STATEMENT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD

In 2023, the Russian financial market stayed under sanctions pressure and continued to adapt to new realities.

The equity market recovery is occurring amidst limited issuer disclosure and the division of liquidity between onshore and offshore sources. Disclosure restrictions along with restrictions on non-residents’ access to new issues also had an effect on changes in the structure of the primary and secondary markets, where Russian individuals played the key role last year. At the same time, the IPO market was primarily focused around small deals, with minor involvement from Russian institutional investors.

The high interest rate period expectedly made bank deposits more attractive, which resulted in less new liquidity flows to the equity market. Launch of vehicles for investors to receive monetary payouts due to them on blocked assets and the emergence of the substitute bonds segment favoured the domestic investor’s confidence in the market. Release of funds held on Type C accounts and access of Russian issuers to foreign investors remain a pressing issue, which may pose certain difficulties in the future.

In autumn 2023, the Group approved its new strategy that responds to the limited opportunities for international expansion and is designed to strengthen the Group’s position in the domestic market. The new strategy relies on current Russian market trends, such as the increasing role of retail investors and the growing need for Russian companies to raise capital in the domestic market. Under the new strategy through 2028, the Group’s mission is to transform the infrastructure services for the growth of everyone’s wealth. The Group also expects to become the number one choice for free and effective financial management.

The key provisions of the new development strategy naturally continue the previous strategies and are based on the strengths of Moscow Exchange’s business model and the key competences of its employees. An integral part of the strategy in terms of capital management is the new dividend policy, which implies a minimum limit on dividend payments set at 50% of the Group’s IFRS net profit and a target 100% of free cash flow to equity. Free cash flow includes necessary capital expenditure to maintain the business and investments in further development, as well as regulatory requirements for Moscow Exchange and its subsidiaries.

A recovery in trading activity and high interest rates supported the Group’s solid performance as of the year-end 2023. Therefore, for 2023 the Supervisory Board recommended to the Annual General Meeting of Shareholders a dividend of RUB 17.35 per share, i.e. 65% of Group’s net profit according to IFRS.

In the reporting year, the Supervisory Board was formed of 12 members, of whom six were independent, thus providing the Supervisory Board with the necessary resources and competences to perform effectively. Throughout the year, the Supervisory Board kept the necessary balance between the interests of shareholders, users and all stakeholders, exercised supervisory, HR and strategic functions in managing the Group (subject to the exemptions set out in the shareholders agreement with respect to NSD).

In conclusion, I would like to thank Moscow Exchange’s partners, clients and shareholders for trusting us, as well as the management and employees of Moscow Exchange Group for their commitment to work and efficiency through 2023.