(85)

2,753

- Secured loans

8,745

(60)

8,685

2,644

(16)

2,628

- Loans to SME

492

(67)

425

363

(33)

330

Total loans and advances
to customers at AC

279,727

(38,602)

241,125

234,710

(36,221)

198,489

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.

POS (“Point of sale”) loans represent POS lending through the Bank’s programme “POS loans” (KupiVKredit).
This programme funds 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.

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

Loans to SME represent loans provided by 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 of purchased loans
and loans to new borrowers (for this particular product) before their first repayment became due. The
related ECL represents the day one ECL on the purchase or origination of these loans;

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;

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 changes in ECL model assumptions including those
arising from update of inputs to ECL model in the period;

write-offs of allowances are related to assets that were written-off during the period;

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.

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Loans and Advances to Customers (Continued)

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 periods

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Total

In millions of RR

(12-

months

ECL)

(lifetime

ECL for

SICR)

(lifetime

ECL for

credit

im-

paired)

(12-

months

ECL)

(lifetime

ECL for

SICR)

(lifetime

ECL for

credit

im-

paired)

Credit card loans

At 31 December 2018

9,266

4,708

19,322

33,296

145,732

6,654

26,010

178,396

Movements with impact
on credit loss allowance
charge for the period:

New originated or
purchased

1,112

14,131

Transfers:

- to lifetime (from Stage
1 to Stage 2)

(1,737)

4,385

2,648

(6,767)

6,767

- to credit-impaired
(from Stage 1 and
Stage 2 to Stage 3)

(160)

(3,312)

3,983

511

(636)

(4,144)

4,780

- recovered (from Stage
3 to Stage 2 and from
Stage 2 to Stage 1)

299

(924)

(20)

(645)

1,390

(1,367)

(23)

Movements other than
transfers and new
originated or purchased
loans

802

856

(978)

680

10,964

335

(1,308)

9,991

Total movements with
impact on credit loss
allowance charge for
the three months
ended 31 March 2019

316

1,005

2,985

4,306

19,082

1,591

3,449

24,122

Movements without
impact on credit loss
allowance charge the
three months ended
31 March 2019:

Unwinding of discount
(for Stage 3)

619

Write-offs

(3,271)

Sales

(102)

(113)

Modification of original
cash flows without
derecognition

(494)

At 31 March 2019

9,582

5,713

19,059 34,354 164,814

8,245

26,200 199,259

TCS Group Holding PLC
Notes to the Consolidated Condensed Interim Financial Information – 31 March 2019

Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

In millions of RR

Stage 1

(12-

months

ECL)

Stage 2

(lifetime

ECL for

SICR)

Stage 3

(lifetime

ECL for

credit

im-

paired)

Total

Stage 1

(12-

months

ECL)

Stage 2

(lifetime

ECL for

SICR)

Stage 3

(lifetime

ECL for

credit

im-

paired)

Total

Credit card loans

At 1 January 2018

9,064

5,319

21,689

36,072

121,988

6,958

25,874

154,820

Movements with impact
on credit loss allowance
charge for the period:

New originated or
purchased

867

6,266

Transfers:

- to lifetime (from Stage
1 to Stage 2)

(1,487)

4,116

2,629

(5,772)

5,772

- to credit-impaired
(from Stage 1 and
Stage 2 to Stage 3)

(145)

(3,668)

4,510

697

(524)

(4,543)

5,067

- recovered (from Stage
3 to Stage 2 and from
Stage 2 to Stage 1)

382

(1,101)

(55)

(774)

1,497

(1,436)

(61)

Movements other than
transfers and new
originated or purchased
loans

210

1,032

(1,180)

4,105

699

(1,234)

3,570

Total movements with
impact on credit loss
allowance charge for
the three months
ended 31 March 2018

(173)

379

3,275

3,481

5,572

492

3,772

9,836

Movements without
impact on credit loss
allowance charge for
the three months ended
31 March 2018:

Unwinding of discount
(for Stage 3)

1,000

Write-offs

(4,762)

Modification of original
cash flows without
derecognition

(326)

At 31 March 2018

8,891

5,698

20,876

35,465

127,560

7,450

25,558

160,568

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