RU
Aug 29, 2017
Performance results of the Public Joint-Stock Company FUTURE Financial Group in H1 2017

Moscow, Russia - August 29, 2017 - Public Joint-Stock Company Future Financial Group (MOEX: FTRE) (hereinafter - the Company or the Group), the public company unifying several of the largest non-state pension funds in Russia, announces the unaudited financial results of the Group for H1 2017, which ended on June 30, 2017. These financial results have been prepared in compliance with international financial reporting standards.1

IMPLEMENTATION OF OPERATING AND STRATEGIC TASKS

  • As of June 30, 2017, the Group's assets increased by 12% (RUB 40.8 bln) and reached RUB 390 bln, including managed assets2, which grew by 15% (RUB 44.8 bln), to RUB 334.2 bln since December 31, 2016.
  • The operating results remained at a level comparable with H1 2016, and amounted to RUB 6.2 bln for H1 2017.
  • The Group is successfully continuing its campaign for attracting insured people through its diversified network of sales channels throughout Russia. Pension savings added RUB 43.6 bln for H1 2017.3
  • Non-state pension funds owned by the Group collectively occupy 4th place in Russia by pension savings and 3rd place by number of insured people. The largest fund of the Group - NPF FUTURE JSC - is in the top 10 of the largest Russian funds and occupies the 2nd place by pension savings and the number of insured people.

KEY INDICATORS FOR H1

  • Net profit in H1 2017 amounted to RUB 4.7 bln. As of June 30, 2017, accumulated profit amounted to RUB 1.3 bln.
  • Contributions under compulsory pension insurance (CPI) contracts for H1 2017 increased by 38% (RUB 11.8 bln), to RUB 42.9 bln; contributions under non-state pension insurance (NPI) remained at a level comparable with H1 2016.
  • As of June 30, 2017, the number of clients under CPI and NPI amounted to 5.1 mln people.
  • Cash balance at the end of the reporting period amounted to RUB 49 bln.
  • Profit payable to the Company's shareholders increased by 36%, to RUB 109.1209 per ordinary share (against RUB 80.3298 in the comparable period of 2016).

Notice: The investment income is distributed to the accounts of insured people and participants following the results of the calendar year, and will be reflected in the Group's annual statement. Current performance result under CPI and NPI is reflected in the profit and loss statement without distribution, thus being of intermediate nature.

MAIN CORPORATE EVENTS OF H1

  • On May 17, 2017, the Extraordinary General Shareholders Meeting of the Company made a resolution to increase the Company's authorized capital through placement of additional shares. 4.
  • On June 30, 2017, the first Annual General Shareholders Meeting of the Company took place in Moscow, and the following key decisions were made:
    • the new composition of the Board of Directors consisting of 7 persons was elected and included: Sergey Areshev, Aleksandr Dolzhitch, Dmitry Mints, Igor Mints, Pavel Nezhutin, Marina Rudneva, Nikolay Sidorov;
    • BDO Unicon JSC was appointed as auditor of the Company's financial and operating activities in 2017 and Q1 2018.
  • Pavel Nezhutin, Director of the Corporate Governance Department of Rostelecom PJSC, Board member of OPIN PJSC, Board member of Noviy Registrator JSC, the winner of the Fifth National Prize "Director of the Year" established by the Russian Independent Directors Association in the nomination Director for Corporate Governance – Corporate Secretary, was invited to the Company's Board of Directors for further improvement of corporate governance quality.
  • On April 5-7, 2017, the Group's management participated in the annual Exchange Forum of the Moscow Exchange organized with the participation of Sberbank CIB and held on April 5-7 in Moscow.
  • Starting from May 2, 2017 Expert RA has been using the holding company credit capacity methodology when assigning ratings. Due to termination of the methodology, the Rating Agency RAEX (Expert RA) has withdrawn the Company's rating without confirmation.

EVENTS AFTER THE REPORTING DATE

  • On July 21, 2017 the Company and its major shareholder, the company FUTURE FINANCIAL GROUP (CYPRUS) LIMITED owning the Company's shares accounting for 75.000003% of its authorized capital, signed a loan agreement for the amount of RUB 3 bln. This is a framework agreement and the loan will be provided by installments in accordance with the Group's needs with the repayment period of each installment to be determined separately. The interest rate under this agreement is 4% per annum. As of the statement release date, the amount of granted loans reached RUB 90.653 thousand, with a repayment period until December 31, 2017.
  • In August 2017 O1 GROUP LIMITED, being the Group's indirect shareholder, repaid the loan attracted by the Company from ROST BANK JSC in the amount of RUB 0.5 bln. The loan claim right was transferred to the shareholder.

CEO of FUTURE Financial Group PJSC Marina Rudneva commented:

"At the end of H1, the Group demonstrated stable results comparable with previous periods. We continued development, both by means of organic growth drivers, such as investment income and attracting insured people, and by synergy from previous M&A transactions, which allowed us to improve our expertise considerably.

The Group is among the market leaders: we occupy fourth place by managed pension savings, and third place by the number of insured people, with our flagship fund NPF FUTURE being number two on the market, both by the scope of assets, and by the number of CPI clients. We continue developing new services, and improving service quality for our clients, the number of which has already reached 5 mln people.

The pension market is currently at its most active development stage, and we consider it important to improve the legal framework in the part of changing the transfer procedure and including the application possibility to the current insurer. This will not only protect the rights of insured people, but also provide conditions for healthy competition. It is also important for us to go through all key parameters of IPC before its launch, including making a unanimous decision on automatic subscription, instruments promoting participation of people in the system, as well as the necessity of establishing a central administrator.

Introduction of the permanent management fee component is also being discussed actively. We support the discussion process, and the approval of the bill with a fee of 0.75% of net assets in the State Duma in July was positive news for us. Introduction of fiduciary responsibility for non-state pension funds along with the remuneration system assuming the management fee will allow protecting the interests of NPF clients in the part of return of pension savings, as well as stimulating business for long-term presence in the industry and its development, in particular, to make investments for longer terms, including into infrastructure projects, thus selecting more suitable instruments. That is why the Group keeps its active position in the dialog with the Government, the Bank of Russia, and key market players and we hope to witness considerable development on each of these matters before the end of the year.

The full text of the abbreviated consolidated unaudited intermediate financial statement of the Company under IFRS for H1, which expired on June 30, 2017, is disclosed on the Company's website: http://futurefg.ru/disclosure/#win_9

Performance presentation: http://futurefg.ru/investoram/#win_29

For further information please refer to the Company's website (http://futurefg.ru/).


1 Managed assets - the amount of cash and its equivalent, deposits in banks and financial assets measured at fair value, which changes are reflected in profit and loss.

2 In compliance with the accounting policy of the Group, deferred acquisition costs (commission costs of agents related to execution of mandatory pension insurance and non-state pension insurance contracts) are capitalized and recognized within the time period, when the respective pension savings are received. The Group established this period to be 8 years. Deferred acquisition costs are depreciated by a line method and recognized in the Profit and Loss Statement. Balance indicators as of December 31, 2015, December 31, 2016, and June 30, 2017 have been revised.

3 Without outflow.

4 Additional Issue: 49,174,725 ordinary registered uncertified shares. Offer type: public offering to general public. Offer price: to be determined by the resolution of the Group's Board of Directors upon expiration of the preemptive right to purchase additional shares, but not later than the commencement date of their placement in the amount at least equal to their nominal value. Payment: (1) in cash in the currency of the Russian Federation by bank transfer and/or (2) by handing over to the issuer of the property constituting ordinary registered uncertified shares of one or several joint-stock companies established in the Russian Federation with a license to carry out activities on pension provision and pension insurance. The resolution is effective until November 17, 2017.

Contacts:

IR Service

Anna Krylova

krylova@futurefg.ru

+7 495 554 40 49 (#4596)

+7 909 934 2008

PR Service

pr@futurefg.ru


REVIEW OF KEY FINANCIAL RESULTS AS OF JUNE 30, 2017 BALANCE

ASSETS, RUB thousand 30.06.2017 December 31, 2016 Δ, RUB thousand Δ, %

Managed assets

Cash and
its equivalents

48,962,399

31,360,703

17,601,696

56

     — Current accounts
in banks

4,029,194

20,558,283

(16,529,089)

(80)

     — Fixed-term deposits
with original maturity
less than 90 days

18,469,534

10,353,654 

8,115,880

78

     — Cash on accounts
with brokers

26,463,671

448,766

26,014,905

5,797

Deposits in banks

21,312,219

6,483,774

14,828,445

229

Financial assets
measured at fair value,
which changes are reflected
in profit and loss

263,844,338

251,629,302

12,215,036

5

Total managed
assets

334,118,956

289,473,779

44,645,177

15

Investments into associated companies

5,151,878

7,296,905

(2,145,027)

(29)

Goodwill

43,855,703

43,855,703

0

0

Other assets

6,571,863

8,327,280

(1,755,417)

(21)

TOTAL ASSETS

389,698,400

348,953,667

40,744,733

12

As of June 30, 2017, the Group's assets increased by 12% (RUB 40.7 bln) against December 31, 2016 and amounted to RUB 390 bln. Growth of assets was mainly caused by monetary funds received by the fund on results of the transient campaign 2016 and the fund's investment results (incomes and revaluation of financial instruments).

As of June 30, 2017, the Group's assets portfolio (RUB 390 bln) had the following structure:

  • managed assets, including:
    • financial assets measured at fair value, 67.7% or RUB 263.8 bln,
    • cash and its equivalents, 12.5% or RUB 49 bln,
    • deposits in banks not related to the Group, 5.5% or RUB 21.3 bln,
  • goodwill, 11.3% or RUB 43.9 bln,
  • investments into associated companies, 1.3% or RUB 5.2 bln,
  • other assets, 1.7% or RUB 6.6 bln.

Assets managed by the Group increased by 15% (RUB 44.7 bln) against December 31, 2016 and amounted to RUB 334.2 bln, including:

    — cash and its equivalents increased by 56% (RUB 17.6 bln). In H1 2017 the Group started to use stock-exchange REPO instruments more actively (cash on accounts with brokers increased from RUB 0.5 bln as of December 31, 2016 to RUB 26.5 bln as of June 30, 2017).

    — the scope of long-term deposits in Russian banks which are not related to the Group increased by 229% (RUB 14.8 bln) (from RUB 6.4 bln as of December 31, 2016 to RUB 21.3 bln as of June 30, 2017). Growth of the deposits share in the portfolio was caused by the necessity to promptly place the funds received from the Pension Fund of Russia on results of the transient campaign 2016 at the end of Q1 2017. The average placement period amounts to 4 years. All deposits in the Group's portfolio are placed in banks, which comply with the pension savings placement requirements and have ratings assigned by Moody’s, Fitch Ratings, Standard & Poor’s or Expert RA agencies of a level not lower than that established by the Bank of Russia.

    — positive revaluation of RUB 12.2 bln (from RUB 263.8 bln as of December 31, 2016 to RUB 251.6 bln as of June 30, 2017), including: corporate bonds (+ RUB 11.5 bln), shares (+ RUB 2.8 bln), mortgage securities (- RUB 0.7 bln), state and municipal bonds (- RUB 2.3 bln), and equity participations (+ RUB 1 bln).

Investments into associated companies decreased by 29% (RUB 2.2 bln), to RUB 5.2 bln. Changes in this indicator were caused by revaluation of the share of net assets and currency obligations of associated companies. The Group considers this result to be temporary, and depending on the capital market environment. Performance of the Group's funds is aimed at the long-term investment horizon, which makes reflection of investment management efficiency broken down by annual results impossible, as the annual horizon depends considerably on the short-term market dynamics.

The Group's goodwill amounted to RUB 43.9 bln (NPF FUTURE - RUB 29.4 bln, NPF StalFond - RUB 12 bln, NPF Obrazovaniye - RUB 0.4 bln, NPF Uralsib - RUB 1.3 bln, and NPF Russian Standard CJSC - RUB 0.7 bln). Goodwill remained unchanged in the reporting period.

OBLIGATIONS, RUB thousand 30.06.2017 December 31, 2016 Δ, RUB thousand. Δ, %

Obligations under CPI

296,574,362

259,987,518

36,586,844

14

Obligations under NPI, including:

24,753,921

25,151,512

(397,591)

(2)

  — under insurance contracts

12,823,540

13,750,191

(926,651)

(7)

  — under investment contracts

11,930,381

11,401,321

529,060

5

Accounts payable

4,238,964

4,837,478

(598,514)

(12)

Long-term credits and loans

2,176,186

2,170,875

5,311

0

Deferred tax liabilities

8,424

1,015

7,409

730

Provisions for future expenses

23,787

49,892

(26,105)

(52)

Other obligations

113,804

12,536

101,268

808

TOTAL OBLIGATIONS

327,889,448

292,210,826

35,678,622

12

TOTAL OBLIGATIONS

30.06.2017

December 31, 2016

Δ, RUB thousand

Δ, %

Authorized capital

49,174,725

49,174,725

-

Surplus funds

31,921

13,499

18,422

137

Currency difference fund

(948,537)

(804,016)

-

-

Compulsory pension insurance reserve and insurance reserve

7,256,926

6,730,173

526,753

8

Merger reserves

4,118,121

4,118,121

-

-

Accumulated profit/loss

1,344,515

(4,003,051)

-

-

Total capital related to the Group's shareholders

60,977,671

55,229,451

5,748,220

10

Non-controlling interests

831,281

1,513,390

(682,109)

(45)

Total equity capital

61,808,952

56,742,841

5,066,111

9

As of June 30, 2017, the Group's obligations increased by 12% (RUB 35.7 bln) against December 31, 2016 and amounted to RUB 328 bln. Growth of the Group's obligations was caused by results of the transient campaign 2016:

    — obligations under CPI increased by 14% (RUB 36.6 bln), to RUB 296.6 bln
    — obligations under NPI remained at a comparable level and amounted to RUB 24.8 bln

The Group's equity capital increased by 9% (RUB 5.1 bln), to RUB 61.8 bln against December 31, 2016. Equity capital increased due to growth of reserves under CPI and insurance reserves by 8% (RUB 0.5 bln), to RUB 7.3 bln. As of June 30, 2017, accumulated profit amounted to RUB 1.3 bln.

REVIEW OF KEY FINANCIAL RESULTS FOR H1 2017 STATEMENT OF PROFIT AND LOSS AND OTHER CONSOLIDATED INCOME

RUB thousand for H1 2017 for H1 2016 Δ H1 2016/H1
2017 RUB thousand
Δ, %

Contributions into pension activities:

43,618,044

31,849,997

11,768,047

37

—  under CPI

42,899,385

31,133,755

11,765,630

37

—  under NPI

718,659

716,242

2,417

0

Pension payments:

(6,998,333)

(24,402,543)

-

-

—  under CPI

(5,780,000)

(23,392,391)

-

-

—  under NPI

(1,218,333)

(1,010,152)

-

-

Changes to pension obligations:

(36,716,921)

(7,447,454)

-

-

-  under CPI

(37,114,620)

(7,741,364)

-

-

—  under NPI

397,699

293,910

-

-

Pension activity results:

(97,210)

0

-

-





Investment results, including:

6,417,941

6,223,627

194,314

3

Interest incomes

7 718 361

9,001,789

(1,283,428)

(14)

Dividend incomes

439,961

13,645

426,316

3,124

Profit/(loss) from operations with financial assets measured at fair value by profit or loss

(1,544,144)

(1,126,189)

(417,955)

-

Profit/(loss) from revaluation of financial assets measured at fair value by profit or loss

2,511,784

(2,865,163)

-

-

Profit/loss from operations with foreign currency

11,652

(307,966)

-

-

Depreciation of investments

(567,023)

1,286,940

-

-

Share in profit/loss of the associated companies

(1,337,135)

1,042,830

-

-

Acquisition costs

(242 910)

(203 269)

-

-

Operating Results

6,175,031

6,020,358

154,673

3

General and administrative costs

(1,115,238)

(980,588)

-

-

Interest costs on received credits and loans

(151,588)

(76,738)

-

-

Other incomes

37,306

386,772

(349,466)

(90)

Other costs

(14,691)

(1,703,414)

-

-

Profit Before Tax

4,833,610

3,646,390

1,187,220

33

Net Profit

4,713,471

2,755,985

1,957,486

71

Other aggregate costs

(174,115)

(259,412)

-

-

Profit per ordinary share payable to the Group's shareholders, base and diluted, in RUB

109.1209

80.3298

28.79110

36

The operating results remained at a level comparable with H1 2016 and amounted to RUB 6.2 bln for H1 2017. Net profit for H1 2017 increased by 71% (RUB 2 bln) against H1 2016 and amounted to RUB 4.7 bln. The operating results and the currency assets revaluation results in H1 2016 stimulated growth of net profit. As the investment income is distributed to the accounts of insured people and participants on results of the calendar year and is reflected in the annual statement, current CPI and NPI results are indicated in the profit and loss statement without distribution, thus being of intermediate nature. Investment income will be received on accounts based on 2017 results, and reflected in the Group's annual statement.

On results of H1 2017, the Group attracted RUB 42.9 bln of pension savings (without outflow) and RUB 718 mln of pension contributions (without outflow). Contributions under CPI contracts for H1 2017 increased by 38% (RUB 11.8 bln), while contributions to NPI remained at the level comparable with H1 2016. Inflow of pension savings from the Pension Fund of Russia (PFR) following the results of the transient campaign 2016 represented the major contribution into growth of pension funds. The Group's funds are first of all oriented at attracting clients from PFR who have not disposed their pension savings yet, and who are mostly interested in a such financial instrument as cumulative pension.

The Group uses a multichannel sales system to attract pension savings and pension reserves of insured people. The Group has its own sales offices in most regions of Russia (52 branches as of June 30, 2017) and actively develops sales of pension products through branch networks of partner banks, and insurance and consulting companies (more than 2,000 branches). As of June 30, 2017 the number of the Group's clients under CPI and NPI amounted to 5.1 mln people.

In addition, the Group is implementing a retention policy for current clients. In comparison with H1 2016, the outflow of pension savings under CPI decreased considerably (CPI payments reduced by 75% (RUB 17.6 bln) and NPI payments remained at a comparable level in H1 2016). Thus, changes to CPI and NPI obligations in H1 2017 amounted to RUB 36.7 bln (against RUB 7.5 bln in H1 2016).

Investment results (RUB 6.4 bln in H1 2017) were provided by:

    — interest income from financial instruments at the level of RUB 7.7 bln. In comparison with H1 2016, interest income decreased by 14% (RUB 1.3 bln) due to changes in interest rates for financial assets measured at fair value by profit and loss (from 10.1% to 9.11%) and deposits in banks (from 10.48% to 6.67%);
    — considerable growth of dividend incomes (RUB 0.4 bln);
    — loss from operations with financial assets measured at fair value (- RUB 1.5 bln). Such a result was caused by negative revaluation of securities of Peresvet Bank in H1 2017 and negative revaluation of securities of Vneshprombank in H1 2016;
    — positive revaluation of market financial instruments measured at fair value (income of RUB 2.5 bln in H1 2017 against a loss of RUB 2.8 bln in H1 2016);
    — positive results of operations with foreign currency (RUB 11.6 mln in H1 2017 against a loss of RUB 0.3 bln in H1 2016);
    — revaluation of the share of net assets and currency obligations of associated companies. The Group considers this result to be temporary and depending on the environment at the capital markets (- RUB 1.9 bln in H1 2017 against + RUB 2.3 bln in H1 2016), Performance of the Group's funds is aimed at the long-term investment horizon, which makes evaluation of investment management efficiency broken down by annual results impossible, as the annual horizon depends considerably on the short-term market dynamics.

As of June 30, 2017, the investment portfolio yield was as follows:

    — NPF FUTURE: pension savings of 3.88% per annum, pension reserves of 6.92% per annum;
    — NPF Telecom-Soyuz: pension savings of 7.58% per annum, pension reserves of 7.26% per annum;
    — NPF Obrazovaniye: pension savings of 6.61% per annum, pension reserves of 7.38% per annum.

The Group's investment portfolio structure as of June 30, 2017:

    — pension savings portfolio - corporate bonds (42%), shares (29%), deposits (16%), and other instruments (13%), including securities received from REPO transactions, municipal bonds and bonds with mortgage collateral;
    — the pension reserves portfolio - corporate bonds (48%), shares (15%), and other instruments (37%), such as state securities and subfederal bonds;

The Group increased other operating costs against H1 2016 by 14% (RUB 0.1 bln), to RUB 1.1 bln due to business growth, necessity to employ new personnel and to rent premises.

In addition, the interest costs on credits and loans increased (from RUB 77 mln in H1 2016 to RUB 152 mln in H1 2017). In H2 2016 the Group attracted credit resources of CREDIT BANK OF MOSCOW PJSC and ROST BANK JSC in the amount of RUB 1.7 bln and RUB 0.5 bln, respectively, in order to purchase pension assets. In addition to that, the loan agreement for the amount of RUB 3 bln was signed between FG FUTURE and its major shareholder FUTURE Financial Group Limited (the capital ownership share of the Group is 75%) on July 21, 2017 to finance operating activities. This is a framework agreement and the loan will be provided by installments in accordance with the Group's needs with the repayment period of each installment to be determined separately. The interest rate under this agreement is 4% per annum. As of the statement release date, the amount was RUB 90.653 thousand, with a repayment period until December 31, 2017.

In August 2017 O1 GROUP LIMITED, being the Group's shareholder, repaid the loan granted by ROST BANK JSC in the amount of RUB 0.5 bln. The loan claim right was transferred to the shareholder.

Other costs of the Group decreased considerably, from RUB 1.7 bln in H1 2016 to RUB 15 mln in H1 2017. Changes in the indicator were caused by negative revaluation of currency deposits in H1 2016.

Profit payable to the Group's shareholders increased by 36% against H1 2016 and amounted to RUB 109.1209 per ordinary share.

REVIEW OF KEY FINANCIAL RESULTS FOR H1 2017 CONSOLIDATED CASH FLOW STATEMENT

RUB thousand in H1 2017 in H1 2016 Δ H1 2016/H1 2017 RUB thousand Δ H1 2016/H1 2017 %

Cash flow from operating activity

Contributions received under CPI contracts

42,899,385

31,165,861

11,733,524

38

Contributions received under NPI contracts

718,659

684,136

34,523

5

Pensions paid under CPI contracts

(5,780,000)

(23,273,422)

-

-

Pensions paid under NPI contracts

(1,218,333)

(1,128,513)

-

-

Payment of salaries and other remunerations to employees

(611,456)

(545,176)

-

-

Payment of commission remuneration to the trustee

(783,513)

(755,720)

-

-

Payment of commission remuneration to the specialized depository

(85,837)

(77,696)

-

-

Payment of other administrative, operatin and acquisition costs

(1,984,715)

(2,899,579)

-

-

Other cash flows from operating activity

207,691

(293,300)

-

-

Interests paid

(127,357)

-

(127,357)

-

Profit tax settlements

(24,979)

(473,085)

-

-

Net cash flow from operating activity

33,209,545

2,403,505

30,806,040

1,282

Cash flow from investment activity

Payments related to acquisition of fixed assets

(62,958)

(4,093)

-

-

Payment related to acquisition of intangible assets

(573)

(2,473)

-

-

Cash inflow in the form of dividends and other similar payments from subsidiary, jointly controlled and associated companies

651,068

-

651,068

-

Interests received

10,834,139

5,172,403

5,661,736

109

Income/(loss) from sales of financial assets measured at fair value, which change is reflected in profit or loss

1,460,769

931,000

529,769

57

Payments related to acquisition of financial assets measured at fair value, which change is reflected in profit or loss

(14,432,701)

(12,997,864)

-

-

Cash inflow less payments for placement and closing of deposits and other assets invested in credit institutions and non-resident banks

(14,847,388)

(5,151,106)

-

-

Payments related to investments into shares and equity interests in subsidiary, jointly controlled and associated companies less cash inflow

(328,893)

(35,517)

-

-

Cash inflow from sales of shares and equity interests in subsidiary, jointly controlled and associated companies

-

677 251

(677 251)

-

Repayment of granted loans

873,352

-

873,352


Other cash inflow / (payments) from investment activity

83,430

616,825

(533,395)

(86)

Net cash flow from investment activity

(15,769,754)

(10,793,574)

-

-

Движение денежных средств от финансовой деятельности

Cash inflow from founding shareholders

161,900

1,485,295

(1,323,395)

(89)

Cash inflow from credits and loans

-

1,393,046

(1,393,046)

-

Net cash flow from financial activity

161,907

2,878,348

(2,716,441)

(94)

Net change in cash for the period

17,601,698

(5,511,721)

-

-

Impact of changes in the foreign currency rates

(3)


-

Opening cash and its equivalents

31,360,703

41,306,772

(9,946,069)

(24)

Closing cash and its equivalents

48,962,398

35,795,051

13,167,347

37

As of June 30, 2017, the balance of cash and its equivalents amounted to RUB 49 bln (growth by RUB 17.6 bln against opening). Growth of the Group's cash as of the end of the reporting period was caused by:

    — net cash inflow from operating activity in H1 2017 of RUB 33.2 bln (growth by RUB 30.8 bln (14 times) against H1 2016).

Considerable growth of cash inflow from operating activity was caused by receipt of contributions under CPI (RUB 42.9 bln in H1 2017 against RUB 31.2 bln in H1 2016). In addition to that, considerable outflow of pension savings under CPI of transient campaigns 2013, 2014, 2015 provided impact on the result for H1 2016. Contributions and payments under NPI remained at a comparable level. As a result of synergy from acquisition of NPF Uralsib and NPF Russian Standard, the outflow by administrative, operating and acquisition costs decreased by 32% (RUB 0.9 bln).

    — net cash outflow from investment activity in H1 2017 of RUB 15.8 bln (growth by 46% (RUB 5 bln) against H1 2016).

Growth of cash outflow from investment activity was provided by:

    — inflow of dividends and other similar payments from subsidiary and associated companies (+ RUB 0.7 bln);
    — interest incomes (+ RUB 10.8 bln);
    — investment of funds as deposits in credit banks (- RUB 13 bln);
    — investments into financial assets (shares and equity interests in subsidiary and associated companies (- RUB 15 bln)),
    — payments for acquisition of funds (RUB 0.3 bln),
    — cash inflow from repayment of granted loans (+ RUB 0.9 bln).

For further information please refer to the Company's website (http://futurefg.ru/).

Contacts:

IR Service

Anna Krylova

krylova@futurefg.ru

+7 495 554 40 49 (#4596)

+7 909 934 2008

PR Service

Ksenia Makarova

kmakarova@futurenpf.ru

+7 495 554 40 49 (#4816)

+7 903 017 1607