Welcome to the 2021 MTS PJSC Annual Report!

We would like to bring to your attention the Annual Report of MTS PJSC¹ following the results of 2021.

This is the 22th report — we have been preparing them for you, starting from 2001.

¹ In this Annual Report, the terms “MTS PJSC”, “MTS” and the “Company” should be understood as Mobile TeleSystems Public Joint Stock Company, and the terms the “MTS Group”. “Group” should be understood as a group of companies consisting of MTS PJSC and its subsidiaries. The figures contained in this Annual Report are as of December 31, 2021, unless other periods or dates are expressly indicated.

Purpose of the 2021 Annual Report

The MTS Annual Report is a tool of our openness and transparency that allows making investors and shareholders, as well as customers aware of the important solutions and Company operation results. It is also one of our mechanisms for internal evaluation of effectiveness and efficiency of the management processes and product offers, which allows us to maintain a high level of resilience to the arising challenges, competitiveness and market leadership.

The Report provides consolidated information on the main results of the Company’s business in accordance with its strategic goals and objectives for the short, medium and long run.

Key topics of the Report

As part of the Annual Report, we inform shareholders, the investment community and all stakeholders as openly as possible about the condition and prospects of our business. We strive to provide comprehensive and unbiased information about the Company, the environment where we operate, a general situation in the markets of our presence and the trends that we observe there. Our primary goal is to help shareholders understand the specifics of our business, our strategic priorities and demonstrate the results of yearly operations in the context of the strategy implementation. Thus, we contribute to correct assessment of the risks and benefits of investing in MTS and, as a result, to informed investment decisions made by the market participants.

In addition to this general obligatory part, we focus on two key separate topics in the 2021 Annual Report.

• The first results of MTS transformation into an IT company with a large-scale ecosystem of digital products. Since the adoption of the new CLV 2.0 strategy in 2019, we have been implementing multi-service solutions allowing us to attract new customers and meet the growing needs of the existing ones. During this time, MTS has been able to strengthen its leadership in telecom, while simultaneously developing a new business.
• In 2021, MTS systematized the ongoing ESG initiatives, which resulted in the approval of MTS ESG strategy. In this Report, the Companyʼs activities in the field of sustainable development are viewed through the prism of the new ESG strategy, which determined the main directions for optimizing business processes and launching the initiatives contributing to sustainable development of the Company.

In 2021, the MTS Strategy for Sustainable Development and Corporate Social Responsibility was updated, that fixed the Company’s strategic priorities in this area for the period up to 2025. In accordance with the document, MTS assumes obligations to act proactively in the interests of achieving 14 of the 17 established UN Sustainable Development Goals (UN SDGs), corresponding to the Company’s capabilities within its industry specifics and social role. With regard to the other three UN SDGs, the Company undertakes to act at the request of stakeholders and additionally consider the possibility of participating in activities to achieve them.

The Report has been prepared in accordance with the statutory requirements of the Russian Federation, as well as the regulatory requirements applicable to MTS:

• Federal Law No. 208-FZ “On Joint Stock Companies” dated December 26, 1995;
• Bank of Russia Regulations No. 714-P dated March 27, 2020 “On Disclosure of Information by Issuers of Equity Securities”;
• recommendations of the Corporate Governance Code approved by the Board of Directors of the Bank of Russia on March 21, 2014.

In addition, when preparing the Annual Report, the Company was guided by international standards and best practices in the area of public annual reporting.