ACRA ASSIGNS AA(RU) TO THE SERIES 001P-02 (RU000A10EXJ3) AND 001P-03 (RU000A10EXK1) BOND ISSUES OF MAIL.RU FINANCE LIMITED

Credit rating rationale. The issues are senior unsecured debt instruments of Mail.Ru Finance Limited, a subsidiary of VK IPJSC (hereinafter, VK, the Company, or the Group). The basis for assigning the credit rating is a public irrevocable offer from the Group, as well as an irrevocable offer from a key operating company.

Due to the absence of either structural or contractual subordination of the issues, ACRA regards them as equal to other existing and future unsecured and unsubordinated debt obligations of the Company in terms of priority. As per ACRA’s methodology, the simplified approach was applied, according to which the recovery rate for the issues corresponds to category II, and therefore the credit ratings of the issues are equal to the credit rating of VK — AA(RU) — and set at AA(RU).

The Company’s credit rating reflects high scores for business and corporate governance, strong liquidity, and medium scores of leverage, size and profitability. The rating is constrained by low scores for interest coverage and cash flow. VK’s credit rating takes into account the support from the shareholder.

VK is developing a number of products, most importantly — social networks VKontakte and Odnoklassniki, national messenger MAX, information and news platform Dzen, entertainment services VK Video, VK Music, VK Clips, applications store RuStore, gaming platform VK Play, mail services Pochta and Oblako Mail, business technologies VK Tech, as well as educational projects.

KEY issue properties

Sources: ACRA, issuer’s data

Sources: ACRA, issuer’s data

REGULATORY DISCLOSURE

The credit ratings have been assigned to the bond issues of Mail.Ru Finance Limited based on the following methodologies: the Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation to determine the credit ratings of the bond issues under the national scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.

Credit ratings of the issues (RU000A10EXJ3, RU000A10EXK1) assigned under the national scale for the Russian Federation have been published for the first time.

The credit ratings are expected to be revised within one year.

The credit ratings were assigned based on data provided by VK IPJSC, information from publicly available sources, and ACRA’s own databases.

The credit ratings are solicited and VK IPJSC participated in their assignment.

In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.

ACRA provided no additional services to VK IPJSC and Mail.Ru Finance Limited during the year preceding the rating action.

No conflicts of interest were discovered in the course of credit rating assignment.