RELIАBILITY
AS А PRINCIPLE
Annual Report 2021
En+ Group Annual Report 2021
WARNING
The information presented in
this Annual Report only reflects
the Company’s position during
the review period from 1 January
2021 to 31 December 2021
(the “Review Period”) pursuant
to the requirements of the Listing
Rules (“LR”) published by the
UK’s Financial Conduct Authority
(the “FCA”) in its capacity
as competent authority under
the Financial Services and Markets
Act 2000 (as amended) and the
FCA’s Disclosure Guidance and
Transparency Rules (“DTRs”)
(the LR and the DTR together
being the “Rules”) (unless
otherwise specified). Accordingly,
all forward-looking statements,
analyses, reviews, discussions,
commentaries and risks presented
in this Annual Report (save for
this Warning, the sub-section
headed “En+ Group’s key
business risks” in the “Internal
Control and Risk Management”
section, “Corporate Governance”
section and unless otherwise
specified) are based upon the
financial information of the
Company covering the Review
Period only and not thereafter.
Shareholders and potential
investors should be aware that,
as widely reported in the media
in late February, March and
April 2022, certain countries
and multilateral organisations
announced new packages
of sanctions against the public
debt of the Russian Federation,
Russia’s central bank, a number
of Russian banks and certain
Russian government-related
entities and institutions, as well
as personal sanctions against
a number of individual as well
as certain other restrictions.
Due to the growing geopolitical
tensions since February 2022,
there has been a significant
increase in volatility on the
securities and currency markets,
as well as a significant depreciation
of the rouble against the US
dollar and the euro. It is expected
that these events will affect the
activities of Russian enterprises
in various sectors of the economy.
The quantitative effect of these
events cannot be accurately
estimated at the moment with
any degree of confidence.
on the Company’s future financial
position and results of operations
in 2022 and onwards, and will make
further announcements if and
when it is necessary or required.
Due to all these circumstances,
the Company may potentially
face difficulties in the supply
of equipment, which may lead to
the postponement of investment
projects. The probable necessity
to replace foreign currency credit
facilities with debt denominated
in RUB may have a negative impact
on the financial results of the
Company due to high interest rates
in the local RUB market caused
by general instability and the
significant increase of the key rate
set by the Bank of Russia (set at
20% in the end of February 2022
and subsequently decreased to
17% in the beginning of April 2022).
The recently announced intention
by the Russian Government
to change the regulation of
domestic metals’ sales prices
affecting En+ Group’s metals
segment represented by RUSAL
may have an adverse effect
on the Company’s profitability.
On 1 March 2022, the Group
has announced that due to
unavoidable logistical and transport
challenges on the Black Sea
and the surrounding area, it has
been obliged to temporarily halt
production at the Nikolaev Alumina
Refinery located in the Nikolaev
Region, Ukraine. 2021 output of
this refinery amounted to 1.8 mt
of alumina. Also, on 20 March
2022, the Australian government
imposed an immediate ban on
exports of alumina and aluminium
ores, including bauxite, to Russia.
This action will affect, among
other things, the alumina export
from Australia. That is almost
20% of RUSAL demand.
Currently, the Company’s
management is evaluating the
effect of all of the above and
analysing the possible impact
of changing and uncertain micro-
and macroeconomic conditions
Shareholders and potential
investors should be aware that the
information presented in this Annual
Report (save for this Warning, the
sub-section headed “En+ Group’s
key business risks” in the “Internal
Control and Risk Management”
section, and unless otherwise
specified) does not take into
account all these new developments
or any potential impact which these
may have on the Company or the
Group. Accordingly, the information
presented in this Annual Report
(save for this Warning, the sub-
section headed “En+ Group’s key
business risks” in the “Internal
Control and Risk Management”
section, and unless otherwise
specified), including but not limited
to all forward-looking statements,
analyses, reviews, discussions,
commentaries and risks, does not
reflect the latest position (financial
or otherwise) of the Group. Given
the global nature of the business
of the Group, the international
politico-economic dimension of
the circumstances indicated above
this matter is continually evolving.
Shareholders and potential
investors are therefore strongly
advised to make reference to the
latest announcements issued by
the Company (i.e. announcements
issued by the Company after
24 February 2022) and such other
announcement(s) to be issued by
the Company in accordance with
the applicable laws and regulations
as and when appropriate before
dealing in the Company’s securities.
Shareholders and potential
investors should exercise caution
when dealing in the Company’s
securities. If in doubt, recently
are advised to consult their
stockbrokers, bank managers,
solicitors and/or other professional
advisers before dealing in
the Company’s securities.
CONTENTS
STRATEGIC REPORT
Warning
reliability as a PrinciPle
Produce loW-carbon aluminium
and PoWer for our customers
Provide suPPort and safety
for our staff
meet our commitments
to local communities
continue environmentally
friendly modernisation
Key events and figures
our Presence and scale
chairman’s statement
strategy
chief executive officer’s statement
business model
business revieW
financial revieW
sustainability revieW
internal control and risK management
ethics and comPliance
CORPORATE GOVERNANCE
corPorate governance
board of directors
committees of the board
audit and risK committee
corPorate governance committee
nominations committee
remuneration committee
comPliance committee
health, safety and environment committee
information for shareholders and investors
FINANCIAL STATEMENTS
consolidated financial statements
APPENDICES
glossary
about the rePort
contacts
02
04
06
08
10
12
14
16
18
20
22
26
28
46
62
104
110
112
116
124
126
126
127
127
130
130
132
136
216
220
222
APPENDICES
(provided as a separate document)
Appendix 1: rePort on comPliance With the russian
corPorate governance code
Appendix 2: energy resource consumPtion
Appendix 3: list of the comPany’s branches
For more on our Company
please visit our webpage at
www.enplusgroup.com/en/
sustainability/
2
2
3
3
#1
STRATEGIC
REPORT
06
Produce low-carbon
aluminium and power for
our customers
08
Provide support
and safety for our staff
10
Meet our commitments to
local communities
12
Continue environmentally
friendly modernisation
14
Key events
and figures
16
Our presence
and scale
18
Chairman’s
statement
20
Strategy
22
Chief Executive
Officer’s statement
26
Business model
28
Business review
46
Financial review
62
Sustainability reviews
104
Internal Control
and Risk Management
110
Ethics and Сompliance
4
4
RELIABILITY AS
A PRINCIPLE
YOU CAN RELY ON US TO…
PRODUCE LOW-CARBON
ALUMINIUM
AND POWER FOR
OUR CUSTOMERS
En+ Group Annual Report 2021
For years, En+ has consistently pursued the goal of greener metal. As the largest aluminium
producer outside of China and the world's leading independent hydroelectric power producer, the
Company has an innovative mindset that enables us to produce low-carbon aluminium, remain a
cost leader, and meet all of our operational and financial commitments.
YOU CAN RELY ON US TO…
MEET OUR
COMMITMENTS TO
LOCAL
COMMUNITIES
Read more at p. 6
Read more at p. 10
YOU CAN RELY ON US
YOU CAN RELY ON US TO…
PROVIDE
SUPPORT AND
SAFETY FOR
OUR STAFF
Read more at p. 8
YOU CAN RELY ON US TO…
CONTINUE
ENVIRONMENTALLY
FRIENDLY MODERNISATION
Read more at p. 12
5
5
YOU CAN RELY ON US TO
PRODUCE LOW-CARBON
ALUMINIUM AND POWER
FOR OUR CUSTOMERS
En+ is the world leader for the production of low-carbon aluminium,
recognised in the market through its leading brand ALLOW.
955 kt ALLOW
sold in 2021
Hydropower produces roughly 70% of all renewable
electricity worldwide. Hydropower plants do not
emit CO2 into the atmosphere and help reduce
greenhouse emissions, making this a carbon-
free energy source. We utilise this clean energy to
produce low-carbon and recyclable aluminium –
ALLOW – with a certified carbon footprint.
2.4 t CO2 e/t Al
(Scope 1&2 smelters only)
ALLOW enables our customers to reduce the
carbon footprint of their products across all
major aluminium consuming segments.
Our Power segment operates the largest and most
cost-efficient network of power plants in the Siberian
Region, allowing us to efficiently and reliably cater
to our core clients in Siberia, including the largest
smelters operated by En+’s Metals segment.
Combined with renewable hydropower, our inert
anode technology will provide an unprecedented
near-zero emissions operation at the smelter.
5+ times
lower emissions than
the global industry average
En+ Group Annual Report 2021
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GEOGRAPHY
OF PRESENCE
IS
WHAT
ALLOW
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Continents
Siberia
strong
operational hub
Guaranteed low CO2
footprint: less than
4 t of CO2e/t of
aluminium produced
(Scope 1&2 smelters only)
Ensuring transparency
and assurance: carbon
footprint statement with
3rd party verification,
ASI certification,
EPDs, ISO and REACH
compliance, CDP
disclosures
Promotes traceability,
enabling attribution
to a single smelter
and guarantees
environmental, health
and safety, and other
safeguards set out in the
producer’s policies
In 2021, more than 100
customers of the En+
Group opted for ALLOW,
with total sales of 955 kt
Read more at p. 16–17
Read more at p. 12
6
Taishet aluminium smelter
7
YOU CAN RELY ON US TO
PROVIDE SUPPORT AND
SAFETY FOR OUR STAFF
0.16
Lost Time Injury Frequency
Rate (LTIFR)1
13
additional educational
programmes were developed
for corporate safety
culture online portal
En+ Group’s top priority of looking after
the health and safety of employees is
reflected in our corporate Health and
Safety (HS) policy, which holds that
life and health come before production
and profit. It commits us to a culture
of individual responsibility to uphold
this principle. The responsibility starts
at the top, with senior management
embodying our strong safety culture and
leadership, and extends to every one
of our employees, who receive extensive
training and are actively encouraged
to report any aspects of our operations
that do not meet safety standards.
1. Per 200,000 hours worked.
En+ Group Annual Report 2021
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OUR CORPORATE HS PRINCIPLES REPRESENT WHAT WE BELIEVE IN,
HOW WE MANAGE OUR BUSINESS, AND WHAT WE EXPECT FROM OUR
EMPLOYEES AND CONTRACTORS
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Life and health are
more important than
production results and
economic indicators
All incidents are
preventable
The safety agenda has to be fully integrated into
all business and production operations from daily
routine to strategic goals and respective plans
An unwavering
commitment to observing
national HS legislation,
and a goal to be the best
HS performing company
among competitors
Read more at p. 90–91
Each employee should
have the appropriate
skills and knowledge
to work safely
Safe behaviour must be
supported and motivated
by management
Suppliers and contractors
to be chosen based on
HS principles and should
follow all of the Company’s
safety requirements
8
9
YOU CAN RELY ON US TO
MEET OUR COMMITMENTS
TO LOCAL COMMUNITIES
We are sure that the Company can only
grow and develop if it cares for the
communities in which it operates. We are
committed to establishing close cooperation
with local communities, government
agencies, and non-profit organisations. En+
adheres to best practices in developing
infrastructure, promoting education and
social entrepreneurship, encouraging
a healthy lifestyle and volunteering.
more than
USD 55 mn
were allocated for
social investments and
charitable projects
the
360 Project
won the BRICS International
Prize in the “Clean
Water” category
more than
100 children
took part in the interregional
championship “Get on Your
Skis, Everyone!” in 2021
En+ Group Annual Report 2021
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AN UNDERSTANDING OF THE INTERESTS AND NEEDS OF LOCAL COMMUNITIES
DETERMINES THE PRIORITIES OF OUR SOCIAL INVESTMENT. EN+ GROUP
IMPLEMENTS SOCIAL INVESTMENTS IN THE FOLLOWING KEY AREAS:
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more than
3,000 people
in 2021 took part in
an eco- campaign to protect
Lake Baikal and other water
bodies in 7 cities where
the Company operates
Infrastructure
development
Assistance
to vulnerable
population
groups
Sports and a
healthy lifestyle
Volunteering
Environmental
protection
Education
10
11
Read more at p. 98–101
YOU CAN RELY ON US TO
CONTINUE ENVIRONMENTALLY
FRIENDLY MODERNISATION
Our approach to modernisation takes into account
industrial and economic feasibility, as well as environmental
impact. Our innovative projects use the best available
environmental technologies and reduce costs.
Environmentally
friendly
Eco- Soderberg
technology helps
to a reduction
perfluorocarbons
(PFCs) emissions
due to reduction
in anode effect
frequency
The Company resolved
to upgrade aluminium
production by switching
from Eco-Soderberg
to pre-baked anode
technology, which helps
massively reduce the
smelter’s emissions of
fluorides and resinous
substances, including
benzo(a)pyrene
12
En+ Group Annual Report 2021
The implementation
of the Group’s
Siberian HPP
modernisation
programme
ensures one of the
best performance
indicators of the
HPPs in the industry
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Read more at p. 43
Modernisation
of equipment at the
CHPs also improves
the environmental
situation in regions
of operation
Read more at p. 44
13
En+ Group Annual Report 2021
KEY EVENTS 2021
January
October
BUSINESS REVIEW
KEY EVENTS AND FIGURES
KEY PERFORMANCE INDICATORS
Operating
Financial
Total electricity production1
(TWh)
Revenue
(USD mn)
Net profit
(USD mn)
Non-financial
Lost Time Injury Frequency Rate3
per 200,000 hours worked
Lost time injury frequency rate, per 200,000 hours worked
12.7
11,994
3,138
3,225
374
0.17
0.16
0.14
77.7
69.3
64.2
2021
2020
2019
12.9
13.6
90.4
2021
82.2
2020
77.8
2019
8,566
2,697
9,711
2,989
14,126
2021
759
257
960
311
10,356
2020
11,752
2019
3,534
1,016
1,304
HPPs
CHPs
Metals
Power
Metals
Power
Aluminium production
and sales (kt)
Adjusted EBITDA2
(USD mn)
Adjusted EBITDA
Capital expenditure2
(USD mn)
Capital expenditure
2021
2020
2019
3,764
3,904
3,755
3,926
3,757
4,176
2021
2020
2019
2,893
1,172
871
993
966
1,127
1,192
897
848
3,992
2021
1,861
2020
2,127
2019
321
237
236
1,513
1,128
1,061
Aluminium production
Aluminium sales
Metals
Power
Metals
Power
2021
2020
2019
0.21
0.21
0.20
0.23
0.19
0.11
Metals
Power
Group
GHG emissions4
(mtCO2e)
GHG emissions (Scope 1 and 2), MtCO2e
29.9
28.6
28.1
2021
2020
2019
22.1
22.0
22.8
52.0
50.6
50.9
18
The Company announced
targets of at least
a 35% reduction in GHG
emissions by 2030 and
to be net zero by 2050
28
En+ Group Metals
segment raised
USD 200 million under
new pre-export financing
linked to the sustainability
performance indicators
February
11
The Metals segment, RUSAL,
announced the acquisition of
the business and assets of the
Aluminium Rheinfelden GmbH
March
18
En+ Group became a partner
of the project for the integrated
development of the city of Baikalsk
and the creation of the International
Centre for Water Resources
April
13
En+ Group Metals segment
successfully produced aluminium
with the industry’s lowest carbon
footprint – less than 0.01 tonnes of
CO2 equivalent per tonne of metal
May
Metals
Power
Group
19
En+ Group Metals segment announced the
intention to demerge its high carbon assets
1
Heat production
(mn Gcal)
Adjusted EBITDA margin
(%)
Read more
at p. 46
Read more
at p. 62
2021
2020
2019
28.5
26.9
27.3
Read more
at p. 30–42
2021
2020
2019
28.3%
18.0%
18.1%
Read more
at p. XX
Note: The consolidated financial data is provided after intersegmental elimination.
1. Excluding Onda HPP (installed capacity 0.08 GW), located in the European part of the Russian Federation,
leased to RUSAL since October 2014.
2. Adjusted EBITDA for any period represents the results from operating activities adjusted for amortisation and
depreciation, impairment charges and loss on disposal of property, plant and equipment for the relevant period.
3. Preliminary data, being verified as part of En+ Group 2021 Sustainability report preparation. KRAMZ and SMR
are included in LTIFR of the Metals segment. Figures for 2020 were recalculated because of an improvement in
methodology.
4. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation.
June
2
En+ Group announced it had
signed Russia’s largest ever 1 million
certificates supply deal for international
renewable energy certificates (I-RECs)
July
21
En+ Group started construction of the
company’s head office in Irkutsk
August
16
En+ Group became a full-cycle supplier
and trader of I-REC certificates
September
1
En+ Group’s 360 Project wins BRICS
award for sustainable development
20
En+ Group published its Pathway to Net Zero Report,
which comprehensively details the initiatives being
undertaken across the Group to achieve its climate targets
5
En+ Group and TransContainer
agreed on cooperation for
sustainable development
22
En+ Group wins 2021
S&P Global Platts Global
Metals Award
November
25
En+ Group ranked ESG
transparency leader
in Expert RA’s ESG-
transparency rating of Russian
companies and banks
December
3
17
En+ Group becomes the first
Russian company with UN
recognised Energy Compact
En+ Group’s Metals segment
announced the launch
of the Taishet aluminium
smelter. Investments in
the project amounted to
about USD 1.7 billion
27
En+ Group started
implementing the concept
of “green offices”
KEY EVENTS 2022
March
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RUSAL announced that due
to unavoidable logistical and
transport challenges on the
Black Sea and surrounding
area, it has been obliged to
temporarily halt production
at the Nikolaev Alumina
Refinery located in the
Nikolaev Region, Ukraine
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3
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The London Stock
Exchange suspended the
admission to trading of
the En+ Group’s GDRs
RUSAL noted that
on 20 March 2022 the
Australian Government
imposed an immediate ban
on exports of alumina and
aluminium ores, including
bauxite, to Russia
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STRATEGIC REPORT
OUR PRESENCE AND SCALE
We are unique among global natural resources companies.
Our business advantage stems from the full integration of world-class hydro power
assets that reliably and sustainably supply the energy required to produce aluminium.
In turn, our substantial production capabilities make us the largest aluminium
producer outside of China.
Metals Segment
Aluminium
smelters1
Alumina
refineries
Bauxite
production sites
Number of facilities
11 aluminium
smelters2
Total capacity
4.2 mtpa
Production level, 2021
3.8 mt
10 alumina
refineries3
10.7 mtpa4
8.3 mt
7 bauxite
mines
20.6 mtpa
15.0 mt
Read more at p. 30 Our Metals segment
No. 1
aluminium producer
excluding China
5.6%
of the world’s alumina
production
77.7 TWh
low-carbon hydropower
generation
19.4 GW
Total installed
electricity capacity
Power Segment
Hydropower
plants
Combined heat
and power plant
Solar
power plant
Number of facilities
5 hydro
power plants5
16 combined
heat and power plants
Abakan solar
power plant
Total installed capacity 15.1 GW5
Production level, 2021
77.7 TWh6
Read more at p. 38 Our Power segment
4.3 GW
12.7 TWh
5.2 MW
6.1 GWh
Note: As at 31 December 2021.
1. Excluding Boguchany Aluminium Smelter (BoAZ), a joint 50/50 project of RUSAL
and RusHydro.
2. Ten aluminium smelters in operation (Alscon in Nigeria is mothballed).
3. Eight alumina refineries in operation (Eurallumina in Italy is mothballed) and QAL, located in
Australia, in which RUSAL owns a 20% share.
4. RUSAL attributable capacity.
5. Including Onda HPP.
6. Excluding Onda HPP with an installed power capacity of 0.08 GW and production
level of 0.5 TWh in 2021 (located in the European part of Russia, leased to RUSAL).
En+ Group Annual Report 2021
Taishet Aluminium Smelter
In December 2021, the first phase of the world’s most
advanced low-carbon aluminium production plant,
Taishet Aluminium Smelter, was launched. The
state-of-the-art smelter is one of the greenest in the
world, operating on clean energy from Siberian hy-
droelectric power plants, which together with
modern gas cleaning equipment and a closed water
circulation system, has a low level impact on the envi-
ronment. Full scope CO2 emissions will be one of the
lowest in the industry. Once fully operational, the
smelter is expected to produce 428.5 thousand tons
of low-carbon aluminium per year during its first
phase and will play a critical role in the town’s overall
social and economic development.
Russia
Sweden
Moscow
Krasnoyarsk
Lake Baikal
Irkutsk
Ireland
Ukraine
Kazakhstan
Armenia
Italy
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Jamaica
Guyana
Guinea
Nigeria
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Metals Segment
Aluminium smelters
Alumina refineries
Bauxite production sites
Power Segment
Hydropower plants
Combined heat and power plant
Solar power plant
FY 2021 Revenue by region1
FY 2021 Revenue by product1
FY 2021 Revenue by region
FY 2021 Revenue by product
USD
14,126 mn
CIS
Europe
America
Asia
Other
38.5%
24.0%
5.3%
14.6%
17.6%
1. From external customers.
USD
14,126 mn
Primary aluminium
and alloys
Alumina and bauxite
Semi-finished
products and foil
Electricity
Heat
Other
69.1%
4.3%
5.4%
10.8%
3.3%
7.1%
Read more
at p. 46
16
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CHAIRMAN’S STATEMENT
WE KNOW THAT
LOW-CARBON
ALUMINIUM IS
THE FUTURE.”
Hon Christopher
Bancroft Burnham,
Chairman of the Board
Dear shareholders,
It has been an extremely challenging past two years.
The tragic images we see daily from Ukraine, where
En+ Group supports 4,500 employees, contractors,
and their families, affect all of us. We’ve also had our
share of tragedy from COVID across our employees
and their families. Our deepest sympathy and prayers
go out to those families who have lost a loved one. The
leadership and management of the Company at all levels
have reacted swiftly with efforts that started in 2020
to alleviate these tribulations. Their efforts included
successfully constructing seven health clinics across the
Krasnoyarsk region to provide relief to existing healthcare
facilities overwhelmed with COVID-related caseloads
and provide for our greater global En+ community.
Against this backdrop, particularly with the ongoing
situation in Ukraine, it is challenging to bring focus to the
En+ Group’s achievements in 2021. But the Group has
had significant success in all aspects of our businesses.
We have reduced debt by over 12% year over year,
benefiting from a more than 45% increase in the price of
aluminium during 2021, which also offset the impact of
inflation on raw materials. While aluminium production
was broadly unchanged year on year, totalling 3,764 kt in
the same period, sales of value-added products (VAPs)
increased by 18.1%; electricity production increased
by 10%; and hydropower output increased by 12.1%. In
2021, the Group produced approximately 5.6% of global
aluminium output and around 6.3% of the world’s alumina.
Recognising our responsibility and commitment to a
cleaner and more sustainable world, and in fulfillment of
our pursuit to be the lowest carbon aluminium producer
in the world, in 2021 we announced our
commitment to transition to net zero by
2050 with a 35% reduction in emissions
by 2030. We know that low-carbon
aluminium is the future. In 2021, more
than 100 customers of the En+ Group
opted for our low carbon brand ALLOW,
with final sales of 955 kt out of total sales
of 3,904 kt. We also continue to pursue
cutting-edge technological innovations,
such as Rusal’s development of inert
anodes for use in the production of
aluminium, which massively reduces carbon
emissions during the smelting process.
With eleven aluminium smelters, ten alumina
refineries, seven bauxite mines, and four foil
rolling mills across a dozen countries and five
continents, we are proud to be the largest
producer of aluminium outside of China,
accounting for 13% of the global aluminium
supply ex-China, and the third-largest in
the world. We are equally proud to be the
largest independent hydro power company
in the world, with a dozen hydropower
and combined heat and power plants. We
produced 90 TWh of electricity last year.
We could not have achieved this leadership
position without the almost 100,000
dedicated men and women who are part
of our global team across five continents
and in more than a dozen countries. On
behalf of the leadership and management
of our Group, we thank them for their hard
work and dedication to our shared future.
En+ Group Annual Report 2021
3,904 kt
total sales of aluminium
52%
share of VAPs in total sales
Stewardship and
Corporate Governance
Committed to the Low
Carbon Economy
We strive not to be just world-class in our
corporate governance: we pursue every
day to set the example and be the leader
within our peer group. Our commitment
to net zero carbon emissions by 2050
took a giant step forward in 2021 with the
success of our next-generation inert anode
electrolysers, allowing us to produce the
lowest carbon aluminium ever created.
Our proprietary technology eliminates
emissions of greenhouse gases (GHG)
from the reduction process while reducing
the cost of production by saving anodes.
Another breakthrough benefit of this
technology is the release of oxygen during
aluminium production, with one inert
anode cell generating the same volume
of oxygen as 70 hectares of forest.
One of the significant successes of the
past year was the completion of the
construction of the world’s most advanced
low-carbon aluminium plant, the Taishet
Aluminium Smelter (TaAZ) in Siberia, which
is the third low-carbon aluminium smelter
to be built by Rusal, creating more than
1,000 local jobs. Once fully operational,
the smelter is expected to produce 428.5
kt of low-carbon aluminium per year
during its first phase. This development
further demonstrates our Metals segment’s
commitment to the decarbonisation of its
operations and consumer supply chains.
Key Partnerships
Last year saw many other new projects
come online. We partnered in a pilot
project to produce an aluminium can with
the lowest-ever carbon footprint of any
beer can in Europe. We also announced
another inert anode partnership to
produce aerosol containers and other
containers to reduce the environmental
footprint of these products significantly.
We forged partnerships that will see
ALLOW, our low carbon aluminium
brand, delivered to new partners
who will collaborate on research and
development to produce innovative
alloys. We also secured a partnership
to use our low-carbon aluminium in
custom-made products to enable end
users to evaluate and trace the metal’s
carbon footprint and energy source.
We are proud that our colleague, Alexey
Spirin, the En+ Group’s Director of
Climate Risk and Environmental Risk
Management Department, joined the
Aluminium Stewardship Initiative (ASI)
board. Lord Barker, then Group Executive
Chairman, was appointed in 2021 as
co-chairman of the Carbon Pricing
Leadership Coalition, a World Bank
Group administered partnership working
to implement universal carbon pricing
to limit atmospheric carbon emissions.
In the second half of 2021, the En+
decarbonisation pathway was submitted
to, and is currently undergoing verification
by, the Science Based Targets initiative
(SBTi). Together with our operations, these
appointments help our Company sit at the
heart of the action on climate change.
Lord Barker stepped down as Executive
Chairman of the En+ Group in March
after leading us through sanctions
removal and instilling a new corporate
focus on sustainability, profitability, and
stewardship. I cannot thank him enough
for his exceptional leadership over the past
four years and his unwavering dedication
to our shareholders and employees.
The challenges ahead of us this year
are significant. Chief among them is
the ongoing situation in Ukraine, which
has affected markets worldwide, and
our company directly. We are doing
our utmost to support our more than
4,500 employees and contractors in
Ukraine and their families and pray
for a swift and peaceful resolution.
Again, I want to thank Lord Barker and our
exceptional leadership and management
team and employees who have persevered
through the challenges of 2021 and the
first quarter of 2022 to produce electricity
to heat and run millions of homes and
businesses, as well as the finest aluminium
products for our global customers. Finally,
to you, our shareholders, thank you for
sticking with us through thick and thin.
Hon Christopher Bancroft Burnham,
Chairman of the Board
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STRATEGY
GROWTH AND LEADERSHIP
The Group’s strategy aims to lead the Company towards becoming the world’s
largest vertically integrated producer of high value added products from low-carbon
aluminium using our own renewable energy and raw materials.
STRATEGIC
OBJECTIVES
En+ Group’s strategy aligns
strongly with the ambitions of the
United Nations’ (UN) Sustainable
Development Goals (SDGs)
Vertical integration for
maximum efficiency
Almost 100% of the electricity
supply to our aluminium
smelters is provided by the
Group’s own hydropower
plants. This ensures revenues
for the Power segment
by creating basic demand
for electricity and reduces
the carbon footprint of
the primary aluminium
production as almost 100%
of the energy used for
smelting is renewable.
Read more
at p. 26
Aluminium production
capacity ramp-up
The first phase of the
Taishet aluminium smelter
was opened in December
2021 to produce 428.5 kt
of aluminium per year and
to become the Group’s
most technologically
advanced aluminium smelter
equipped with cutting-
edge electrolysis facilities.
Read more
at p. 36
>98%
of aluminium smelting is
supplied by hydropower
2021
the year when the first
phase of the Taishet
aluminium smelter with
nameplate capacity of
428.5 kt of aluminium
per year was launched
Net zero transition
In early 2021, the Company
announced its ambition
to achieve net zero GHG
emissions by 2050 and
reduce its GHG emissions by
at least 35% by 2030 (Scope
1 and 2 vs. the 2018 baseline).
11%
reduction of direct GHG
emissions per tonne of
aluminium produced by
the Company’s smelters
in 2021 vs. 2014
Development
of hydropower
generating capacity
The Company continues to
develop new hydropower
generation capacity.
The project portfolio
includes four HPPs, i.e.
Nizhneboguchanskaya,
Motyginskaya, Telmamskaya
and Krapivinskaya, with a
2.5 GW aggregate capacity.
Read more
at p. 44
2.5 GW
the aggregate capacity of
the new hydropower projects
Read more
on Most Relevant
UN SDGs at p.64
Read more
on Most Relevant
UN SDGs at p.64
20
En+ Group Annual Report 2021
We adhere to the Group’s “green” development strategy through improving production
technology and asset modernisation in both the Metal and Power segments, at the same time
complying with the international sustainability agenda, increasing the output of low- cost
aluminium, which positively affects margins, financial stability and deleveraging.
Production cost saving
We pursue cost-cutting
initiatives across the Group.
In the Metals segment it
is achieved by the almost
100% self-reliance in bauxite,
nepheline and alumina
supply, and long-term supply
contracts for other feedstock,
including anodes, coke and
pitch. The second phase of
the Taishet anode plant is
currently under construction.
Higher profitability
The Metals segment’s
development priority is raising
the VAP production capacity.
To achieve this, the Aluminium
division is expanding its value-
added product manufacturing
facilities. A new metal casting
facility is being launched at the
Taishet smelter to manufacture
large (double length) slabs,
which positions the Taishet
products among the world’s
best. The Downstream
division produced 242 kt of
products in 2021, including
foil, extrusion, and car wheels,
which sell at a high premium.
Closed loop economy
development
The Metals segment is
developing pilot projects
that will bring low carbon
primary billets with recycled
content to the market. This
comes as a response to the
Group’s clients declaring
their own Scope 3 reduction
goals. Three of the Group’s
plants have recycling projects
underway, with a substantial
share of production
to involve recycled
aluminium in the future.
Innovations
The Metals segment aims
to introduce inert anode
technology on an industrial
scale, which is a key
technological development
vector for the segment. What
makes inert anode technology
different from the conventional
technology is that electrolytic
smelting of one tonne of
aluminium produces 2 tonnes of
oxygen instead of CO2 emissions.
Tests on inert anode electrolysis
cells are underway at the
Krasnoyarsk aluminium smelter;
the electrolytic cells should emit
no GHG upon the transition.
Read more
at p. 67
Position in the second
quartile on the global
aluminium production
cost curve
52%
the share of VAP in
aluminium sales in 2021
More than 10 kt
of secondary aluminium
were used in recycling
operations to produce low-
carbon aluminium in 2021
0.01 tonnes
of CO2e per tonne of
aluminium produced with
inert anode in accordance
with Scope 1 and Scope 2
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Expansion
of green energy
The Power segment’s R&D
projects involve research
into and development
of solar and wind energy,
transportation of green
hydrogen and a small-
capacity nuclear reactor.
Read more
at p. 69
6.1 GWh
electricity produced at
Abakan solar plant in 2021
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Deleveraging and
ensuring high
dividend payments
through stable FCF
En+ allocates capital
conservatively and aims
at deleveraging. In making
recommendations to the
general shareholders
meeting on dividend
payments, the Board takes
into account current market
situation and economic
conditions and subject to the
declared dividend policy.
Commitment to sustainability principles
The Group’s sustainability focus extends to
climate leadership, environmental stewardship,
human development, and collaboration with
stakeholders in support of the sustainability
principles both nationally and internationally.
From programmes aimed at reducing the
Group’s environmental impact, such as the
HPP New Energy modernisation programme,
to research around ecosystem impact in
our regions of operation, to social initiatives
supporting healthcare and education, the Group’s
operations align with the Group’s priority SDGs.
Read more
at p. 62
Net debt is
USD 1.2 bn
lower vs. 2020
LTIFR is 24%
lower compared to 20201
1. LTIFR is calculated per 200,000 hours worked.
21
STRATEGIC REPORT
CHIEF EXECUTIVE
OFFICER’S STATEMENT
OUR COMMITMENT TO THE
HIGHEST STANDARDS OF
CORPORATE GOVERNANCE
AND SOCIAL RESPONSIBILITY
SUPPORTS OUR STRATEGY.”
Vladimir Kiriukhin,
Chief Executive Officer
The recent developments have created a wide range
of uncertainty; the management is deeply concerned
about everyone who has been impacted in this
difficult situation. The management is reviewing all
of the Company’s activities to assess the possible
impact of imposed restrictions on our business.
It is our intention to continue our operations and
support our employees in this volatile environment.
Notwithstanding these challenges, I would
like to report on the business performance in
2021 amid another year of global uncertainty
from the continuing COVID-19 pandemic.
En+ Group once again demonstrated the
resilience of our people, our business model, and
our strategy to deliver low-carbon aluminium
to support a sustainable economy.
Throughout this period, we continued to put
the safety of our people first and were pleased
to support the federal vaccination programme.
By the end of the year, the collective immunity
among our employees reached an impressive
94%. In addition to previously built medical
centres, we went on supplying regional hospitals
with modern medical vehicles and equipment.
Thanks to solutions put in place in 2020 to mitigate
the impact of the pandemic on our business, we
were able to maintain uninterrupted operations
throughout 2021. Critically, we maintained a world-
class customer service to our aluminium customers
around the globe. We also continued to upgrade
our assets, delivered new innovations and set out
an industry-leading decarbonisation strategy and
ensured the supply of energy to homes across Siberia.
The year of stable
operational performance
Our aluminium production remained stable,
and we increased sales of value-added
products (VAPs) by 18.1% to 2,034 kt
reaching 52% of total output (vs 44% in
2020). Our Power segment increased
electricity output by 10.0% y-o-y and our
HPP output increased by 12.1%, reflecting
favourable hydrological conditions and
progress on our capacity modernisation
programme. We continued to benefit from
the combination of our unique assets and
operational excellence, and we maintained
our leading position as the world’s largest
producer of low-carbon aluminium.
Our fully vertically-integrated model
helped us offset the inflationary pressures
on raw materials prices seen across
the world and we managed our cost
base effectively. The Russian metal
industry as a whole was impacted by the
announcement at the end of June that
the Russian government has approved a
temporary export tax on ferrous and base
metals, valid until 31 December 2021.
Overall, our strong financial performance
was supported by higher aluminium
prices, which rose during the year driven
by economic recovery from the early
impacts of the COVID pandemic.
12.1%
increase in our HPP output
18.1%
increase in VAP sales
En+ Group Annual Report 2021
Leading on decarbonisation
We made important announcements
in relation to our long-term strategy
to lead the aluminium industry
into the low-carbon economy.
In January, we announced the most
ambitious decarbonisation targets our
industry has ever seen, and in September
we disclosed the detailed roadmap of
initiatives that will enable our Group to
reduce its greenhouse gas emissions
by at least 35% by 2030, and to be net zero
by 2050 (Scope 1 and 2 as benchmarked
against the Group’s 2018 GHG emissions).
Our Pathway to Net zero includes emissions
abatement, avoided emissions solutions,
and compensation and neutralisation.
In our Metals segment, this will involve
initiatives such as optimising our raw
materials supplying system, implementing
Eco-Søderberg technology at our plants,
converting smelters to pre-baked anode
technology, and launching large-scale
production of our ground-breaking
inert anode technology. In the future,
we will also look to improve our energy
efficiency in alumina refineries and
capitalise on the greater availability of
green hydrogen. We will also increase the
amount of recycled aluminium we use.
In our Power segment, we will increase
renewable power generation by the
development and construction of new
renewable power and heat generation:
hydropower, biofuels and hydrogen
production and by the implementation
of the New Energy programme.
Continuous improvement
and innovation
In 2021, we continued to make progress on
the Group’s New Energy Programme, which
will enable us to achieve industry-leading
efficiency metrics at our hydropower
stations while contributing to our emissions
reduction. Upgraded equipment at the
Group’s Bratsk, Ust-Ilimsk, Irkutsk and
Krasnoyarsk HPPs supported an increase
in hydropower production during the year.
Last year we replaced one runner at one of
the Bratsk Hydropower Station’s hydraulic
units. This is one of 18 hydro-turbine
runners, which have been undergoing a
three-stage modernisation programme.
The Company also launched a new, the
second in a row hydroelectric unit at the
Irkutsk HPP. So far, increased efficiency
will be provided by the new runners, with
an efficiency rate increase of up to 8%
depending on the runner. In 2021, the
Group’shydropower stations generated
an additional 2.1 billion kWh of energy
from the same volume of water, helping
to prevent greenhouse gas emissions
by approximately 2.4 kt of CO2e.
The ongoing modernisation of our HPPs’
equipment will increase their efficiency,
reduce the cost of repair work, and
improve the performance of the units
and stations in general. As we expand
hydropower production, we have been
pleased to support the development of
Russia’s renewable energy certificate
market. In 2021, we announced Russia’s
largest-ever supply deal for I-RECs,
issuing over one million certificates
corresponding to the electric energy
produced by En+ Group companies such
as JSC EuroSibEnergo (Krasnoyarsk HPP)
and LLC Abakan SPP (Abakansk Solar
Plant). I-RECs certificates adhere to major
international sustainability and carbon
accountability standards including the
GHGP, CDP and RE100. Energy consumers
can use renewable energy certificates
to meet their carbon targets within ‘scope
2’, and to support their internal corporate
social responsibility policies. We were
delighted in 2021 to receive confirmation
from UN Energy that the Group’s
commitments to expanding clean energy
generation and access have been officially
recognised within the Energy Compact.
In our Metals segment we continued
to focus on further reducing the carbon
footprint of our aluminium products
through the upgrading of equipment
and developing new technology, and
on expanding consumer markets for our
low-carbon aluminium brand, ALLOW.
We are constantly innovating to reduce
the carbon footprint of our aluminium
further, and in April 2021, we announced
that our Metals segment had produced
the lowest carbon aluminium ever seen,
with a carbon footprint of less than
0.01 tonnes of CO2 equivalent per tonne
of metal (Scope 1, Scope 2 – direct
and indirect energy emissions).
22
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STRATEGIC REPORT
2.1 TWh
of additional power from
the same volume of water
as a result from New
Energy programme
2.4 kt of CO2
New Enregy programme
helped to prevent GHG
emissions in 2021
It was achieved by using breakthrough
technology, a revolutionary environmental
solution in metallurgy, driving the
emissions-intensive production of
aluminium towards net zero. Inert anodes
replace standard carbon anodes with
inert, metal-ceramic materials, which
results in a reduction of emissions from
the smelting process. In comparison to
full-scope industry average emissions,
metal produced with inert anodes
has an 85% lower carbon footprint.
In our bid to ensure we are the most
responsible and efficient major aluminium
producer, we continue to upgrade our
assets. In June 2021, we announced the
intention to refurbish the largest aluminium
smelters in Krasnoyarsk, Bratsk, Irkutsk
and Novokuznetsk. The programme
involves constructing new facilities using
the most modern and environmentally
friendly technology whilst simultaneously
dismantling or modernising the old
workshops. Together with the expansion
of the capacity of the Taishet Anode Plant,
the cost of the programme is estimated
at USD 4,900 million until 2030.
to temporarily halt the production at the
Nikolaev Alumina Refinery. Our priority is
to ensure the safety of all our employees
there and around the world. Meanwhile
we will continue to secure stability of
supply for our customers and to support
our employees and their families.
In March 2022, the Australian Government
imposed an immediate ban on exports
of alumina and aluminium ores, including
bauxite, to Russia. This action will affect,
among other things, the alumina export
from Australia that comprises almost
20% of RUSAL’s total alumina demand.
Currently, we are evaluating the effect
of all of the recent developments and
analysing the possible impact of a
variety of micro- and macroeconomic
conditions on the Company’s future
financial position and results of
operations in 2022 and onwards.
We look forward to updating our
stakeholders on our progress on
delivering the key elements of our
climate strategy, which is core
to our overall business strategy.
The year 2022 has already brought
new challenges. Due to the tragic
developments in Ukraine, we have had
Vladimir Kiriukhin,
Chief Executive Officer
En+ Group Annual Report 2021
En+ Group and the Victoria and
Albert Museum partnered to produce
an immersive pavilion “Between Forests
and Skies” for the London Design Festival.
The pavilion was made from aluminium
with the world’s lowest carbon footprint,
produced using En+ Group’s unique inert
anode technology.
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25
BUSINESS MODEL
THE POWER OF OUR
INTEGRATED AND SUSTAINABLE
BUSINESS
En+ Group benefits from its unique base of tightly-integrated assets that results in a fully
integrated and highly self–sufficient green business model. A substantial degree of vertical
integration provides the Group with significant advantages and additional sources of growth.
Hydropower from the Power segment is used to refine raw materials and produce
aluminium by the Metals segment in Siberia. More than 98% of aluminium
production energy needs are met by carbon-free power sources.
En+ Group Annual Report 2021
INPUTS
Assets
We have a total installed electricity
capacity of 19.4 GW (15.1 GW
from low-carbon hydropower
generation and 4.3 GW from
thermal power). Our aluminium
production capacity is 4.2 mtpa.
Research and development
The Company performs vast research
and development activities to
introduce environmentally friendly
technologies into production cycles
to save resources and reduce costs.
Raw materials
Bauxite production capacity of 20.6 mtpa
and alumina production capacity of
10.7 mtpa. The Group is c.77% self-
sufficient in bauxites and nephelines.
More than 98% of aluminium production
energy needs are met by hydro and
other carbon-free power sources.
People
We have c.90,000 employees
across over 60 sites in 12 countries,
and are considered one of the
largest employers in Russia.
Financial
Strong and resilient cash flow with
industry-leading EBITDA margins.
26.25%
Strategic investment
in Norilsk Nickel
(USD 12.4 bn)
26
POWER SEGMENT
Water
Coal
51
hydropower plants
14.4 mt
coal production in 2021
16
combined heat and
power plants
Hydropower
Thermal power
77.7 TWh
of electricity
production in 2021
12.7 TWh
of electricity
production in 2021
28.5 mn
Gcal of heat
production in 2021
METALS SEGMENT
OUTPUTS
Bauxite
Nepheline
15.0 mt
production in 2021
4.4 mt
production in 2021
Alumina
8.3 mt
production
in 2021
>100%
% self–sufficiency
in alumina
Social
The Group remained focused on ensuring the health
and safety of its employees, maintaining stable
operations and providing support to the regions
of operations. The Lost Time Injury Frequency Rate
of the Group showed a reduction compared to 2021
due to successful prevention of group injury cases.
c. USD 55 mn
total social investments
and charitable
projects in 2021
Environmental
In 2021, En+ Group announced ambitious
decarbonisation targets and disclosed
the detailed roadmap of initiatives that
will enable the Group to reduce its
greenhouse gas emissions by at least 30%
by 2030, and to be net zero by 2050.
Electricity transmission and distribution
Primary aluminium production
+41,000 km
of power lines in
our networks
50.5 TWh
of electricity
distributed
Electricity trading and retail
– Capturing
additional margin
– Direct access to
consumers
20.3 TWh
sales in 2021
– USD 1,525 mn
electricity
– USD 465 mn heat
Read more
at p. 41
3.8 mt
production
in 20212
Sales volumes
3.9 mt
aluminium sales
2.0 mt
VAP sales
– USD 9,966 mn primary aluminium and alloys
– USD 610 mn alumina
– USD 515 mn semi-finished products and foil
Read more
at p. 32
11%
reduction in GHG
emissions at smelter in
2021 compared to 20141
Financial
Reflecting the improved pricing
environment, adjusted EBITDA
increased to USD 3,992 million
from USD 1,861 million, driven
by a 45.4% y-o-y increase in
London Metal Exchange aluminium
prices, as well as an increase in
electricity production y-o-y of
10.0%. EBITDA margin reached
28.3% compared to 18.0% in 2020.
USD 14.1 bn
revenue
A commitment to high international standards of corporate governance
and social responsibility underpins our business model and strategy.
1.
Including Onda HPP.
1. Preliminary data, being verified as part of En+ Group 2021 Sustainability report preparation.
2. Excluding Boguchany Aluminium Smelter (BoAZ), a joint 50/50 project of RUSAL and RusHydro.
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BUSINESS REVIEW
BUSINESS REVIEW
INDUSTRY POSITIONING
En+ Group is a market-leading, vertically integrated low-carbon aluminium
and hydroelectric power producer.
The composition of the
Group’s assets and operations,
both in terms of industries
and geographies, enables it
to achieve strategic synergies.
En+ Group’s scale allows it to
actively manage the flow of
aluminium products, alumina
and other raw materials within
the Company and proactively
plan electricity production
and consumption targets.
This allows the Group to
optimise capacity utilisation
and maximise efficiency
at smelters, refineries
and generating assets.
Based on the current
management structure and
internal reporting system,
the Group has defined two
business segments:
Metals segment:
Comprising RUSAL,
including the power
assets of RUSAL
Power segment:
Mainly comprising
power assets
Metals segment
En+ Group’s Metals segment, represented
by RUSAL, produced approximately
5.6% of global aluminium output in
2021, and around 6.3% of the world’s
alumina. In 2021, RUSAL remained
among the largest producers of primary
aluminium and alloys globally.
RUSAL is actively developing a
groundbreaking inert anode technology.
This technology will allow the significant
reduction of GHG emissions from
primary aluminium production. Only
a few Scope 3 emissions will remain
related to indirect emissions from
the production of raw materials used
for the making of inert anodes.
RUSAL is fully self-sufficient in alumina
capacity (with potential to supply more
to third parties) and about 77% self-
sufficient in bauxites and nephelines.
The efficient smelting technologies
together with low-cost input material
and utilities mix secure the Company’s
global leadership on the cost curve.
RUSAL’s production chain includes
bauxite and nepheline ore mines, alumina
refineries, aluminium smelters and
casting houses, foil mills, and packaging
and wheel production centres.
RUSAL has a diversified product mix with
a strong share of VAP in the portfolio
(2.03 mtpa out of 3.90 mt of total sales).
Top aluminium producers
globally (mt)1
Chinalco
Hongqiao Group
RUSAL’s sales geography is represented
by a diversified portfolio of regions,
enabling it to deliver aluminium products
to the domestic market and across all
key global consuming regions (Europe,
America and South East Asia).
RUSAL
Xinfra
Rio Tinto
Emirates Global Alumnium
SPIC
Norsk Hydro
Vedanta
Alcoa
To achieve the Group’s ambitious net
zero commitment, RUSAL is going to
upgrade all of its production facilities,
and introduce innovative technologies
throughout the production chain. This
involves the projects on conversion to
pre-baked anode technology. Converting
half of the capacity at Krasnoyarsk,
Bratsk, Irkutsk, and Novokuznetsk
smelters to pre-baked anode technology
is planned for the period between
2025 and 2030. Once implemented,
the programme will also help massively
reduce the smelters’ emissions of
fluorides and resinous substances,
including benzo(a) pyrene. This will also
reduce energy consumption by 11–18%.
6.7
5.7
3.8
3.6
3.2
2.5
2.4
2.2
2.2
2.2
1. Based on the Company’s internal data and peer companies’ publicly available results, announcements,
reports and other information.
28
En+ Group Annual Report 2021
With a well-established presence across five continents and a strong operational hub in
Siberia, combining the assets of both our Metals and Power segments, the Group is able
to capture commercial opportunities arising from its world-class assets and scale.
Power segment
En+ Group’s Power segment is the largest
independent power producer in Russia
by installed capacity and the largest
independent hydropower generator globally.
Russia has a well-developed power sector,
which is essential for the country’s high-
energy-consuming economy. The total
installed capacity of the Unified Energy
System of Russia was 246.6 GW in 2021, with
total electricity production of 1,114.55 TWh.
The Russian electricity market is dominated
Power companies by installed
hydro capacity globally, 2021 (GW)1
Eletrobras |
91% | State
China Yangtze Power |
100% | State2
HydroQuebec |
99% | State
RusHydro |
82% | State
Enel |
33% | State
EDF |
18% | State
SDIC Power |
54% | State
46.2
45.5
36.7
31.1
27.8
22.5
16.8
by thermal assets, which represent 66% of the total installed
capacity in Russia, while the Siberian region’s capacity is
roughly equally split between hydro (48.5%) and thermal
(50.9%), with a minor share of solar (0.7%). The Group’s
power generation assets are located in the Eastern Siberia
and Volga Regions, and the Company is engaged in all of
the major areas of the power industry in Russia: electricity
and heat generation; electricity, capacity and heat sales; heat
distribution; retail energy trading and supply; engineering
services; and electricity distribution and transmission.
Hydropower generation is a key area of the Power
segment’s business, with the majority of its assets located
in Siberia. In 2021, En+ Group remained the largest
producer in Siberia, with a 36% share of installed capacity.
Furthermore, 78% of its total capacity is represented
by hydropower assets, and it enjoys utilisation priority
over the regulatory range of thermal power plants.
Coal prices are the main driver of day-ahead market prices
since CHPs are the marginal producers. The output of
HPPs, driven by weather conditions, is also relevant, as it
affects the production volumes required from CHPs.
The Group’s key priority in its Power segment is to provide
a low-carbon hydropower supply to further reduce our
overall carbon footprint and to achieve carbon neutrality
by 2050. As part of this, the Group is planning to construct
new power stations such as Nizhneboguchany HPP and
Telmamskaya HPP for third-party sales. En+ is also continuing
its New Energy programme for HPPs modernisation, as
well as the modernisation programme for its CHPs.
Competitive landscape in Siberia
by installed capacity, 2021 (GW)4
En+ Group (Power segment) |
78% | Private
15.1
2021
En+ Group5
3.8
15.0
Iberdrola |
24% | Private
Verbund |
95% | State
EDP |
30% | State3
Engie Brasil |
78% | State
14.1
2020
SGK
8.3
2019
RusHydro
7.1
InterRAO
6.4
BEMO HPP6
Company | Hydro share | Ownership
Thermal
Hydro
1. Based on latest filings.
2. Subsidiary of China Three Gorges Corporation.
3. State owned China Three Gorges Corporation owns 20.22% stake.
4. Based on the Company’s internal data and peer companies’ publicly available results, announcements, reports and other information.
5. The Company’s assets capacity provided for Siberia only. The Company’s total capacity is 19.4 GW, including 15.1 GW in hydropower.
6. BEMO (Boguchany HPP) is a 50:50 JV between UC RUSAL and RusHydro. It is operated by RusHydro.
18.8
12.3
7.2
3.9
3.0
29
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BUSINESS REVIEW
METALS SEGMENT REVIEW
69.0 mt
global primary aluminium
demand grew by 8.8% y-o-y
Market overview
Current situation on the market is largely
affected by various sanctions imposed.
In present circumstances any forecast
or outlook made or previously made
may very rapidly become irrelevant
due to ongoing developments on the
market and therefore the stakeholders
should exercise due caution when
making their analysis or decision.
The analysis below is referring to the
situation as of the end of 2021.
Global aluminium demand
In 2021, global primary aluminium demand
grew by 8.8% y-o-y to 69.0 mt. In the Rest
of the World ex-China (“RoW”) demand
increased by 12.8% to 28.6 mt, while
demand in China increased by 6.1% to
40.4 mt. Demand in China was suppressed
throughout the August-November
period due to power rationing policy but
rebounded strongly in December with
the normalisation of power supply.
Regardless, the global manufacturing
sector ended 2021 on a positive note.
The global manufacturing PMI rose
for three consecutive months and, in
December, settled at a respectable 54.2.
Global aluminium demand in construction,
the largest segment of aluminium end-
use, grew by 5% in 2021 compared to
the previous year, and by 3% compared
to pre-COVID 2019. The European
construction sector has been supported
by government stimulus packages
and showed strength in late 2021
despite material supply issues. The US
construction sector was supported
by low mortgage rates, driving
demand across the residential sector.
In June, President Joe Biden signed
a USD 1.2 trillion infrastructure bill, to
be invested over the next eight years.
China’s construction sector showed a
sharp decline in the second half of 2021.
Pressure on developers to de-leverage—
particularly from the government’s
Three Red Lines policy—has led to
serious financial problems at Evergrande
and other development companies.
Aluminium demand in the transportation
sector, the second largest end-consuming
segment, grew by 10% compared to
2020 levels, but at the same time
remained 4% lower in comparison with
2019. Global semiconductor shortage
forced OEMs to reduce their planned
vehicle output in 2021. As per analyst
consensus, approximately 8 million cars
have either not been produced or were
deferred in 2021 due to the semiconductor
chip shortage. Many OEMs prioritised
production of more expensive models,
including EVs, in order to make up for
material shortages and secure revenue.
Global sales of BEVs and plug-in hybrids
grew over 70% in 2021, while in China
electric vehicle sales surged 154%. The
majority of global OEMs have committed
to achieving carbon neutrality, increasing
BEVs and hybrids in their portfolios.
This trend reinforces aluminium usage in
the automotive sector, boosting further
lightweighting and implementing new
applications such as the battery tray.
The aerospace sector has also shown
clear signs of a recovery. Key aircraft
manufacturers, namely Airbus and Boeing,
released their annual orders and deliveries
for 2021, showing strong growth in aircraft
deliveries of 8% and 117%, respectively.
The packaging sector remains a bright
spot in aluminium demand growth.
Having not contracted in demand in
2020, the segment grew another 9%
in 2021. Beverage brands continue to
position new drinks in aluminium cans
as environmentally friendly, targeting
sustainability-conscious consumers as
well as carbon neutrality. The growing
demand in the aluminium packaging
segment is also evidenced by the fact
that the largest can manufacturers
are actively investing in expanding
production capacities across the world.
Finally, aluminium demand in the power
sector grew by 7% compared to 2020.
Global trends in decarbonisation and the
green energy transition have stimulated
investment into renewable energy to
address climate change. According
to preliminary IEA data, additions of
renewable power capacity set another
annual record in 2021, with almost
290 GW added, driven by solar PV. This is
3% higher than 2020’s already exceptional
growth. Solar PV alone accounts for
more than half of all renewable power
expansion in 2021, followed by wind and
hydropower. The majority of solar panels
are fitted with aluminium frames, which
provide mounting attachment points
and protection for the edges of the glass
laminate. In rooftop and commercial
applications, mounting systems for PV
panels are also made of aluminium to
ensure lightweight and durability.
En+ Group Annual Report 2021
Global aluminium supply,
inventories and premiums
The worldwide supply of primary
aluminium continued to grow in 2021,
increasing by 3.9% y-o-y to 67.8 mt. At
the same time, RoW production increased
up by only 2.8% to 28.9 mt. High gas
prices in Europe have caused significant
disruption to the aluminium smelting
production due to smelters’ negative
cash margins. Nine European smelters
with 1.46 mtpa capacity executed or
announced c. 720 ktpa of operating
aluminium capacity cuts starting from
4Q 2021, which is equal to c. 14.4% of the
total installed aluminium capacity in the
region (c. 5.02 mtpa). This has triggered
a strong growth in EU aluminium ingot
premiums, which rose by 33% on average
over November—December 2021 period.
Regional premiums remained strong
and elevated with Midwest Al premium
reaching levels above 27.6 cents/ lb
and EU DU premium – above
USD 250 tonne. This growth occurred
against the backdrop of sellers raising
quotations on expectations that the
premium will continue to climb in line
with strong physical demand, and in
anticipation of possible further smelting
disruptions in Europe following a
significant rise in the cost of power.
Supply growth in China slowed
significantly from 7.4% in 9M 2021 to 4.7%
for FY 2021 and the resulting supply in
China was 39.0 mt. Despite easing of
power supply tightness in China and a
drop in domestic thermal coal prices,
significant smelting capacity cuts are
still in place due to power constraints
in some provinces and dual control
for decorbanisation targets. Chinese
primary aluminium production has
therefore fell steadily since July 2021.
Chinese unwrought aluminium and semis
exports continued to recover during
4Q 2021 and numbers for the full year
2021 demonstrate strong growth of
15.6% y-o-y to 5.6 mt. This result was
largely due to attractive export arbitrage
and rising overseas demand. At the
same time, Chinese import of unwrought
aluminium and products, which include
primary metal and unwrought, alloyed
aluminium, was 3.2 mt in 2021, a new
record high and up from 2.7 mt in 2020.
During 2021, aluminium inventories were
mostly falling, starting from March,
with total LME stocks remaining below
0.9 mt at the end of the year. Metal
held outside of LME warehouses (off-
warrant reported stocks) fell to 447 kt
by the end of November 2021.
LME aluminium price dynamics (USD/t)1
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Overall, the global market
recorded a deficit of 1.2 mt in
2021 compared to the 1.9 mt
of surplus observed during
the same period of 2020
3,500
2,800
2,100
1,400
700
0
Jan
2020
Feb Mar
Apr May
June
July
Aug
Sept
Oct
Now Dec
Jan
2021
Feb Mar
Apr May
June
July
Aug
Sept
Oct
Now Dec
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1. Bloomberg data.
BUSINESS REVIEW
67.8 mt
worldwide supply of
primary aluminium
increased by 3.9% y-o-y
The Company
owns
11
aluminium smelters
In 2021, VAP sales increased
18.1%
y-o-y
Operational performance
Aluminium
RUSAL owns eleven1 aluminium smelters,
which are located in three countries:
Russia (nine plants), Sweden (one plant)
and Nigeria (one plant). The Company’s
core asset base is located in Siberia,
Russia and accounts for approximately
93% of the Company’s aluminium
output in 2021. Among those, BrAZ and
KrAZ together account for more than
half of RUSAL’s aluminium production.
The Company also owns an 85% stake
in a smelter located in Nigeria.
During 2021, RUSAL continued to
implement the comprehensive programme
designed to control costs and optimise
the production process to strengthen the
Company’s position as one of the world’s
most cost-efficient aluminium producers.
The Group’s primary aluminium
production for the year ended
31 December 2021 was stable as
compared to the previous year and
totalled 3,764 kt. In line with its strategy,
the Group continued to grow the share
of VAPs in total sales. During 2021, VAP
sales increased 18.1% y-o-y to 2,034 kt,
with VAP share in total sales mix at
52%, compared to 44% in 2020.
Alumina
The Group owns nine2 alumina refineries
as of the end of 2021. RUSAL’s alumina
refineries are located in six countries:
Ireland (one plant), Jamaica (two plants,
one legal entity), Ukraine (one plant),
Italy (one plant), Russia (four plants),
and Guinea (one plant). In addition, the
Company holds a 20% equity stake in QAL,
an alumina refinery located in Australia.
The Company’s long position in
alumina capacity secures sufficient
supply for existing production and the
prospective expansion of the Company’s
aluminium production capacity, and
allows the Company to take advantage
of favourable market conditions
through third-party alumina sales.
RUSAL’s total attributable alumina
output increased 1.5% y-o-y to 8,304 kt
in 2021 due to PGLZ becoming a part
of RUSAL and being in operation for
the entire reporting period, an increase
in production capacities at Nikolaev
Alumina Refinery, and normalisation
of production processes at Achinsk
Alumina Refinery, Urals Alumina
Refinery and Queensland Alumina.
Aluminium production (kt)
Alumina production (kt)3
Aluminium production, (kt)
Alumina production, (kt)
3,507
3,499
3,495
2021
2020
2019
124
117
133
139
142
1,878
448
1,769
3,053
414
1,883
523
1,725
2,873
439
3,764
2021
3,755
2020
1,893
461
1,690
2,755
368
120
3,757
2019
742
8,304
740
8,182
691
7,858
Russia (Siberia)
Russia (other than Siberia)
Other countries
Ireland
Jamaica
Ukraine
Russia
Guinea
Australia (JV)
The Company operates
7
bauxite mines
Bauxites and nephelines
Bauxites and nephelines are key raw
materials for alumina production. In 2021,
the Group was approximately 77% self-
sufficient in bauxites and nephelines.
Bauxites
The Group operates seven bauxite mines.
RUSAL’s bauxite mines are located in four
countries: Russia (two mines), Jamaica
(one mine), Guyana (one mine), and
Guinea (three mines). The Company’s
long position in bauxite capacity helps
secure sufficient supply for existing
operations and the prospective expansion
of the Company’s alumina production
capacity. In addition, the Group sells low
volumes of bauxite to third parties.
The Group’s total attributable bauxite
output1 was 15,031 kt in 2021, as compared
to 14,838 kt in 2020. An increase in
mining of own bauxites occurred due
to the increased demand of end-
users. The most notable increase in
bauxite mining volumes occurred at
the Friguia and Dian-Dian mines.
En+ Group Annual Report 2021
Nephelines
RUSAL’s nepheline syenite
production was 4,390 kt in 2021,
as compared to 4,599 kt in 2020.
The reduction in mining volumes by
4.6% occurred due to the need to stabilise
the quality of ore shipped to the plant.
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Bauxite production (kt)2
Nepheline mines (Achinsk) (kt Wet)
Bauxite
Nepheline mines (Achinsk), (kt Wet)
1,863
5,679
7,489
1,752
5,570
7,435
0
81
1,856
5,574
7,205
1,412
2021
2020
2019
15,031
2021
14,838
2020
16,047
2019
Jamaica
Russia
Guinea
Guyana
4,390
4,599
4,244
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1. Aluminium operation is mothballed at the Alscon smelter, located in Nigeria.
2. Alumina operation is mothballed at the Eurallumina, located in Italy.
3. Pro-rata share of production attributable to the Group.
1. Bauxite output data was:
• Calculated based on a pro-rata share of the Company’s ownership in the corresponding bauxite mines
and mining complexes. The total production of the Company’s fully consolidated subsidiary, Bauxite
Company of Guyana Inc., is included in the production figures, notwithstanding that minority interests
in each of these subsidiaries are held by third parties
• Reported as wet weight (including moisture)
2. Pro-rata share of production attributable to the Group.
32
33
BUSINESS REVIEW
42%
increase in wheels production
Downstream projects
Foil and packaging
The volume of foil produced by the
Group’s facilities in 2021 amounted to
108.83 kt, which was a 5.39 kt or 5.2%
increase from 2020. The domestic supply
of plain foil, converted foil and tape
increased by 19.37 kt or 41.5% due to the
increased demand. At the same time,
the output of plain foil for export fell by
13.98 kt or 24.6% compared with 2020,
due to the redistribution of production
capacities towards the domestic market.
Wheel business
The output of wheels in 2021 increased
by 42% due to a gradual recovery
in new car production and sales,
as well as recovery in after-market
demand for aluminium wheels.
However, the impact of the COVID-19
pandemic on the industry remains
significant, the global shortage of
semiconductors led to temporary
shutdowns of the main original equipment
manufacturer-customers in Russia and the
redistribution of the wheels production
facilities towards after-market segment.
Foil production
(kt)
Foil production, kt)
66.02
46.65
48.57
2021
2020
2019
Aluminium wheels production
(ths pcs)
Aluminium wheels production,
42.81
56.79
49.43
108.83
2021
103.44
2020
98.00
2019
3,034
2,140
3,053
Domestic market (RF and CIS)
Export
Other business
Powders
Powder production volumes in 2021
increased by 7.9 kt or 34.9% compared
to 2020 due to the recovery of the
European economy after the recession
due to COVID-19 restrictions in 2020,
as well as the increased use of aerated
concrete in residential construction.
Secondary alloys
The amount of dross and aluminium-
containing waste converted into
secondary aluminium increased in 2021
by 1.4 kt or 10.0% to 15.3 kt compared to
the previous year due to the growth of the
volume of waste received for processing
from the Company’s enterprises.
Other mining assets
RUSAL owns and operates 15 mines and
mine complexes, including bauxite mines
(the resources of which are described
above), two quartzite mines, one fluorite
mine, two coal mines, one nepheline
syenite mine and two limestone mines.
The long position in alumina capacity
is supported by RUSAL’s bauxite and
nepheline syenite resource base.
RUSAL jointly operates two coal
mines with SamrukEnergo, the energy
division of Samruk-Kazyna through a
50/50 joint venture, Bogatyr Coal LLP.
26.25%
Rusal’s shareholding
stake in Norilsk Nickel
En+ Group Annual Report 2021
Bogatyr Coal LLP
Bogatyr Coal LLP, located in Kazakhstan,
is a 50/50 joint venture between
RUSAL and Samruk-Energo.
Bogatyr Coal LLP, which produced
approximately 44.63 mt of coal in
2021, has approximately 1.61 billion
tonnes of Proved and Probable Ore
Reserves and has Measured Mineral
Resources and Indicated Mineral
Resources totalling approximately
1.96 billion tonnes as of 31 December
2021 (reported on under JORC by
SRK). Bogatyr Coal LLP generated
sales of approximately USD 243 million
in 2020 and USD 241 million in 2021.
Russian and Kazakh customers
contribute to approximately 30%
and 70% of sales respectively.
Investment in Norilsk Nickel
Norilsk Nickel is the world’s largest
palladium producer, the largest high-
grade nickel producer, and one of the
leading producers of platinum, copper,
and cobalt. RUSAL held a 26.25%
shareholding (nominal) stake in Norilsk
Nickel as at the latest practicable date.
RUSAL’s shareholding in Norilsk Nickel
allows for significant diversification of
earnings through Norilsk Nickel’s exposure
to PGMs1 and non-ferrous metals (nickel,
copper, cobalt), and broadens RUSAL’s
strategic opportunities. The Company’s
objective is to maximise the value of
this investment for all shareholders.
Norilsk Nickel’s profile and financial
results2
As of 31 December 2020, Norilsk Nickel’s
resource base on the Taimyr and Kola
Peninsulas consisted of 743 mt of
Proven and Probable Ore Reserves and
2,019 mt of Measured and Indicated
Mineral Resources. Its key assets are
located in the Norilsk Region, the
Kola Peninsula, and the Trans-Baikal
Territory in Russia, and in Finland.
In 2021, Norilsk Nickel produced 193 kt
of nickel (down 18% compared to 2020),
407 kt of copper (down 16% compared
to 2020), 2,616 koz of palladium (down
7% compared to 2020) and 641 koz of
platinum (down 8% compared to 2020).
Metals production in 2021, compared
to 2020, decreased mainly due to
the temporary suspension of mining
operations at the Oktyabrsky mine
(recovered to full capacity in May 2021)
and Taimyrsky mine (recovered to full
capacity in December 2021) after flooding
caused by an inflow of underground water,
as well as the temporary suspension of
the Norilsk Concentrator and consequent
repairs (fully recovered in December
2021). The production figures above do
not include the production results of
Nkomati. In 2Q 2021, Nkomati was placed
on limited care and maintenance due to
the cessation of production activity.
Norilsk Nickel’s metal sales are highly
diversified by region: Europe, Asia, North
and South America, Russia and the CIS;
and by product: nickel, copper, palladium,
platinum, semi-products and other metals.
The market value of RUSAL’s investment
in Norilsk Nickel amounted to
USD 12,395 million as of 31 December
2021, which decreased in comparison with
the market value as at 31 December 2020
(USD 14,123 million). The positive effect
from the increase in metal prices was
offset by: (1) flooding of the Oktyabrsky
and Taimyrsky mines and an accident at
Norilsk Concentrator, and (2) changes in
legislation (temporary export duties and
an increase in mineral extraction tax).
In addition, in 2021, as part of the Norilsk
Nickel buyback programme, RUSAL
disposed of approximately 2.33% of the
issued share capital of Norilsk Nickel for
a total consideration of (approximately)
USD 1.4 billion. After cancelation of
repurchased (treasury) shares by Norilsk
Nickel, RUSAL’s stake in Norilsk Nickel
decreased from 27.82% to 26.25% of the
total issued share capital of Norilsk Nickel.
34
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1. PGMs are platinum group metals.
2. Production and operational data in this section are derived from www.nornik.ru/en/.
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Taishet aluminium smelter
was opened in December
2021 to produce aluminium
428.5 kt
per year
Projects
BEMO project
The Boguchany (BEMO) project involves
the construction of the 3,000 MW
Boguchany HPP (average annual
electricity output: 17.6 billion kWh) and the
Boguchany Aluminium Smelter capable
of producing 600 kt of metal per annum
in the Krasnoyarsk Territory in Siberia.
The construction of the Boguchany
Aluminium Smelter is divided into two
stages (each stage with capacity for
298 kt of aluminium per annum). The
first part of the first stage (149 kt of
aluminium per annum, 168 pots) was
launched in 2015, and the second part
of the first stage was launched in March
2019. In May 2019, the first stage of the
smelter reached its design capacity. In
2021, 292 kt of aluminium and alloys was
produced, which is 2 kt more than in 2020.
The second stage of the Boguchany
Aluminium Smelter is to be considered
with a strategic partner, RusHydro,
subject to the state of the market and
the availability of project financing.
Boguchany HPP is the fourth step in
the Angara Hydroelectric Power Chain,
the largest hydropower plant project
ever completed in Russia. Construction
of the power plant was suspended
in Soviet times due to the lack of
financing, but was resumed in May
2006 by RUSAL and RusHydro, after
they jointly agreed to complete it.
The project’s 79-metre-high and
2,587-metre-long composite gravity,
rock-fill dam was completed at the end
of 2011, and nine 333 MW hydropower
units of the Boguchany HPP commenced
operation between 2012 and 2014. The
total installed capacity of all nine hydro
units in operation amounts to 2,997 MW.
The hydropower plant started the
commercial supply of electricity to
the wholesale electricity and capacity
market on 1 December 2012. In 2021,
the hydropower plant produced and
delivered 17.238 TWh to the wholesale
electricity and capacity market, which is
2.3%, or 0.4 TWh lower than in 2020.
Taishet
Construction of the Taishet aluminium
smelter in Taishet, in the Irkutsk Region
(Eastern Siberia), was started in 2006.
Due to unfavourable market conditions,
RUSAL decided to suspend the project
in 2009. After the economic recovery
and improvement in market conditions
in 2016, the Board of Directors of RUSAL
decided to resume the construction of
LC-1 (first series) of the Taishet smelter
and approved the start of preliminary
work. Actual construction of the Taishet
Aluminium Smelter resumed in 2017.
LC-1 (first series) has a design
production capacity of 352 pots,
or 428.5 ktpa. Electricity consumption
by LC-1 (first series) amounts to
6,370 million kWh. On 16 December
2021, the first electrolyzers were
put into trial operation.
En+ Group Annual Report 2021
Assets overview
ALUMINIUM SMELTERS
Location
Installed
capacity
2020
production
2021
production
Capacity
utilisation rate
Bratsk aluminium smelter
Russia (Irkutsk Region)
1,009 ktpa
1,004 kt
Krasnoyarsk aluminium smelter
Russia (Krasnoyarsk Territory)
1,019 ktpa
1,020 kt
Sayanogorsk aluminium smelter
Russia (Republic of Khakassia)
542 ktpa
Novokuznetsk aluminium smelter
Russia (Kemerovo Region)
215 ktpa
Khakas aluminium smelter
Russia (Republic of Khakassia)
297 ktpa
Irkutsk aluminium smelter
Russia (Irkutsk Region)
422 ktpa
Taishet Aluminium Smelter1
Russia (Irkutsk Region)
428.5 ktpa
Kandalaksha aluminium smelter
Russia (Murmansk Region)
Volgograd aluminium smelter
Russia (Volgograd Region)
KUBAL
ALSCON2
Sweden
Nigeria
76 ktpa
69 ktpa
128 ktpa
-
529 kt
215 kt
308 kt
422 kt
-
70 kt
70 kt
117 kt
-
1,009 kt
1,019 kt
536 kt
215 kt
303 kt
424 kt
0
63 kt
70 kt
124 kt
-
Boguchany aluminium smelter3
Russia (Krasnoyarsk Territory)
298 ktpa
290 kt
292 kt
ALUMINA REFINERIES
Achinsk Alumina Refinery
Russia (Krasnoyarsk Territory)
1,069 ktpa
Bogoslovsk Alumina Refinery
Russia (Sverdlovsk Region)
1,030 ktpa
Urals Alumina Refinery
Russia (Sverdlovsk Region)
900 ktpa
PGLZ Alumina Refinery
Russia (Leningrad Region)
Friguia Alumina Refinery
Queensland Alumina Ltd.4
Eurallumina
Aughinish Alumina Refinery
Windalco
Nikolaev Alumina Refinery
BAUXITE MINES
Timan Bauxite
Guinea
Australia
Italy
Ireland
Jamaica
Ukraine
Russia (Republic of Komi)
3,300 ktpa
3,310 kt
North Urals Bauxite Mine
Russia (Sverdlovsk Region)
3,000 ktpa
2,260 kt
Compagnie des Bauxites de Kindia
Guinea
Friguia Bauxite and Alumina Complex Guinea
Bauxite Company of Guyana Inc.5
Windalco
Guyana
Jamaica
Bauxite Company of Dian-Dian
Guinea
3,500 ktpa
2,100 ktpa
2,941 kt
1,423 kt
1,700 ktpa
81 kt
4,000 ktpa
1,752 kt
3,000 ktpa
3,071 kt
900 kt
990 kt
916 kt
67 kt
439 kt
740 kt
-
265 ktpa
650 ktpa
3,950 ktpa
1,085 ktpa
1,990 ktpa
1,883 kt
1,210 ktpa
523 kt
1,759 ktpa
1,725 kt
907 kt
977 kt
917 kt
253 kt
414 kt
742 kt
-
1,878 kt
448 kt
1,769 kt
3,405 kt
2,274 kt
2,652 kt
1,544 kt
0 kt
1,863 kt
3,293 kt
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102%
95%
64%
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37%
101%
103%
76%
76%
74%
0%
47%
110%
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Taishet aluminium smelter
36
1. Pre-operation verifications and testing began in December 2021.
2. Alscon aluminium production is mothballed.
3. A 50/50 joint venture of RUSAL and RusHydro. Capacity and production volumes of the
BEMO project are not included to the Company’s consolidated operating data.
4. Pro-rata share of capacity and production attributable to RUSAL.
5. Mothballed in February 2020.
En+ Group Annual Report 2021
Electricity output
in Siberian IES in 2021 (TWh)
HPP
CHP
Total
Total in Siberia
En+ Group in Siberia
127.8
77.7
87.7
10.7
215.9
88.4
Electricity and capacity prices
In the Siberian IES, electricity spot
prices are effectively determined
by the production costs of the least
efficient coal-fired generation plants,
with HPPs acting as price takers. Over
the long term, electricity prices tend
to move with prices of thermal coal.
A significant proportion of the power
generated by Siberian CHPs is produced
using locally sourced brown coal.
Due to seasonality in demand and
the intermittency of hydropower,
the price of electricity can exhibit
significant fluctuations throughout
the course of the year.
One of the major factors exerting
significant influence in the medium term
is the water inflow to and water volumes
in the reservoirs of Siberian HPPs, which
determines the availability of low-cost
hydropower for the wholesale market.
Reflecting the long-term nature of these
decisions, the capacity market functions
rather differently to the electricity
market, with annual auctions carried
out to determine the price and select
an optimal set of generating facilities
to meet the forecast demand in each
pricing zone. Capacity prices are currently
determined through to 2026, and prices
are indexed annually at the previous year’s
Consumer Price Index (CPI) minus 0.1% –
the indexation is applied starting from
1 January of the year when the auction
was conducted, until 1 January of the
year when the capacity is supplied. On 10
October 2021, the Russian Government
issued Order No. 1852, changing the
length of the period for which the results
of the long-term auctions apply; effective
from 2022, it is now 3 years instead of the
previous 6 years. The same Government
Order sets a deadline of 15 November
2023 for a capacity auction for the
period till 2027. The shorter horizon is
to ensure planning flexibility and better
accommodate investment decisions
taken in the electric energy industry.
4.3%
increase in electricity output
within the Siberian IES
BUSINESS REVIEW
POWER SEGMENT REVIEW
3.8%
increase in electricity
consumption in the
Siberian IES
Market overview1
Overview of the Russian power sector
The Russian Federation’s power sector
is among the largest in the world, with
installed electricity capacity of the Unified
Energy System (UES) of Russia of 246.6
GW in 2021, and electricity output of
1,114.55 TWh. The UES of Russia covers
the most populated areas of Russia. Grid
interconnections between different energy
systems are limited by long distances, with
the Russian wholesale power and capacity
market split into two market pricing and
four non-market pricing zones. The first
pricing zone (European-Ural)2 includes
the integrated energy systems (IES) of the
North-West, Centre, Middle Volga, Urals
and South in the European part of Russia.
The second pricing zone, the Siberian
IES, encompasses Siberia. The electricity
prices of the two market price zones are
driven by the differences in capacity and
fuel mix in the respective price zones,
while grid limitations are yet another
factor affecting prices in the second
pricing zone. The zones where special
rules are used to set prices instead of
the market environment, include the
Kaliningrad and Arkhangelsk Regions,
Komi Republic and the Russian Far East.
The Group’s power generation facilities are
mostly located in the second price zone,
the Siberian IES, which covers 4,944,300
km2 and has a population of с. 19 million.
The Siberian IES includes 118 power plants
with an aggregate installed capacity of
52.3 GW, with 25.3 GW (48.4%) provided
by HPPs, 26.6 GW (50.9%) by CHPs
and 350.2 MW (0.7%) by SPPs (solar).
The backbone grids of the Siberian IES
consist of 102,807 km2 of HV power
lines of 110, 220, 500 and 1,150 kV3.
A unique feature of the Siberian IES is
the significant role of HPPs in both the
installed electricity capacity mix and
electricity output. Thermal power in
the Siberian IES is generated mostly
through coal-fired power plants,
which are primarily located near
regions where the coal is mined.
Electricity demand
Electricity consumption in the UES of
Russia in 2021 increased by 5.5% y-o-y
to 1,090.4 TWh. Electricity consumption
in the European-Ural zone grew
5.9% to 830.2 TWh, and by 3.8% to
217.3 TWh in the Siberian IES.
Electricity supply
The total installed electricity capacity
of the UES of Russia as of 1 January
2022 amounted to 246.6 GW and
increased by 1.3 GW in 2021. The increase
can be explained by the commissioning of
2.7 GW of new capacity, decommissioning
of 1.9 GW of old capacity, and a 0.5 GW
capacity increase linked to remarking,
corrections, etc. In the second pricing
zone, 60 MW was commissioned, no
capacity was decommissioned and
there was an increase in capacity as
a result of 51 MW being remarked.
In 2021, electricity output in
the UES of Russia increased by
6.4% y-o-y to 1,114.55 TWh. Electricity
output in the European-Ural pricing
zone increased by 7.0% to 851.7 TWh.
Electricity output within the Siberian IES
in 2021 was 215.9 TWh, up 4.3% y-o-y.
Output from HPPs in Siberia increased
by 8.5% y-o-y to 127.8 TWh. In 2021, the
Group’s HPPs generated approximately
60.8% of the total electricity produced
by hydropower stations in the Siberian
IES. At the same time, thermal power
plants decreased their electricity
production by 1.4% y-o-y to 87.7 TWh.
In 2021, combined heat and power
(CHP) plants accounted for 40.6% of
full-year electricity output within the
Siberian IES, while HPPs accounted for
59.2% and SPPs contributed 0.2%.
1. Unless otherwise stated, data for the Power segment’s “Market overview” section is sourced from ATS,
Association “NP Market Council”, System Operator of the Unified Energy System of the Russian Federation.
2. Comprises the Central, Central Volga, Urals, North-West and South Energy systems.
3. According to the System Operator of the Unified Energy System of the Russian Federation
(www.so-ups.ru/).
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BUSINESS REVIEW
7.1%
increase in the the average
electricity spot price on
the day-ahead market
in the 2nd price zone
Capacity prices
Price determined in capacity auctions (excl. CPI, ‘000 RUB/MW/month):
Second price zone
191
225
264
267
279
303
299
2020
2021
2022
2023
2024
2025
2026
CAPACITY PRICE (INCL. CPI MINUS 0.1% INDEXATION):
First price zone
Second price zone
‘000 RUB/MW/month
151.0
126.5
253.2
209.2
+19.4%
+21.0%
2021
2020
Change, %
The CCO price for the European-
Ural (first) pricing zone grew by 19.4%
year-on-year in 2021 (including CPI
minus 0.1% indexation). The capacity
price for the Siberian IES (second)
zone increased by 21.0% y-o-y in 2021
(including CPI minus 0.1% indexation).
Electricity prices
ELECTRICITY SPOT PRICES1:
First price zone
Second price zone
RUB/MWh
RUB/MWh
Nizhny Novgorod Region
RUB/MWh
Irkutsk Region
RUB/MWh
Krasnoyarsk Territory
RUB/MWh
In 2021, the average electricity spot price
on the day-ahead market in the second
price zone increased by 7.1% to 934 RUB/
MWh y-o-y. This dynamic was driven
by fewer low-price periods compared
to 2020, when there were transmission
constraints on the transit between East
and West Siberia on the back of high HPP
generation. These factors predominantly
affected prices in 4Q 2021. Higher coal
prices, which affected the CHPs’ price
bids levels on the market, and change
in market demand structures also
contributed to the price increases.
An increase in demand (+4.5%),
considered for CCO procedure,
was the key factor of the CCO
price growth y-o-y in 2021.
2021
2020
Change, %
1,406
934
1,211
872
1,454
1,259
807
857
793
789
+16.1%
+7.1%
+15.5%
+1.8%
+8.6%
In 2021, average electricity spot
prices in the Irkutsk Region and
Krasnoyarsk Territory increased by
1.8% to 807 RUB/ MWh and by 8.6% to
857 RUB MWh, respectively. The lower
prices in the Irkutsk Region reflected
ongoing transmission constraints on the
transit between East and West Siberia in
the period from October to December.
1. Day ahead market prices, data from ATS and Association “NP Market Council”.
90.4 TWh
The Group’s total electricity
production in 2021
En+ Group Annual Report 2021
Operational performance
As at 31 December 2021, the total installed
electricity capacity of the Group’s power
assets amounted to 19.4 GW1, while its
total installed heat capacity amounted
to 15.0 Gcal/h. As at 31 December
2021, 77.8% of the installed electricity
capacity was represented by HPPs,
with the remaining 22.2% accounted
for by CHPs (which are predominantly
coal-fired) and one solar plant.
The Company produced 90.4 TWh2 of
electricity in 2021, which represented 8.0%
of Russia’s total electricity generation
and 41.9% of the Siberian IES’s total
electricity generation for the period.
Hydropower generation
Hydropower generation is the main focus
of the Group’s Power segment. The Group
operates five HPPs3, including three
of the five largest HPPs in Russia and
of the twenty largest HPPs globally, in
each case in terms of installed electricity
capacity. In 2021, the Power segment’s
HPPs produced 77.7 TWh of electricity,
which accounted for 85.9% of the total
electricity generated by the Group.
Total electricity output by the Angara
cascade HPPs (Irkutsk, Bratsk and Ust-
Ilimsk HPPs) increased by 12.1% y-o-y
to 53.0 TWh in 2021, due to increased
water reserves in the reservoirs.
Water levels in Lake Baikal reached
457.23 metres in 2021 vs. 457.12 metres
in 2020. Water levels in the Bratsk
reservoir reached 402.03 metres
in 2021 vs. 400.60 metres in 2020.
In 2021, Krasnoyarsk HPP’s total
power generation increased by 12.3%,
from 22.0 TWh in 2020 to 24.7 TWh.
The increase was the result of a more
intensive state-regulated drawdown
in the Krasnoyarsk reservoir due to
high water reserves which resulted
from abnormally high water inflows in
2Q 2021. The maximum mark of the
headwater level of the Krasnoyarsk
reservoir was 242.60 metres
(1.5 metres higher than last year).
In 2021, Bratsk HPP and Krasnoyarsk
HPP generated their highest
ever annual power volumes.
Combined heat and power plants
The Group’s СHPs decreased electricity
output in 2021 by 1.6% y-o-y to
12.7 TWh, mainly due to increased
generation by the Angara cascade HPPs
in 2021. Heat generation amounted
to 28.5 million Gcal (up 5.9% y-o-y)
reflecting weather conditions – the
average temperature during 2021 was
1.7°С lower than during the last year.
Abakan Solar Power Plant generated
6.1 GWh in 2021 (up 10.9% y-o-y)
due to a higher number of sunny
days during the reporting period.
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Total Electricity Production4 (TWh)
Heat generation (mn Gcal)
53.0
47.3
44.5
2021
2020
2019
24.7
12.7
22.0
12.9
19.7
13.6
Total
90.4
2021
82.2
2020
77.8
2019
Angara cascade HPPs5
Yenisey cascade HPPs6
CHPs
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27.3
1.
Including Onda HPP, with installed power capacity of 0.08 GW (located in the European part of Russia,
leased to UC RUSAL); excluding Boguchany HPP with installed power capacity of 3,000 MW (50/50 JV
between UC RUSAL and RusHydro).
2. Excluding Onda HPP, with installed power capacity of 0.08 GW (located in the European part of Russia,
leased to UC RUSAL); excluding Boguchany HPP (50/50 JV between UC RUSAL and RusHydro).
3. Including Onda HPP.
4. Excluding Onda HPP, with installed power capacity 0.08 GW (located in European part of Russia, leased
to UC RUSAL); excluding Boguchany HPP, with installed power capacity of 3,000 MW (50%/50% JV of
UC RUSAL and RusHydro).
5. Includes Irkutsk, Bratsk, Ust-Ilimsk HPPs.
6. Krasnoyarsk HPP.
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BUSINESS REVIEW
The Group is involved in
heat and electricity sales
directly to end-users
Retail
The Company, through its subsidiaries LLC
Irkutskenergosbyt, JSC Volgaenergosbyt
and LLC MAREM+, purchases electricity
on the wholesale market (from both
the generating facilities of the Group
and third parties) and then resells it
on the retail market to both industrial
consumers that do not have access to
the wholesale market and residential
consumers. The Group is involved in heat
and electricity sales directly to end-users.
In 2007, the Group’s subsidiaries in
the Irkutsk and Nizhny Novgorod
Regions were granted the status of
guaranteeing suppliers within these
regions. In accordance with this status,
the Group is under an obligation to
conclude an electricity supply contract
with any consumer located within the
boundaries of these operational areas
that applies for such a contract.
Electricity transmission
and distribution
As at 31 December 2021, the Group
operated a transmission and distribution
system of approximately 41,600 km of
high and low voltage lines with an annual
output of approximately 50.5 TWh.
Through this system the Group transmits
electricity generated at the Angara
cascade HPPs to wholesale and retail
consumers, including RUSAL’s aluminium
smelters. Other generation facilities
of the Group, such as Krasnoyarsk
HPP and Avtozavodskaya CHP, do
not use this transmission network,
as they are not located within close
geographical proximity to the network.
Coal production
The Coal segment provides the
Group’s CHPs with a self-sufficient coal
resource base and covers En+ Group’s
internal coal demand. A portion of
the coal production is sold to third
parties both in Russia and abroad.
Coal prices in the domestic market
are determined based on the level of
competition and demand from various
categories of consumers in the region
(energy, utilities, other industrial
enterprises, and the general population).
2.1 TWh
Additional hydropower
output enabled by the
New Energy programme
En+ Group Annual Report 2021
Projects
The New Energy
modernisation programme
New Energy is a programme aimed
at modernising the power plants of
the Angara and Yenisei HPP cascade
with a view to ramping up the energy
output from the same volume of water
passing through the hydropower
turbines. Another objective is to reduce
the Company’s carbon footprint by
curbing the greenhouse gas emissions
of the Company’s coal-fired power
plants. In 2021, the programme
has enabled En+ Group to increase
its power output by 2.1 TWh.
The programme assumes a large-scale
overhaul and replacement of the core
equipment of the Company’s largest
Siberian HPPs, i.e. the Krasnoyarsk,
Bratsk, Irkutsk and Ust-Ilimsk HPPs.
The programme envisages modernisation
of hydroelectric generation units and
the replacement of runners. Increased
efficiency will be provided by the
new runners’ improved blades and
by utilising new materials, with an
efficiency rate increase of up to 8%
depending on the runner. Higher safety
and better reliability of the HPPs is
another priority of the modernisation
programme, which will mitigate the risks
associated with cavitation and address
the HPP generator wear problem.
The modernisation programme investment
is expected to total RUB 21 billion in the
period to 2026 (around USD 282.7 million
as at 31 December 20211), including
funds already invested in the project
(RUB 13 billion as at 31 December 2021).
The HPP efficiency will match that of
the world’s best performers after the
New Energy programme is completed,
providing for better reliability and a higher
quality power supply to our Siberian
consumers. On top of the expected
economic improvement, the New Energy
programme will positively impact the
environment of the Siberian regions in
which we operate. Hydroelectric energy
is used to partially replace the energy
generated by coal-fired power plants
and thus prevent GHG emissions of
2.44 mt of СО2e in 2021. The modernised
turbines also incorporate an up-to-
date runner design that prevents the
leakage of turbine oil into water.
In 2021, the Company launched a new,
the second in a row hydroelectric
unit at the Irkutsk HPP and began
works on the next hydroelectric unit
replacement. The Company replaced
one runner and started works for the
replacement of another runner at the
Bratsk HPP. Two new runners were
delivered to the Krasnoyarsk HPP and
technical re-equipment works began.
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Bratsk HPP
(18 generation units)
Ust-Ilimsk HPP
(16 generation units)
Krasnoyarsk HPP
(12 generation units)
Irkutsk HPP
(8 generation units)
PROJECTS COMPLETED AND UNDERWAY
13 of 18 runners
replaced (2007–2021)
5 remaining runners
to be replaced by 2026
4 of 16 runners
replaced (2014–2018)
2 of 12 runners
replaced (2016–2019)
2 generation units
replaced in 2020–2021
6 of 12 runners to be
replaced by 2025
2 of 8 generation units
to be replaced by 2023
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1. Calculated based on USD/RUB exchange rate of 74.29 as at 31 December 2021.
BUSINESS REVIEW
The Group will improve the
reliability and safety of
33.7%
of total CHP capacity
Small HPP project
As part of the state programme backed
by the CAC mechanism for renewable
projects, En+ Group is implementing the
small-scale Segozerskaya HPP (8.1 MW) in
Karelia (Russia). Total expected CAPEX for
small HPP construction is approximately
USD 22 million1 (RUB 1.6 billion).
In 2021, the Group completed preparatory
work at the construction site and
began construction and installation
work on the Segozerskaya HPP, and
in 2022, the Company is planning to
complete construction work, supply
and installation of three turbine units.
En+ Group has formed a portfolio of
projects with a total installed capacity
of about 200 MW. Depending on the
results of the project feasibility studies,
a decision will be made on when
these projects will be implemented.
CHP modernisation programme
The Group participated in the state
programmes for CHP modernisation,
providing us with a guaranteed return
on investment. The Capacity Allocation
Contracts (CAC) will be signed between
buyers, market regulator (ATS) and
generating companies in the wholesale
market, setting the key criteria for
modernisation, parameters of capacity
supply after the modernisation
and return on investment.
Through this programme the Group
will improve the reliability and safety
of 1,445 MW of its CHP capacity (33.7%
of total CHP capacity). Total expected
CAPEX for CHPs is USD 266 million1
(RUB 19.7 billion) in 2020–2026. The
current approved generating facilities
should be completed and launched
by 2026, with the project’s internal
rate of return at around 14%.
In 2021, the Company delivered
equipment and started construction
and installation work under the CAC
projects at CHP-6 in Bratsk and, at
Novo- Irkutsk CHP, equipment was
supplied to replace three turbo generators
for CHP-10. In 2022, the Company is
planning to complete the replacement
of the main equipment at CHP-6 in
Bratsk and at the Novo-Irkutsk CHP.
En+ Group Annual Report 2021
Installed
capacity
2020
production
2021
production
687.1 MW
4,500 MW
3,840 MW
4.1 TWh
22.4 TWh
20.8 TWh
22.0 TWh
4.8 TWh
28.5 TWh
19.6 TWh
24.7 TWh
Location
Russia (Irkutsk Region)
Russia (Irkutsk Region)
Russia (Irkutsk Region)
Russia (Krasnoyarsk Territory)
6,000 MW
Assets overview
HYDROPOWER PLANTS
Irkutsk HPP
Bratsk HPP
Ust-Ilimsk HPP
Krasnoyarsk HPP
COMBINED HEAT AND POWER PLANTS
CHP-10
• Electricity
• Heat
CHP-9
• Electricity
• Heat
Russia (Irkutsk Region)
Russia (Irkutsk Region)
Novo-Irkutsk CHP
Russia (Irkutsk Region)
• Electricity
• Heat
Ust-Ilimsk CHP
• Electricity
• Heat
CHP-11
• Electricity
• Heat
CHP-6
• Electricity
• Heat
Russia (Irkutsk Region)
Russia (Irkutsk Region)
Russia (Irkutsk Region)
Novo-Ziminskaya CHP
Russia (Irkutsk Region)
• Electricity
• Heat
Avtozavodskaya CHP
Russia (Nizhny Novgorod Region)
1,110 MW
3.1 TWh
3.0 TWh
563 Gcal/h
0.4 mn Gcal
0.3 mn Gcal
540.0 MW
1.9 TWh
1.8 TWh
2 401.8 Gcal/h
6.0 mn Gcal
6.2 mn Gcal
726 MW
2.7 TWh
2.7 TWh
2,075.8 Gcal/h
5.5 mn Gcal
5.8 mn Gcal
515 MW
0.7 TWh
0.8 TWh
1,015.0 Gcal/h
1.6 mn Gcal
1.8 mn Gcal
320.3 MW
0.7 TWh
0.5 TWh
1,056.9 Gcal/h
0.9 mn Gcal
1.0 mn Gcal
282 MW
0.7 TWh
0.7 TWh
2,071.2 Gcal/h
3.6 mn Gcal
3.7 mn Gcal
260 MW
1.1 TWh
1.1 TWh
818.7 Gcal/h
1.5 mn Gcal
1.6 mn Gcal
480 MW
1.7 TWh
1.8 TWh
2,172.0 Gcal/h
3.3 mn Gcal
3.7 mn Gcal
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Russia (Republic of Khakassia)
5.2 MW
5.5 mn kWh
6.1 mn kWh
142.4 MW
0.8 TWh
0.7 TWh
2,802.9 Gcal/h
4.2 mn Gcal
4.5 mn Gcal
• Electricity
• Heat
SOLAR POWER PLANT
Abakan solar power plant
OTHER ASSETS1
• Electricity
• Heat
Segozerskaya HPP project
1. Calculated based on USD/RUB exchange rate of 74.29 as at 31 December 2021.
1. Other assets include Onda HPP and small scale generators and heat producers.
44
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FINANCIAL REVIEW
KEY HIGHLIGHTS
Financial review
The following table
sets forth selected data
from the Group’s key
financial information:
(USD mn)
Revenues
Gross profit
Gross profit margin
Results from operating activities (EBIT)
Operating profit margin
Pre-tax profit
Profit for the year
Net profit margin1
Adjusted EBITDA2
Adjusted EBITDA margin3
Net debt4
Net working capital5
Free cash flow6
Basic earnings per share7
Equity attributable to shareholders of the Company
As at or year ended 31 December
2021
14,126
4,952
35.1%
2,898
20.5%
4,138
3,534
25.0%
3,992
28.3%
8,581
2,753
1,705
4.264
5,775
2020
10,356
2,548
24.6%
1,010
9.8%
1,125
1,016
9.8%
1,861
18.0%
9,826
1,614
968
1.320
3,156
1. Net profit margin for any period represents net profit or loss for the relevant period divided by total
revenues for the relevant period and expressed as a percentage, in each case attributable to the Group,
Power or Metals segment, as the case may be.
2. Adjusted EBITDA for any period represents the results from operating activities adjusted for amortisation
and depreciation, impairment of noncurrent assets and gain/loss on disposal of property, plant and
equipment for the relevant period, in each case attributable to the Group, Power or Metals segment, as
the case may be.
3. Adjusted EBITDA margin for any period represents adjusted EBITDA for the relevant period divided by
total revenues for the relevant period and expressed as a percentage, in each case attributable to the
Group, Power or Metals segment, as the case may be.
4. Net debt represents the sum of loans and borrowings and bonds outstanding less total cash and cash
equivalents as at the end of the relevant period, in each case attributable to the Group, Power or Metals
segment, as the case may be.
5. Net working capital represents inventories plus shortterm trade and other receivables (excluding
dividend receivables from related parties) less trade and other payables as at the end of the relevant
period, in each case attributable to the Group, Power or Metals segment, as the case may be.
6. Free cash flow means, for any period, the cash flows generated from operating activities less net interest
paid, capital expenditures, restructuring fees and other payments related to issuance of shares, adjusted
for payments from settlement of derivative instruments plus dividends from associates and joint ventures.
7. The earnings per share calculation is based on a 502 million and 518 million weighted average number of
shares in 2021 and 2020, respectively.
En+ Group Annual Report 2021
The following table sets forth
the Group’s revenue by business
segment for the years indicated:
(USD mn)
Metals segment
Power segment
Business segment
revenues
Elimination of
intersegmental
revenues
Total revenues
Year ended
31 December
2021
11,994
3,138
2020
8,566
2,697
15,132
11,263
(1,006)
(907)
14,126
10,356
The Group’s revenue is mainly attributable
to the Metals segment’s operations.
In 2021 and 2020, its revenue (before
intersegmental elimination) accounted for
79.3% and 76.1% of the Group’s revenue,
respectively. In 2021 and 2020, the Power
segment’s revenue (before intersegmental
elimination) accounted for 20.7% and
23.9% of the Group’s revenue, respectively.
The Group’s revenue increased
by USD 3,770 million, or 36.4%,
from USD 10,356 million in 2020 to
USD 14,126 million in 2021. This increase
was primarily due to a rise in RUSAL’s
revenue, following a 45.5% increase in
the LME aluminium price to an average
of USD 2,475 per tonne in 2021, from
USD 1,702 per tonne in 2020, and sales
of primary aluminium growth by 18.1% to
2,034 kt. The Group’s revenue was also
affected by an increase in the Power
segment’s revenue, mainly following the
increase in electricity generation volumes.
FINANCIAL OVERVIEW
The results of the Group’s operations
are divided into the Power and Metals
segments. The Power segment comprises
the power industry, including power
generation, power trading and supply.
It also includes supporting operations
engaged in the supply of coal resources to
the Group. The Metals segment consists
of RUSAL, which includes RUSAL’s
equity investment in Norilsk Nickel.
In 2021, RUSAL accounted for
approximately 5.6% of the world’s
aluminium output and about 6.3% of the
world’s alumina production. RUSAL’s
offices are operating in 20 countries all
over the world and across five continents.
The Company’s management believes that
the division of the results of the Group’s
operations into the Power and Metals
segments enables investors and analysts
to assess the parts of the Group’s business
which are under the Company’s direct
day-to-day operational management.
In its comparison of period to period results
of operations, the Group presents its results
of operations on a consolidated basis after
intersegmental eliminations, in order to
analyse changes, developments and trends
by reference to the individual segment’s
results of operations (the Power and
Metals segments). Amounts attributable
to the segments are presented prior to
intersegmental eliminations between them.
Revenues
The following table sets forth the
Group’s revenue from sales, broken
down by each product sold by the
Group, for the years indicated:
Year ended
31 December
(USD mn)
2021
2020
Sales of primary
aluminium and alloys
Sales of electricity
Sales of alumina and
bauxite
Sales of semifinished
products and foil
Sales of heat
Other revenues
Total revenues
9,766
1,525
6,969
1,169
612
767
465
991
534
547
426
711
14,126
10,356
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FINANCIAL REVIEW
The Group’s cost of
sales increased by
USD 1,366 mn
or 17.5%, from USD
7,808 mn in 2020 to
USD 9,174 mn
in 2021
Cost of sales
The following table sets forth the
Group’s cost of sales by business
segment for the years indicated:
(USD mn)
Year ended
31 December
2021
2020
Metals segment
8,273
7,112
Power segment
1,821
1,582
Business segment cost
of sales
10,094
8,694
Elimination of
intersegmental cost of
sales
(920)
(886)
Total cost of sales
9,174
7,808
The cost of sales in the Power and Metals
segments reflect costs incurred directly
by the sale and production of the principal
products and services of both groups of
companies. For the Power segment, the
cost of sales primarily includes costs for
electricity and capacity purchased for resale,
the cost of raw materials, fuel, personnel
expenses, depreciation and amortisation.
For Metals segment, the cost of sales mainly
consists of the cost of energy, alumina,
bauxite, other raw materials, personnel
expenses, depreciation and amortisation.
The Group’s cost of sales increased
by USD 1,366 million or 17.5%,
from USD 7,808 million in 2020
to USD 9,174 million in 2021.
The increase was primarily attributable
to the increase in the cost of sales of
RUSAL by USD 1,161 million, or by 16.3%,
to USD 8,273 million for the year ended
31 December 2021, as compared to
USD 7,112 million for the year ended
31 December 2020. The increase was
primarily driven by sharp rise in raw
materials prices, and 18.1% increase in
primary aluminium sales volumes (share in
total sales in 2021 is 52% vs 44% in 2020).
In addition, En+ Group raised salaries for
its employees in Siberian and other regions
on two steps during 2021, leading to an
average overall increase in personnel costs.
Gross profit
The Group’s gross profit for 2021
increased by USD 2,404 million, or
94.3%, to USD 4,952 million from
USD 2,548 million in 2020.
The Group’s gross profit margin increased
from 24.6% in 2020 to 35.1% in 2021.
Distribution, general and
administrative expenses
The Group’s distribution, general
and administrative expenses for 2021
increased by USD 249 million, or 18.9%, to
USD 1,569 million from USD 1,320 million in
2020 following the growth of export customs
duties, the significant increase in transport
tariffs, as well as increase in personnel costs.
Adjusted EBITDA, adjusted
EBITDA margin and results
from operating activities
The following table sets forth a reconciliation
of the Group’s adjusted EBITDA to
the Group’s results from operating
activities for the periods indicated:
(USD mn)
2021
2020
Year ended
31 December
Reconciliation of
adjusted EBITDA
Results from
operating activities
Add:
Amortisation and
depreciation
Loss on disposal of
property, plant and
equipment
Impairment of
noncurrent assets
2,898
1,010
822
781
5
267
12
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Adjusted EBITDA
3,992
1,861
The Group’s results from operating
activities for 2021 increased
by USD 1,888 million, or 186.9%,
to USD 2,898 million from
USD 1,010 million for 2020.
Results from operating activities
attributable to Metals segment
increased by USD 1,800 million, or
645.2%, from USD 279 million in
2020 to USD 2,079 million in 2021;
results from operating activities
attributable to the Power segment
increased by USD 158 million, or
21.6%, from USD 731 million in 2020,
to USD 889 million in 2021.
The Group’s operating profit
margin increased from 9.8%
in 2020 to 20.5% in 2021.
USD 3,992 mn
the Group’s adjusted
EBITDA in 2021
USD 1,762 mn
the Group’s share
of profits of associates
Adjusted EBITDA is defined as results
from operating activities adjusted
for amortisation and depreciation,
impairment charges and loss on disposal
of property, plant and equipment.
The following table sets forth the Group’s
adjusted EBITDA and adjusted EBITDA
margin by segment (before intersegmental
elimination) for the years indicated:
(USD mn, except %)
2021
2020
Year ended
31 December
Adjusted EBITDA
Metals segment
Adjusted EBITDA
Power segment
Consolidation
adjustment
Adjusted EBITDA
Adjusted EBITDA
margin Metals
segment
Adjusted EBITDA
margin Power
segment
Adjusted EBITDA
Margin Group
2,893
1,172
(73)
3,992
871
993
(3)
1,861
24.1%
10.2%
37.3%
36.8%
28.3%
18.0%
In 2021, the Group’s adjusted EBITDA
increased by USD 2,131 million, or
114.5%, to USD 3,992 million from
USD 1,861 million in 2020. The increase
in 2021 as compared to 2020 was mainly
due to the same factors that influenced
the operating results of the Group.
Share of profits of associates
and joint ventures
Year ended
31 December
(USD mn, %)
2021
2020
Share of profit in
Norilsk Nickel, with
Effective
shareholding of
Share of profit in
BEMO project, with
Effective
shareholding of
Share of profit in
other associates/
joint ventures
Share of profits of
associates and joint
ventures
1,762
930
15.01%
15.82%
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28.44%
28.44%
(18)
(10)
1,802
971
En+ Group Annual Report 2021
The Group has a number of associates
and joint ventures, which are accounted
for in the Financial Statements under
the equity method. The principal
associates and joint ventures include
Norilsk Nickel, Queensland Alumina
Limited and the BEMO Project.
The Group’s share of the profits of
its associates and joint ventures
increased by USD 832 million, or
89.5%, to USD 1,762 million in 2021
from USD 930 million in 2020.
The deviation in the share of the profits
of the associates and joint ventures
in 2021 as compared to 2020 can
primarily be attributed to the increase
of profit from the Group’s investment
in Norilsk Nickel. In 2020, Norilsk Nickel
recognised the environmental provision
in the amount of USD 2.2 billion due
to liquidation of diesel fuel leak at the
industrial site of HPP-3 in Norilsk and
compensation of environmental damages
that led to EBITDA decreasing in 2020.
In 2021, the Group has participated in the
repurchase of Norilsk Nickel shares to
raise additional funds to finance its own
investment programme. The Group sold
Norilsk Nickel shares with the aggregate
consideration of USD 1,418 million. The
carrying value of the shares sold amounted
to USD 313 million, and USD 613 million
of currency translation reserve attributed
to the shares sold was reclassified to
profit/(loss) for the period, resulting in
net gain of USD 492 million recognised in
the consolidated statement of income.
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The market value of the investment
amounted to USD 12,395 million and
USD 14,123 million as at 31 December 2021
and 31 December 2020, respectively,
and is determined by multiplying the
quoted bid price per share on the Moscow
Exchange on the year-end date by the
number of shares held by the Group.
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FINANCIAL REVIEW
Finance income and costs
Profit before taxation
The Group’s finance income primarily
consists of interest income and net
foreign exchange gain. The Group’s
finance costs primarily consist of interest
expense on interestbearing liabilities
and net foreign exchange loss.
(USD mn)
2021
2020
Year ended
31 December
For the reasons inscribed above, the
Group recorded a profit before taxation
of USD 4,138 million in 2021 as compared
to USD 1,125 million in 2020. In 2021,
the Power segment generated a profit
before taxation of USD 566 million
compared to USD 409 million in 2020. In
2021, Metals segment generated a profit
before taxation of USD 3,641 million as
compared to USD 716 million in 2020.
FINANCE INCOME
Net foreign
exchange gain
Interest income
Dividend income
Total finance
income
Finance costs
Income tax expense
-
65
22
87
98
61
1
160
The Group’s income tax expense for
2021 increased by USD 495 million to
USD 604 million from USD 109 million in
2020, as a result of the rise profit before
taxation in 2021 as compared to 2020.
Interest expense
(709)
(788)
Profit for the year
For the reasons inscribed above, the
Group’s profit for the year ended
31 December 2021 was USD 3,534 million,
as compared to profit for the year ended
31 December 2020 of USD 1,016 million.
Net foreign
exchange loss
Change in
fair value of
derivative financial
instruments
Revaluation of
financial assets
Other finance costs
(33)
-
(352)
(226)
(47)
-
-
(2)
Total finance costs
(1,141)
(1,016)
The Group’s finance income for
2021 decreased by USD 73 million,
or 45.6%, to USD 87 million from
USD 160 million in 2020, mainly a result
of foreign exchange gain in 2020.
The Group’s finance costs for 2021
increased by USD 125 million, or 12.3%,
from USD 1,016 million in 2020 to
USD 1,141 million in 2021 as a result of
change in fair value of derivative financial
instruments (USD 352 million in 2021
compared to USD 226 million in 2020) due
to strong appreciation in prices for the
metal hedged, and foreign exchange loss.
En+ Group Annual Report 2021
Metals segment’s revenue increased
in 2021 by USD 3,428 million, or by
40.0%, to USD 11,994 million from
USD 8,566 million in 2020.
Revenue from sales of primary aluminium
and alloys increased by USD 2,878 million,
or by 40.6%, to USD 9,966 million in
2021, as compared to USD 7,088 million
in 2020, primarily due to a 41.4% increase
in the weighted-average realised
aluminium price per tonne (to an average
of USD 2,553 per tonne in 2021 from
USD 1,805 per tonne in 2020) driven
by an increase in the LME aluminium
price (to an average of USD 2,475 per
tonne in 2021 from USD 1,702 per tonne
in 2020), while sales volumes remained
almost flat in the compared periods.
Revenue from sales of alumina increased
by 14.4% to USD 610 million for the
year ended 31 December 2021 from
USD 533 million for the year ended
31 December 2020, due to an increase in
the average sales price by 18.2%, together
with a decrease in sales volumes of 3.0%.
Revenue from sales of foil and other
aluminium products increased by
USD 134 million, or by 35.2%, to
USD 515 million in 2021, as compared
to USD 381 million in 2020 due to
an increase in revenue from sales of
aluminium wheels by 58.6% together
with an increase in sales of foil by 28.3%
between the comparable periods.
Revenue from other sales, including
sales of other products, bauxite and
energy services increased by 60.1% to
USD 903 million for the year ended
31 December 2021 as compared to
USD 564 million for the previous year,
due to a 54.3% increase in sales of other
materials that was a result both by the
increase in sales volumes along with
the increase in average sales price.
METALS
SEGMENT
Selected financial data
The following table sets forth
selected data of Metals segment
(before intersegmental elimination)
for the periods indicated:
In 2021 and 2020, Metals
segment accounted
for 79.3% and 76.1% of
the business segments’
revenues (before
adjustments), respectively.
As at 31 December 2021
and 31 December 2020,
the assets of the Metals
segment accounted for
66.5% and 62.2% of the
Group’s total assets (before
adjustments), respectively
(USD mn)
Revenues
Gross profit
Gross profit margin
Pre-tax profit
Profit for the period
Net profit margin
Adjusted EBITDA
Adjusted EBITDA
margin
Adjusted net profit1
Recurring net profit2
Recurring net profit
margin3
Year ended
31 December
2021
2020
11,994
8,566
3,721
31.0%
3,641
3,225
26.9%
2,893
24.1%
1,536
3,298
1,454
17.0%
716
759
8.9%
871
10.2%
60
990
27.5%
11.6%
Revenues
The following table sets forth
components of Metals segment’s
sales data (before intersegmental
elimination) for the years indicated:
Year ended
31 December
2021
2020
SALES OF PRIMARY ALUMINIUM
AND ALLOYS
Revenue, USD mn
9,966
7,088
Sales volumes, kt
3,904
3,926
Average sales price
(USD/t)
SALES OF ALUMINA
Revenue, USD mn
Sales volumes, kt
Average sales price
(USD/t)
Sales of foil and other
aluminium products,
USD mn
Other revenue, USD mn
2,553
1,805
610
1,677
533
1,729
364
308
515
903
381
564
Total, USD mn
11,994
8,566
1. Adjusted net (loss)/profit for any period represents net (loss)/profit for the relevant period adjusted
for the net effect from the share in the results of Norilsk Nickel, the net effect of embedded derivative
financial instruments and the net effect of noncurrent assets impairment.
2. Recurring net profit represents adjusted net (loss)/profit for the relevant period plus RUSAL’s effective
share of Norilsk Nickel’s profits, net of tax.
3. Recurring net profit margin represents recurring net profit for the relevant period divided by total
revenues and expressed as a percentage for the relevant period attributable to Metals segment.
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FINANCIAL REVIEW
POWER
SEGMENT
In 2021 and 2020, the
Power segment accounted
for 20.7% and 23.9% of
the business segments’
revenues (before
adjustments), respectively.
As at 31 December 2021
and 31 December 2020,
the assets of the Power
segment accounted for
33.5% and 37.8% of the
Group’s total assets (before
adjustments), respectively
Cost of sales
The following table sets forth components of Metals
segment’s cost of sales (before intersegmental
elimination) for the years indicated:
(USD mn)
Cost of alumina
Cost of bauxite
Cost of other raw materials
and other costs
Purchases of primary
aluminium from joint ventures
Energy costs
Depreciation and amortisation
Personnel expenses
Repair and maintenance
Net change in provisions for
inventories
Change in finished goods
Total cost of sales
Year ended 31 December
2021
741
506
2020
608
447
3,387
2,298
696
2,070
572
618
407
28
(752)
8,273
465
1,868
542
512
381
(2)
(7)
7,112
Metals segment’s cost of sales increased by
USD 1,161 million, or by 16.3%, to USD 8,273 million for
the year ended 31 December 2021, as compared to
USD 7,112 million for the year ended 31 December 2020.
The cost of alumina increased by USD 133 million, or
by 21.9%, to USD 741 million in 2021 as compared to
USD 608 million in 2020 primarily due to the increase
in alumina purchase price between the periods.
The cost of bauxite increased by USD 59 million,
or by 13.2%, to USD 506 million in 2021 as
compared to USD 447 million in 2020.
The cost of raw materials (other than alumina and
bauxite) and other costs increased by 47.4% for the year
ended 31 December 2021 compared to the same period of
2020, due to an increase in raw materials purchase price.
Energy costs increased by USD 202 million, or by 10.8%,
to USD 2,070 million for the year ended 31 December
2021, as compared to USD 1,868 million for the year
ended 31 December 2020 due to increase in the average
electricity tariff between the comparable periods.
The finished goods mainly consist of primary
aluminium and alloys (c.95%). The dynamic of
change between the reporting periods was driven
by the fluctuations of primary aluminium and alloys
physical inventory between the reporting dates:
96.9% increase in 2021 and 2.6% increase in 2020.
Adjusted EBITDA and adjusted
EBITDA margin
In 2021, Metals segment’s adjusted EBITDA
(before intersegmental elimination) increased by
USD 2,022 million, or 232.1%, to USD 2,893 million from
USD 871 million in 2021. The factors that contributed
to the increase in adjusted EBITDA margin were the
same ones that influenced the operating results.
The following table sets forth a reconciliation of
Metals segment’s adjusted EBITDA to its results from
operating activities for the periods indicated:
(USD mn)
Year ended 31 December
2021
2020
RECONCILIATION OF ADJUSTED EBITDA
Results from operating
activities
Add:
Amortisation and depreciation
Loss on disposal of property,
plant and equipment
Impairment of noncurrent
assets
Adjusted EBITDA
2,079
596
9
209
2,893
279
570
13
9
871
The following table sets forth a reconciliation of
Metals segment’s adjusted net profit and recurring
net profit to its net profit for the periods indicated:
(USD mn)
Year ended 31 December
2021
2020
RECONCILIATION OF ADJUSTED NET PROFIT
Net profit for the period
3,225
759
Adjusted for:
Share of profits and other
gains and losses attributable
to Norilsk Nickel, net of tax
effect
Change in derivative financial
instruments, net of tax (20%)
Gain from partial disposal of
investment in associate
Impairment of noncurrent
assets, net of tax
Adjusted net profit
Add back:
Share of profits of Norilsk
Nickel, net of tax
Recurring net profit
(1,762)
(930)
356
(492)
209
1,536
1,762
3,298
222
-
9
60
930
990
Adjusted net (loss)/profit for any period is defined as
the net (loss)/profit adjusted for the net effect of the
Company’s investment in Norilsk Nickel, the net effect
of derivative financial instruments and the net effect of
non-current assets impairment. Recurring net profit for
any period is defined as adjusted net (loss)/profit plus the
Company’s net effective share in Norilsk Nickel results.
En+ Group Annual Report 2021
Selected financial data
Revenues
The following table sets forth
selected data of the Power segment
(before intersegmental elimination)
for the periods indicated:
The following table sets forth
components of the Power segment’s
sales data (before intersegmental
elimination) for the years indicated:
(USD mn)
Revenues
Gross profit
Year ended
31 December
2021
2020
3,138
1,317
2,697
1,115
Year ended
31 December
2021
2020
Average rate RUB/USD
73.65
72.15
SALES OF ELECTRICITY
Gross profit margin
42.0%
41.3%
Revenue, USD mn
Results from
operating activities
(EBIT)
Operating profit
margin
Pre-tax profit
Profit for the period
Net profit margin
Adjusted EBITDA
Adjusted EBITDA
margin
889
731
28.3%
27.1%
566
374
11.9%
1,172
409
257
9.5%
993
37.3%
36.8%
The Power segment’s revenue
increased by USD 441 million, or 16.4%,
to USD 3,138 million in 2021 from
USD 2,697 million in 2020, mainly
reflecting increase in average electricity
generation volumes by 10.0%.
Revenue from electricity sales increased
by 15.1% y-o-y to USD 1,453 million in
2021. The increase was driven mainly
by 10.8% growth in electricity sales
volumes and higher electricity sales
prices compared to 2020. In 2021, the
average electricity spot price on the day-
ahead market in the second price zone,
increased 7.1% y-o-y to 934 RUB/MWh.
Capacity sales increased by 15.2% y-o-y
to USD 500 million in 2021. The increase
was mainly driven by higher сapacity
sales prices compared to 2020.
Sales volumes, TWh
Average sales price
(RUB/MWh)
SALES OF CAPACITY
1,453
1,262
108.4
97.8
988
931
Revenue, USD mn
500
434
Sales volumes, GW/year
172.8
178.5
Average sales price
(‘000 RUB/MW)
SALES OF HEAT
Revenue, USD mn
Sales volumes, mn Gcal
Average sales price
(RUB/Gcal)
Sales of semifinished
products, USD mn
Other revenues, USD mn
Total, USD mn
213
175
417
24.5
393
23.4
1,257
1,209
268
500
180
428
3,138 2,697
Heat sales increased by 6.1% y-o-y to
USD 417 million in 2021 reflecting growth
in heat prices and sales volumes.
The Power segment’s electricity
generation increased from 82.2 TWh in
2020 to 90.4 TWh in 2021. In 2020, HPPs
generated 69.3 TWh of electricity, or
84.3% of the total electricity generated
by the Power segment, while in 2021 they
generated 77.7 TWh of electricity, or
86.0% of the total electricity generated
by the Power segment. The increase
in HPP generation can be primarily
explained by increased water reserves.
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53
FINANCIAL REVIEW
In 2021, the Power segment’s adjusted EBITDA
(before intersegmental elimination) increased by
USD 179 million, or 18.0%, to USD 1,172 million, from
USD 993 million in 2020. The growth was driven by an
increase in electricity generation volumes and increase
in average electricity spot prices and capacity prices.
As Power operations account for a sizeable portion of
the revenues attributable to the Power segment, and
are, therefore, a predominant contributor to the adjusted
EBITDA of the segment. The low-cost operation of HPPs
positively affects the overall adjusted EBITDA of the
Power segment. The proportion of HPPs’ contribution
to the adjusted EBITDA of the Power segment in
particular was 91.8% in 2021 and 92.1% in 2020.
The following table sets forth a reconciliation
of the Power segment’s adjusted EBITDA to
the Power segment’s results from operating
activities for the periods indicated:
(USD mn)
Year ended 31 December
2021
2020
RECONCILIATION OF ADJUSTED EBITDA
Results from operating
activities
ADD:
Amortisation and depreciation
Gain on disposal of property,
plant and equipment
Impairment of non-current
assets
Adjusted EBITDA
889
229
(4)
58
1,172
731
214
(1)
49
993
Cost of sales
The following table sets forth components
of the Power segment’s cost of sales (before
intersegmental elimination) for the years indicated:
(USD mn)
Electricity and capacity
Personnel expenses
Depreciation and amortisation
Cost of raw materials and fuel
Aluminium
Electricity transmission costs
Other
Total cost of sales
Year ended 31 December
2021
2020
427
354
216
257
182
160
225
361
319
206
227
117
141
211
1,821
1,582
The Power segment’s cost of sales increased by
USD 239 million, or by 15.1%, to USD 1,821 million for
the year ended 31 December 2021, as compared to
USD 1,582 million for the year ended 31 December 2020.
Power segment’s cost increased following gradual
raise of salaries for employees throughout 2021,
inflationary growth in raw materials purchase prices,
as well as significant hike in aluminium purhcase
prices, increase in raw materials purchase price due
to inflationary pressure and increase of aluminium
purchase prices as a result of LME aluminium prices
growth to an average of USD 2,475 per tonne
in 2021 from USD 1,702 per tonne in 2020.
Adjusted EBITDA and adjusted
EBITDA margin
The following table sets forth the Power
segment’s adjusted EBITDA and adjusted
EBITDA margin for the years indicated:
(USD mn)
Adjusted EBITDA (HPP’s)
Adjusted EBITDA (CHP’s)
Adjusted EBITDA (Coal)
Adjusted EBITDA (Other and
unallocated)
Adjusted EBITDA (Power
segment)
Adjusted EBITDA margin
(Power segment)
Adjusted EBITDA margin
(HPP’s)
Adjusted EBITDA margin
(CHP’s)
Adjusted EBITDA margin
(Coal)
Year ended 31 December
2021
1076
38
31
27
2020
914
30
30
19
1,172
993
37.3%
36.8%
86.4%
84.8%
5.2%
4.4%
13.1%
12.8%
NET ASSETS
In 2021, the Group’s
net assets increased by
USD 4,246 mn to
USD 10,311 mn
as at 31 December 2021,
from USD 6,065 mn as
at 31 December 2020
(USD mn)
GROUP
Year ended
31 December
2021
2020
Non-current assets
Current assets
Non-current
liabilities
17,090
8,967
16,062
6,599
(9,897)
(12,021)
Current liabilities
(5,849)
(4,575)
Net assets
RUSAL
Non-current assets
Current assets
Non-current
liabilities
Current liabilities
Net assets
POWER SEGMENT
Non-current assets
Current assets
Non-current
liabilities
Current liabilities
Net assets
10,311
6,065
12,470
8,436
11,501
5,877
(5,790)
(8,044)
(4,592)
10,524
(2,791)
6,543
9,725
824
(4,121)
(1,461)
4,967
9,667
903
(3,981)
(1,955)
4,634
In 2021, Metals segment’s net assets
increased by USD 3,981 million, or by
60.8%, to USD 10,524 million as at
31 December 2021, from USD 6,543 million
as at 31 December 2020. This was
mainly caused by an increase in
total assets, driven primarily by
the increase in property, plant and
equipment, inventories, trade and
other receivables (including dividends
receivable) and advances paid.
In 2021, the Power segment’s net assets
as at 31 December 2021 increased
by USD 333 million, or by 7.2%, to
USD 4,967 million, from USD 4,634 million
as at 31 December 2021 mainly due
to current liabilities decrease, driven
by loans scheduled repayments (net
repayment – USD 431 million).
En+ Group Annual Report 2021
Net working capital
Net working capital is defined as
inventories plus short-term trade and
other receivables (excluding dividend
receivables), less trade and other payables.
The following table sets forth the
calculation of the net working capital of
the Group, Power segment and Metals
segment as at the dates indicated:
(USD mn)
GROUP
Inventories
As at 31 December
2021
2020
3,731
2,339
Shortterm trade and
other receivables
Dividends receivable
Trade and other
payables
2,655
(827)
(2,806)
Net working capital
2,753
METALS SEGMENT
1,431
-
(2,156)
1,614
Inventories
3,692
2,292
Shortterm trade and
other receivables
Dividends receivable
Trade and other
payables
2,473
(827)
1,163
-
(2,408)
(1,836)
Net working capital
2,930
1,619
POWER SEGMENT
Inventories
Shortterm trade and
other receivables
Trade and other
payables
Net working capital
158
306
(602)
(138)
113
333
(491)
(45)
As at 31 December 2021, the Group’s
net working capital amounted to
USD 2,753 million, compared to
USD 1,614 million as at 31 December 2020.
In 2021, net working capital increased
by 71% compared to 2020 due to an
increase of inventories (accumulation of
inventories for future repairs, increase of
cost due to increase of mineral extraction
tax and implementation of temporary
export duties), which was partly offset
by increase in account payables (export
duties, investment and repair works,
purchases of equipment and materials).
54
55
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FINANCIAL REVIEW
LIQUIDITY AND CAPITAL RESOURCES
Free cash flow
Capital expenditures
En+ Group Annual Report 2021
Liquidity was managed
separately in both segments
– Power and Metals
General
Cash flows from
operating activities
The following table sets forth a reconciliation
of the free cash flow to the cash flows from
operating activities for the periods indicated:
The Group’s cash flows from operating
activities for 2021 were USD 2,168 million,
an increase of USD 278 million, or 14.7%,
compared to USD 1,890 million in 2020.
This increase was driven by the same
factors that led to the increase in adjusted
EBITDA between the comparable periods.
Cash flows generated from/
(used in) investing activities
The Company generated USD 285 million
net cash from investing activities for
the year ended 31 December 2021 as
compared to outflow of USD 77 million
in the previous year primarily due
to proceeds from partial disposal of
associate in amount USD 1,421 million
in 2021 compensated by an increase
by USD 385 million in an acquisition of
property, plant and equipment and an
acquisition of intangible and a decrease
by USD 550 million of dividends
from associates and joint ventures
between the comparable periods.
Cash flows used in
financing activities
The Group’s cash flows used in financing
activities for 2021 were USD 2,691 million,
an increase of USD 1,319 million
from USD 1,372 million in 2020 was
primarily driven by significant net debt
repayments of USD 1,593 million in 2021.
In 2021, the Group’s liquidity requirements
primarily related to funding working
capital, capital expenditures and debt
service. The Group used a variety of
internal and external sources to finance
operations. During the periods under
review, short and longterm funding
sources included predominantly the
rouble and foreign currencydenominated
secured and unsecured loans from Russian
and international banks, as well as debt
instruments issued in both the Russian
and international capital markets.
Dividends
No dividends were declared and paid
during the year ended 31 December 2021
and the year ended 31 December 2020.
Cash flows
The following table sets forth the
Group’s selected cash flow data
for the periods indicated:
(USD mn)
Cash flows from
operating activities
Cash flows from/(used
in) investing activities
Cash flows used in
financing activities
Net change in cash and
cash equivalents
Cash and cash
equivalents at the
beginning of the period,
excluding restricted
cash
Effect of exchange rate
changes on cash and
cash equivalents
Cash and cash
equivalents at the end
of the period, excluding
restricted cash1
Free cash flow
Year ended
31 December
2021
2020
2,168
1,890
285
(77)
(2,691)
(1,372)
(238)
441
2,549
2,265
17
(157)
2,328
2,549
1,705
968
1. As at 31 December 2021 and 31 December 2020, included in cash and cash equivalents was restricted
cash of USD 2 million and USD 13 million, respectively.
(USD mn)
Reconciliation of free cash flow
Group
Year ended
31 December
2021
2020
Cash flows generated from operating
activities
2,168
1,890
In 2021 and 2020, the Group’s capital expenditures
(comprising the acquisition of property, plant and
equipment, as well as the acquisition of intangible
assets) were USD 1,513 million and USD 1,128 million,
respectively. The Group’s subsidiaries financed their
cash requirements through a combination of operating
cash flows and borrowings. The table below sets forth
the capital expenditures (before adjustments) of Metals
and Power segments for the periods indicated:
(USD mn)
Metals segment
Power segment
Year ended
31 December
2021
1,192
321
2020
897
237
Metals segment recorded a total capital expenditure of
USD 1,192 million for the year ended 31 December 2021.
Metals segment’s capital expenditure in 2021 was aimed
at maintaining existing production facilities. Maintenance
capex amounted to 67% of the aggregate capex in 2021.
The Group continued to the invest in Taishet
aluminium smelter. The project includes construction
of an aluminium smelter in Taishet in the Irkutsk
Region (Eastern Siberia), with a design production
capacity of LC-1 (first series) of 352 pots, or
428.5 kt per annum. Electricity consumed by
LC-1 (first series) amounts to 6,370 million kWh.
On 16 December 2021, the first electrolyzers of
Taishet smelter were put into trial operation.
In 2021, capital expenditure by the Power segment
amounted to USD 321 million. Maintenance capex
accounted for 52% of total capital expenditure.
The Group’s Power segment continued to invest
in technical connections to its power supply
infrastructure and improving the efficiency of
the Group’s CHPs, further progressing the HPP
New Energy modernisation programme.
In 2021, the Company launched a new hydroelectric unit
at the Irkutsk HPP, replaced runner at the Bratsk HPP.
Two new runners were delivered to the Krasnoyarsk
HPP and technical re-equipment works began.
In 2021, the Company delivered equipment and started
construction and installation work under the Capacity
Allocation Contracts (CAC) projects for CHP-6 in
Bratsk and Novo-Irkutsk CHP, equipment was supplied
to replace three turbo generators for CHP-10.
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(1,513)
(1,128)
620
63
(703)
1,170
56
(779)
(36)
(26)
(315)
1,705
(215)
968
1,146
1,091
(1,192)
(897)
620
37
1,170
26
(380)
(465)
(34)
(12)
(315)
(215)
1,303
698
1,022
805
Cash
(321)
(237)
26
30
(323)
(314)
(2)
402
(14)
270
As at 31 December 2021 and 31 December 2020,
the Group’s cash and cash equivalents, excluding
restricted cash, were USD 2,328 million and
USD 2,549 million, respectively. As at 31 December
2021 and 31 December 2020, the Power segment’s
cash and cash equivalents were USD 346 million
and USD 333 million, respectively. Meanwhile, the
Metals segment’s cash and cash equivalents were
USD 1,984 million and USD 2,229 million, respectively.
ADJUSTED FOR:
Capital expenditures (acquisition of
property, plant and equipment and
acquisition of intangible assets)
Dividends from associates and joint
ventures
Interest received
Interest paid
Restructuring fees and expenses
related to issuance of shares
Settlement of derivative financial
instruments
Free cash flow
Reconciliation of free cash flow
Metals segment
Cash flows generated from
operating activities
ADJUSTED FOR:
Capital expenditures (acquisition of
property, plant and equipment and
acquisition of intangible assets)
Dividends from associates and joint
ventures
Interest received
Interest paid
Restructuring fees
Settlement of derivative financial
instruments
Free cash flow
Power segment
Cash flows generated from
operating activities
ADJUSTED FOR:
Capital expenditures (acquisition of
property, plant and equipment and
acquisition of intangible assets)
Interest received
Interest paid
Restructuring fees and expenses
related to issuance of shares
Free cash flow
56
57
FINANCIAL REVIEW
LOANS AND BORROWINGS
SECURITY
KEY EVENTS
En+ Group Annual Report 2021
As of 31 December 2021, the Metals
segment’s debt (save for several
unsecured loans and bonds) is secured,
among others, by assignment of
receivables under specified contracts,
certain pledges of shares of a number
of the Group’s subsidiaries, designated
accounts, shares in Norilsk Nickel
(representing 25% of Norilsk Nickel’s
total nominal issued share capital).
As of 31 December 2021, the Power
segment’s debt is secured, among
others, by pledges of shares and
interests in certain operating and
non-operating companies and
property, plant and equipment.
On 28 January 2021, RUSAL signed
the sustainability-linked pre-export
finance facility for an amount of up to
USD 200 million. Following the success
of the first Russian sustainability-linked
syndicated pre-export finance facility
arranged in 2019 by international and
Russian banks, RUSAL continues to pursue
its ambitious decarbonisation goals. The
group of international banks continues
to support RUSAL in its aim to develop
low-carbon aluminium technologies and
sustainable aluminium production. The
interest rate under the facility is subject
to a sustainability discount or premium
depending on the RUSAL’s fulfilment of
the applicable key performance indicators
which will be further agreed between
the parties. The proceeds were used
to refinance more expensive debt.
In March 2021, RUSAL announced the
signing and commencement of the
drawdown of a syndicated loan agreement
for an amount of up to RUB 45 billion.
The term of financing is up to 15 years.
The funds raised were used to finance
the completion of the start-up phase of
the TaAZ smelter and partial refinancing
of investments made in 2020.
The nominal value of
the Group’s loans and
borrowings was
USD 8,448 mn
as at 31 December 2021,
not including bonds,
which amounted to an
additional USD 2,457 mn
Set out below is an overview of certain key terms of selected facilities
in the Group’s loan portfolio as at 31 December 2021:
Facility /
Lender
Principal amount
outstanding as at
31 December 2021
METALS SEGMENT
Syndicated facilities
PXF facility
2019
USD 995 mn
PXF Facility
2021
USD 200 mn
Taishet
project
financing
Bilateral loans
RUB 23 bn
Bank Loan
USD 375 mn
USD 2.1 bn
Bank Loan
RUB 17.9 bn
Bonds
Eurobond
USD 5,121 mn1
Eurobond
USD 482 mn
Eurobond
USD 498 mn
Tenor/Repayment schedule
Pricing
Up to USD 1.085 bn syndicated
aluminium pre-export finance
term facility – until November
2024; equal quarterly
repayments starting from
January 2022
Up to USD 200 mn syndicated
aluminium pre-export finance
term facility — until January
2024 equal quarterly repayments
starting from April 2022
Up to RUB 45 billion syndicated
project finance facility — until
December 2035, quarterly
repayments starting from March
2023
2 tranches, the last repayment
in November 2022, bullet
repayment at final maturity date
December 2027, quarterly
repayments starting from
September 2024
3 month LIBOR
plus 2.1% p.a.
3 month LIBOR
plus 1.7% p.a.
Key rate of the
Bank of Russia
plus 3.15% p.a.
2.15% - 2.25% p.a.
3 month LIBOR
plus 3.0% p.a.
Key rate of the
Bank of Russia
plus 1.9% p.a.
February 2022, repayment at
final redemption date
May 2023, repayment at final
redemption date
February 2023, repayment at
final redemption date
5.125% p.a.
5.3% p.a.
4.85% p.a.
RUB 70 bn
swapped into USD,
for equivalent USD
1.1 bn (after cross-
currency swaps)
5 tranches, the last repayment
is May 2030, repayments at
final redemption dates, subject
to a bondholders’ put option
exercisable within 3.0–3.5 years
RUB bonds
POWER SEGMENT
Syndicated
loan
RUB 44.9 bn2
June 2023, quarterly repayments
starting from September 2019
Bilateral loan RUB 88.5 bn
December 2026, quarterly
repayments starting from
September 2020
2.9%–4.69% p.a.
(after cross-
currency swaps)
The key rate
of the Bank of
Russia + 2% p.a.
The key rate
of the Bank of
Russia + 1.5% p.a.
Bilateral loan
RUB 100.8 bn
December 2022 (with the
Borrower’s right to extend
to December 2026 – with
scheduled repayments starting
from 2023)
The key rate
of the Bank of
Russia + 1.65%
p.a.
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1.
In February 2022, Rusal completed the scheduled repayment of Eurobonds in the amount of
USD 512 million out of its own funds.
2. The loan was fully refinanced in March 2022 through a new RUB 41 bn bilateral loan.
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FINANCIAL REVIEW
CONTINGENCIES
FINANCIAL RATIOS
REPORT ON PAYMENTS TO GOVERNMENTS
The summary of the Group’s principal
contingencies is set out below. For
a detailed discussion of the Group’s
contingencies in 2021, including
environmental contingencies, risks
and considerations, see Note 22 of
the Annual Financial Statements.
Gearing
The Group’s gearing ratio – the ratio of
total debt (including both long-term
and short-term borrowings and bonds
outstanding) to total assets – as at
31 December 2021 and 31 December 2020,
was 41.9% and 54.7%, respectively.
The table below shows the amounts paid by the Group’s entities
to public authorities (primarily in the form of miscellaneous taxes
and levies) in connection with their extraction activities:
Type of payment
2021 (‘000 USD)
Russia Kazakhstan Ukraine Guinea Guyana Jamaica
Total
Production fees
–
–
–
–
–
–
–
En+ Group Annual Report 2021
54,615
24,843
88
5,887
17
14,061
99,512
–
–
–
–
–
–
–
–
–
4,642
1,101
56
–
–
–
–
–
–
–
–
692
692
–
–
–
–
347
55
6,201
–
–
3,093
2,844
62,102
248
–
26,193
144
5,887
364
14,808 109,497
Taxes or levies on
corporate sales,
production or profits
Royalties
Dividends
Signing-on,
discovery and
production bonuses
License fees, rental
charges, entry
fees and other
consideration for
licenses and/or
concessions
Infrastructure
improvement
payments
Total
Return on equity
The Group’s return on equity – the
amount of net profit as a percentage
of total equity – was 34.3% and
16.8% as at 31 December 2021 and
31 December 2020, respectively.
Interest coverage ratio
The Group’s interest coverage ratio –
the ratio of earnings before interest and
taxes to net interest – for the years ended
31 December 2021 and 31 December 2020,
was 4.5x and 1.4x, respectively.
GOING CONCERN
The Group closely monitors and manages
its funding position and liquidity
risk throughout the year, including
monitoring forecast results, to ensure
that it has access to sufficient funds
to meet forecast cash requirements.
Cash forecasts are regularly produced
and sensitivities considered for, but
not limited to, changes in power and
aluminium prices, foreign exchange
and interest rates, production rates,
costs and interests. These forecasts and
sensitivity analyses allow management
to mitigate liquidity or covenant
compliance risks in a timely manner.
After making enquiries of management,
the Directors believe that adoption of
the going concern basis in preparing the
financial statements is appropriate.
Taxation
Russian tax, currency and customs
legislation is subject to varying
interpretations, and changes, which
can occur frequently. Management’s
interpretation of such legislation, as
applied to the transactions and activities
of the Group, may be challenged by
the relevant local, regional or federal
authorities. Notably recent developments
in the Russian environment suggest
that the authorities in this country are
becoming more active in seeking to
enforce, through the Russian court system,
interpretations of the tax legislation,
in particular in relation to the use of
certain commercial trading structures,
which may be selective for particular tax
payers and different from the authorities’
previous interpretations or practices.
Different and selective interpretations of
tax regulations by various government
authorities and inconsistent enforcement
create further uncertainties in the taxation
environment in the Russian Federation.
Tax risks attributable to the Group,
together with an estimate of the maximum
possible additional amounts which may
reasonably become payable in respect
of such risks, are disclosed in Note 22 (a)
of the Annual Financial Statements.
Legal contingencies
The Group’s business activities expose
it to a variety of lawsuits and claims
which are monitored, assessed and
contested on an ongoing basis. Where
management believes that a lawsuit
or another claim would result in an
outflow of economic benefits for the
Group, a best estimate of such outflow is
included in provisions in the consolidated
financial statements (Note 22 (с)). As at
31 December 2021, the amount of claims
where management assesses outflow
as possible approximates USD 21 million
(31 December 2020: USD 21 million).
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FINANCIAL REVIEW
STRATEGIC REPORT
SUSTAINABILITY
REVIEW
This section of the Annual Report provides an overview of the
programmes En+ Group has established to drive continuous improvement
in our sustainability performance. Our 2021 Sustainability Report will
provide much more detailed information.
SUSTAINABLE
MANAGEMENT
From the generation of clean energy that powers our smelters and provides
affordable electricity to millions of people across Siberia, to the production
of low-carbon aluminium, En+ Group is built on sustainability. We are
committed to integrating sustainable development principles and values into
our daily operations and to continuously improving our ESG practices.
In 2021, the Group adopted six corporate policies to support
our ESG practices. Corporate documents are available
in both English and Russian on our website.
Diversity
and Equal
Opportunities
Policy
Quality
Policy
Biodiversity
Policy
Supplier
standards
Regulations
on Information
Policy
Regulations
on Insider
Information
OUR REPORTS
In 2021, En+ Group released its third
Sustainability Report which is compiled
using international non-financial
standards and best global practices.
Our Sustainability Reports provide our
stakeholders with information about
the Group’s approach to Sustainable
Development, ESG risk management, key
ESG indicators and the progress of our
sustainability projects and programmes.
Our contribution to the United Nations’
Sustainable Development Goals is covered
in our Sustainability Reports and, in
significantly more detail, in our annual SDG
Report. In 2021, the Company released the
third annual SDG Report, which reflects
the Group’s approach to supporting the
UN SDGs and highlights the Group’s
projects that support these efforts.
In September 2021, En+
Group published its Pathway
to Net Zero Report, which
provides comprehensive
details on the initiatives
undertaken across the
whole value chain to
achieve our previously
announced sector-beating
climate targets in line
with the 1.5°C scenario.
En+ Group Annual Report 2021
Key results in 20211
Total number of employees
Gender diversity
LTIFR
Social investment
Metals segment’s GHG emissions in
electrolysis operations
93,189 at the end of 2021
27.3% of workforce were female
(27% in 2020)
0.162 (24% decrease compared to 2020)
USD 55 mn
2.02 tCO2e/tAl3
ESG RANKINGS AND
AWARDS
CDP
RUSAL A-
LLC EUROSIBENERGO-
HYDROGENERATION C
WWF
LLC BAIKAL ENERGY
COMPANY WAS RANKED
FIRST AMONG POWER
GENERATING COMPANIES
IN RUSSIA FOR THE THIRD
TIME IN A ROW
WINNER OF THE BRICS
SOLUTIONS FOR SDGS
AWARDS 2021 FOR THE
COMPANY’S STELLAR
360 PROJECT.
EN+ GROUP WON THE
“INDUSTRY LEADERSHIP
AWARD: ALUMINIUM” AT THE
2021 S&P GLOBAL PLATTS
GLOBAL METALS AWARDS.
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TOP RANKED IN EXPERT
RA’S “ESG-TRANSPARENCY
RATING OF RUSSIAN
COMPANIES AND BANKS”
SHORTLISTED FOR
THE BUSINESS
TRANSFORMATION AWARDS
NOMINATION AT THE
RESPONSIBLE BUSINESS
AWARDS 2021
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THE WINNER OF “ESG
BREAKTHROUGH”
IN THE GREEN LIGHT
AWARDS.
EN+ GROUP IS ONE OF JUST
28 COMPANIES GLOBALLY
WITH CONFIRMATION
FROM UN ENERGY THAT
ITS COMMITMENTS TO
EXPANDING CLEAN ENERGY
GENERATION AND ACCESS
HAVE BEEN OFFICIALLY
RECOGNISED AS AN ENERGY
COMPACT.
1. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation.
2. LTIFR is calculated per 200,000 hours worked.
3. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation. Level 1 in accordance with the Aluminium
Carbon Footprint Technical Support Document (2018) (https://www.world-aluminium.org/media/filer_public/2018/11/22/carbon_footprint_
technical_support_document_v1_published.pdf).
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STRATEGIC REPORT
We support the UN SDGs
En+ Group Annual Report 2021
Chosen based on
the areas where the
Group could have the
most positive impact,
eight of the seventeen
SDGs were selected as
central to the Group’s
operations. Nonetheless,
En+ Group supports all
17 SDGs, and due to the
interconnectedness of the
Global Goals, most of our
projects support more
than one single SDG.
En+ Group participated in
the UN Global Compact’s
SDG Ambition Accelerator
programme, which
supports private sector
organisations’ accelerated
integration of the Goals
into corporate strategy
and management systems.
The Accelerator empowers
and equips participating
companies to establish
and implement business
goals that support and
increase their positive
impact on the SDGs.
The Goals were presented
to the Health, Safety and
Environment Committee
under the En+ Group
Board of Directors, which
made a decision to approve
further research on the
integration of the Goals
into Сompany strategy.
New SDG-Focused Goals
Key SDG
En+ Group goals
Reduce emissions by at
least 35% by 2030, and
achieve net zero greenhouse
gas (GHG) emissions by
2050 (Scope 1 and 2, as
benchmarked against the
Group’s 2018 GHG emissions1)
Other SDGs supported
• By 2030, eliminate
untreated wastewater
discharge generated by
the Power segment
• By 2030, minimise non-
production water losses
through technological
optimisation
• By 2025, deploy recycled
water systems for main
processes in the Metals
segment2
•
Increase use of alternative
energy sources by 2030
• Reduce the average
carbon intensity of
generated and consumed
electricity
• By improving hydropower
plant efficiency, increase
clean electricity
generation by 2.5 TWh,
from the same amount of
water passing through the
turbines, and prevent over
2.5 mt of CO2 emissions
per annum from 2025
Climate leadership
For more than a decade, we have been working
to address the climate crisis. As the world’s largest
producer of renewable energy from hydropower, which
powers our aluminium smelters and provides a clean
and affordable source of electricity to communities
across Siberia, we believe we have an important
role to play in driving and supporting the clean
energy transition. Our commitment to these goals
underpins our ambitious 2050 net zero target.
Human development
En+ Group works hard to ensure that
all communities local to our operations
benefit from our presence. We encourage
healthy lifestyles through sport, provide
support during health crises, offer
access to industry-oriented education
and training, and focus on delivering
sustainable economic development.
Read more on Climate Leadership at p.70
Read more on Human Development at p.90
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Collaboration and partnerships
Our collaborations and partnerships
look both outward towards international
stakeholders and seek to address
urgent sustainability issues on national
and regional levels. Together with
sustainability leaders and leaders of our
respective industries, we come together
to discuss, share, and develop the latest
progress in sustainable development.
Environmental stewardship
Our main hydropower production facilities are located
in Siberia. Almost two thirds of their energy production
depends on the water flow of the Angara, the sole river
flowing out from Lake Baikal – the world’s oldest, largest
and deepest freshwater lake. Being reliant on the lake, we
recognise we have a responsibility to create partnerships
and coalitions to protect Baikal and its unique
biodiversity, as well as our other regions of operation.
Read more on Partnerships at p.66
Read more on Environmental Stewardship at p.82
1. The Group’s 2018 GHG emissions (Scope 1 and 2) were 50.0 mt CO2e.
2. At the BAZ, UAZ, and RBA facilities.
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STRATEGIC REPORT
We collaborate to build a better future
We invest in scientific and technological development
The Company believes that collaboration is essential for achieving progress
towards the SDGs and building a better future. We are committed to working
closely with various local and international stakeholders, and to sharing our
vision and insights for the collaborative development of potential solutions
to the world’s economic, social and environmental challenges.
Stakeholder Engagement Policy
Goals and results
Goals
2021 Results
En+ Group Annual Report 2021
R&D Policy
Patent Policy
Advocacy
Energy transition
Recognising that global change cannot
come from one actor alone, En+ Group
unites with the industry and like-
minded peers to advocate for a shift
of the entire market towards a green
economy. In 2021, our advocacy-
oriented partnerships included:
• United Nations Global
Compact (UNGC)
• World Business Council on Sustainable
Development (WBCSD)
• Climate Partnership of Russia
• International Chamber of
Commerce (ICC) Russia
• Carbon Pricing Leadership
Coalition (CPLC)
• International Policy Coalition
for Sustainable Growth
• Business 20 (B20)
• Business and Industry Advisory
Committee to the Organisation
for Economic Cooperation
and Development (BIAC)
Transparency and certification
En+ Group supports the notion that
emission transparency is the first
stage towards increased climate
commitments. We disclose our own
emissions and promote industry-wide
transparency and disclosure. In 2021,
in support of the transparency and
certification values, we worked closely
with the following organisations:
• Aluminium Stewardship Initiative (ASI)
• International Aluminium Institute (IAI)
• Carbon Disclosure Project (CDP)
• London Metal Exchange
As the world’s largest independent
hydropower producer, En+ Group
places the energy transition at the core
of its values. We believe the future
green economy will be shaped
by the energy transition and will depend
on renewable energy sources. In 2021,
through the following energy-focused
partnerships, we aimed to increase
exposure around the future possibilities
surrounding renewable energy:
• International Hydropower
Association (IHA)
• Global Sustainable Electricity
Partnership (GSEP)
• ‘Hydropower of Russia’ Association
Climate
Operating among the hard-to-
abate sectors, En+ Group is aware
of the impact that industrial sectors
are having on the climate. Therefore,
we believe it is essential to reduce our
GHG emissions to ensure a contribution
to the global efforts to mitigate
climate change and align with the 1.5°C
scenario. In 2021, the partnerships below
supported our climate ambitions:
• Science Based Targets initiative (SBTi)
• UN High-Level Political Forum
on Sustainable Development
• Conferences of the Parties to the United
Nations Framework Convention
on Climate Change (UNFCCC)
• Business Ambition for 1.5°C
• Mission Possible Partnership
and Aluminium for Climate
• Race to Zero
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4
REVISE THE APPROACH
AND UPDATE THE R&D
MANAGEMENT SYSTEM.
R&D management system updated.
New approach for R&D project
evaluation implemented.
CREATE A RESEARCH
STRATEGY.
A research strategy has been developed
and implemented as part of the R&D Policy.
REVIEW THE EXISTING
REGULATORY DOCUMENTS.
Existing regulatory documents
have been updated.
INSTALL FIVE NEW
CHARGING STATIONS FOR
ELECTRIC VEHICLES TO
SUPPORT THE GROWTH OF
CLEAN ENERGY.
Five EV charging stations were installed
and put into service in 2021.
Our approach to scientific and
technological development takes
into account industrial and economic
feasibility, as well as environmental
impact. Our innovative projects use
the best available environmental
technologies and reduce costs.
En+ Group has established a Technology
Council, consisting of representatives
of the Company’s business units and
experts from research institutes. The
council is responsible for approving
R&D projects and assessing their
results. R&D across the Company is
coordinated by the Patent Policy.
In the Power segment, an Innovation
Committee was established, which
is now responsible for selecting and
evaluating projects, and identifying
technological approaches to energy
efficiency, digitalisation, renewable
energy, and other areas of development.
The committee is made up of the
Company’s project leaders, experienced
engineers, and industry professionals.
As the world’s leading producer of
low-carbon aluminium and renewable
energy, En+ Group is focused on further
developing a robust technological
base within the Company. En+ Group
has an R&D Department specialising
in technology scouting and evaluation,
energy-related applied research, and
intellectual property management and
commercialisation. Our Metals segment
concentrates its own R&D competences
in research centres and institutes:
• The Institute of Light Materials
and Technologies (ILM&T)
• Russian Aluminium and
Magnesium Institute
• The Siberian Scientific Research and
Design Institute of the Aluminium
and Electrode Industry
• The Engineering and Technology
Centre (RUSAL ETC)
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STRATEGIC REPORT
DEVELOPMENT OF
PEROVSKITE SOLAR
PANELS
Since 2016, the Group has been engaged in the ‘Perovskite Solar Module
Development’ project in cooperation with the Faculty of Materials
Science of Moscow State University (MSU). The project implementation
was supported by the Federal Target Programme until 2019, and is
currently supported by the Russian Scientific Foundation. In 2021, the
research yielded the following results:
A new method of multilayer
sealing (encapsulation) of
perovskite solar cells that does
not damage the light-absorbing
and organic conductive layers
of the devices was developed.
The efficiency of encapsulated
perovskite solar cells is over 19%
and it does not decrease after
the devices have been stored
in humid air for >1,500 hours,
which proves a high resistance
to atmospheric factors at
ambient temperatures. The
samples demonstrate high
photostability: encapsulated
solar cells retain 93% of the
initial efficiency after 1,000
hours of irradiation with white
light with a power of 90–110 MW
at a temperature of 21–28°C.
New computer modelling
and machine learning
algorithms were
developed to predict
the properties of hybrid
perovskite-like materials.
The optimum conditions for the
synthesis of single-phase hybrid
perovskite films with the target
morphology and composition
were confirmed by applying
reactive polyhalide ink to the
surface of a lead-containing
precursor film and immersing
the precursor film in a solution
of iodine and polyhalides in
non-polar solvents. The high
photostability of the synthesised
films was demonstrated in
comparison with the samples
synthesised using the classical
solution technique.
Test perovskite solar cells with
an efficiency of more than 17%
were produced using improved
approaches to the synthesis of
AMX3 films using polyhalides.
It was demonstrated that the
solar cells produced using
the approaches developed by
the project team are highly
competitive with conventional
test samples in terms of
photostability and retain at
least 99–100% of the initial
efficiency after exposure to
>800 hours of white light
irradiation at 100 MW/cm2 in
humid air at room temperature.
HYDROGEN
ENERGY
DEVELOPMENT
En+ Group embarked on a new development in
hydrogen energy in 2021. With its massive green
energy opportunities, En+ is considering hydrogen
production by electrolysis using hydrpower. In addition,
the Company is interested in facilities for hydrogen
transportation over long distances and is considering a
project to develop, jointly with partners, cryogenic tank
containers for liquid hydrogen transportation.
En+ Group Annual Report 2021
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The Company is working on
developing hydrogen usage
and is exploring opportunities
for supplying hydrogen to
consumers in Russia and abroad,
and also plans to participate
in a project to build hydrogen
fuelling stations in Siberia
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STRATEGIC REPORT
CLIMATE
LEADERSHIP
Goals and results
Goals
2021 Results
Gross GHG emissions
(Scope 1 + 2)2 (mt CO2e)
Gross GHG emissions (Scope 1 + 2) Mt CO2e
We are striving to become
one of the leaders in the fight
against climate change
En+ Group Annual Report 2021
Environmental Policy
29,9
22.1
2021
2020
2019
28.6
22.0
28.1
22.8
52.0
50.6
50.9
Metals
Power
The Metals segment’s
GHG emissions in
electrolysis operations(
tCO2e/tAl)3
2021
2020
2019
2018
2014
2.02
2.04
2.04
2.11
2.28
We are constantly expanding renewable
energy sources, improving production
efficiency, and reducing negative impact
on the environment and climate.
In January 2021, En+ Group committed
to reduce GHG emissions by at least 35%
by 2030 and to be net zero by 2050
(Scope 1 and 2 as benchmarked against
the Group’s 2018 GHG emissions1) . To
achieve its commitments, the Group
will need to upgrade its production
facilities and introduce innovative
technologies throughout the production
chain. In September 2021, En+ Group
published its Pathway to Net Zero
Report, which outlines, in comprehensive
detail, the initiatives being undertaken
across the whole value chain to
achieve its sector-beating climate
targets in line with 1.5°C pathways.
En+ Group’s total GHG emissions
increased in 2021 compared to 2020, due
to a number of factors. GHG emissions in
the Power segment were increased due
to the length of the heating season. The
increase of GHG emissions in the Metals
segment was due to the fact that the
PGLZ was taken into account in full for the
entire year (in 2020 only the 4th quarter
was taken into account), the perimeter of
covered enterprises was also expanded.
The Group is confidently moving towards
reducing direct specific greenhouse
gas emissions by 15% from 2014 levels
(2.28 tCO2e/tAl) at existing aluminium
smelters by 2025. In 2021, the intensity
of GHG emissions from electrolysis
operations was 2.02 tCO2e/tAl – a 11%
reduction from the 2014 baseline.
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DISCLOSE THE PATHWAY TO
NET ZERO.
A detailed pathway for achieving a 35%
reduction in emissions and net zero
by 2050 was published in September
2021. Detailed plans for each part of
the pathway are being developed.
VERIFY AND APPROVE
THE SBTI TARGETS OF THE
METALS SEGMENT.
En+ Group submitted its SBTs and
roadmap to net zero for verification
to the SBTi in September. The targets
are currently under review by SBTi.
FINALISE A TCFD PROJECT
TO ASSESS CLIMATE CHANGE
RISKS AND OPPORTUNITIES.
The project is completed. The results
of the project will be considered in the
Pathway to Net Zero progress Report.
MINIMISE THE INDUSTRIAL
CARBON FOOTPRINT
THROUGH THE
IMPLEMENTATION OF ENERGY
EFFICIENCY MEASURES.
The internal audit and inventory of available
actions were implemented in the Power
segment. The energy efficiency projects
were prioritised by term, implementation
complexity and expected effect. The first
projects are planned to be reviewed by
the Investment Committee in 2022.
START CONSTRUCTION
WORKS ON THE SMALL-
SCALE SEGOZERSKAYA
HPP (8.1 MW) IN KARELIA
(RUSSIA).
Preparations for construction
work were carried out, building
permits have been obtained.
CONTINUE ASSESSMENT
OF GREENHOUSE
GAS EMISSIONS
FROM HYDROPOWER
RESERVOIRS AND EXPAND
THE ASSESSMENT TO UST-
ILIMSK HPP.
Annual cycle of measurements for Bratsk
and Ust-Ilimsk HPP reservoirs has been
performed (autumn, summer and spring
campaigns). Second year cycle for Bratsk
reservoir has been started in autumn 2021.
The preliminary data for average annual
methane emissions are in the lower emissions
range for global boreal HPP reservoirs.
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1. The Group’s 2018 GHG emissions (Scope 1 and 2) were 50.0 mt CO2e.
2. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation.
3. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation. Level 1
in accordance with the Aluminium Carbon Footprint Technical Support Document (2018) (https://www.
world-aluminium.org/media/filer_public/2018/11/22/carbon_footprint_technical_support_document_
v1_published.pdf).
STRATEGIC REPORT
We improve
energy efficiency
Our energy generation
strategy includes
expanding hydropower
generation, reducing
network losses, and
increasing the share
of power generated
closer to the regions of
highest consumption.
Energy efficiency
programmes and projects
are central and energy-
saving technology is
widely implemented. We
actively develop new ways
to generate electricity,
optimise power generation,
and make our aluminium
production more efficient
to address our carbon
footprint and other issues
related to the environment
and climate change.
In 2020, we developed
project documentation
for the Segozerskaya
HPP in Russia (Karelia).
In 2021, preparations
for construction work
were carried out,
building permits have
been obtained.
Read more on Energy
Consumption in
Appendices
ALLOW
RUSAL has been offering its customers
ALLOW low-carbon aluminium, produced
with renewable hydropower, since 2017.
ALLOW enables our customers to progress
their decarbonisation journey, and to reduce
the carbon footprint of their products across
all major aluminium-consuming segments.
ALLOW has a guaranteed low-carbon footprint
of less than 4 tCO2e/tAl (smelter emissions,
Scope 1 and 2, IAI Level 1) and 2.4 tCO2e/tAl
on average. The Group verified its primary
aluminium alloys in accordance with the criteria
of the ALLOW brand in 2020 with the help of
the international audit company, TÜV Austria.
The ALLOW digital passport will provide
our customers with easy access to a full set
of environmental, social, and governance
(ESG) information. It will also be available
on LME’s platform to enable buyer decisions
based on carbon footprint, ASI (Aluminium
Stewardship Initiative) certification, and the
sources of energy used in its production.
ENERGY
EFFICIENCY
INITIATIVE
In 2021, Aughinish Alumina Ltd. (AAL)
reduced its carbon footprint by 34.15 kt of
CO2e through increased energy efficiency,
and it continues to have one of the lowest
carbon footprints in the world, ranked
among the best 5%. As a result of this
continued improvement Aughinish’s
carbon footprint has reduced by 3%.
En+ Group Annual Report 2021
NEW ENERGY
PROGRAMME
Upgraded equipment at the Bratsk, Ust-
Ilimsk, Irkutsk and Krasnoyarsk HPPs
supported an increase in hydropower
production of 2,105.2 GWh in 2021, helping
to prevent greenhouse gas emissions by
approximately 2,440 kt of CO2e emissions,
due to the partial replacement of prior
thermal power generation volumes.
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I-REC
By the end of 2021 En+ Group has issued over
one million international renewable energy
certificates (I-RECs). The certificates issued
meet major international sustainability and
carbon accountability standards, including
the GHGP, CDP and RE100, and meet the
stakeholder expectations of industry best
practice. The certificates correspond to the
electric energy produced by En+ Group
companies such as LLC EuroSibEnergo-
Hydrogeneration (Krasnoyarsk HPP) and
LLC Abakan SPP (Abakansk Solar Plant).
The electrical energy produced by these
companies meets internationally recognised
standards for renewable energy tracking.
I-RECs serve to increase transparency in the
energy sector and provide clarity about the
use of renewable electricity among end-
consumers. Energy consumers can use
I-RECs to help them meet their Scope 2
carbon targets, and to support their internal
corporate social responsibility policies.
72
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STRATEGIC REPORT
Task Force on Climate-related
Financial Disclosures (TCFD)
This chapter of climate risk analysis
has been prepared in line with the
recommendations of the Task Force on
Climate-related Financial Disclosures
(TCFD). We intend to provide our
stakeholders with additional information
on the principles guiding our approach
to climate change, including identified
and assessed risks for our assets and
measures taken to mitigate and adapt
those risks. The conducted climate
risk analysis of the Metals and Power
segments, which includes transitional
and physical risks, was implemented in
terms of the Company’s consolidated
operations in line with the TCFD disclosure.
The project on the assessment of
climate change risks and opportunities
for our value chain is completed. As
part of the strategy development,
the detailed disclosure in accordance
with the TCFD recommendations
will be published in autumn 2022.
CLIMATE RISK
GOVERNANCE STRUCTURE
BOARD OF
DIRECTORS
HSE
COMMITTEE
AUDIT AND RISK
COMMITTEE
CEO
CLIMATE CHANGE TASKFORCE
DIRECTOR FOR
SUSTAINABLE
DEVELOPMENT
DIRECTOR FOR
CAPITAL MARKETS
AND STRATEGIC
INITIATIVES
CHIEF
TECHNICAL
OFFICER
CHIEF
OPERATING
OFFICER
CHIEF
FINANCIAL
OFFICER
SUSTAINABLE
DEVELOPMENT
DIRECTORATE
DEPARTMENT OF
CAPITAL MARKETS
AND STRATEGIC
INITIATIVES
TECHICAL
DEPARTMENT
FINANCIAL
DIRECTORATE
Governance
In 2020–2021, the Board and
HSE Committee discussed
climate-related issues in
18 out of 43 meetings
The Group’s climate risk corporate
governance system outlines the
relationship between the Group’s
shareholders, the Board, the CEO and
the management team, as well as the
competencies and duties of the Board
committees in relation to managing
the global climate change agenda.
When making strategic decisions
concerning climate change, the Group is
guided by its environmental policy, whose
main objective is the continual reduction
of environmental and climate impacts,
as well as mitigation and management
of related risks, with a view to preventing
global temperature rises above 1.5°С.
The Board of Directors possesses
strong capacity and competence to
respond to climate-related risks and
opportunities effectively. The Board
oversees the implementation of all ESG-
related corporate policies, monitors
the attainment of the Company’s
environmental protection and climate
goals, performs annual analysis of the
progress towards climate change goals
and the implementation of activities
related to climate change, and makes
decisions to revisit the targets and
implement new activities that will be
included in the business plans.
On the subject of climate change, the
Board is mainly assisted by the Health,
Safety and Environment Committee (HSE
Committee). The HSE Committee assists
the Board in solving climate change
issues. The HSE Committee currently
oversees climate-related risks and reports
them to the Board of Directors to enable
the Board to address these risks.
In 2020–2021, the Board and HSE
Committee discussed climate-related
issues in 18 out of 43 meetings.
The main issues related to climate
change, which were addressed by
the HSE Committee, are as follows:
• Health, safety and environment KPIs
• Environmental risk management
• Results of the environmental audits
• Introduction of the UN Global Compact
Business Ambition for 1.5°C initiative
• UN Global Compact’s SDG
Ambition Accelerator
En+ Group Annual Report 2021
Should any obstacles or important
matters related to climate change arise
that require a decision by the Board
of Directors, meetings may be held
dedicated specifically to discuss the
particular climate issue, in order to make
an immediate decision, such as potential
acquisitions and divestitures entailing
consideration of climate related risks.
To manage our pathway to net zero, we
have created the En+ Climate Change
Taskforce to drive our transformation.
The Taskforce is headed by the
Chief Operating Officer and reports
directly to the Chairman. Each of the
transformational verticals is led by a
senior executive from our management
team. The Taskforce works in continuous
collaboration across multiple lines
of business. The key objective of the
Taskforce is to develop an integrated
climate strategy that will enable us to
achieve our ambitious net zero GHG
emissions goal by assessing climate
change risks and opportunities.
The Group cooperates with branch
managers to stay up to date with the
most recent information on risks and
opportunities in all regions of operations.
KPIs are applicable to management
team members to ensure the absence
of environmental incidents, accidents,
or violations by such members. For the
CEO, KPIs also include other sustainability
metrics. A detailed list of goals is given
in the Metrics and Targets section.
Environmental protection activities are
carried out in both of our segments by
the specialised sustainable development
directorate. We are working on the
development of a climate risk register
covering the Group’s assets. Managers
at all levels are responsible for the
timely identification and assessment of
risks, development of risk management
activities and communication of risks to
all of the Company’s stakeholders within
their area of responsibility, and also for
ensuring that identified risks are included
in risk maps for the Group’s divisions
and in the Group’s corporate risk map
in a timely and complete manner.
74
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Strategy
Risk management
Key physical risks of the Group are described in a table below:
En+ Group Annual Report 2021
The Group has been involved in climate
risk assessment for many years. Climate
risk assessment is one of the stages of the
Company’s strategy. Climate-associated
risks and factors have been identified,
analysed and evaluated to make strategic
decisions related to global climate change.
Scenario analysis was used to assess
the importance of climate risks and their
potential impact on the Group’s assets.
The scenario analysis conducted complies
with the TCFD guidelines and underlines
the importance of a key type of transition
risk scenario – the so-called 2°C scenario
– which lays out a pathway and an
emissions trajectory consistent with
keeping the increase in the global average
temperature to 2°C above pre-industrial
levels, corresponding to the baseline
goals of the Paris Climate Agreement.
Different climate scenarios were
considered to assess how climate risks and
opportunities might affect the Company.
The following scenarios1 were chosen:
• SSP 126 “Sustainability scenario”
corresponding to warming of 1.5–2°C
• SSP 245 “Middle of the road scenario”
corresponding to warming of 2–4°C
• SSP 585 “Fossil Fuel Economy scenario”
corresponding to warming of 4–7°C
En+ Group realises the necessity
of integrating the identification,
assessment, and management of
climate-related risks into the Company’s
overall risk management process.
The Company’s risk management system
provides for the identification and the
financial and probabilistic estimation
and control over any change in risks
from both the internal and external
environments with regards to the financial
and/or economic activities of the Group’s
operating companies and businesses.
Risk assessment is part of the Company’s
corporate governance system. Climate
risks are identified, assessed, and
managed by the Company as a specific
risk management process, which is fully
compliant with the Company’s corporate
risk management system. The main
purpose of risk management is to choose
the most effective methods of addressing
each identified risk and to ensure that
both executives and employees of the
Company are informed on the topic.
The HSE Committee currently oversees
climate-related risks and reports on
them as part of its agenda to address
the risks for the Board of Directors.
En+ Group has identified climate-related
risks and opportunities in the short,
medium, and long terms. The short
term is defined as 0–1 year. The short-
term horizon is used to set immediate
decarbonisation objectives. The medium
term is defined as 2–3 years. The medium-
term horizon is used to set objectives
which require more than a year for
implementation. The long term is defined
as up to 10 years. This is a period with a
higher uncertainty, during which activities
and projects are planned with a high
margin of resistance to variable factors.
Physical risks and opportunities
The physical risk register lists physical
risks that may potentially undermine
the Group’s operations and supply
chain. The register will be updated on
a regular basis. Among the physical
risk factors we consider the probability
of severe events (acute risks) such as
precipitation and flooding anomalies,
abnormal heat and abnormal cold, as
well as the chronic risks relevant to the
Group’s activities, such as average annual
temperature and precipitation increase.
En+ Group is a company with many
assets in different regions. For a correct
assessment of climate risks, it is important
to consider the climatic features of
different regions. Therefore, an in-depth
analysis of climate risks specific to the area
under consideration was carried out with
regard to the local specifics of the regions.
Physical risk
Risk factor
Scenario Region of exposure
Impact in time horizon
Short term
2022
Medium-term
2022–2025
Long-term
2025–2050
Infrastructure
disrup-
tion (under-
flooding of
quarries)
Infrastructure
disruption
abnormal
precipitation
Komi Republic
SSP126
Republic of Guinea
Komi Republic
SSP245
Republic of Guinea
Republic of Guinea
SSP585
Komi Republic
SSP126
SSP245
Krasnoyarsk Territory
Republic of Guinea
Nizhny Novgorod
Region
Irkutsk Region
Republic of Guinea
Nizhny Novgorod
Region
Irkutsk Region
SSP585
Krasnoyarsk Territory
abnormal
precipitation
SSP126
SSP245
SSP585
Armenia
SSP126
SSP245
strong wind
SSP585
Jamaica
Supply
disruptions
SSP126
Krasnoyarsk Territory
Republic of Guinea
Krasnoyarsk Territory
SSP245
Republic of Guinea
Krasnoyarsk Territory
SSP585
Republic of Guinea
SSP126
SSP245
SSP585
Irkutsk Region
SSP126
SSP245
SSP585
Irkutsk Region
SSP126
SSP245
SSP585
Irkutsk Region
SSP126
SSP245
SSP585
Irkutsk Region
Reduced
productivity
abnormal
heat
Equipment
damage/loss
abnormal
frosts
Halt in
production
Breaching of
the integrity
of production
facilities
abnormal
precipitation
deficits
abnormal
precipitation
Main
building’s roof
collapse
abnormal
snowfall
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○ - insignificant impact, ● - significant impact (based on a qualitative risk assessment)
SSP 126 “Sustainability scenario” corresponds to warming of 1.5–2°C.
SSP 245 “Middle of the road scenario” corresponds to warming of 2–4°C.
SSP 585 “Fossil Fuel Economy scenario” corresponds to warming of 4–7°C.
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Probability1
Low
Medium
Low
High
High
Low
Low
Low
Low
Medium
Low
Low
Low
Low
Low
Low
Medium
Medium
High
Medium
High
Low
Low
Low
Low
Low
Low
Low
Medium
Low
Low
Low
Low
1. Keywan Riahi et al. The Shared Socioeconomic Pathways and their energy, land use, and greenhouse gas
emissions implications: An overview, Global Environmental Change, Volume 42, 2017, p. 153-168, ISSN
0959-3780, https://doi.org/10.1016/j.gloenvcha.2016.05.009.
1. Based on a qualitative risk assessment scale: low (less than 20%), medium (20–60%), high (60–100%) probability.
76
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Physical opportunities of the Group are described in the table below:
Opportuni-
ty category
Opportunity
Assets under exposure
Impact in time horizon
Metals
segment
Power
segment
Short-
term 2022
Medium-term
2022–2025
Long-term
2025–2050
Reduction in consumption of fuel
and energy resources and in required
heating energy capacity due to a
shorter heating season.
+
Increase in the share of low-carbon
electricity supply through solar
energy development. The number of
cloudy days in summer is expected
to decrease in the Russian Federation
with the exception of the Primorsky
Krai and the Caucasus Region.
Increase in dwelling electricity
demand for air conditioning due to
abnormal heat will increase profit.
Increase in dwelling heat demand
for heating due to abnormal cold will
increase profit.
Additional energy potential (in low-
water years, abnormal precipitation
can restore normal headwater level in
reservoir within a short period of time).
Increase in the share of low-carbon
electricity supply through solar
energy development.
Chronic
Acute
Applicable to En+ Group
+
+
+
Applicable to En+ Group
○
○
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●
●
●
●
●
●
●
●
○ - insignificant impact, ● - significant impact (based on a qualitative opportunity assessment)
Transition risks and opportunities
Compilation of the transition risk register was carried out in accordance with the TCFD
recommendations. The transition risk register includes risks such as policy constraints on
emissions, imposition of a carbon tax, water restrictions, land use restrictions or incentives, and
market demand and supply shifts. The register will be updated on a regular basis.
Transition risks of the Group are described in the table below:
Assets under
exposure
Metals
seg-
ment
Power
seg-
ment
Applicable to
En+ Group
+
+
+
Risk factor
Setting the
national car-
bon price and
creating a
regional inven-
tory of GHG
emissions
Introduction of
CBAM
Approval of the
national action
plan for adapta-
tion to climate
change
Introduction of
CBAM
Scenario
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
Risk
category
Risk
Expenses related to the
purchase of offsets
Additional tax bur-
den due to the CBAM
introduction
Costs of arranging
measures to adapt to
and to minimise the
impact of the global cli-
mate change
Reduction in demand
for non-green electri city
due to the introduction
of CBAM
Policy
and Legal
78
2022
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○
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○
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○
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○
Impact in time horizon
Medium-
term
Long-
term
Short-
term
2022–
2025
2025–
2050
●
●
●
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●
●
●
●
●
●
●
●
●
●
●
●
●
●
Proba bility
within the
scenario
analysis
high
medium
low
high
high
high
medium
high
high
high
medium
low
Impact in time horizon
Medium-
term
Long-
term
Short-
term
En+ Group Annual Report 2021
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Proba bility
within the
scenario
analysis
high
medium
low
high
medium
low
medium
medium
low
low
low
low
low
low
low
high
medium
low
high
medium
medium
high
medium
low
high
medium
low
2022–
2025
2025–
2050
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Risk
category
Risk
Risk factor
Capital expenditure on
the transition to energy-
efficient and energy-
saving solutions in
production processes
High carbon
intensity of
manufacturing
processes
Assets under
exposure
Metals
seg-
ment
Power
seg-
ment
Scenario
SSP126
SSP245
SSP585
Applicable to
En+ Group
Decrease in demand
for the Company’s
products in the
European markets
Reduction or absence
of additional gover-
nment investments to
reduce GHG emissions
Failure to achieve the
declared impeller per-
formance of hydrau-
lic units within the New
Energy programme
Increasing the car-
bon intensity of pro-
duction by using
Elegaz-insulated circuit
breakers
Reduced investment
appeal of the Company
Sludge overflow that
entails costs on elimi-
nating the conse-
quences of the accident
and paying a fine
Reduced product mar-
gins and competi-
tiveness due to high
carbon footprint
Techno logy
Repu tation
Market
Lower demand for coal
products
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
SSP126
SSP245
SSP585
Reorientation
of aluminium
exports to Asian
markets
Investment
restriction for
hydro generation
facilities
Implementation
of the New
Energy
programme
Replacement
of switching
equipment
Negative per-
ception of the
Company by
investors, inde-
pendent share-
holders, local
communities
Level overflow on
sludge fields
Lower demand
for high-carbon
generation
Transition to
low-carbon
economic
development
+
+
+
+
+
+
+
+
+
+
+
+
Applicable to
En+ Group
+
+
+
Applicable to
En+ Group
+
+
+
○ - insignificant impact, ● - significant impact (based on a qualitative risk assessment)
SSP 126 “Sustainability scenario” corresponds to warming of 1.5–2°C.
SSP 245 “Middle of the road scenario” corresponds to warming of 2–4°C.
SSP 585 “Fossil Fuel Economy scenario” corresponds to warming of 4–7°C.
2022
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1. Based on a qualitative risk assessment scale: low (less than 20%), medium (20–60%), high (60–100%) probability.
79
Assets under exposure
Metals
segment
Power
segment
Impact in time horizon
Medium-
term
Short-term
Long-term
2022
2022–2025
2025–2050
STRATEGIC REPORT
Transition opportunities of the Group are described in the table below:
Opportuni-
ty category
Policy
and Legal
Technology
Reputation
Market
Opportunity
Company’s regular annual reporting of GHG
emissions to stakeholders
Continuous monitoring of GHG emission
reduction targets
Adoption of the methodology to calculate
GHG emissions and the carbon footprint of
products
Possibility of attracting additional
investments in connection with the
publication of reports in which a company/
supplier’s low carbon footprint is noted (low
carbon products and power generation).
Introduction of the carbon price criterion
to assess the strategic areas of product
manufacturing and sales at the national and
corporate levels
Additional profit from selling carbon credits
in the domestic market (national regulation)
Additional profit associated with the
possibility of selling carbon credits within
the framework of the mechanism provided
in Article 6.4 of the Paris agreement
(international regulation)
Regulatory Impacts for the Coal Industry
Policy Directions (bank lending, licensing
regulation, regulation of the use of coal
in the domestic market, development of
infrastructure, attraction of investment from
domestic and external coal consumers)
Decarbonisation of processes
Increasing investment in the production
of low-carbon generation (high-current
production, CCUS technologies)
Use of Energy-Efficient Equipment in
the Process Chain and Best Available
Technologies (BAT)
Increasing investment attractiveness
Increased demand for materials used in the
transition to a decarbonised power system +
Increased demand for less carbon-intensive
products
Increased demand for electricity due to
transport electrification
Additional profits from a green hydrogen
project
Implementation of climate projects for the
introduction of small hydropower plants
●
●
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●
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○
○
●
○
●
Applicable to En+ Group
+
Applicable to En+ Group
+
○
Applicable to En+ Group ●
Applicable to En+ Group ○
+
+
+
○
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Metrics and targets
The GHG emissions of the
Group were calculated in
compliance with the GHG
Protocol. The GHG emissions
calculation for the Metals
segment is certified by the
independent authority TÜV
Rheinland as part of the
audit and GHG verification
Read more on GHG emissions
and GHG emissions intensity
at p.71
In line with TCFD
recommendations,
En+ Group sets short-
term, medium-term,
and long-term goals
En+ Group Annual Report 2021
Short-term climate-related goal:
Read more on Short-term Climate-Related Goals
for 2021 at p.70
Mid-term climate-related goals
The Metals segment of the Group set seven goals in
its strategy up to 2025 to reduce GHG emissions. In
addition to reducing the average specific direct and
indirect GHG emissions to no more than 2.7 tonnes of
CO2 equivalent per tonne of aluminium, as mentioned
above, our strategic climate change goals up to 2025 are:
Goals
1
2
3
To reduce direct
specific GHG
emissions by
10% vs. 2014 in
existing alumina
refineries by 2025.
To reduce direct
specific greenhouse
gas emissions by 15%
compared to 2014
(2.28 tCO2e/tAl) at
existing aluminium
smelters by 2025.
To purchase at least
95% of electricity from
hydropower plants
and other carbon-
free sources of power
generation for aluminium
smelters by 2025.
4
5
6
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To reduce specific
electric power
consumption
by aluminium
smelters by 7% vs.
2011 by 2025.
To use an internal
carbon price when
making strategic and
investment decisions,
starting in 2017.
To support Russian and
international initiatives and
associations advocating for
actions to prevent climate
change and backing
carbon prices, provided
they are aligned with the
Company’s strategic goals.
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Long-term climate-related goals:
In January 2021, the Board of Directors approved
targets of a reduction in GHG emissions by at
least 35% by 2030, with a target to reach net zero
emissions by 2050 (Scope 1 and 2, as benchmarked
against the Group’s 2018 GHG emissions).
Read more on Group’s Objectives and
Intentions in the Pathway to Net Zero Report
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STRATEGIC REPORT
ENVIRONMENTAL
STEWARDSHIP
Goals and results
Goals
2021 Results
Environmental Policy
1
2
3
IMPLEMENT ACTIONS
FOR THE TECHNICAL
REFURBISHMENT OF FLY ASH
PRECIPITATORS
at the Novo-Irkutsk and Ust-Ilimsk CHPs,
and CHP-6.
IMPLEMENT LARGE-SCALE
ASH AND SLAG WASTE
UTILISATION INITIATIVES
according to the plan of LLC Baikal
Energy Company.
DEVELOP PROJECT
DOCUMENTATION FOR
THE BRANCHES OF
LLC EUROSIBENERGO-
HYDROGENERATION
to ensure the organised collection,
treatment, and disposal of surface and
drainage wastewater from HPPs, and
to equip drainage systems with local
wastewater treatment systems. Draft
materials for a preliminary feasibility
study for similar projects at Krasnoyarsk
HPP.
The fly ash precipitator refurbishment
project is ongoing.
The project for using the wastes for
mines restoration/land habitation is
on the Environmental examination
stage. After the examination it will be
decided how to scale up this practice.
A second project concerns the use of waste
as a component in road construction. In
2021, the appropriate R&D has been started.
150 metres of roadbed near Irkutsk has
been constructed by using fly and bottom
ash. The monitoring of road conditions was
started in autumn of 2021 and will continue
in the first half of 2022 to assess the use of
fly and bottom ash in road construction.
The project documentation stage for
wastewater treatment facilities was started in
2021 at Bratsk, Ust-Ilimsk and Irkutsk HPPs.
The pre-preliminary examination for
wastewater treatment facilities at
Krasnoyarsk HPP has been completed.
En+ Group Annual Report 2021
En+ Group takes a responsible approach to the use
of natural resources and applies the precautionary
principle in its risk management system and when
evaluating environmental impacts to minimise the
adverse consequences of its activities. The Company
uses innovative high-tech solutions that allow us to
combine the minimisation of environmental impacts
with optimisation of the production process.
The key aspects of the Company’s
environmental protection activities are:
• Identifying and assessing the environmental and
climate aspects and risks generated by the Company’s
facilities, as well as the impact of environmental
and climate risks on the Company’s activities
• Complying with environmental legislation in the regions
where the Group operates, as well as with internal
corporate regulations and industry best practice,
which can be more tough than local regulations
• Preventing and mitigating environmental
and climate impacts
• Restoring of territories and offsetting the residual
impacts on ecosystems from operational activity
reach 20% of the volume of the 2017 base year by 2024,
and automatic continuous emissions measurement
systems should be installed. The Company’s facilities
located in the cities affected by the programme are
taking various measures to reduce the volume of
emissions of pollutants released into the atmosphere.
Enterprises of the Metals segment are implementing
a list of measures aimed at improving air quality
in the regions of operation, including:
• Monitoring atmospheric conditions through
automatic continuous emissions measurement
systems and mobile laboratories
• Using modern gas treatment facilities,
including units engineered by RUSAL’s
design and scientific departments
• Conducting R&D activities and
implementing the results
• Applying Eco-Søderberg technology
(at the Krasnoyarsk, Bratsk, Irkutsk, and
Novokuznetsk aluminium smelters)
• Using best available technologies
to reduce air emissions
• Engaging with stakeholders and respecting their views
• Refurbishing aluminium smelters
In line with its environmental policy, the Company
is constantly improving the existing environmental
management system to comply with ISO 14001,
the international standard on environmental
management systems, and GOST R 14001–2016,
the Russian national standard on environmental
management systems. In 2021, the ISO 14001
implementation project has been completed at LLC
EuroSibEnergo-Hydrogeneration including the Bratsk,
Irkutsk, and Ust-Ilimsk HPPs. The environmental
management system is ready for certification.
In 2021, the supervisory authorities carried out
inspections of the Company’s enterprises. No
significant environmental fines or incidents
(exceeding USD 1 million) were reported. Work is
underway to remedy all recorded minor incidents.
We take a responsible approach to air
quality issues in regions of operation
All of the Company’s facilities, without exception,
comply with the requirements of environmental
legislation. Despite this, En+ Group is constantly
striving to improve its environmental performance
by implementing measures and initiatives aimed at
reducing emissions of pollutants into the atmosphere.
As part of its responsible approach to air quality
issues in its regions of operation, En+ Group has been
taking an active part in the implementation of the
Environmental National Project and Clean Air Federal
Programme since 2018. The goal of this programme
is to significantly improve air quality in 12 industrial
Russian cities, including Bratsk, Novokuznetsk, and
Krasnoyarsk – cities where En+ Group operates.
According to the plan, the reduction in emissions should
The main emissions of the Power segment are associated
primarily with the combustion of fossil fuels for energy
generation. One of the ways to reduce the volume of
pollutant emissions into the atmosphere is to increase
the efficiency of generation at the Company’s facilities.
Baikal Energy Company LLC is continuing to upgrade
the electrostatic precipitators at the Novo-Irkutsk
CHP and the Novo-Ziminskaya CHP, and replacing fly
ash traps with modern electrostatic precipitators at
CHP-6 and UICHP to reduce the pollutant output.
We comply with the limits on water
withdrawal from water bodies
and wastewater discharge
The majority of water usage at Company sites
relates to the alumina facilities of the Metals segment
and the power generation facilities in the Power
segment. All enterprises of En+ Group comply with
the limits on water withdrawal from water bodies
and wastewater discharge; no significant violations
of legal requirements were recorded in the reporting
period. Most of the enterprises are located in
regions that are not classified as water scarce.
The Company’s activities in the field
of water management include:
• Reducing the volume of fresh water
used in operational processes
• Reducing the volume of wastewater
produced and the concentration of hazardous
substances contained therein
• Increasing water recycling
• Increasing the quantity and quality of
wastewater treatment processes
• Water quality monitoring
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Lake Baikal
En+ Group, the largest
company operating in the
Baikal region, operates
hydropower plants on
the Angara River flowing
out of Lake Baikal, thus
providing a supply of
renewable power for the
local population. En+
Group regulates the water
regime of the Angarsk
cascade in accordance
with the instructions
of Rosvodresursy, the
Russian federal water
resources agency
LAKE BAIKAL
WATER LEVEL
MANAGEMENT
The Institute of Water Problems of the Russian Academy of Sciences,
with the financial support of En+ Group, completed studies to define
operation schedules for controlling the water regimes of the Angara-
Yenisei cascade reservoirs and Lake Baikal in the spring of 2021.
One of the most important deliverables of the work was the
“Green” version of the operation schedule for managing the water
regime of the Irkutsk Reservoir and Lake Baikal. The “Green” option
is based on the following idea: in order to minimise the impact
of anthropogenic management of the level of Lake Baikal, it is
necessary to arrange management in such a way that the lake level
trend replicates its natural behaviour as accurately as possible.
The natural (restored) levels of Lake Baikal for specific inflow
conditions are determined by simulation modelling. New rules for
managing the lake level were developed based on this approach.
At the same time, the needs of water users are still met and the
energy parameters of the HPP cascade are generally maintained.
ENVIRONMENTAL
MONITORING OF
LAKE BAIKAL
En+ Group recognises its share of responsibility for the
environmental well-being of the lake and takes efforts
to support and preserve its biodiversity. In 2021, the
third annual expedition for environmental monitoring
of Lake Baikal was carried out to obtain unbiased data
on the condition of the lake’s ecosystems. Researchers
from seven leading Russian scientific research
institutions took part in the expedition, i.e. Lomonosov
Moscow State University, Moscow; Severtsov Institute
of Ecology and Evolution of the Russian Academy
of Sciences, Moscow; Siberian Federal University,
Krasnoyarsk; Irkutsk State University, Irkutsk; Moscow
Institute of Physics and Technology, Moscow;
Institute of Limnology of the Russian Academy of
Sciences, Saint-Petersburg; and Trofimuk Institute of
Petroleum Geology and Geophysics, Siberian Branch
of Russian Academy of Sciences, Novosibirsk.
Research into underground flows of biogenic
substances and assessment of stress levels in the
Baikal sponge and gammarus populations were
added to the basic monitoring programme in 2021.
Hydrochemical analyses of the water samples
confirmed that the main pollutants entered Lake Baikal
through the Selenga River. New data were obtained
confirming inflows of biogenic substances into Lake
Baikal carried by groundwater from populated areas
that do not have waste water treatment facilities.
ENVIRONMENTAL
PROJECTS GRANT
COMPETITION
The second grant competition aimed
at protecting Lake Baikal and aquatic
ecosystems from adverse environmental
impacts was held in 2021. The competition
considered projects for the conservation
of Lake Baikal and its natural territories,
as well as other water bodies.
7
participating cities:
Irkutsk, Baikalsk,
Ust-Ilimsk, Angarsk,
Divnogorsk, Miass and
Nizhny Novgorod
4
nominations: “Science
and practice”,
“Pooling resources”,
“Local initiative”, and
“Transferring experience”
22
projects received
Company support.
The size of the
grant fund in
2021 amounted
to RUB 10 mn
En+ Group Annual Report 2021
ELECTRIC
VEHICLE
CHARGING
STATIONS
IN IRKUTSK
En+ Group pursues development of EV charging
infrastructure in the Irkutsk Region, Siberia, to
contribute to improvement of the environment
in the cities where the Group operates.
Eight 50–100 kW EV charging stations were installed and
launched in the Irkutsk Region in 2020–2021, providing
both slow and fast charging (80% of battery capacity
in 20 min). Another 18–20 100 kW charging stations are
to be installed throughout 2022–2023 in large cities in
the Irkutsk Region (Bratsk, Usolye-Sibirskoye, Tulun,
and Taishet), along the Federal Motor Road connecting
the cities, and along the road to Olkhon island.
More than 700 different consumers have already used the
stations, with 10,000 charging sessions overall. En+ Group’s
new charging stations are integrated within a single system
enabling current and future users to take advantage of a
special mobile application to activate a charging session by
simply choosing a station and plugging their vehicle in.
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BAIKAL
DIALOGUE
The Baikal Dialogue project, supported by WWF Russia,
is aimed at updating the status of the environmental and
social challenges of the Baikal Natural Territory (BNT) and
finding solutions. “Assessment of environmental and social
challenges of the BNT” was performed in 2021 by nine experts
gathered under the aegis of EcoCentre “Zapovedniki”, with
participation of specialists from the Lake Baikal Foundation.
The Project’s seven main themes are:
• International aspects of protection and sustainability of the BNT
• Integration of strategic environmental assessment
approaches within the assessment of environmental
and social challenges of the BNT
• Assessment of cumulative environmental
and social impact on the BNT
• Industrial and domestic pollution in the BNT
• Solidifying the network of the Natural Areas under Preferential
Protection and preserving the biodiversity of Lake Baikal
• Development of a dialogue between the authorities,
businesses and civil society around Lake Baikal
• Analysis of corporate practices used by various
companies in the BNT to preserve the unique
ecosystem and support local residents
Interim results of the project were widely discussed at
various venues throughout the year, including the Shapkhaev
Hearings in Irkutsk. A kick-off and bottom-line sessions
were held on the basis of the Public Chamber of the Russian
Federation by videoconferencing with the Public Chambers
of the Irkutsk Region and the Republic of Buryatia.
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STRATEGIC REPORT
We reduce and mitigate the
impact of waste generation
En+ Group’s two main focus areas for
waste management are increasing
waste recycling and ensuring the safe
disposal of waste at disposal facilities.
En+ Group. The Company has developed
a plan for the complete removal of
such waste from all enterprises by
2025. This goal is consistent with the
international obligations assumed by
Russia under the Stockholm Convention
on Persistent Organic Pollutants (POPs).
En+ Group implements several
measures to prevent or mitigate
the impact of waste generation:
• Conducting research on waste recycling
and implementing the results
• Land rehabilitation after
decommissioning of waste dams
• Using modern waste disposal
facilities to ensure long-term and
reliable storage and/or burial
• Reducing the amount of bauxite and
nepheline residue generated by the
Metals segment and ash and slag waste
generated by the Power segment
• Raising awareness of waste
En+ Group operates a significant number
of waste disposal sites. Each of these sites
meets all legal requirements, and their
safe management is one of the Company’s
key priorities. Safety is an absolute priority
at all stages of the waste disposal facilities
life cycle. The key elements ensuring the
safety of sludge storage facilities are
constant monitoring of their technical
condition and the high qualifications of
the personnel of these facilities. Each
of these aspects is closely monitored:
• Tailing dams are inspected periodically,
and their condition is consistently
monitored using instruments
management throughout the Company
• The Company requires that personnel
The issue of disposal of waste containing
polychlorinated biphenyls (PCBs) –
extremely hazardous persistent organic
pollutants – is especially important for
operating tailing dams are certified and
ensures the professional development
of technicians that supervise the
safety of hydraulic structures
WASTE MANAGEMENT
INITIATIVE
Aughinish Alumina Ltd. (AAL) continues to participate in RemovAL, which is
a large research project funded by the EU’s Horizon 2020 programme, and
coordinated by the National Technical University of Athens (NTUA) to advance
existing technologies for the sustainable processing of Bauxite Residue (BR). In
2021, AAL in association with industry partners developed and constructed a
pilot scale residue dealkalisation plant to produce residue with a soda content
<0.5%, making it usable in the iron and cement industries. In 2021, AAL also
demonstrated the use of farmed bauxite residue as a stabiliser with other industrial
by-products (fly ash) for civil work applications, with the successful construction
of a 150m section of road on our Bauxite Residue Disposal Area (BRDA).
AAL is also participating in ReActiv, another large research project funded by
the EU’s Horizon 2020, which is coordinated by Holcim, the biggest cement
producer in Europe. The objective of the project is to produce cements with
a portion of clinker replaced with modified Bauxite Residue (BR). Through
ReActiv, modification will be made to both the alumina and cement production
processes, linking them through the new ReActiv technologies and transforming
them into an active material suitable for new, low-carbon cement products.
In 2021, AAL also started construction work on the Salt Cake Wet Oxidation
Project (SWOP). This project will convert salt cake, which is an impurity
removed as part of the refinery process, to caustic which will be fully
recovered into the refinery. The elimination of salt cake will reduce the
future requirement for storage of this by-product on the BRDA.
En+ Group Annual Report 2021
We rehabilitate disturbed land
The rehabilitation of disturbed lands
is also an important aspect of the
Company’s environmental activities.
These works are carried out by En+
Group specialists after the completion of
open pit mining and decommissioning of
waste disposal facilities. They include:
• The reclamation of disturbed
terrain and soil upon the
completion of open-cut mining
• The restoration of waste
disposal facilities, such as
ash dumps and landfills
• The recultivation of disturbed
and contaminated land
We pay special attention to the study of the
state of biodiversity in the regions of operations
Biodiversity Policy
Goals and results
Goals
2021 Results
1
2
3
CONTINUE THE MONITORING
OF BIODIVERSITY IN
COLLABORATION WITH
SCIENTIFIC INSTITUTIONS.
The Company pursued implementation of its
biodiversity preservation projects in 2021.
CONTINUE TO IMPLEMENT
BIORESOURCE RESTORATION
PROGRAMMES.
See page 88 for the measures
of on the replenishing the of
aquatic biological resources.
CONTINUE TO IMPROVE
MANAGEMENT
OF BIODIVERSITY
CONSERVATION ISSUES.
A Biodiversity Policy was developed
and adopted in 2021. The Company
designed its strategic approach
to biodiversity conservation.
En+ Group is aware that deterioration
of biodiversity and ecosystem services
caused by anthropogenic factors is a
global challenge requiring decisions
to be taken at all governance levels
and practical action. The Biodiversity
Policy was developed and adopted in
December 2021 for the Group’s Metals and
Power segments. The policy stipulates
our key principles and approaches to
biodiversity conservation and ecosystem
services management. Our practice of
biodiversity conservation and ecosystem
services management is based on
the hierarchy of measures devised to
mitigate impact on the environment and
open consultations with stakeholders
and the local communities in the first
instance. We have no doubt that our
success in the long run will be conditional
on the development of science and
education. This is why we pay special
attention to environmental education
and research into the biodiversity of
the regions where we operate.
Provisions of the Policy are implemented
through various projects aimed at
supporting certain species and their
habitats, and also through our daily
efforts to improve the environmental
management system. The Group
relies on scientific surveys, carries out
specific environmental monitoring and
takes actions to prevent environmental
impacts, and protect ecosystems and
habitats. The monitoring results are
used to assess the current state of
the environment and adjust planned
environmental actions to mitigate the
adverse consequences arising from the
industrial development of the area.
Specialists of En+ Group and RUSAL,
jointly with partners from Business for
Nature and the World Business Council
for Sustainable Development, have
provided their comments on the revised
Convention on Biological Diversity to be
discussed and adopted by COP-15 in 2022.
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Read more on Environmental
Monitoring of Lake Baikal at
p.84
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WATER
DWELLERS
En+ Group has been successfully working on the artificial
restoration of aquatic biological resources endemic to the
rivers of Eastern Siberia since 2014. This action is included
in the annual plan for the artificial reproduction of aquatic
biological resources of the Angara-Baikal Territorial
Administration of the Federal Agency for Fishery.
Overall, the Group’s production facilities released over 10,100
Siberian sturgeon fry, 12,645 grayling fry and around 253,000
peled (northern whitefish) in the Yenisei, Chikoy, and Belaya
rivers, and in Bratsk Reservoir on the Angara River. The
Group has already invested more than RUB 4.3 million on
the conservation of fish resources and released more than
1.5 million fry into the reservoirs of the Angara region.
AVIFAUNA
A scientific study of the state of avifauna in the lower
reaches of the Irkutsk hydropower plant was conducted
in 2021 as part of the semiaquatic bird support project.
The researchers studied the 200km section of the Angara
River downstream from the dam. The aim of the work was
to identify the bird species most vulnerable to fluctuations
in water levels and propose measures to support them.
Out of 249 species living in the area under consideration,
four were selected: mallard, grey duck, lake gull and river
tern. These species nest mainly on islands in the Angara
riverbed near Irkutsk. These species have a nesting period
in May-June, when spring floods occur in the Angara basin.
Since birds arrange nesting sites directly at the water’s edge,
sharp fluctuations in water levels can lead to clutch losses.
Four possible biotechnical solutions were considered
to protect the nesting sites of these bird species from
water level fluctuations. A floating island is considered
to be the most effective solution for bird conservation
given the engineering and administrative issues.
En+ Group Annual Report 2021
BAIKAL SEAL
PRESERVATION
PROGRAMME
The Baikal seal is the only mammal that lives in Lake Baikal
and is endemic to the region. The seal sits at the top of
the food chain in the Baikal ecosystem, and conclusions
about the quality of its habitat, i.e. the Baikal ecosystem
as a whole, can be drawn from the condition of the seals.
For this reason the seals, particularly their migration
patterns and health, need to be constantly monitored.
En+ Group and the Severtsov Institute of Ecology and
Evolution of the Russian Academy of Sciences (IEE RAS)
signed a cooperation agreement at the end of 2019, which
envisages, inter alia, preservation of biodiversity, including
the Baikal seal preservation programme. En+ Group and
other partners of the Institute joined a comprehensive
programme developed by IEE RAS through to 2025 to
preserve the Baikal seal. In 2021, as part of the programme,
scientists carried out an expedition to the Ushkan islands
to count the seal population and to study the health of the
animals. We also made a contribution to this work by sharing
the findings of the Lake Baikal environmental monitoring.
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BIODIVERSITY
MANAGEMENT PLAN
In 2021, Aughinish Alumina Ltd. (AAL) launched a 5
Year Biodiversity Management Plan (BMP). This plan
identifies opportunities for biodiversity enhancement
and conservation, and recommends practical measures
aimed at conserving and enhancing the natural heritage of
AAL and its surrounding lands, which have a large variety
of habitats and species. These habitats range from salt
marsh to lowland hay meadows, and species range from
Eurasian otters to barn owls. The plan includes objectives
and targets associated with native species, vegetation
management, habitat management, improving ecological
connectivity and increasing biodiversity awareness.
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STRATEGIC REPORT
HUMAN DEVELOPMENT
HEALTH
AND SAFETY
Gross GHG emissions (Scope 1 + 2) Mt CO2e
Goals and results
Goals
2021 Results
Health, Occupational, Industrial and Fire Safety Policy
Nothing matters more to us
than the safety, health, and
well-being of our employees.
Our approach to health
and safety (HS) rests on
strong leadership and a
“zero injuries” culture. En+
Group believes that health
and safety is not just about
legal requirements and duty
1
1
1
ACHIEVE ZERO WORK-
RELATED FATALITIES.
Goal was not achieved.
REDUCE LTIFR.
The LTIFR experienced a decrease through
successful prevention of group injury cases.
ENHANCE THE OHS
MANAGEMENT SYSTEM,
guided by international best practice.
External auditors EXELUM provided findings
of their audits at nine Group facilities in 2021.
Lofty goals and good operational
procedures are not enough. Our
approach is about each employee,
regardless of position, and building
a culture of prioritising work safety
and care for employees’ health.
Awareness of the importance
of HS issues from the top of the
organisation is essential to create
inspiring working conditions and
save the lives of our employees. En+
Group pays particular attention to
the engagement of executives and
senior managers since they set a
good “tone at the top” by focusing
their teams on the right priorities.
The Group monitors, records and
investigates all incidents regardless
of severity. This includes incidents
resulting in micro-injuries, and instances
of employees’ health deteriorating over
a period of time. The findings of these
investigations are used to develop and
implement corrective actions, intended to
prevent future accidents or occupational
health impacts. Protecting human
life and health from threats related to
industrial factors, or from consequences
of accidents, is our highest priority.
We conduct comprehensive
investigations of all injuries
En+ Group’s key HS document is
the corporate Health, Occupational,
Industrial and Fire Safety Policy, in
which the Company states, as a shared
core principle, that the health and
safety of employees has overall priority.
No circumstances and goals, either
production or commercial, should be
considered as a reason for not complying
with industrial safety requirements. This
strategic document also determines the
role of line managers and executives
in ensuring safe working conditions
and the well-being of all employees.
En+ Group deeply regrets that there
were nine work-related fatalities in
2021, notwithstanding the Company’s
commitment to zero fatalities. The Group
apologises to the families of our colleagues
and grieves for these unbearable losses.
En+ Group management conducts
comprehensive investigations of all
fatalities in order to develop and implement
corrective measures and achieve zero
fatalities. The number of fatalities in Metals
segment increased as a result of safety
violations by the deceased employees
or other workers in related jobs.
In compliance with domestic legislation
requirements, Group employees regularly
undergo all respective mandatory
training, including in health and safety,
and fire and industrial safety, as well
as compulsory safety briefings for
new employees, and regular, targeted,
and ad hoc employee briefings.
Despite an overall decrease in LTIFR,
one fatal accident occurred at the
Novo-Irkutsk CHP of the En+ Group’s
Power segment in 2021. A site visit for
risk auditing was arranged, followed
by a meeting among top managers
and the heads of the HS service to
uncover the causes of the accident.
Work-related
employee fatalities1
Work-related employee fatalities
1
8
2
4
2021
2020
2019
2
1
Metals segment
Power segment
Lost Time Injury
Frequency Rate
(LTIFR)2
per 200,000 hours
worked
0.17
0.14
0.21
0.20
0.23
0.11
2021
2020
2019
0.16
0.21
0.19
Metals segment
Power segment
During the reporting period,
LTIFR within the Group
amounted to 0.16, a decrease
of 24%, with the LTIFR of the
Power segment at 0.14. The
LTIFR of the Power segment
showed a reduction by 30%
through the successful
prevention of group injury
cases. The LTIFR of the
Metals segment showed
a 19% reduction to 0.17
En+ Group Annual Report 2021
We develop a safety culture
The Company promotes a healthy environment through a wide
range of health and safety initiatives and projects, protecting against
occupational health hazards and supporting our employees.
METALS SEGMENT
Transition to
international
standard
Introduction of
an automated
information system
Remote control
overhead cranes
Reducing the
physical exertion of
the employees of the
electrolysis shop
Look Around
project
POWER SEGMENT
Lifesaving rules
Monthly HSE
meetings
Regulation
of ongoing
monitoring
Video recording of
work permits
Problem solving
board
Uniform procedure
for introductory
HS briefings for
visitors
Workshop for
HS department
managers
The production safety management system in the Metals segment was
transitioned from the OHSAS 18001:2007 standard to the international
ISO 45001:2018 standard, as confirmed by the DNV GL certificate
(international accredited registrar and classification society).
In 2021, the Metals segment began the introduction of the automated
information system “Safety of production activities – RUSAL” at two
enterprises: in Krasnoyarsk (KrAZ) and Achinsk (AGK).
This Metals segment project, launched in 2019, continues to equip
overhead trailing cranes with remote control systems.
The Metals segment realised a project to reduce the physical exertion
levels for electrolysis shop workers.
The Look Around project to identify risks and hazardous situations is
targeted at improving the level of immersion of employees into daily HSE
issues and timely identification and reporting of potential hazards so they
can be addressed.
Basic and Essential safety rules were developed in 2020 to form a
conscious attitude to safety based on an analysis of the causes of injury. A
set of posters was designed to visualise separate rules. Visualisation of all
Basic and Essential safety rules was completed and posters were placed
around production sites in 2021.
In 2021, managers continued to hold monthly HSE meetings via video
conference calls, where directors of the production facilities reported on
the results of their HSE efforts, discussed the findings of workplace audits,
and shared experiences in health and safety improvements.
To assess the OHS management system, the Group established a
programme of ongoing monitoring of health and safety conditions. Under
this regulation, the state of the OHS management system at production
sites is regularly assessed in various key areas. The final review is announced
by the executive of the production site at the monthly HS meeting. Review
components were revised following the monitoring findings analysis in 2021
to launch upgraded regulations in 2022, including a substantial increase in the
weight of assessment based on monitoring findings and KPI structure.
The Group’s Power segment began to use video recording in 2019 to
enhance the safety of the most hazardous works. The list of operations to
be recorded was extended in 2020, and later in 2021 a competition was
held for the best video record of permits to carry out hazardous work and
switching in electrical installations using portable video recorders.
In 2021, an accelerated procedure for solving HS problems was introduced
based on the deliverables of an analysis of the functioning of the
regulation adopted in 2019, through involving top managers in solving
problems spotted by employees, reviewing the results achieved and
considering issues which require a large amount of time to be resolved at
a monthly HSE meeting by the CEO of the Group’s Power segment.
Furthermore, in 2021, a training video was filmed with professional actors
explaining in plain language and a humorous and didactic style how this
tool is to be used.
In 2021, a uniform procedure for introductory HS briefings for visitors was
introduced at all operating companies of the Group’s Power segment. At
briefings, visitors will learn about the priorities of the Group’s HS policy,
and receive an extract from the Basic and Principal Rules relevant to
visitors, explaining existing risks, and the measures required for safe visits
to the operating facilities.
At the end of 2021, an offline three-day workshop was held for the
managers of the HS departments of the Group’s Power segment in
Irkutsk. The participants visited nine production facilities, made their
proposals on enhancing occupational safety, and finally drafted a
statement where they defined the main mission of the HS departments
and assumed advanced obligations for ensuring safety at work.
1. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation. KRAMZ
and SMR are included in work-related fatalities of the Metals segment.
2. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation. KRAMZ
and SMR are included in LTIFR of the Metals segment. Figures for 2020 were recalculated because of an
improvement in methodology.
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RESPONSIBILITY
FOR EMPLOYEES
Goals and results
Goals
2021 Results
Diversity and Equal Opportunities Policy
EXPANSION OF THE
NETWORK OF SPECIALISED
UNIVERSITIES AND
COLLEGES, interaction with schools
in all regions where we operate.
CONTINUE THE PROJECT
FOR OBTAINING HIGHER
EDUCATION at the National
Research Technical University (INRTU)
by the Company’s employees.
LAUNCH A SCHOLARSHIP
PROGRAMME.
We are actively interacting with educational
institutions, and we have made agreements
with professional training schools in the
regions where the Power segment operates.
Project implementation is underway.
Scholarship programme was launched.
En+ Group consists of
more than 60 companies
in 12 countries. We
comply strictly with
labour laws and personnel
management standards
in Russia and other
operating countries.
En+ Group’s key
personnel objectives:
• Attract and retain
the best talent
• Increase employee
engagement
• Ensure favourable
working conditions
and a working
environment conducive
to the professional
development of
employees and the well-
being of their families
We support diversity and
equal opportunities
We work hard to promote equal
employment opportunities and fair
working conditions, and deliver
excellent results. The Group respects
personal freedom and human rights
and does not tolerate any form of
discrimination in the workplace.
En+ Group has always been committed
to ensuring socio-cultural diversity and
building a more inclusive workplace. The
Group works to ensure equal employment
opportunities, promotions, training, and
remuneration for all employees, regardless
of ethnicity, national origin, religious
beliefs, gender, age, sexual orientation,
marital status, disability, or any other
characteristics, within the framework
of applicable legislation. In our opinion,
the complete elimination of all forms of
discrimination, intimidation or harassment
is an integral part of the Group’s success.
En+ Group Annual Report 2021
As we understand the advantages of
a diverse team, we search for and hire
employees from different backgrounds.
Leveraging access to a broad range
of opinions and expertise from our
employees, we can improve business
performance and better support local
economies around the world. Women
accounted for 27.3% of En+ Group
employees in 2021, a slight increase on
the previous year (27% in 2020). The
nature of our business involves some
highly hazardous operations. Women’s
access to such positions and work in
such operations are strictly regulated by
law in some of the countries where we
operate, including Russia. We endeavour
to fully comply with all industry-related
restrictions, while doing our best to create
an inclusive and diverse environment.
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CONTINUE THE IT ACADEMY
PROGRAMME, ENERGY LAB.
Project implementation is underway.
Total number
of employees
(full-time equivalent)1
Lost Time Injury Frequency Rate (LTIFR)
Workforce gender
diversity2
En+ Group’s Board
gender diversity
CONTINUE TO WORK WITH
THE PERSONNEL RESERVE
AND SEARCH for high-potential
personnel.
The work is underway.
Workforce gender diversity2
57,933
35,256
56,150
35,003
53,654
35,607
2021
2020
2019
93,189
91,153
89,261
CONTINUE CORPORATE
DEVELOPMENT PROGRAMMES
TRANSFORMATION, Kommersant,
School of Occupational Safety and
Health Administration.
CONTINUE YOUTH
DEVELOPMENT
PROGRAMMES.
Project implementation is underway.
Metals
Power
Women
Men
2021
27.3%
72.7%
2020
27%
73%
Women
Men
2021
33%
67%
2020
33%
67%
Programme implementation is underway.
Management team
gender diversity
Senior management
gender diversity3
Middle management
gender diversity3
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The number of women at all
levels of Group management
corresponds to the general
gender balance of the Group
IMPLEMENTATION OF NEW
IT PROGRAMMES FOR WORK
WITH ASSESSMENT, training and
development of personnel.
A new internal web portal was launched
for Company staff assessment and
development, as well as an external
career portal for both school/university
students and experienced professionals.
INSTALL DIGITAL SIMULATORS
FOR HPP OPERATIONAL
PERSONNEL at all En+ Group
hydroelectric power plants in 2021-2022,
including Krasnoyarsk, Bratsk and Ust-
Ilimsk HPPs.
Simulators were installed.
Women
Men
2021
21%
79%
2020
25%
75%
Women
Men
2021
19%
81%
2020
17%
83%
Women
Men
2021
22%
78%
2020
21%
79%
1. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation. The
total number of employees at the end of the year does not include external secondary job employees
and employees in German asset acquired in 2021(Headcount as of December 31, 2021 was 210 people).
Data was collected on the basis of the HR data collection system. The figures for 2020 were recalculated
owing to improvements in the methodology.
2. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation.
3. Preliminary data, being verified as part of the En+ Group 2021 Sustainability Report preparation. Figures
for 2020 were recalculated because of an improvement in methodology.
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The greatest capital of our
Group is our people. En+
Group’s success is due to
the creation of a culture of
team engagement, where
everyone can develop
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We recognise and respect human rights
Policy on Human Rights
Corporate Code of Ethics
Key points
In 2021, the Group identified
The Group is guided by
>
• No incidents of discrimination
• No incidents of child labour
• No incidents of forced or
compulsory labour
• The Universal Declaration of Human Rights
• The ILO Declaration on Fundamental
Principles and Rights at Work
• The UN Global Compact
• The UN Guiding Principles on Business and
Human Rights
We maintain the long-term
motivation of our employees
The well-being of our employees is
important to us. We guarantee all
employees a decent wage, benefits,
an inclusive work environment,
and safe working conditions.
Depending on the position, an employee
may receive bonuses monthly, quarterly,
and annually. Employees who perform
special tasks or participate in working
groups can also expect additional
payments. The bonus component of a
manager’s salary is contingent on the
achievement of specific targets and KPIs.
EN+ MOTIVATIONAL
SYSTEM
BONUSES AWARDED BY THE
HEAD OF A COMPANY FROM
A SPECIALLY ALLOCATED FUND
PAYMENTS TO EMPLOYEES
PROACTIVELY PARTICIPATING
IN SOCIAL PROJECTS AT
GROUP COMPANIES
PAYMENTS TO EMPLOYEES WHO HAVE
RECEIVED CORPORATE, STATE OR
DEPARTMENTAL AWARDS
ANNUAL
PERFORMANCE
BASED BONUSES
We have a broad social
support system designed
to encourage and maintain
the long-term motivation
of our employees. Full-time
and part-time employees
have equal access to all
benefits. In addition to the
guarantees and benefits
established by the labour
legislation of the Russian
Federation, En+ Group
provides employees with the
following social benefits
KEY SOCIAL
BENEFITS FOR
EMPLOYEES
FINANCIAL AID
MEDICAL SERVICES
SPORTS ACTIVITIES
PENSION BENEFITS
En+ Group Annual Report 2021
PROVISION
OF MEALS
CHILDCARE
PROGRAMMES
RECREATION AT
HEALTH RESOSTS
PREFERENTIAL
MORTGAGE PROGRAMME
PAY RISES
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Unprecedented measures
were taken in 2021 to raise the
attractiveness of the Metals and
Power segments. The Company’s
management substantially
raised salaries to improve the
Company’s attractiveness as
an employer, and to attract
and retain highly qualified
professionals. The pay rise is
one of the most important
prerequisites for the Company’s
further sustainable development.
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35,455
man-courses
were completed in 2021
We invest in training and
development of our employees
The key objective of En+ Group in
personnel training is to cultivate a set
of professional skills in our employees
which meet the requisite quality
and efficiency of our production
programme while ensuring safety and
fostering long-term technological
development within the industry.
We encourage the training and
development of our employees, starting
with career guidance at school, and the
training of students in targeted training
programmes at specialised institutes
and universities, as well as continued
training once young professionals join
the Group, in the process contributing
to the development of the personal
effectiveness and professional skills
of employees in the workplace.
The current system of mandatory staff
training regulates the training and
procedures for each position in the
industry. The En+ Group’s corporate
training system complements the
mandatory system, taking into account
the specific requirements imposed
by the external environment.
Every employee has access to
vocational and advanced training
In 2021, the following developments
in training were implemented:
• Employees received training
in professional competencies,
including development of practical
skills at special training sites. A
new training ground for labour
protection when working at
height was put into operation
Every employee has access to the
Corporate University platform
The Corporate University of the Power
segment obtained a new educational
licence and completely updated its
training programmes in 2021.
Employees are able to attend higher
education on a preferential basis
The project enabling the Power
segment’s employees to receive
higher education at Irkutsk National
Research Technical University (INRTU)
has proven to be successful and in
demand. It will be continued in 2022.
We invest in a health
and safety culture
Achievements of 2021:
• An annual Safety Culture
Contest was held
• The School of Occupational Health
and Safety programme was completed
for those who enrolled in 2020
• 323 teachers and 5,574
workers were trained
We invest in the
internal talent pool
Achievements of 2021:
• The Company launched a new portal
for the assessment and development
of the Company’s personnel and
an external career portal aimed at
both schoolchildren and students, as
well as experienced professionals
• The Internal Talent Pool was reviewed
at the top management level;
the training methodology for the
personnel reserve was changed
• Managers and specialists completed
• The Company continues to implement
the “Kommersant” project, and the third
wave of the “Transformation” personnel
reserve members commenced their
assessment and development
• The Corporate University developed
the “Competence Development Guide”
advanced training aimed at improving
and acquiring new competencies
required for their work
• Vocational and advanced training
programmes were updated
and revised in accordance with
professional standards and the
law of the Russian Federation
• The Company continues to introduce
and develop unique hydropower
plant mock-up simulators
• The Company provided simulators
for training boiler, turbine and boiler-
turbine shop operational personnel
• The Company conducted competitions
among the operational personnel of
LLC EuroSibEnergo-Hydrogeneration
• An automated WEB-Expert-based
system was introduced to test the
knowledge of managers and specialists
36 project teams
were qualified for the final
We invest in the innovation skills
of the younger generation
Attracting youth to innovation
“Energy Lab” is an annual acceleration
programme aimed primarily at
attracting talented youth to address
current production challenges and
search for promising technological
ideas of interest to the Company and
the energy industry in general.
The En+ Group’s acceleration of innovative
projects programme was launched in
partnership with INRTU and supported by
the EuroSibEnergo Corporate University
in 2018. Get-to-know tours were held for
the participants of the Energy Lab contest
for the first time in 2021; 36 project teams
from 10 universities and colleges from
8 Russian cities qualified for the final.
Attracting IT students to the
Power and Metals segments
The unique project “IT Academy” was
launched in 2021 to serve as an additional
programme of targeted training for IT
students to attract them to the power
and metals sectors. Graduates, once
they successfully complete the course,
will enjoy guaranteed employment with
En+ Group and RUSAL. Training takes
place through the Institute of Information
Technologies and Data Analysis at
INRTU with the support of En+ Digital
and the EuroSibEnergo Corporate
University, assisted by the Company’s
IT specialists and external speakers.
The programme offers unique knowledge,
practical skills and competencies,
and increased scholarships for the
period of study, plus internships at the
companies of the Power and Metals
segments, and assistance and support
in choosing a topic and preparing
graduate qualification work, as well
as obtaining Russian and international
certificates and advanced training
certificates in a state-approved format.
En+ Group Annual Report 2021
Scholarship programme for
engineering students
In 2021, a new En+ Group and RUSAL
Scholarship Programme was launched
for promising students in the following
specialties: power, metallurgy, chemistry,
thermal power engineering, thermal
chemistry, etc. The amount of the
scholarship is determined based on
the level of further education (higher
or secondary), as well as the year of
study. For example, a scholarship for a
second-year university student will be
RUB 10,000 a month, and for a fifth-
year student up to RUB 25,000.
Youth Development Programme
In 2021, the updated “My Career 2.0” youth
development programme was successfully
completed with the 2020 intake. The
winners of 2021 were included in the
Internal Talent Pool of the Power segment
and will continue their development under
corporate development programmes.
It was resolved to have the programme
continue on an annual basis to search
for talented young professionals.
In order to arrange for targeted training
for students and advanced training for
specialists in the Power segment, two
Corporate Training and Research Centres
were established: in partnership with
Irkutsk National Research Technical
University (2008) and the other in
partnership with Bratsk State University
(2011). Students take a 2.5-year course
at the Corporate Training and Research
Centre under additional educational
programmes that include more than
1,000 academic hours of specialised
training in technical areas (repair and
operation of thermal/electrical equipment,
relay protection and automation,
etc.) under the guidance of expert
teachers. The list of additional training
programmes was expanded in 2021.
We invest in the human
resources of the
scientific community
In 2021, En+ Group, in partnership with
INRTU and the EuroSibEnergo Corporate
University, launched the “Future Teacher”
project, which will contribute to the
development and skills of INRTU lecturers.
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COMMUNITY
ENGAGEMENT
Goals and results
Goals
2021 Results
Stakeholder Engagement Policy
1
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3
4
IMPLEMENT CHARITABLE,
SOCIAL AND
INFRASTRUCTURE PROJECTS
in the regions of operation.
The implementation of social projects in
the field of ecology, landscaping, and social
support continued in accordance with the
Company’s sustainable development goals.
OPTIMISE AND STANDARDISE
SOCIAL INVESTMENT
MANAGEMENT PROCESSES.
All social investments of the Company
are reviewed and approved by the
Company’s Social Investments
Committee on a monthly basis.
CONDUCT SOCIAL RESEARCH
IN 2021-2022 TO DETERMINE
FURTHER DEVELOPMENT
GOALS FOR LOCAL
COMMUNITIES.
A sociological study is planned for 2022.
SUPPORTING LOCAL
COMMUNITIES IN THE FIGHT
AGAINST COVID-19.
Specialised hospitals have been
built, the transfer of masks and
medicines to healthcare institutions
has been organised, and the work of
volunteers has been organised.
En+ Group has a large direct positive
effect on the economy of its regions of
operation; the enterprises of En+ Group
being one of the largest employers,
taxpayers, and implementers of social
and infrastructure programmes.
Local communities represent one of the
key stakeholder groups for En+, as do
local NGOs and local authorities. En+
strives to support local communities
both in Russia and abroad, increasing
the Group’s positive community impact
and minimising any possible negative
influence in all regions of operation.
The Group’s interaction with local
communities is based on regular
discussions with representatives of the
local community and annual community
surveys to identify local challenges and
target community development activities.
When interacting with local communities,
the Group seeks to understand and
take into account local specifics and
is actively involved in solving the
problems faced by local communities.
The Company implements a wide range
of social and charitable programmes,
primarily free of charge, aimed at the
improvement of residents’ well-being, the
development of social infrastructure and
the urban environment, the improvement
of educational and healthcare services,
support for public and children’s sports,
and help for vulnerable groups of
people. En+ Group regularly evaluates
its programmes, updates them, and
introduces new ones. Assessment shows
that programme results correspond
to the goals set. Our contribution
to the development of the regions
where we operate allows us to create
a positive social climate and loyalty to
the Company among the population.
USD 55 mn
the Group’s total social
investment in 2021
We develop
infrastructure in our
regions of operation
The Group considers
infrastructure development
as its main community
engagement activity.
By implementing
infrastructure projects,
the Group contributes
significantly to the
urban development
of the cities where
it is present. We
are convinced that
cities should reflect
the needs of their
residents and
be convenient
to live in.
En+ Group Annual Report 2021
The Power segment has carried out activities aimed at the development
of infrastructure and the urban environment, including:
Construction of a
children’s sports-
and playground in
Ust-Ilimsk, Angarsk,
Divnogorsk, and Tulun
Construction of a modern
eco-friendly game
complex in Irkutsk
Construction of a ski
base in Nizhneudinsk
Construction of a ski
base in Divnogorsk
Reconstruction of the
Bratsk Drama Theater:
construction of an
addtional chamber stage
Development of an
architectural concept for
the improvement of the
IGPP dam based on a
survey of stakeholders
The RUSAL Territory programme accounts for a significant share of the
Group’s infrastructure investment. Despite the limitations associated
with COVID-19, this programme continued its activities in the area of
socioeconomic development of the territories, including:
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Completion of the last
project supported in
the framework of the
2017 RUSAL Territory
competition (the Museum
Yard cultural heritage
site, Krasnoyarsk)
Continuation of realisation
of projects supported
by RUSAL in 2019 in
Volgograd, Krasnoturinsk,
Severouralsk, and the
Taezhny village of the
Boguchansky district
Holding an international
competition to develop
a concept for the
development of the
Gorky Central Park
in Krasnoyarsk
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Attraction of federal funds
to the cities of presence
within the framework of
the competition of the
Ministry of Construction
Selection of contractors
to create plans for the
architectural development
of public spaces in ten
cities of presence
Monitoring of the
implementation of
RUSAL’s previous
infrastructure projects
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We support health
of employees and
local communities
The year 2021 has shown
the particular importance
of the Group’s investment
in healthcare. Both
segments have committed
significant resources to
counter the pandemic.
The Group continued
programmes to provide
assistance and protection
for employees, veterans
and local communities
from COVID-19.
100
COVID-19
RESPONSE
Operations
En+ Group will take every opportunity
to prevent the spread of the virus and to
ensure maximum employee protection.
During the pandemic, we ensured secure,
uninterrupted production at the Group’s
facilities and achieved robust financial
results supported by solid operational
performance. We also successfully negotiated
refinancing for credit facilities and drastically
reduced our financing costs while fuelling
growing sales of our value-added products
(VAP) due to increasing premiums.
Support for employees
Keeping our employees healthy is our main
goal. Since March 2020, En+ Group has
been taking active measures to combat
the spread of coronavirus: a situation room
and a hotline for assistance were set up,
personnel flows and proximity were limited
as much as possible, and some employees
moved to remote working. We also provided
thermometry control and disinfection of
the workplaces and premises of production
facilities to ensure the safety of our employees.
Consultations regarding COVID-19
The Consulting Centre for Medical Assistance
of En+ Group received more than 470,000
requests from employees and their families
regarding the diagnosis and treatment of
illness caused by coronavirus infection.
The consulting services programme was
launched on 24 December 2020 for Power
segment employees in Miass and Nizhny
Novgorod, as well as in cities in the Irkutsk
Region and Krasnoyarsk Territory.
Remote consultations are available 24/7.
They are conducted by the best medical
personnel from medical facilities in the
cities where the Company operates. If
necessary, specialists arrange hospitalisation
under personal supervision in medical
centres for patients with COVID-19.
En+ Group recognises that these medical
consultations are indespensible to ensuring
full recover after COVID-related illness.
Vaccination
The Company believes that achieving
collective immunity is an important task for
the organisations involved in ensuring the
health and safety of the regions. En+ Group
has launched a partnership programme
with leading state medical facilities in the
regions of its presence for the prompt
vaccination of Power segment employees.
Support for communities
Throughout the COVID-19 pandemic,
the Company has purchased PPE, medical
equipment, and medicines for medical
facilities in the regions of its operation,
local communities and employees.
En+ Group Annual Report 2021
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In addition, both Metals and Power
segments actively promoted healthy
lifestyle and sports activities among
local citizens, employees, and their
families. For this purpose, En+ builds
and renovates sports infrastructure,
purchases sports equipment, and holds
healthy lifestyle events. One of the
Group’s largest sport and healthy lifestyle
projects is Get on Your Skis, Everyone!
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NATURE MATTERS
PROGRAMME
The Nature Matters programme has been
implemented by the Company since
2011. It includes environmental, social,
scientific, and educational projects that are
implemented in cooperation with leading
non-profit societies and associations.
360 PROJECT
In 2021, the 360 volunteer project was
held for the tenth time. Taking all safety
precautions, volunteer actions were carried
out to collect garbage and improve the
territories of reservoirs in six cities where En+
Group enterprises operate. The volunteers
collected 23 tonnes of garbage and sent
more than 2,500 kg of waste for recycling.
The participants also planted 772 shrubs,
installed information stands and equipped
recreation areas. An online eco-marathon 360
was also launched, the main idea of which was
to unite civically-minded people. More than
1,000 participants registered for the online
eco-marathon. In total, more than 3,000
people took part in the 360 Project in 2021.
STRATEGIC REPORT
We invest in
innovation skills
The Group considers
the implementation of
educational projects
to be one of its most
important tasks in the
field of social investment.
We develop
volunteering
Volunteer initiatives are
an important tool for the
Group when building
relationships with local
communities, non-
profit organisations, and
government agencies.
En+ pays great attention
to the development of
volunteer programmes,
considering them one of
the most important ways
to solve social problems.
The Group has been
active in volunteer
activity since 2010. In
2021, the implementation
of charitable projects
continued. However, due
to the ban on holding mass
events, changes were
made to the programme
implementation plan,
with most of the events
being moved online.
The Group strives to
involve the volunteer
movement in
environmental protection.
Among the most popular
environmental projects
of the Metals segment
are Day of the River and
Green Wave. The most
famous projects of the
Power segment are the
360 Project, environmental
grant competition, and
partnerships with local
environmental NGOs
realised under the Nature
Matters programme.
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En+ Group Annual Report 2021
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educational projects at
p.96
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STRATEGIC REPORT
INTERNAL CONTROL
AND RISK MANAGEMENT
A comprehensive framework of internal controls is in place across
the Group, designed to protect the Group’s assets, improve business
processes, and ensure compliance of the Group’s operating companies
with applicable laws and regulations.
Audit and Risk Committee
Internal control system (ICS)
The Board of Directors has responsibility
for the efficiency and effectiveness of the
financial and economic activities of the
Group and is responsible for maintaining
and reviewing the effectiveness of
the Company’s systems of internal
control and risk management.
The Board has established an Audit
and Risk Committee (the “A&RC”),
which assists the Board in its review of
the financial statements of the Group;
ensures that systems of internal control
and risk management are in place and
operating effectively; oversees the
internal and external audit processes
and performs such other activities
as are requested by the Board.
The Company’s structure includes the
Internal Audit Directorate (the “IAD”),
which is independent of management,
and which reports to the A&RC and the
Board. The IAD assists the A&RC and
the Board in overseeing the financial
and economic activities of the Group
and the related systems of internal
control and risk management.
The IAD reports regularly to the A&RC
concerning the results of both scheduled
and unscheduled audits; any deficiencies
identified in the system of internal
control; recommendations and corrective
measures to be taken by management;
identified risks and related financial
exposures and mitigation measures.
The IAD seeks to provide assurance
to management and shareholders
of the Company that the Group’s
assets are safeguarded and profits are
maximised; that the Company complies
with the requirements of applicable
laws and regulations; and that proper
accounting records are maintained.
The IAD seeks to ensure that an
effective system of internal control
is in place and operating effectively
across the Group, including:
1. Operational and financial control
• Conducting audits of the efficiency
and effectiveness of business
processes across the operating
companies in order to identify
and minimise risks associated with
ineffective management, and to
enhance control of operational
and technological processes,
commercial activities, personnel
management, implementation of
investment projects, financing, etc.
• Conducting audits to prevent and
identify fraudulent activities by
management, employees and third-
party contractors (such as fraud,
misappropriation, misuse of the Group’s
assets, sub-optimal use of materials and
time), and mitigate the effects thereof
• Exercising control over commercial
activities (including the selection
of suppliers of raw materials, other
materials and services, including
construction and/or installation
works) in the interests of effective
cost management for the Group
(including by participating in the
Tenders Committee and overseeing
the work of Tenders Committee across
the Group’s operating companies)
En+ Group Annual Report 2021
Improvement of the corporate
system of internal control
The IAD achieved substantial results in
2021 in controlling and improving the ICS.
1. Targets for control over the Group’s
commercial activities and development
of measures to increase the
efficiency of commercial activities
• Reduction of costs for the purchase of
services, construction and assembly
works and key commodities and
materials was achieved through
improved commercial conditions,
broadened competitive environment
and negotiations as part of the
control of procurement activities
• Goals regarding standardised control
over commodities and turnover
of goods and materials in the
Power segment’s companies were
achieved; specialised automated
forms for inventory management
were developed and implemented
• The target for the sale of the Group’s
illiquid assets was exceeded by 20%
• General Guidelines for forming initial
minimum prices for purchasing
in the Group’s Power segment
• Third update of the General
Procurement Regulations for all
enterprises of the Company
• Second update of the General
Regulations on Illiquid and Non-
core Assets of the Company
2. Development and adoption of a
framework of regulations for the ICS
• The contracting regulations of the
Group companies have been updated
• The automated work travel
documentation execution process
has been improved to comply
with the respective regulations
• Development of the Group’s
regulations portal has been launched
The operational and financial control
objectives are achieved through
comprehensive audits and controls
inspections conducted by the IAD
in accordance with the annual audit
plan (approved by the A&RC) using
a risk-based approach. In addition,
the IAD conducts unscheduled audits
as requested by management and
provides an independent opinion in the
fields and areas requiring immediate
decision-making by management. The
IAD uses audit findings to develop
corrective actions aimed at minimising
or eliminating any failures or weaknesses
identified by audits, with a view to
preventing such breaches in the future.
The IAD regularly updates management
and the A&RC on its audit and review
findings, and on the status and
implementation of the recommendations
it has provided to management.
2. Compliance control
• Auditing compliance with the
requirements of creditor banks, listing
rules and other financial regulators,
including with respect to sanctions, etc.
• Auditing compliance with the internal
regulations and policies of the Group,
designed to ensure compliance with
the requirements of the supervisory
authorities, financial institutions and
other counterparties of the Company
3. Regulation of business processes
• Development of the Group’s system
of internal control and mitigation of
risks of common process violations/
losses and particular aspects of
the Group’s activities (system of
authority delegation; control over
conflicts of interest, related-party
transactions, compliance procedures;
control over business travel, etc.).
• Development of uniform standards
of commercial activities (e.g.
Generalised Regulations on Purchases
in accordance with applicable law
and regulations; regulations on sales
of illiquid assets of the Company)
4. Development and implementation
of projects to improve ICS
• Identifying cost management
opportunities in commercial activities
(e.g. sales of illiquid assets – regulations
are reviewed and tools and measures
introduced aimed at improving the
Company’s commercial services
efficiency, including the reduction in
cost of goods, works, and services)
• Providing recommendations and
development of terms of reference for
automation of separate modules of the
e-document flow, general accounting
and management accounting systems
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RISK MANAGEMENT FRAMEWORK
The Company has established a risk management system,
which is an integral part of the Company’s internal control
system and corporate governance framework, to reduce
any potential threats to the Company’s compliance
with its corporate governance standards and ensure
consistent and sustainable business development.
The Company’s risk management system provides
for the identification, financial and probabilistic
estimation and control over any change in the
risk of both the internal and external environment
with regard to the financial and/or economic
activities of the Group’s operating companies.
2. Better use of risk management tools in achieving
the production targets of operating companies
Risk management targets have been incorporated
into setting the Group’s overall targets, as well
as into the targets of the operating companies’
management. The actual achievements in risk
management will be measured against the managers’
KPIs to calculate their performance bonuses.
3. Increasing awareness of the Company’s employees
of the risk management measures taken by
their operating companies and the Group
The vertical principle is used to manage the risks of
the Company, based on the identification of any risks
to the business processes of standalone operating
companies with subsequent consolidation at the
Business level, and then at the Company level, in
accordance with the regulating documents that
stipulate the procedure and the responsibilities of
all participants in the risk management process.
Materials on risk management system basics and
objectives were developed for training. The materials
were posted on bulletin boards and uploaded to
the corporate portals of operating companies and
their branches; all employees have free access to the
risk management regulations. The second phase of
large-scale training in risk management took place
on the Company’s Corporate University platform.
Risk maps are used to illustrate the risks of operating
companies and the Businesses. Risk maps provide details
of each risk event scenario, estimates of possible risk
impact and measures aimed at mitigating the possible
negative impact on the activities of operating companies,
Businesses and the Company. The Company risk map
includes a list of all possible risks that may threaten the
objectives of the Company in the current calendar year.
Risk status monitoring is undertaken on a quarterly basis
to analyse any changes, update the estimates for existing
risks and implement measures for controlling identified
risks, as well as to search for, identify and estimate the
impact of new risks arising during the quarter/year.
The risk monitoring results are submitted to
management, the Chief Executive Officer, the A&RC
and the Board. Responsibility for effective risk
management rests with the Chief Executive Officer.
Key risk management developments
of the Company in 2021:
1. 2021 Risk Map development and monitoring
on quarterly basis over the year
The En+ Group’s Regulations on Risk Management
establish the procedure for the development of Risk
Maps by all entities of the Group for the coming
year and for the quarterly review and update of the
developed Risk Maps. A high level of detail has been
provided in the development of risk management
measures, with subsequent regular monitoring of their
implementation. The results are provided to the Group’s
executive management and the Board of Directors.
4. Update of local risk management regulations
of the Group’s operating companies
The risk management regulations were updated following
the improvement of the risk management system.
Risk identification
As part of its strategic, business planning and risk
processes, the Group considers how a number of
macroeconomic themes may influence its principal
risks. These are factors about which the Company
should be cognisant in developing its strategy,
including long-term supply and demand trends. They
include, for example, developments in technology,
demographics, climate change, and how markets
and the regulatory environment may respond. These
themes are relevant to the Group’s assessments
across a number of its principal risks. The Group will
continue to monitor these themes and the relevant
developing policy environment at an international and
national level, and will adapt its strategy accordingly.
Since March 2020, the Company has been monitoring
the evolving situation, and consequent emerging risk,
with regard to the spread of COVID-19. The Group
has been working with a variety of stakeholders,
including industry and medical organisations to
ensure its operational response and advice to its
workforce is appropriate and commensurate with
the prevailing expert advice and level of risk.
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En+ Group Annual Report 2021
En+ Group’s key business risks
The Group’s principal risks, as set out in the table below, are those risks which could prevent the business
from executing its strategy and creating value for shareholders, or which could lead to a significant loss
of reputation. The Committee has carried out an assessment of the principal risks facing the Company,
including those that would threaten its business model, future performance, solvency or liquidity.
Risk impact is based upon an estimation of the combined impact of probability and financial
effect of a given risk (i.e. a probabilistic assessment of the risk impact on the Group). Thus,
the higher the probability, the higher the potential impact, and vice versa.
Risk impact on the Company
Changes in 2021
High
Medium
Low
Higher impact
N/C
No impact
Lower impact
Risk
Description
EXTERNAL AND MARKET RISKS
1
Environment
Pollution of land, water courses or air due
to equipment failure or human error, delay in
implementation of investment projects of production
modernisation giving rise to penalties and/or fines.
Suspension of operations or loss of licence to operate
Change
in 2021
N/C
2
Laws
and regulations
Business impact of changes in, or the manner
of enforcement of laws and regulations in Russia
and globally, including antimonopoly regulation,
tariff regulation, licensing and permits, environmental
regulation, and HSE regulation
N/C
3 Market –
supply,
demand,
and commodity
price volatility
4 Geopolitical
Business impact of volatility in supply, demand and/
or prices of commodities fundamental to the Group’s
operations:
Metals segment: aluminium, alumina, bauxite, energy
sources (primarily gas)
Power segment: electricity prices in certain segments
of the Wholesale Electricity and Capacity Market
(long-term contracts, ‘day-ahead’ market)
Risks of a negative impact on the Group in the case
that new sanctions are imposed by foreign states:
impact on the Company’s share price; supply
of equipment, which may lead to the postponement
of investment projects; capital flows and ability
of the Group to secure foreign currency credit
facilities
Risks of a negative impact on the Metals segment’s
operations in various countries (Guyana, Guinea)
5
Force majeure
– natural
disasters,
large-scale
accidents,
epidemics, etc.
The Company may suffer major damages to its
production facilities, or suspension/ discontinuation
of operations as a result of natural disasters,
epidemics, terror attacks
N/C
Mitigation measures
The Group’s environmental
management system
Consistent application
of the Group’s Environmental
Policy throughout planning
and implementation
of the environmental strategy
Environmental audit
and environmental monitoring
of production processes
Engagement with national
and local governments
on developments in environmental
legislation
Environmental KPIs for Company
management
Monitoring of changes
in the regulatory frameworks
Interaction with the regulatory
authorities
The Group monitors its key risks,
and conducts market research &
analysis, and business & scenario
planning
The Company partially hedges its
market risks by using derivative
financial instruments
Continuous monitoring
of the political situation is exercised
in the countries where the Group
operates
Scenario planning
and development of early response
measures
Implementing a set
of organisational and practical
measures to ensure asset safety
Continuous implementation
of the measures until the end
of the COVID-19 pandemic
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En+ Group Annual Report 2021
In late February and in March 2022,
some countries and organisations
announced new packages of sanctions
against the public debt of the Russian
Federation, Russia’s central bank,
a number of Russian banks and certain
Russian-government related entities
and institutions plus personal sanctions
against a number of individuals
as well as certain other restrictions.
There has been a significant increase
in volatility on the securities and currency
markets, as well as a significant
depreciation of the rouble against the US
dollar and the euro. The quantitative
effect of these events cannot
be accurately estimated at the moment
with any degree of confidence.
Due to all these circumstances, Central
Bank of Russia increased key rate
to 20% in the end of February 2022
and subsequently decreased to 17% in
the beginning of April 2022 that may
negatively affect the financial position
of the Company due to high interest
rates for credit facilities. The Russian
Government has also announced intention
to change regulation of domestic
metals’ sales prices, which may have
an adverse effect on the Company’s
profitability.Due to unavoidable logistical
and transport challenges on the Black Sea
and surrounding area, RUSAL’s had been
obliged to halt temporarily production
at the Nikolaev Alumina Refinery located
in the Nikolaev Region, Ukraine. Output
of this refinery in 2021 amounted to 1.8 mt
of alumina. In addition, on 20 March 2022
the Australian government imposed
an immediate ban on exports of alumina
and aluminium ores, including bauxite,
to Russia. This action will affect, among
other things, the alumina export from
Australia that comprises almost 20%
of RUSAL’s total alumina demand.
At the date of this Report, the Company
continues to evaluate the effect
of all of the above and analysing
the possible impact of a variety
of micro- and macroeconomic
conditions on the Company’s
future financial position and results
of operations in 2022 and onwards.
Climate-related risks1
The Company considers and examines
climate-related risks and opportunities.
This year En+ Group continued its
work on implementing the Task
Force on Climate-related Financial
Disclosures (TCFD) recommendations.
The Company aims to make its climate
change reporting more transparent
for stakeholders. For detailed information
please refer to the Task Force on
Climate-related Financial Disclosures
section that focuses on implementation
of the TCFD recommendations
and to the Sustainability Reports.
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STRATEGIC REPORT
Risk
Description
BUSINESS AND OPERATIONAL RISKS
Change
in 2021
Mitigation measures
6 Maintenance
These risks relate to equipment: failures of equipment
that may result in damage to property, reduced
output or discontinued operations
N/C
Timely maintenance and repairs/
overhauls of equipment;
modernisation of production
facilities
N/C
Legal defence against lawsuits
Negotiating with the claimants
7
Legal
8
Commercial
and project
Risks that losses may be incurred as a result
of enforcement of court judgements on claims
by contractors or shareholders of the companies
of the Group
Risks of disruptions in supply chains of goods
and raw materials: sales of the products from metals
and coal businesses require the use of railway
infrastructure with its uncertain availability pattern
Risks of monopoly pricing at the transportation
market
Risks of projects not completed on time/on budget
9
Health
and safety
Workforce or contractor injury due to human
error, equipment failure, or job management, given
the endemic risks within the Power and Metals
segments relating to major accident hazards
and asset integrity
N/C
10 IT security &
resilience
FINANCIAL RISKS
11
Financial
Risks of important data loss or damage
to components of the IT infrastructure by hacking or
malware attacks
Risks of failures of the automated information control
and management systems of large industrial facilities
(HPPs, CHPs, etc.)
N/C
Financial impact of market volatility regarding foreign
exchange and interest rates
Tax risks
CLIMATE-RELATED RISKS1
Financial or reputational impact due to policy, legal,
technology, and market changes
N/C
Negotiating with suppliers
of logistical services
Ensuring timely supply
and performance under investment
contracts in accordance
with the Group’s internal
regulations
The Group has arranged
special-purpose units to reduce
the probability of occupational
injuries by means of development
of regulations, staff training
and ensuring compliance
with the rules relevant
to complicated and hazardous
works through relevant
control measures. Supervisory
authorities (the Russian
technological supervision service
Rostechnadzor, and the consumer
rights compliance service
Rospotrebnadzor, etc.) exercise
scheduled and ad hoc checks
to control compliance with HSE
requirements
Testing the IT infrastructure
to detect security vulnerabilities
Use of uniform policies
and procedures for ensuring
security of all Group entities
The Group exercises continuous
control over the financial
condition of Group companies.
Monitoring of compliance
with the terms of the loan
agreements with banks is arranged
at the Group’s entities to ensure
uninterrupted operating activities.
Regular control is exercised
over compliance with the agreed
financial covenants; tax planning
is undertaken, as well as control
over tax accruals and payments
Constant monitoring of policy,
legal, technology, and market
changes and proactive
management of these issues
12 Transitional
risks
N/A
13 Physical risks
N/A
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Negative impact on operational process due
to climate change, including water supply
and temperature variations
N/C
Business and scenario planning;
climate research and analysis
1. For detailed information please refer to the Task Force on Climate-related Financial Disclosures
section of the Annual Report 2021.
109
STRATEGIC REPORT
ETHICS
AND COMPLIANCE
En+ Group develops a unified corporate culture shared by all employees
with an atmosphere of mutual respect, trust and openness. Commitment
to the highest legal and ethical standards is at the core of our business
and declared in the Code of Corporate Ethics.
The Code states the key values, principles and standards of business
conduct to be adhered to by the employees and Board members.
It explains matters relating to employees, third parties, customers
and governmental authorities; health, safety and environment;
efficiency; ensuring confidentiality of information; control and reporting,
and conflicts of interest. The Code of Corporate Ethics is publicly
available in Russian and English on the Company’s corporate website.
Corporate compliance system
Sanctions compliance
Hotline “Signal”
En+ Group Annual Report 2021
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En+ Group operates
a 24/7 hotline, “Signal”,
for employees and other
stakeholders to interact
on issues related to ethical
violations, corruption
and other illegal actions.
The Group is constantly
running an information
campaign designed
to promote this way
of communication
and to involve stakeholders
in the continuous
improvement of the unified
corporate culture.
CORPORATE
CODE OF ETHICS
EN+ GROUP IPJSC
APPROVED
by the Board of Directors of
EN+ GROUP IPJSC
25 December 2020 Minutes No. 29
ANTI-BRIBERY
AND CORRUPTION
POLICY
EN+ GROUP IPJSC
APPROVED
by the Board of Directors of
EN+ GROUP IPJSC
25 December 2020 Minutes No. 29
To download the Code
of Corporate Ethics
from our website:
To download the Anti-
Bribery and Corruption
Policy from our website:
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https://enplusgroup.com/en/
investors/corporate-documents/
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En+ Group operates an effective
corporate compliance system, subject
to applicable laws, recommendations
issued by regulators, special requirements
of the industry and best practices.
The Group is striving for the continuous
improvement of existing processes
and the implementation of new
ones. The Compliance Committee
of the Board of Directors ensures
control and continuous development
of the Group’s compliance
management system.
Anticorruption compliance
and corporate ethics
En+ Group takes every opportunity
to promote best practice in fighting
corruption, and consistently complies
with high standards of responsible
and ethical behaviour. The Group has
adopted an Anti-Bribery and Corruption
Policy and a Conflict of Interest Policy.
The provisions of these policies are applied
at each Group company and serve
as the basis for continuous improvement
of the corporate culture. En+ Group
consistently adjusts existing corruption
prevention measures and implements
new ones. Particular attention is paid
to conflicts of interest, which are often
a cause of corruption offences.
As part of our commitment to ethical
business practices, in 2021 the Board
of Directors approved the En+ Group
Supplier Standards, thereby setting out
expectations for partners of the Group’s
in terms of responsible business,
quality assurance and sustainability.
En+ Group is focused upon mitigating
the risk of imposition of international
economic sanctions. A relevant
compliance programme has been
devised and is being continuously
developed by the Group. The Board
of Directors approved the Sanctions
Compliance Policy aimed at ensuring
that En+ Group and its officers, directors
and employees comply with the applicable
legislation for mitigating such risk.
Insider information compliance
Since the financial instruments
of En+ Group are traded on securities
markets in Russia and in the UK,
the Group has paid great attention
to maintaining an effective system
of measures to prevent misuse of insider
information and market manipulation.
The Board of Directors approved
the Regulations on the Information Policy
and Regulations on Insider Information.
These regulations, as well as a number
of additional internal acts, determine
the procedure for using insider
information, the rules for protecting its
confidentiality and monitoring compliance
with the requirements of legislation
in order to ensure fair pricing of financial
instruments and protect the rights
of stakeholders of En+ Group. The Group
approved the list of insider information,
maintains the list of insiders, sets up timely
disclosure processes, and implements
appropriate internal control.
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111
CORPORATE GOVERNANCE
CORPORATE
GOVERNANCE
CORPORATE
GOVERNANCE
The Company is committed to high standards of corporate governance.
The Group intends to continue to improve in this area and to adhere
to internationally recognised standards of corporate governance,
transparency, disclosure and accountability applicable to listed
companies.
The Company has made substantial
changes to its corporate governance
practices, as a result of the OFAC
Sanctions imposed on the Company
and its subsidiaries on 6 April 2018
and their subsequent removal
on 27 January 2019. Following these
changes, the Company has proven
its commitment to high international
standards of corporate governance.
As an international company1,
the Company aims to comply
with the recommendations of the Russian
Corporate Governance Code insofar
as is appropriate and practicable
in the Group’s context. In its corporate
governance practices, the Company
is also guided by the Listing Rules
of the Moscow Exchange.
As a company incorporated in Russia,
with GDRs listed on the Official List
of the UK Financial Conduct Authority
and traded on the Main Market
of the London Stock Exchange2,
the Company is not required to comply
with the provisions of the UK
Corporate Governance Code. However,
the Company has chosen to comply
with the UK Corporate Governance
Code insofar as is appropriate
and practicable in the Group’s context.
Adhering to high standards of corporate
governance is an important element
in attracting new investment,
strengthening the Group’s competitive
position and enhancing shareholder
value. Good governance is based
on clarity of roles and responsibilities,
and the Company aims to ensure
that its governance procedures
are applied to all areas of decision-
making across the Group.
The Board of Directors of the Company
is responsible to all of En+ Group’s
stakeholders for the strategic
management of the Company. The day-
to-day running of the Company falls
within the competence of the CEO3.
However, the Board retains responsibility
for the approval of certain matters,
which affect the shape and risk profile
of the Company (see details below).
The Company’s corporate governance
system outlines the relationship
between the Company’s shareholders,
the Board, the CEO and the management
team, as well as the remit and duties
of the Board committees.
We consider the following
corporate governance principles
to be fundamental to our operations:
• Transparency
• Open and clear decision-making
• Legal compliances
• Ongoing growth of the Company’s
value for the benefit of all stakeholders
1. As defined under the Federal Law No. 290-FZ On International Companies and International Funds dated
3 August 2018.
2. On 3 and 4 March 2022, the London Stock Exchange suspended the admission to trading of the
instruments for most Russian companies, including En+ Group.
3. The Charter uses the term “General Director” which is used interchangeably with the term “CEO” in public
disclosures made by the Company.
4. As at the date of this Report.
112
Corporate
Governance
116
Board
of Directors
124
Committees
of the Board
126
Audit and Risk
Committee
126
Corporate
Governance
Committee
127
Nominations
Committee
127
Remuneration
Committee
130
Compliance
Committee
130
Health, Safety
and Environment
Committee
132
Information for
shareholders and
investors
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AT A GLANCE
including
9 directors
5
independent non-executive directors4
En+ Group Annual Report 2021
CORPORATE
GOVERNANCE
STRUCTURE
The Company’s corporate governance structure includes
the following key elements
6 Board
committees
Chairs of all Board
committees
are independent non-
executive directors
18 January 2021
– En+ announced its
ambition to become
net zero by 2050
and to reduce
greenhouse gas
emissions by at least
35% by 2030
23 December 2021
– the Board approved
6 new corporate policies
General
shareholders
meeting
Board
CEO
read more
at p. 114
read more
at p. 116
read more
at p. 125
TIMELINE OF CORPORATE GOVERNANCE CHANGES
2021 /26 MAY
2021 /DECEMBER
The annual general shareholders
meeting of the Company took place.
The Board’s composition has been
updated, inter alia two new independent
non-executive directors were appointed
to the Board.
One new non-executive director was elected
to fill in the vacant position on the Board.
The Board approved six new corporate
policies, including the Supplier Standards,
the Biodiversity Policy, the Quality Policy
and the Diversity and Equal Opportunities Policy.
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2022 /3 MARCH
2022 /7 MARCH
The London Stock Exchange
suspended the admission to trading
of the En+ Group’s GDRs.
Joan MacNaughton has
resigned from the Board.
2022 /25 MARCH
2022 /31 MARCH
Lord Barker has resigned from his
role as Executive Chairman of the
Board and as a director, Christopher
Burnham has been elected as Chairman
of the Board on the same date.
Carl Hughes has resigned from the Board.
112
113
CORPORATE GOVERNANCE
GENERAL SHAREHOLDERS MEETING
The general shareholders
meeting (the “GSM”)
is the supreme governance
body of the Company.
The Charter details
the matters which fall within
the powers of the GSM.
Voting at a GSM is conducted on the basis
of one vote per ordinary share. Decisions
are generally passed by a simple
majority of shareholders voting
in favour of a motion at the meeting,
save for a number of matters which,
under the Charter, require the adoption
of a special resolution (i.e. voting
by a 2/3 majority), including, inter alia:
• The adoption of amendments
to the Charter or approval
of the restated Charter
• A change in the Company’s status
to non-public, or obtaining public status
• The reorganisation of the Company
by way of consolidation, merger
in the form of acquisition,
division, or divestment
• The liquidation of the Company
• The fragmentation, conversion or
consolidation of Company shares
• The acquisition of the Company’s
outstanding shares
• Fn increase or reduction
in the Company’s share capital
The GSM is quorate if shareholders
holding more than half of the votes
attached to the outstanding voting
shares in the Company participate.
If the quorum for holding of an annual
GSM is not reached, an adjourned
GSM with the same agenda shall
be reconvened at a later date. If
the quorum for an extraordinary GSM
is not reached, an adjourned GSM
with the same agenda may be reconvened
at a later date. An adjourned GSM
is quorate if attended by shareholders
holding no less than 30% of outstanding
voting shares in the Company.
Resolutions of the GSM may
be adopted either in a meeting
held in the form of joint presence
of shareholders or by absentee voting.
If the agenda of a GSM includes issues
relating to the election of the Board,
approval of the Company’s auditor
for the audit of accounting (financial)
statements prepared under the Russian
Accounting Standards (“RAS”), or
approval of the annual report and annual
accounting (financial) statements
of the Company, it may be conducted only
with the joint presence of shareholders.
However, due to the COVID-19
pandemic, in 2021 the Russian joint-
stock companies were permitted1
to hold GSMs with the above-mentioned
agenda via absentee voting.
An extraordinary GSM may be held
based on a resolution of the Board
either adopted on its own initiative,
or at the request of a shareholder (or
shareholders) holding no less than
10% of voting shares in the Company
as at the date of the request.
An extraordinary GSM convened
at the request of a shareholder (or
shareholders) holding at least 10%
of voting shares in the Company
shall be held within 50 days from
the date of the request to convene
the extraordinary GSM.
The Charter envisages a procedure
for electronic voting at GSM. Voting may
be carried out in electronic form if this
is envisaged by the decision of the Board.
In such a case ballots may be filled out
in electronic form on the Internet, or
sent to the Company’s email address.
Information (materials) which
are to be provided to the GSM should
be made available within 20 days
prior to the GSM, and in the event
of a GSM with an agenda item
on the Company’s reorganisation,
within 30 days prior to the GSM.
En+ Group Annual Report 2021
Annual GSM
Report on meetings held
The annual GSM must be convened
by the Board between 1 March
and 30 June of each year, and the agenda
must include the following items:
• The election of the Board members
• The approval of the Company’s
auditor for the audit of accounting
(financial) statements prepared
in accordance with RAS
• The approval of the Company’s
annual report
In 2021, the annual GSM of the Company
was held on 26 May 2021
in the form of absentee voting.
The annual GSM considered and passed
the following resolutions:
1. “To approve the Company’s
Annual Report for 2020”
2. “To approve the Company’s annual
accounting (financial) statements
for the 2020 reporting year”
• The approval of annual accounting
3. “Not to distribute the net profit received
(financial) statements of the Company
• The approval of distribution
of profits of the Company,
including the payment (declaration)
of dividends, except for payment
(approval) of any interim dividends
The Company’s shareholders holding
in aggregate at least 2% of voting shares
in the Company may no later than
30 days from the end of the reporting
year propose items for the agenda
of the annual GSM and candidates
for election to the Board.
by the Company for 2020 and not
to pay dividends on shares for 2020”
4. “To elect the Board of Directors
of the Company consisting
of 12 members from the list
of candidates approved by the Board
of Directors of the Company:
1. Lord Barker
2. Christopher Burnham
3. Timur Fidailevich Valiev
4. Vadim Viktorovich Geraskin
5. Anastasia Vladimirovna Gorbatova
6. Joan MacNaughton
7. Thurgood Marshall Jr.
8. Elena Valerievna Nesvetaeva
9. Zhanna Sergeevna Fokina
10. Carl Hughes
11. Andrey Vladimirovich Sharonov
12. Andrey Vladimirovich Yanovsky”
5. “To approve Ernst & Young Limited
Liability Company as the auditor
of the Company for the audit
of accounting (financial)
statements prepared in accordance
with the legislation of the Russian
Federation on accounting”
1.
In accordance with the Federal Law No. 17-FZ dated 24 February 2021.
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CORPORATE GOVERNANCE
BOARD
OF DIRECTORS
The Board adheres to the consistent approach that aims to create a long-
term value of the Company by supporting the balance between short-
term and long-term objectives.
The Board of Directors
of the Company
is responsible to all of En+
Group’s stakeholders
for the strategic
management
of the Company
As at 31 December 2021, there were 12
directors on the Board, including
seven independent non-executive
directors, four non-executive directors
and the Executive Chairman of the Board.
As at the date of this Report, there
are nine directors on the Board, including
five independent non-executive directors
and four non-executive directors.
In accordance with the Barker Plan1
and as a condition to the removal
of the Company from OFAC’s SDN
List, the Company announced
on 28 January 2019 the immediate
appointment of 7 new independent
non-executive directors, namely:
• Christopher Burnham
• Carl Hughes
• Joan MacNaughton
• Nicholas Jordan
• Igor Lojevsky
• Alexander Chmel
• Andrey Sharonov
On 8 February 2019, Lord Barker was
appointed as Executive Chairman of
the Board and Christopher Burnham
as Senior Independent Director.
and procedures of the Company.
The appointment was aimed at further
increasing cooperation between
the Board and the Company’s
management, with the ultimate
objective of promoting the successful
performance of the Company.
Most of the above directors
were re-elected in 2021 by the annual
GSM. On 26 May 2021, the annual GSM
has elected two new independent non-
executive directors: Thurgood Marshall
Jr. and Zhanna Fokina. On 15 December
2021, following resignation of Anastasia
Gorbatova, who has served as a director
of the Company since May 2019, one
new non-executive director, Olga Filina,
was elected to fill in the vacant position.
On 7 March 2022, Joan MacNaughton
has resigned from the Board.
On 25 March 2022, Lord Barker has
resigned from his role as Executive
Chairman of the Board and as a director,
Christopher Burnham has been elected
as Chairman of the Board on the same
date. On 31 March 2022, Carl Hughes
has resigned from the Board.
Lord Barker’s appointment
came with additional powers
and responsibilities, designed
to enhance the control of the Board
over the corporate governance systems
The quality and breadth of experience
of the directors, and the balance
of the Board’s composition
are intended to protect and promote
the Board’s effectiveness.
En+ Group Annual Report 2021
Board composition and attendance
Board attendance and number of meetings in 2021
EXECUTIVE CHAIRMAN OF THE BOARD
Lord Barker
17.10.2017
25.03.2022
17/17
Appointed on Resigned on
Attendance1
NON-EXECUTIVE DIRECTORS
Olga Filina
Vadim Geraskin
Anastasia Gorbatova
Elena Nesvetaeva
Ekaterina Tomilina
Timur Valiev
15.12.2021
08.02.2019
–
–
29.05.2019
09.12.2021
08.02.2019
–
08.02.2019
26.05.2021
26.05.2021
–
–
INDEPENDENT NON-EXECUTIVE
DIRECTORS
Christopher Burnham
27.01.2019
Alexander Chmel
Zhanna Fokina
Carl Hughes
Nicholas Jordan
Joan MacNaughton
Thurgood Marshall Jr.
Andrey Sharonov
Andrey Yanovsky
TOTAL NUMBER OF MEETINGS
27.01.2019
26.05.2021
26.05.2021
–
27.01.2019
31.03.2022
27.01.2019
26.05.2021
27.01.2019
07.03.2022
26.05.2021
27.01.2019
25.09.2020
–
–
–
During 2021, the Board held
17 meetings, and all of them
were held in the form of
absentee voting
2/2
17/17
14/14
17/17
6/6
11/11
17/17
6/6
11/11
17/17
6/6
17/17
11/11
17/17
17/17
17
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1. Lord Barker’s plan regarding the removal of the OFAC Sanctions from the Company was announced
on 27 April 2018 and subsequently adopted by the Board on 18 May 2018. The plan provided
for the reduction of Mr. Deripaska’s shareholding to below 50% and the appointment of certain new
directors such that the Board would include a majority of newly appointed independent directors.
Further details in connection with the Barker Plan were disclosed, in particular, in the Company’s
2018 Annual Report, available on the Company’s website at https://enplusgroup.com/en/investors/
results-and-disclosure/annual-reports/.
1. The number of meetings attended/maximum number of meetings
the directors could have attended.
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CORPORATE GOVERNANCE
Board’s focus during the year
STRATEGY AND RISK
16 December 2021
• The Board considered an update
on health and safety matters
• The Board considered an update
on COVID-19
• The Board approved the Company’s
Business Plan for 2022
19 November 2021
• The Board considered an update
on health and safety matters
• The Board considered an update
on COVID-19
17 September 2021
The Board approved the Company’s
Pathway to Net Zero Report
18 August 2021
• The Board considered
an update on health
and safety matters
• The Board considered
an update on COVID-19
19 July 2021
The Board approved
the Company’s Sustainability
Report for 2020
26 May 2021
• The Board considered
an update on health
and safety matters
• The Board considered
an update on COVID-19
18 May 2021
The Board considered
the Company’s climate change
ambition (in the form of the Spin-
Off Action Plan)
21 April 2021
The Board preliminarily approved
the Company’s Annual Report 2020
24 March 2021
• The Board considered an update
on health and safety matters
• The Board considered an update
on COVID-19
15 January 2021
The Board approved the Company’s
climate change ambition
SUCCESSION AND LEADERSHIP
15 December 2021
• The Board elected Olga Filina
as a member of the Board
• The Board elected its committees
3 June 2021
The Board updated the composition
and appointed the chairpersons of all its
committees
26 May 2021
The Board re-appointed Lord Barker
as a chairperson of the Board
24 March 2021
The Board approved the results
of the assessment of the CEO KPI achievement
for 2020
CORPORATE GOVERNANCE
23 December 2021
The Board approved the Supplier Standards,
the Biodiversity Policy, the Quality Policy,
the Diversity and Equal Opportunities Policy,
the Regulations on the Information Policy,
the Regulations on Inside Information.
29 October 2021
The Board approved the general levels of D&O
liability insurance
24 March 2021
The Board approved the assessment of
achievement of annual KPIs for the CEO for 2021
FINANCIAL PERFORMANCE
18 August 2021
The Board approved the consolidated interim
condensed financial information for the 6
months ended 30 June 2021
21 April 2021
The Board preliminarily approved
the Company’s annual accounting (financial)
statements for the 2020 reporting year
24 March 2021
The Board approved the consolidated financial
statements for the year ended 31 December
2020 and the separate financial statements
for the year ended 31 December 2020
En+ Group Annual Report 2021
BOARD RESPONSIBILITIES
The matters specifically reserved
for the Board under the Charter
include, inter alia, the following:
• The determination of the priority
areas for the Company’s activities
• The approval of the Company’s long-
term strategy and objectives and its
overall management mechanism
• The day-to-day control
over implementation of the Company’s
long-term strategy and objectives
• The approval of consolidated
annual budgets and material
amendments made thereto
• Control over the Company’s core
business and regular evaluation
of its business in the context
of the Company’s long-term strategy
and objectives and discharge
of obligations contemplated
by law and the Charter
• The convening of annual
and extraordinary general
meetings of shareholders
Training and professional
development of the Board
members
Newly elected directors complete
an induction training programme
upon their appointment.
The key elements of the programme
include, inter alia:
• Personal meetings, in person
or electronically, with the CEO,
the Chairman of the Board,
the Corporate Secretary,
management team, and/or heads
of corporate business units
• Familiarisation with operations,
including on-site visits to the Group’s
production facilities with briefings
on operational and managerial issues
and meetings with local management
• Provision of Board information
packages, including internal reporting
documents for previous periods
• Provision of internal documents
and Q&As with the management team
• The establishment and termination
• Presence, as invitees, at meetings
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of all Board committees
• Mandatory training, including
by external advisors, on matters relating
to insider trading, regulatory disclosure
and compliance with sanctions
The Corporate Secretary runs
the induction training programme
for newly elected directors
of the Company, and coordinates all
involved parties with the assistance
of the Corporate Governance Committee
and the Nominations Committee.
As part of its Board training
and professional development efforts,
the Board also regularly conducts
training sessions for Board members
on various matters, often led by external
advisors. In 2021, due to COVID-19
pandemic all planned training sessions
were postponed until 2022.
of committees, commissions,
councils and other structural units
of the Board, approval of their
personal composition and regulations
governing their operations
• The approval of internal documents
of the Company (or making
amendments or additions thereto)
on the issues of environmental
protection, insurance and risk
management of the Company
• The approval of the Company’s
dividend policy
• The approval of certain transactions
with a value exceeding USD 75 million
• The approval of share incentive
plans and schemes provided
to employees, as well as annual Key
Performance Indicators for the CEO
• The approval of the Company’s
auditors (for the audit of financial
statements in accordance
with IFRS, or other internationally
recognised rules other than IFRS)
• The approval of the register
holder of the Company
• The appointment of the sole executive
body (the CEO) of the Company
The Board has taken steps to ensure
that the members of the Board
(in particular, the non-executive
directors) develop an understanding
of the major shareholders’ views
about the Company. The directors,
including the Chairman, have direct
face-to-face contact with shareholders
at regular investor meetings.
DIRECTORS’
AND OFFICERS’
INSURANCE
The liability of members
of the Board of Directors
related to execution of their
duties at the Company
is insured under a D&O
liability insurance policy,
which is renewed annually
and represents insurance
against any in-scope
losses of the Directors.
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CORPORATE GOVERNANCE
Biographies
of directors
who served on the Board
in 2021 and have resigned
as at the date of this Report
Alexander
Chmel
Independent Non-
Executive Director
Appointed:
27 January 2019
Resigned:
26 May 2021
Nicholas
Jordan
Independent Non-
Executive Director
Appointed:
27 January 2019
Resigned:
26 May 2021
Alexander is a Senior
Advisor to the Board
Practice of Korn Ferry
in Russia and the CIS.
He has extensive
experience working
as an independent director,
chairman, and member
of audit committees
of Russian public
companies, including
ENEL RUSSIA, ChelPipe,
Vysochaishy (GV Gold).
He spent 22 years in senior
management roles
in PricewaterhouseCoopers,
worked as an Adjunct
Professor and a Director
of Corporate Programmes
at the Moscow School
of Management,
SKOLKOVO.
In 2016, 2019 and 2020
Alexander became
one of the Top 50
Independent Directors
in Russia in the national
“Director of the Year”
rating. He holds a Diploma
in Company Direction
from the Institute
of Directors (UK).
Nicholas has more than 30
years’ experience in senior
positions in leading global
financial institutions.
Nicholas serves as a Non-
Executive Director at ITI
Capital. His previous
roles include Chairman
of the Supervisory
Board at 4finance Group
S.A, CEO at Finstar
Financial Group, Co-CEO
of Goldman Russia
and CEO of Russia &
CIS at UBS Group AG.
Nicholas worked
for more than 10
years with Deutsche
Bank, becoming Vice
Chairman and Head
of the Russian Office
where he was responsible
for overseeing
the securities, trading
and asset management
departments.
He has a BA in Political
Science from Boston
University.
Rt Hon The Lord
Barker of Battle PC
Executive Chairman of the Board
Appointed:
17 October 2017
Resigned:
25 March 2022
After an early career
spanning both international
corporate finance
and the Russian energy
sector, Lord Barker
entered the British House
of Commons in 2001
through to 2015, during
which time he served
as UK Minister of State
for Energy & Climate
Change and Prime Minister
David Cameron’s special
envoy on Climate Change.
He was made a life Peer
in 2015. In February 2019,
Lord Barker took a leave
of absence from the House
of Lords following his
appointment as Executive
Chairman of En+ Group.
Lord Barker has
served on the boards
of The Environmental
Defense Fund Europe
and The Climate Group
and also chaired
the London Sustainable
Development Commission
for Mayor Boris Johnson
2014-2016. He is also
currently a non-executive
chairman of EVN
Group, the leading UK
developer of electric
vehicle infrastructure.
Lord Barker was educated
at Lancing College, London
University and London
Business School.
En+ Group Annual Report 2021
Joan MacNaughton
CB Hon FEI
Independent Non-
Executive Director
Appointed:
27 January 2019
Resigned:
7 March 2022
Anastasia
Gorbatova
Non-Executive Director
Ekaterina
Tomilina
Non-Executive Director
Appointed:
29 May 2019
Appointed:
8 February 2019
Resigned:
9 December 2021
Resigned:
26 May 2021
Carl D. Hughes
Independent Non-
Executive Director
Appointed:
27 January 2019
Resigned:
31 March 2022
Anastasia is the head
of M&A and International
Projects at Basic Element
which she joined in 2013.
Anastasia has over 20
years of professional
experience with top tier law
firms and Russian key blue
chip companies advising
on multibillion cross border
transactions on M&As,
EPC, capital markets
and corporate finance.
Anastasia graduated from
Moscow State University
of International Relations
(MGIMO) with a degree
in Law (cum laude).
Joan is currently Chair
of the Climate Group
and of the Advisory
Board of the New Energy
Coalition of Europe. She
sits on the Strategic
Advisory Board of ENGIE
UK, of the Grantham
Institute at Imperial
College and LSE, London.
Her former positions
include Chair
of the International Energy
Agency and Executive
Chair of the “World
Energy Trilemma”
of the World Energy
Council and membership
of many academic
and corporate Boards.
Joan held a wide range
of positions in the UK
Government until 2007.
As Director General
of Energy, she played
a key role in shaping UK
energy policy, including
leading the Clean Energy
Action Plan of the 2005
Gleneagles G8 Summit.
Ekaterina is currently
the Director of Corporate
Finance at Basic Element.
She joined RUSAL
in 2000 as the Head
of its Structured Finance
and Capital Markets
Department. In 2012,
Ekaterina was appointed
as Director of Corporate
Finance at RM Rail,
which is part of Russian
Machines, an industrial
and engineering
company controlled
by Basic Element.
Ekaterina held various
finance positions
at investment company
Alfa Group and Tyumen
Oil Company from 1997
until 2000, where she
oversaw finance, trade
and international matters.
Ekaterina is a graduate
of the Moscow State
University of International
Relations (MGIMO),
with a degree
in International Economics.
Throughout his career,
Carl has specialised in the
oil and gas, mining and
utilities sectors. He joined
Arthur Andersen in 1983
and became a partner in
1993. He was appointed the
head of the UK energy and
resources industry practice
of Andersen in 1999 and
subsequently of Deloitte
in 2002. When Carl retired
from the partnership of
Deloitte in 2015, he was a
vice-chairman, senior audit
partner and leader of the
firm’s energy and resources
business globally.
Carl holds a number of
corporate and charitable
appointments. He is a
non-executive director
and chairman of the
audit committee of
EnQuest Plc; a member
of the finance and audit
committee of the Energy
Institute; a board member
of the Audit Committee
Chairs’ Independent
Forum; a member of the
General Synod of the
Church of England; and
deputy chairman of the
finance committee of The
Archbishops’ Council.
He holds an MA in
Philosophy, Politics and
Economics from the
University of Oxford, is a
Fellow of the Institute of
Chartered Accountants
in England and Wales,
and a Fellow of the
Energy Institute.
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Andrey Yanovsky
Independent Non-Executive Director
Appointed: 25 September 2020
Appointed: 8 February 2019
Appointed: 8 February 2019
Appointed: 26 May 2021
H
Vadim Geraskin
Non-Executive Director
R
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Elena Nesvetaeva
Non-Executive Director
Timur Valiev
Non-Executive Director
En+ Group Annual Report 2021
CORPORATE GOVERNANCE
Biographies of the directors
currently serving
on the Board
Gender diversity1
Male
Female
8
4
Age1
35-45
46-55
56-65
65+
3
4
4
1
Independence1
Executive
Chairman
Independent
Directors
Non-executive
Directors
1
7
4
1. As at 31 December 2021.
122
Hon Christopher Bancroft Burnham
Chairman of the Board, Independent
Non-Executive Director
Appointed: 27 January 2019
Appointed as Chairman
of the Board: 25 March 2022
Christopher has a distinguished
career in government, diplomacy,
banking, and private equity.
He is a globally recognised
expert in the implementation
of accountability and transparency,
having served as Under Secretary
General for Management
of the U.N., Under Secretary
of State for Management (acting),
Assistant Secretary of State
for Resource Management and CFO
of the U.S. Department of State.
Christopher serves as Chairman
and CEO of Cambridge Global
Capital, which he co-founded.
He is the former Vice Chairman
and Managing Director of Deutsche
Asset Management.
He studied at Georgetown’s
National Security Studies Program,
graduated from Washington and Lee
University, and Harvard University,
where he earned an M.P.A. in 1990.
G
H
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Zhanna Fokina
Independent Non-Executive Director
Appointed: 25 May 2021
Zhanna has extensive experience
working in environmental control
and supervisory authorities.
Currently, she heads the Environment
unit at RUSAL Krasnoyarsk.
Zhanna manages the company’s
environmental reporting
and monitoring in the zone
influenced by the enterprise,
as well as programmes
of industrial ecological control.
She also supports government
supervisory authorities’ inspections
in the environmental protection field.
Before joining RUSAL she worked
in Rosprirodnadzor (Federal Service
for Supervision of Natural Resources)
and in pharmaceutical industry.
In 2009, she graduated from
the Siberian Federal University.
Andrey has been CEO
of the Moscow-based hospital
operator European Medical
Centre and a member
of the Board since 2014.
During his career, Andrey was CEO
of the Coca-Cola Company
franchise in Russia, CEO of Nidan
Juices (2003-2009), vice-president
for organisational development
and personnel at TNK-BP
(2009-2013), Director for strategy
and organisational development
at Nefteservice (2013-2014).
Andrey graduated from the Riga High
Military School, Kingston University,
Strategic Management, MBA.
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Thurgood Marshall Jr.
Independent Non-Executive Director
Appointed: 26 May 2021
Thurgood Marshall Jr. has
an extensive experience
at the intersection of law,
business, politics and policy.
Throughout his career, Thurgood
served as an international law
firm partner, was a member
of the boards of listed companies
and held a wide range of positions
in the US Government: Staff Director
and Chief Counsel to Senator Al
Gore, Director of Legislative Affairs
& Deputy Counsel to Vice President
Al Gore, Cabinet Secretary.
Thurgood also practiced law
in Washington DC when he
completed his judicial clerkship.
He earned his Bachelor of Arts
(BA) in 1978 and a Juris
Doctor (JD) degree in 1981
in University of Virginia.
Elena has extensive experience
working on investments
and in the banking sector. She
currently heads the Investment
Department at Basic Element,
which she joined in 2009. At Basic
Element she manages the company’s
investment projects and portfolio,
and is responsible for driving
the group’s investment strategy
and asset valuation, acquisition
projects and M&A transactions.
She worked in the banking sector
and for a timber-processing holding.
Elena graduated with distinction
from the Faculty of Economics
of the Syktyvkar State University,
the Russian Academy of National
Economy under the Government
of the Russian Federation,
and the Institute of Business
and Business Administration
with a degree in Management.
C
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Olga Filina
Non-Executive Director
Appointed: 15 December 2021
Olga Filina has over 15 years
of experience in internal control
and compliance (including senior
positions at Deloitte and KPMG).
Main areas of specialisation
are investigations of complex
cases of fraud, anti-corruption
investigations (including in the field
of financial investigations and audits
for compliance with the US
Foreign Corrupt Practices Act
(FCPA)), formation and testing
of the compliance function,
outsourcing and support of hotlines,
project management for internal
audit and internal control.
Vadim has significant experience
in government relations at both
a national and regional level.
Since September 2012, he has been
the deputy CEO for Government
Relations at Basic Element
and heavily involved in pushing
the company’s socioeconomic
development programmes
in the regions where it operates.
Vadim headed RUSAL’s Natural
Monopolies Administration for eight
years before joining Basic Element,
and previously headed RUSAL’s
transport and logistics administration
and Transport Department. From
1997 to 2000 he served as CEO
of Zarubezhcontract, a company
operating in the non-ferrous metals
market. From 1993 to 1997 he worked
for Aluminproduct Company.
Vadim graduated from Lomonosov
Moscow State University
with a degree in Physics.
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Andrey Sharonov
Independent Non-Executive Director
Appointed: 27 January 2019
Andrey is CEO of National ESG-
Alliance, Chairman of the Board
of NefteTransService, Skolkovo
Foundation, a member
of several other boards.
He was a People’s Deputy of the USSR,
Chairman of the State Committee
for Youth Affairs, served in the Ministry
of Economic Development and Trade,
was managing director and chairman
of the Board of Troika Dialog, Deputy
Mayor of Moscow for Economic
Policy, Chairman of the Regional
Energy Commission, and headed
the Executive Committees of Moscow
Urban and Open Innovations Forums.
He graduated from Ufa State Aviation
Technical University and the Russian
Academy of Public Administration,
and holds a PhD in sociological science.
Timur has extensive professional
experience in managing court
activities, claims and contracting,
legal support of M&A projects
and the creation of joint ventures.
From 2013 to 2019, he held
the position of General
Counsel of En+ Group.
Prior to his career at En+
Group, he served as Director
for International Projects
and M&A at Basic Element Limited.
Prior to joining Basic Element
Limited, Timur worked
at international law firm Dewey
& LeBoeuf, the legal department
of TNK-BP, and at a number
of Russian consulting firms.
He graduated from Lomonosov
Moscow State University.
Full biographies can
be found on the Company’s website:
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https://enplusgroup.com/en/company/
corporate-governance/board-of-directors/
Key
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Committee chair
Audit and Risk Committee
Compliance Committee
Corporate Governance Committee
Health, Safety, and Environment
Committee
Nominations Committee
Remuneration Committee
123
CORPORATE GOVERNANCE
COMMITTEES
OF THE BOARD
Overview
22
Total number
of meetings in 2021
As at the date of this Report the Board
has established six committees
to assist it in exercising its functions:
• the Audit and Risk Committee
All of the Committees are advisory
bodies, whose primary function
is to make recommendations to the Board
on the matters falling within their remit.
(the “A&RC”)
• the Compliance Committee (the “CC”)
• the Corporate Governance
Committee (the “CGC”)
• the Health, Safety and Environment
Committee (the “HSE Committee”)
• the Nominations Committee (the “NC”)
• the Remuneration Committee
(the “RemCom”)
The composition of the Company’s
existing Board committees
was amended on 3 June 2021
and further amended on 15 December
2021. The details regarding each
of the Committees are set out below.
Committees attendance and number of meetings in 20211
A&RC
CC
CGC
HSE
Committee
NC RemCom
EXECUTIVE CHAIRMAN OF THE BOARD
Lord Barker
—
3/32
—
1/23
1/1
NON-EXECUTIVE DIRECTORS
Olga Filina
Vadim Geraskin
Anastasia Gorbatova
(until 9 December 2021)
Elena Nesvetaeva
Timur Valiev
—
—
—
—
—
0/0
—
4/4
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1/1
INDEPENDENT NON- EXECUTIVE DIRECTORS
Christopher Burnham
6/6
4/4
Alexander Chmel
(until 26 May 2021)
Zhanna Fokina
Carl Hughes
Nicholas Jordan
(until 26 May 2021)
Joan MacNaughton
Thurgood Marshall Jr.
Andrey Sharonov
Andrey Yanovsky
TOTAL NUMBER OF MEETINGS
3/3
—
6/6
—
—
—
5/6
6/6
6
3/3
—
3/4
—
—
1/1
—
—
4
0/0
—
1/1
—
—
—
—
1/1
1/1
0/0
1/1
—
1/1
—
1
—
5/5
—
—
—
—
2/2
3/3
—
—
5/5
3/3
—
3/3
5
—
—
—
—
—
—
—
0/1
4/4
3/3
4/4
—
4/4
—
4
—
—
—
—
2/2
1/1
2/2
—
—
—
1/1
—
0/1
—
2/2
2
En+ Group Annual Report 2021
of the directors directly or indirectly
held any shares in the Company
and none of the directors
concluded any transactions
with the Company shares.
Currently, the post of the CEO
is held by Vladimir Kiriukhin
Vladimir Kiriukhin
Chief Executive Officer (CEO)
Responsibility Statement
Appointed: 1 November 2018
Joined the Group: January 2000
Vladimir oversees the Company’s
long-term strategy, business
development and cooperation
with key external stakeholders,
including regulators.
A long-serving member of En+
Group, previously Vladimir
held several senior positions
at EuroSibEnergo, including CEO.
He held senior positions at Russian
Aluminium and MAREM+. Vladimir
was also a Chairman of the Board
at Irkutskenergo, Chairman
of the Board at Krasnoyarsk HPP,
served in the Board of RUSAL.
He is a member of the Governmental
Commission on Electric Power
Sector Development, which
coordinates regulatory decisions
on key issues facing the Russian
electric power industry.
He graduated from the All-Union
Institute of Interindustrial Information
with a PhD in engineering, having
previously obtained a major
in mathematics from the Higher
Naval School of Radio Electronics.
Vladimir does not hold any shares
in the Company and has not
entered into any transactions
with the Company
shares during 2021.
The members of the Board confirm
that, to the best of their knowledge:
The consolidated financial
statements, prepared
in accordance with IFRS as issued
by the International Accounting
Standards Board and as adopted
by the European Union, give
a true and fair view of the assets,
liabilities, financial position and profit
or loss of the Company and its
subsidiaries, taken as a whole.
This Annual Report includes
a fair review of the development
and performance of the business
and the position of the Company
and its subsidiaries, taken as a whole,
together with a description
of the principal risks
and uncertainties that they face.
Sole executive body – CEO
Under the Charter, the CEO
acts as the sole executive
body of the Company.
The CEO is responsible for directing
the Company’s day-to-day
operations and holds all powers
falling outside the exclusive
competence of the GSM
and the Board, including, inter alia:
• acting on behalf of the Company
without a power of attorney
(including by representing
the Company and entering
into transactions on its behalf)
• passing resolutions to establish
branches and representative
offices of the Company
• issuing powers of attorney,
authorising their holders
to represent the Company
The CEO is appointed by the Board
for a period of five years
unless another term of office
is established by the Board.
Environmental Advisory
Board1
In order to enhance its
commitment to sustainability,
on 25 September 2019 the Company
announced the launch of its
new Environmental Advisory
Board (the “EAB”). The EAB
is chaired by Adnan Z. Amin, who
was the first Director-General
of the International Renewable
Energy Agency (“IRENA”),
an intergovernmental organisation
charged with driving the transition
towards the use of renewable
energy on a global scale.
The EAB advises the Board
on delivering its environmental
agenda and identifying emerging
environmental issues.
The members of the EAB include
Joan MacNaughton (resigned
from the Board on 7 March
2022), Chair of The Climate
Group and of the Advisory Board
of the New Energy Coalition
of Europe, as well as external
advisors with specific expertise
in both environmental and wider
sustainability issues.
Share Dealing Code
Upon admission to the Main Market
of the London Stock Exchange
in November 2017, the Company
adopted a code or dealing
in securities in relation to the GDRs,
the ordinary shares, and any other
securities of the Company, which
is based on the requirements
of EU Market Abuse Regulation
(EU) 596/2014. This code applies
to the directors and other
relevant employees of the Group
(to the extent it does not contradict
the Charter and the applicable
UK and Russian law provisions).
Shareholdings of Directors
As at 31 December 2021 Carl Hughes
(resigned from the Board on 31
March 2022) held 5,000 GDRs in
the Company. As at the date of
this Report Timur Valiev holds
64 shares of the Company. Aside
from this, throughout 2021, none
1. The number of meetings attended/maximum number of meetings the directors could have attended.
2. Until 3 June 2021.
3. Until 3 June 2021.
1. On 28 April 2020, the Board decided to temporarily suspend the work of the EAB
due to COVID-19 pandemic. The Group remains committed to its climate and broader
environmental agenda.
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CORPORATE GOVERNANCE
COMMITTEES
CORPORATE
GOVERNANCE G
NOMINATIONS N
Composition
Composition
• Reviewing and assessing
the implementation of risk
management and internal
control policies to ensure that
the systems of risk management
and internal control are adequate
and operating effectively
• Monitoring and assessing
any important new systems
(including IT systems)
and ensuring that related controls
are adequate, reliable and effective
• Ensuring that the internal
audit function is independent
and unbiased
• Assessing the effectiveness
of the internal audit function
• Controlling the operating
effectiveness of the system
for reporting potential cases
of fraud by the Group’s employees
and third parties, and other
violations within the Group
The A&RC is also responsible
for reviewing the effectiveness
of the external audit process
and of the external auditor,
in conjunction with any other
relevant Board committees.
In 2021, the A&RC held six
meetings. The A&RC meetings
have been to consider financial
statements, internal audit reports
and plan for 2022, control
and risk management reports,
external audit reports.
Pursuant to the Regulations
on the CGC approved by the Board
on 1 December 2020, the majority
of CGC members are represented
by independent directors recognised
as such pursuant to the Listing Rules
of the Moscow Exchange. The CGC
meets at least three times a year.
The current composition
of the CGC is as follows:
• Andrey Sharonov, as chairman
• Olga Filina
• Zhanna Fokina
The CGC’s primary role is to oversee
the Company’s and the Group’s
corporate governance matters.
The responsibilities of the CGC
are the following:
• Determining the priorities
of the Group in the area
of corporate governance
• Reviewing the corporate
governance system and corporate
values of the Company
for compliance with the goals
and objectives of the Company,
and the scale of its business
and risks assumed
In 2021, the CGC held one meeting
to consider D&O liability insurance
policy of the Company.
Pursuant to the Regulations
on the NC approved by the Board
on 1 December 2020, the NC
members are represented
by independent directors recognised
as such pursuant to the Listing Rules
of the Moscow Exchange. The NC
meets at least three times a year.
The current composition
of the NC is as follows:
• Andrey Sharonov, as chairman
• Zhanna Fokina
The NC’s primary role is to develop
recommendations to the Board
on Board performance evaluation
and planning internal appointments.
The primary responsibilities of the NC
are, inter alia, the following:
• Conducting a detailed
formalised self-evaluation
and external performance
evaluation of the Board, its
members, and the Board
committees on an annual basis,
and determining priority areas
to improve the Board’s capacity
• Organising external
performance evaluation
of the Board and its members
and of the Board committees
• Interacting with shareholders
(including minority shareholders)
to develop recommendations
to shareholders regarding
voting on the Board elections
• Planning appointments so
as to ensure the continuity
of activities of the CEO, develop
recommendations to the Board
regarding nominations
for the position of the Corporate
Secretary (head of the unit
functioning as the Corporate
Secretary), and recommendations
to the Board regarding nominees
for the position of the head
of the Internal Audit Service
and the CEO of the Company
• Assessing the independence
of the Board members
• Taking part in the ongoing
advanced professional training
of the Board members
• Considering the current
and expected needs
of the Company in terms
of the professional qualifications
of the Company’s CEO,
in the interests of the Company’s
competitiveness and development,
and succession planning
for such persons
In 2021, the NC held four meetings.
The majority of NC meetings
have been to consider selection
of candidates as Board members
of the Company or its subsidiaries.
AUDIT AND RISK A
Composition
Pursuant to the Regulations
on the Audit and Risk Committee,
approved by the Board
on 13 December 2019, the A&RC
consists of members, all
of whom have been determined
by the Board to be independent
non-executive directors,
recognised as such pursuant
to the Listing Rules of the Moscow
Exchange. The Committee
meets at least once per quarter
of the Company’s financial year.
The current composition
of the A&RC is as follows:
• Christopher Burnham
• Andrey Sharonov
• Andrey Yanovsky
The A&RC is responsible, inter
alia, for the following matters:
• Overseeing the integrity,
completeness and accuracy
of the financial statements
of the Company
and the consolidated financial
statements of the Group
• Reviewing material aspects
of the Company’s and its
subsidiaries’ accounting policies
to ensure that they are appropriate
and consistently applied
• Reviewing the Company’s
annual report (including
the annual consolidated financial
statements) and making
recommendations to the Board
with respect to its contents
• Reviewing material matters
and judgments (including
significant financial reporting
estimates and judgements)
regarding the Company
and the consolidated
financial statements
• Monitoring the adequacy, reliability
and effectiveness of operation
of the Group’s systems of risk
management and internal control
126
En+ Group Annual Report 2021
REMUNERATION R
Composition
The RemCom consists of a majority
of independent directors. The RemCom
meets at least three times during
a financial year of the Company.
The current composition
of the RemCom is as follows:
• Christopher Burnham, as chairman
• Thurgood Marshall Jr.
• Elena Nesvetaeva
• Timur Valiev
• Andrey Yanovsky
The RemCom is responsible, inter
alia, for the following matters:
• Developing and revising from time
to time the Company’s remuneration
policy for Board members, the CEO,
the Corporate Secretary, the head
of the Internal Audit Service,
and developing parameters of short-
term incentive programmes
• Supervising the introduction
and implementation
of remuneration policy
and various incentive programmes
in the Company, and revising
the policy and programmes
as and when necessary
• Performing preliminary year-end
performance evaluation of the CEO
in the context of the established
remuneration criteria,
and performing a preliminary
assessment of achievement
by the CEO of the targets under
the long-term incentive programme
• Developing recommendations
to the Board on determining
the amount of remuneration
and principles of bonus payment
for the Company’s Corporate
Secretary, performing a preliminary
year-end performance evaluation
of the Company’s Corporate
Secretary, as well as issuing proposals
on bonus payment to the Company’s
Corporate Secretary
• Supervising the disclosure
of remuneration policies
and procedures,
and of the ownership
of the Company shares by Board
members and the person acting
as the CEO in the annual report
and on the Company’s website
In 2021, the RemCom held
two meetings and mainly
considered KPIs of the CEO.
127
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CORPORATE GOVERNANCE
REMUNERATION DISCLOSURE REPORT
Structure of remuneration:
Element of remuneration
Approach
Indices and dependencies
The Group’s remuneration
structure is designed
to ensure a balance between
engaging and retaining
highly qualified managers
and the interests
of our shareholders
Objectives of the remuneration
policy
Remuneration of executive
management1
Our remuneration policy is based
on the following principles:
• Attract, remunerate and retain
qualified specialists who will,
in their turn, enable the Company
to achieve its strategic objectives
• Provide for a balance between
the achievement of short-term
operating results and the long-
term objectives of the Company
• Create value for our shareholders, given
the risks that may impact the variable
component of remuneration.
Remuneration structure
The Group’s remuneration structure
is designed to ensure a balance
between engaging and retaining highly
qualified managers and the interests
of our shareholders. The established
remuneration system comprises fixed
and variable components. The fixed
component consists of base salary,
which is set in line with the market
to ensure retention of key executives,
and reflects the level of competence,
experience, responsibility and personal
achievements of the respective manager.
The variable component consists
of annual bonuses and may also include
one-off and target bonus payments
and other payments, that are determined
based on the performance against pre-
set key performance indicators (KPIs).
In 2021, the remuneration
of the key management personnel,
including the CEO, amounted
to USD 15.4 million. This remuneration
includes base salary in the amount
of USD 8.2 million and bonuses
in the amount of USD 7.2 million.
Remuneration of Board
members
In 2019, the Board considered
and approved the general levels
of compensation for Board members.
All members of the Board, except
for the Executive Chairman,
are entitled to receive remuneration
of EUR 215,000 (c. USD 249,000)2
gross per annum, paid monthly.
All members of the Board, except
for the Executive Chairman, are entitled
to receive additional remuneration
for serving on a committee or other
structural unit of the Board3:
• EUR 26,000 (c. USD 30,000)4 gross
per annum for chairing a committee
or other structural unit of the Board
• EUR 18,000 (c. USD 21,000)5 gross
per annum for participation in each
committee or other structural
unit of the Board as a member
The aggregate amount of remuneration
to Board members in 2021 amounted to
USD 10.3 mn, excluding social insurance6.
Base salary
Base salary is stipulated
by the agreements
concluded with each
member of the Group’s
management team
and is aimed at attracting
and retaining high caliber
professionals
Benefits
Provided to support
successful fulfilment
of responsibilities
by compensation
of additional expenses
associated with these
responsibilities
Pension
Retirement funding
provision
Annual bonus
Ensures focus
on and alignment
with strategic goals
of the Group
Board of Directors
members’ fee (excluding
Chairman of the Board
of Directors)
For participation in/
chairing board committees
in addition to payments
as Board members
Additional compensation
and benefits
Optional bonus payments
for achievements beyond
the scope of the KPIs
for the relevant year
Remuneration for other
risk-taking employees
To attract and retain high
caliber professionals
En+ Group Annual Report 2021
Key changes-
during the year
No changes
made during
the year
No changes
made during
the year
No changes
made during
the year
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• Salary is set to ensure
Not applicable
competitiveness with other
comparable Russian and foreign
industry peers – Fixed remuneration
reflects the level of competence,
responsibility and personal
achievements of the respective
manager, and his/her professional
experience
• The company ensures a competitive
Not applicable
total compensation portfolio
for its employees, providing them
with meal expenses, certain other
reimbursements and medical
insurance
• We do not fund any pension
Not applicable
contributions or retirement benefits,
except for mandatory contributions
to the pension fund of the Russian
Federation, as required by Russian
law, which permits retiring
employees to receive a defined
monthly pension for life from
the statutory pension fund
• Bonus payments for achieving
personal KPIs
• KPIs for the CEO are developed
by the Remuneration Committee
and approved by the Board
• KPIs are set at the beginning
of each financial (calendar) year
• KPIs are regularly reviewed
and updated to ensure that they
align with the Group’s goals
Examples:
• Financial performance – Adjusted
EBITDA; Free Cash Flow
• HSE & sustainability – Lost
No changes
made during
the year
Time Injury Frequency Rate
(LTIFR); ensuring the absence
of environmental incidents,
accidents or violations
• Strategy – Achievement of strategic
goals and successful realisation
of development projects
• Other objectives – In accordance
with the manager’s area
of responsibility
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• The objective in setting the fees
Not applicable
paid to Board of Directors members
(excluding Chairman of the Board)
is to be competitive with other
comparable, listed peer companies
• Members of the Board receive
a fixed fee for participation in/
chairing each Board committee
• Paid for achievements that
Task specific
are important for the Company, but
which are outside the main KPIs
• Top managers of En+ Group
• Aligned with the Group’s
subsidiaries are considered as risk-
taking employees
• Application of the Group’s executive
remuneration policy
executive remuneration structure
No changes
made during
the year
No changes
made during
the year
No changes
made during
the year
1. Accrual basis.
2. Calculated based on a EUR/USD exchange rate of 1.16 as at 31 December 2021.
3. The CGC members (including the chairman) do not receive compensation for membership (chairmanship) in the CGC if they at the same time
participate in the NC of the Board and receive relevant compensation for participation in (chairing) the NC of the Board.
4. Calculated based on a EUR/USD exchange rate of 1.16 as at 31 December 2021.
5. Calculated based on a EUR/USD exchange rate of 1.16 as at 31 December 2021.
6. Mandatory payments (pension provision, mandatory health insurance, etc.) as required by the legislation of Russian Federation.
128
129
En+ Group Annual Report 2021
Corporate Secretary
Sergey Makarchuk
Corporate Secretary
Pursuant to the Regulations
on the Corporate Secretary,
the Corporate Secretary
of the Company is responsible
for the Company’s efficient ongoing
interaction with shareholders,
coordination of the Company’s
activities in protecting the rights
and interests of shareholders,
and support of the effective
operation of the Board
and Board Committees.
The functions of the Corporate
Secretary include, inter alia:
• Participation in preparation
and holding of GSMs
• Supporting the activities
of the Board and the Board
Committees
• Implementing the Company’s
disclosure policy and ensuring
the storage of the Company’s
corporate documents
• Liaisons between the Company
and its shareholders,
and preventing corporate conflicts
• Improving the corporate
governance system
and practices of the Company
Sergey Makarchuk was appointed
as Secretary of the Board on 10 April
2019 and Corporate Secretary
of En+ on 14 November 2019.
After working at various law firms,
Sergey worked for RUSAL Group
in 2007–2010 at the Corporate
Governance Department of RUSAL
Global Management B.V.,
responsible for legal corporate
support of the Group’s entities,
the RUSAL Board, and Board
Committees support. He was also
involved in the Hong Kong SE &
NYSE Euronext IPO of RUSAL.
In 2011–2013 Sergey was Deputy
Director of the Corporate
Governance Department at TNK-BP
Management. After the acquisition
of TNK-BP by Rosneft, he continued
working at Rosneft as Deputy Head
of the Foreign Assets Department/
Project Director of the Corporate
Governance Department.
Sergey graduated from the law
faculty of Lomonosov Moscow
State University in 2004.
The Corporate Secretary can
be contacted with any queries at:
CS@enplus.ru.
Shareholdings of CEO
and management team
As at the date of this Report,
neither the CEO nor members
of the management team directly
or indirectly hold any shares
in the Company. Throughout
2021, neither the CEO nor
members of the management
team concluded any transactions
with the shares of the Company.
Conflicts of interest
and loans issued
to members of the Board
and the CEO
In 2021 and up to the date of this
Report, the Company has not
been aware of any conflicts
of interest affecting any member
of the Board or the CEO
(including in connection with their
participation in the managing bodies
of the Company’s competitors).
In 2021, no loans have been
issued by the Company (or
any Group company) to members
of the Board or the CEO.
CORPORATE GOVERNANCE
COMMITTEES CONTINUED
COMPLIANCE C
HEALTH, SAFETY AND ENVIRONMENT H
Composition
The CC was established following
the removal of the Company from
OFAC’s SDN list. The CC holds
meetings at least once per quarter
of the Company’s financial year.
The CC is currently
comprised as follows:
• Christopher Burnham, as chairman
• Olga Filina
• Thurgood Marshall Jr.
• Timur Valiev
The primary responsibilities of the CC
are, inter alia, the following:
• Ensuring the formation
of a compliance management
system within the Group
• Taking part in the development
of policies and other internal
regulations of the Company
relating to matters of compliance,
and consistently following
up on their observance
• Ensuring that adequate
compliance control
is in place at the Group
• Conducting due diligence
in the event of any reasonable
doubt regarding observance
of compliance requirements
and the provisions
of compliance documents
The СС reviews its own performance
and reassesses the adequacy
of procedures and guidelines
in respect of regulatory compliance.
In 2021, the CC held four
meetings and considered regular
compliance reports and goals
for 2022 and demerger of higher
carbon assets of the Company.
The HSE Committee meets
at least once per quarter
of the Company’s financial year.
The current composition of the HSE
Committee is as follows:
• Zhanna Fokina, as chair
• Vadim Geraskin
• Thurgood Marshall Jr.
• Andrey Yanovsky
The primary responsibilities of the HSE
Committee are, inter alia, the following:
• Reviewing leading international
research and best practices
in the area of health, safety
and environment, and, if
necessary, assessing their impact
and preparing respective strategic
recommendations to the Board
in relation to the Group
• Preparing recommendations
to the Board on formulating
Group strategies, policies
and instructions in the areas
of health, safety and environment
• Taking part in the development
of policies and other bylaws
of the Company regarding
health, safety and environment
• Preparing recommendations
to the Board on possible
participation, cooperation
and consultations on health,
safety and environmental matters
with government authorities, NGOs
and other companies or associations
• Controlling the Company’s
compliance with international
standards, applicable laws
and the Company bylaws on health,
safety and environment
• Benchmarking the Group’s
operating results on occupational
safety and environment
against global best practices,
and considering the results
of such benchmarking
In 2021, the HSE Committee held five
meetings and considered measures
to prevent COVID-19 infection,
regular HSE reports, environmental
risk management status, the UN
Global Compact’s SDG ambition
accelerator report, HSE KPIs
results for 2021 and KPIs for 2022,
biodiversity strategy update.
130
131
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CORPORATE GOVERNANCE
INFORMATION
FOR SHAREHOLDERS
AND INVESTORS
As at 31 December 2021,
the free float was
Ordinary shares and global
depositary receipts
Depositary bank
13.93%
of total shareholder capital
As at 31 December 2021, the share capital
of En+ Group was divided into 638,848,896
ordinary shares with the par value of USD
0.00007 each.
The En+ Group’s ordinary shares in the form
of Global Depositary Receipts (GDRs),
are listed on the London Stock Exchange
(ticker: ENPL), where one GDR repre-
sents one share. Since 18 February 2020,
the Company’s ordinary shares are also
traded in the Level One Quotation List
of the Moscow Exchange (ticker: ENPG).
On 3 and 4 March 2022, the London
Stock Exchange suspended the admis-
sion to trading of the instruments for most
Russian companies, including En+ Group.
The Company’s depositary bank
is Citibank N.A., registered address:
388 Greenwich Street New York, New
York 10013, United States of America.
The contact details of Citibank N.A. are:
Citibank, N.A.
Tel: +1 (212) 723 5435
Email: CitiADR@Citi.com
Website: https://citiadr.
factsetdigitalsolutions.com/
www/drfront_page.idms
Registrar
The Company’s registrar is Joint
Stock Company “Interregional
Registration Centre” (the “IRC”).
Contact details of IRC are:
The Company’s management is not
aware of any holdings in excess
of 5% of the Company’s share cap-
ital save for those disclosed
by the Company immediately above.
JSC “IRC”
Tel: +7 (495) 234 4470
Email: info@mrz.ru
Website: www.mrz.ru
En+ Group voting and shareholder structure as at 31 December 2021
En+ Group Annual Report 2021
En+ Group share performance and trading volumes
Moscow Exchange
1400
1200
1000
800
600
400
200
0
Jan ‘21
Feb ‘21
Mar ‘21
Apr ‘21
May ‘21
Jun ‘21
Jul ‘21
Aug ‘21
Sep ‘21
Oct ‘21
Nov ‘21
Dec ‘21
Share price, RUB per share (LHS)
Trading volume, ths shares (RHS)
1400
1200
1000
800
600
400
200
0
Source: Bloomberg.
RUB 886.5
The En+ Group’s
ordinary share price
on the Moscow Exchange
as at 4 January 2021
The En+ Group’s ordinary share price on the Moscow Exchange increased from
RUB 770.5 as at 4 January 2021 to RUB 886.5 per ordinary share as at 30 December
2021. En+ Group’s market capitalisation increased from RUB 492.2 billion
at the beginning of the year to RUB 566.3 billion on 30 December 2021.
The average daily trading volume during the year was 159,075 ordinary shares.
London Stock Exchange
16
14
12
10
8
6
4
2
0
Jan ‘21
Feb ‘21
Mar ‘21
Apr ‘21
May ‘21
Jun ‘21
Jul ‘21
Aug ‘21
Sep ‘21
Oct ‘21
Nov ‘21
Dec ‘21
GDR price, USD per GDR (LHS)
Trading volume, ths GDRs (RHS)
80
70
60
50
40
30
20
10
0
13.93% Free float
13.93% Free float
2.55% Former family members
3.42% Other shareholders
3.22% Volnoe delo
2.55% Independent trustee1
6.64% Independent trustee1
10.55% Glencore
10.55% Glencore
21.37% En+ Group23
44.95% Mr. Deripaska3
14.33% Independent trustee1
7.04% En+ Group’s Executive
hairman of the Bord2
9.95% Independent trustee1
35.00% Mr. Deripaska3
Shareholders
Voting rights
132
Note: percentages may not add up to 100% due
to rounding.
Source: Bloomberg.
USD 11.7
The price of En+ Group’s
GDRs as at 4 January 2021
The price of En+ Group’s GDRs on the LSE increased from USD 10.4 as at 4 January
2021 to USD 11.7 as at 31 December 2021. En+ Group’s market capitalisation increased
from USD 6.6 billion at the beginning of the year to USD 7.5 billion on 31 December
2021. The average daily trading volume during that period was 5,465 GDRs.
1.
Independent trustees, who exercise voting rights
attaching to certain shares of the Company
(33.48% in total), as required by OFAC: D.J Baker,
David Crane, Arthur Dodge, Ogier Global Nominee
(Jersey) Limited.
2. Shares acquired from VTB by En+ Group’s
subsidiary as per Company’s announcements on 6
and 12 February 2020. Voting rights in respect
of 14.33% of shares are held by an independent
trustee, while the remaining voting rights
in respect of 7.04% of shares are exercised
by Executive Chairman of the Board, Lord
Barker, at the Board’s direction.
3. Directly or indirectly. Under the agreement
between the Company and OFAC, the major
shareholder’s share can not exceed 44.95%
and the voting rights can not exceed 35%.
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CORPORATE GOVERNANCE
En+ Group’s international
securities identification numbers
London Stock Exchange
Ticker
ISIN1
Common Code2
CUSIP3
Rule 144A GDR
Regulation S GDR
ENPL
ENPL
US29355E1091
US29355E2081
171560667
29355E109
170465199
29355E208
Moscow Exchange
Ticker
ISIN
Instrument
GDRs
Ordinary shares
Ordinary shares
ENPG
RU000A100K72
Trading platform
Bloomberg code
London Stock Exchange
Moscow Exchange
ENPL LI
ENPG RM
Share repurchases
In the reporting period the Company did
not, either itself or through a person acting
in their own name but on the Company’s
behalf, repurchase any of the Company’s
own shares, and did not, either itself
or through a person acting in their
own name but on the Company’s
behalf, hold any shares in treasury.
1.
ISIN (International Securities Identification Number) – international identification number of the share.
2. Common Code – a nine-digit identification code issued jointly by CEDEL and Euroclear.
3. CUSIP (Committee on Uniform Security Identification Procedures) – identification number is given
to the issue of shares for the purposes of facilitating clearing.
En+ Group Annual Report 2021
Dividend policy
Diversity
The Company is committed to promoting
a diverse and inclusive workforce,
and recognises and embraces the benefits
of having a diverse Board to enhance
the quality of its performance.
The Board recognises the desire
of stakeholders to have greater diversity
in senior management and on boards.
In 2020, En+ adopted the Board
of Directors Diversity Policy that aims
to set out the Company’s approach
to promoting and maintaining
the diversity of the Board.
Inclusion
En+ aims to create an environment
of inclusion, where everyone
is treated without discrimination.
We are working to ensure equal
opportunity in recruitment,
promotion, training and reward for all
employees regardless of ethnicity,
national origin, religion, gender, age,
sexual orientation, marital status,
disability, or any other characteristic
protected by applicable laws.
In the unfortunate event that existing
employees should become disabled,
our ambition is to provide continued
employment, training and occupational
assistance where needed.
Email
The Investor Relations
Department can be contacted
with any queries at: ir@enplus.ru
On 14 November 2019, the Board
approved the Regulations on Dividend
Policy, which provide that when
determining the size of the dividends
recommended to the GSM, the Board
shall calculate the minimum dividends as:
• One hundred per cent (100%)
of dividends received from
RUSAL (as long as the Company
is a RUSAL1 shareholder)
• Seventy-five per cent (75%)
of Free Cash Flow2 of the En+
Power Segment3, but in any event
at least USD 250 million per year
Dividend payments
During 2021, the GSM of the Company did
not approve any dividend distributions.
The Company anticipates that
dividend payments shall be resumed
as soon as market condition allow.
Information disclosure
The Company pays considerable
attention to ensure that any relevant
information is delivered to all
shareholders and analysts at the same
time, in accordance with the applicable
provisions of Russian law and the Moscow
Exchange disclosure requirements,
as well as the UK Market Abuse
Regulations4 and the FCA’s Disclosure
Guidance and Transparency Rules.
Information is distributed through
the following channels:
• The Moscow Exchange and UK
regulatory news service (RNS):
the Company’s price-sensitive
information is disclosed through
information disclosure systems
• The Company’s website:
the Company publishes releases
on key events as well as operational
and financial results
• The Company’s webpage
on the Russian regulatory newsfeed
(Interfax e-Disclosure)
1. RUSAL’s dividend policy: annual payout of up to 15% of Covenant EBITDA, subject to compliance
with relevant regulation and loan agreements. Covenant EBITDA is defined as UC RUSAL’s EBITDA
on LTM basis as defined in the relevant credit agreements, adding dividends declared by Norilsk Nickel
and attributable to the shares owned by UC RUSAL.
2. “Free Cash Flow” means the operating cash flow, less net interest paid, capital expenditures
and restructuring expenses, adjusted for distributions on derivatives and one-off acquisitions, plus
dividends from associated companies and joint ventures, pursuant to the Group’s IFRS consolidated
statements.
3. “En+ Power Segment” means the Segment defined in the Group’s IFRS consolidated statements.
4. Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market
To download the Regulations
on Dividend Policy from our
website:
https://enplusgroup.com/en/
investors/corporate-documents/
To download the Diversity
Policy from our website:
https://enplusgroup.com/en/
investors/corporate-documents/
abuse, as retained in the domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018.
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135
#3
FINANCIAL
STATEMENTS
APPENDIX
EN+ GROUP IPJSC
CONSOLIDATED
FINANCIAL
STATEMENTS
for the year ended
31 December 2021
En+ Group Annual Report 2021
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Consolidated
Financial Statements
216
Glossary
220
About
the Report
222
Contacts
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EN+ GROUP IP JSC
Statement of Management's Responsibilities
Statement of Management's Responsibilities for the Preparation and Approval
of the Consolidated Financial Statements for the year ended 31 December 2021
The following statement, which should be read in conjunction with the auditors' responsibilities stated in
the auditors' report on the audit of the consolidated financial statements set out on pages 139-143, is made
with a view to distinguishing the respective responsibilities of management and those of the auditors in
relation to the consolidated financial statements of EN+ GROUP IPJSC and its subsidiaries.
Management is responsible for the preparation of the consolidated financial statements for the year ended
31 December 2021 in accordance with International Financial Reporting Standards ("IFRS").
In preparing the consolidated financial statements, management is responsible for:
•
•
•
•
Selecting suitable accounting principles and applying them consistently;
Making judgements and estimates that are reasonable and prudent;
Stating whether International Financial Reporting Standards have been followed, subject to any
material departures disclosed and explained in the consolidated financial statements; and
Preparing the consolidated financial statements on a going concern basis, unless it is inappropriate to
presume that the Group will continue in the business for the foreseeable future.
Management, within its competencies, is also responsible for:
•
•
•
•
Designing, implementing and maintaining an effective system of internal controls throughout the Group;
Maintaining statutory accounting records in compliance with local legislation and accounting
standards in the respective jurisdictions in which the Group operates;
Taking steps to safeguard the assets of the Group; and
Detecting and preventing fraud and other irregularities.
These consolidated financial statements were approved by the Board of Directors on 30 March 2022 and
were signed on its behalf by:
General Director of EN+ GROUP IPJSC
Vladimir IGriukhin
En+ Group Annual Report 2021
EY
CoeepweHCTBYR 6113Hec,
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0Kn0: 59002827
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Independent auditor's report
To the Shareholders and Board of Directors
of EN+ GROUP IPJSC
Opinion
We have audited the consolidated financial statements of EN+ GROUP IPJSC and its subsidiaries
(hereinafter collectively referred to as the "Group"), which comprise the consolidated statement
of financial position as at 31 December 2021, the consolidated statement of profit or loss and
other comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at 31 December 2021 and its
consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards (IFRSs).
Basis for opinion
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We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditor's responsibilities
for the audit of the consolidated financial statements section of our report. We are independent
of the Group in accordance with the International Ethics Standards Board for Accountants'
(IESBA) International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code) together with the ethical requirements that are relevant
to our audit of the consolidated financial statements in the Russian Federation, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
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Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. For the matter below, our description of how our audit addressed the matter is provided
in that context.
A member firm of Ernst & Young Global Limited
138
139
FINANCIAL STATEMENTS
EV
CoeepweHCTBYR 6H3Hec,
y11y'fwaeM MHP
We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the
consolidated financial statements section of our report, including in relation to this matter.
Accordingly, our audit included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the consolidated financial statements.
The results of our audit procedures, including the procedures performed to address the matter
below, provide the basis for our audit opinion on the accompanying consolidated financial
statements.
Key audit matter
How our audit addressed the key audit matter
Impairment analysis of property, plant and equipment
Impairment analysis of property, plant and
equipment was a key audit matter due to the
significance of fixed assets balance in the
consolidated financial statements, high subjectivity
of judgments and estimates underlying the
impairment analysis and used by management.
Current global market conditions, including
fluctuations in LME aluminium prices, market
premiums and alumina purchase prices together
with their long-term forecasts, may indicate that
some cash generating units (CGU) may be subject to
either impairment loss or full or partial reversal of
previously recognized impairment.
Evaluation of the recoverable amount of fixed
assets is based on the higher of the fair value less
cost to sell and value in use. As of the reporting
date management makes an assessment of value-in
use based on the discounted cash flow models.
Information on the results of the impairment testing
is provided in Note 11 (c) to the consolidated
financial statements.
We tested management's assessment of whether
indicators for potential impairment or reversal of
impairment previously recorded exist. For the
impairment tests performed our procedures
included, among others:
Comparison of key assumptions such as production
volumes, forecasted aluminium sales prices,
forecasted alumina and bauxites purchase prices,
forecasted costs inflation, forecasted currency
exchange rates, discount rates, used in the Group's
financial model with published macroeconomic
indicators and forecast data.
Assessing the historical accuracy of management's
budgets and forecasts by comparing them to actual
performance.
Checking the arithmetic accuracy of the impairment
model and assessing a sensitivity analysis of value
in-use to changes in key assumptions.
We engaged our internal valuation experts to
analyze the Group's management calculations of
the recoverable amount of fixed assets.
We assessed the impairment related disclosures in
the consolidated financial statements, including the
key assumptions used and the sensitivity of the
consolidated financial statements to these
assumptions.
Emphasis of matter
We draw attention to Note 24 "Events subsequent to the reporting date" to the consolidated
financial statements which describes the development of geopolitical tensions related to the
situation in Ukraine and sanctions imposed by certain countries that have affected and could
significantly affect in the future the Russian economy, as well as the activity of the Group. Our
opinion is not modified in respect of this matter.
En+ Group Annual Report 2021
EY
CoeepweHCTBYR 61113Hec,
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Other matter
The consolidated financial statements of the Group for the year ended 31 December 2020 were
audited by another auditor who expressed an unmodified opinion on those statements on
24 March 2021.
Other information included in the Annual Report
Other information consists of the information included in the Annual Report other than the
consolidated financial statements and our auditor's report thereon. Management is responsible
for the other information. The Annual Report is expected to be made available to us after the
date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and
we will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read
the other information identified above when it becomes available and, in doing so, consider
whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
Responsibilities of management and the Audit and Risk Committee of the Board of Directors
for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRSs and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing
the Group's ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either
intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The Audit and Risk Committee of the Board of Directors is responsible for overseeing
the Group's financial reporting process.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial
statements.
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
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En+ Group Annual Report 2021
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
►
►
►
►
►
►
Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group's ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the related disclosures in
the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit and Risk Committee of the Board of Directors, among other
matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the Audit and Risk Committee of the Board of Directors with a statement that we
have complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit and Risk Committee of the Board of Directors, we
determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
The partner in charge of the audit resulting in this independent auditor's report is
Mikhail Khachaturian.
M.S. Khachaturian,
acting on behalf of Ernst & Young LLC
on the basis of power of attorney w/o number dated 1 March 2022,
partner in charge of the audit resulting in this independent auditor's report
(main registration number 21906108270)
30 March 2022
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Details of the auditor
Name: Ernst & Young LLC
Record made in the State Register of Legal Entities on 5 December 2002, State Registration Number 1027739707203.
Address: Russia 115035, Moscow, Sadovnicheskaya naberezhnaya, 77, building 1.
Ernst & Young LLC is a member of Self-regulatory organization of auditors Association "Sodruzhestvo".
Ernst & Young LLC is included in the control copy of the register of auditors and audit organizations,
main registration number 12006020327.
Details of the audited entity
Name: EN+ GROUP IPJSC
Record made in the State Register of Legal Entities on 9 July 2019, State Registration Number 1193926010398.
Address: Russia 236006, Kaliningrad, Oktyabrskaya street, office 34, b. 8.
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2021
Revenues
Cost of sales
Gross profit
Distribution expenses
General and administrative expenses
Impairment of non-current assets
Other operating expenses, net
Results from operating activities
Share of profits of associates and joint ventures
Gain from partial disposal of investment in associate
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the year
Attributable to:
Shareholders of the Parent Company
Non-controlling interests
Profit for the year
Earnings per share
Basic and diluted earnings per share (USD)
Note
5
6
13
13(a)
8
8
10
16(g)
9
Year ended 31 December
2021
USD million
2020
USD million
14,126
(9,174)
4,952
(708)
(861)
(267)
(218)
2,898
1,802
492
87
(1,141)
4,138
(604)
3,534
2,142
1,392
3,534
4.264
10,356
(7,808)
2,548
(545)
(775)
(58)
(160)
1,010
971
–
160
(1,016)
1,125
(109)
1,016
684
332
1,016
1.320
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2021 (continued)
Year ended 31 December
Note
2021
USD million
2020
USD million
Profit for the year
3,534
1,016
Other comprehensive income/(loss)
Items that will never be reclassified subsequently to
profit or loss
Actuarial (loss)/gain on post-retirement benefit plans
Revaluation of non-current assets
Тахation
18(b)
11(e)
10(c)
Items that are or may be reclassified subsequently to
profit or loss
Reclassification of accumulated foreign currency translation
loss to statement of profit or loss due to partial disposal of
investment in associate
Foreign currency translation differences on foreign operations
Foreign currency translation differences for equity-accounted
investees
Change in fair value of cash flow hedge
Change in fair value of financial assets
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income for the year
Attributable to:
Shareholders of the Parent Company
Non-controlling interests
Total comprehensive income for the year
13
13
19
16(g)
(4)
–
–
(4)
613
25
21
(28)
–
631
627
4,161
2,488
1,673
4,161
3
230
(46)
187
–
(210)
(667)
(53)
(1)
(931)
(744)
272
405
(133)
272
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The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
notes to, and forming part of, the consolidated financial statements set out on pages 150 to 215.
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
notes to, and forming part of, the consolidated financial statements set out on pages 150 to 215.
144
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FINANCIAL STATEMENTS
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
Year ended 31 December
Note
2021
USD million
2020
USD million
Operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Impairment of non-current assets
Net foreign exchange loss/(gain)
Loss on disposal of property, plant and equipment
Share of profits of associates and joint ventures
Gain on partial disposal of investment in associate
Interest expense
Interest income
Dividend income
Income tax expense
Write-down of inventories to net realisable value
Impairment of trade and other receivables
Provision for legal claims
Change in fair value of derivative financial instruments
Revaluation of investments measured at fair value through
profit and loss
Other finance costs
Operating profit before changes in working capital
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables and
advances paid
Increase/(decrease) in trade and other payables and
advances received
Cash flows from operations before income tax
8
6
13
13
8
8
8
10
6
8
8
Income taxes paid
Cash flows from operating activities
10(f)
3,534
822
267
33
5
(1,802)
(492)
709
(65)
(22)
604
24
65
10
352
47
–
4,091
(1,373)
(455)
434
2,697
(529)
2,168
1,016
781
58
(98)
12
(971)
–
788
(61)
(1)
109
3
10
10
226
–
2
1,884
212
166
(146)
2,116
(226)
1,890
Assets
Non-current assets
Property, plant and equipment
Goodwill and intangible assets
Interests in associates and joint ventures
Deferred tax assets
Investments in equity securities measured at fair value
through profit and loss
Derivative financial assets
Other non-current assets
Total non-current assets
Current assets
Inventories
Trade and other receivables and advances paid
Short-term investments
Derivative financial assets
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Treasury shares
Additional paid-in capital
Revaluation reserve
Other reserves
Foreign currency translation reserve
Accumulated losses
Total equity attributable to shareholders of the
Parent Company
Non-controlling interests
Total equity
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
Provisions – non-current portion
Derivative financial liabilities
Other non-current liabilities
Total non-current liabilities
Current liabilities
Loans and borrowings
Provisions – current portion
Trade and other payables and advances received
Derivative financial liabilities
Total current liabilities
Total equity and liabilities
Note
11
12
13
10(b)
15(f)
19
15(e)
14
15(b)
19
15(d)
16
16(g)
17
10(b)
18
19
17
18
15(c)
19
EN+ GROUP IPJSC
Consolidated Statement of Financial Position
as at 31 December 2021
31 December
2021
USD million
2020
USD million
10,117
2,199
4,028
150
316
22
258
17,090
3,731
2,655
131
120
2,330
8,967
26,057
–
1,516
(1,579)
9,193
2,945
153
(5,561)
(892)
5,775
4,536
10,311
8,174
1,064
485
61
113
9,897
2,737
161
2,806
145
5,849
26,057
9,577
2,181
3,832
244
75
20
133
16,062
2,339
1,431
237
30
2,562
6,599
22,661
–
1,516
(1,579)
9,193
2,902
169
(5,923)
(3,122)
3,156
2,909
6,065
10,215
1,139
518
28
121
12,021
2,173
89
2,156
157
4,575
22,661
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 150 to 215.
The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 150 to 215.
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Consolidated Statement of Cash Flows
for the year ended 31 December 2021 (continued)
Year ended 31 December
Note
2021
USD million
2020
USD million
Investing activities
Proceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of intangible assets
Cash paid for investment in equity securities measured at
fair value through profit and loss
Cash received from / (paid for) other investments
Interest received
Dividends from associates and joint ventures
Dividends from financial assets
Proceeds from partial disposal of associate
(Contribution)/return of contribution to joint ventures
Prepayment for and acquisition of subsidiaries
Cash flows from / (used in) investing activities
Financing activities
Proceeds from borrowings
Repayment of borrowings
Acquisition of own shares
Acquisition of non-controlling interest
Interest paid
Restructuring fees and expenses related to issuance of shares
Settlement of derivative financial instruments
Cash flows used in financing activities
Net (decrease)/increase in cash and cash equivalents
16(a)
Cash and cash equivalents at beginning of the year,
excluding restricted cash
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of the year,
excluding restricted cash
15(d)
20
(1,485)
(28)
(291)
39
63
620
34
1,421
(9)
(99)
285
2,881
(4,474)
–
(44)
(703)
(36)
(315)
(2,691)
(238)
2,549
17
2,328
19
(1,108)
(20)
–
(198)
56
1,170
4
–
1
(1)
(77)
3,040
(1,813)
(1,579)
–
(779)
(26)
(215)
(1,372)
441
2,265
(157)
2,549
Restricted cash amounted to USD 2 million and USD 13 million at 31 December 2021 and 31 December
2020, respectively.
USD million
Balance at 1 January 2020
Comprehensive income
Profit for the year
Other comprehensive (loss)/income
for the year
Revaluation of hydro assets as at
31 December 2020 (notes 16(f), 11(e))
Taxation (note 10(с))
Other comprehensive loss
Total comprehensive income
for the year
Transactions with owners
Acquisition of own shares
Total transactions with owners
Share
premium
1,516
–
–
–
–
–
–
–
–
Treasury
share
reserve
–
–
–
–
–
–
–
(1,579)
(1,579)
Balance 31 December 2020
1,516
(1,579)
Balance at 1 January 2021
1,516
(1,579)
Comprehensive income
Profit for the year
Other comprehensive (loss)/income
Total comprehensive income
for the year
Share of equity transactions of an
associate (note 13)
Transactions with owners
Change in effective interest in
subsidiaries (note 16(a))
Total transactions with owners
–
–
–
–
–
–
–
–
–
–
–
–
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Accumu-
lated
losses
Non-
controlling
interests
Total
equity
Total
Attributable to shareholders of the Parent Company
Foreign
currency
translation
reserve
Additional
paid-in
capital
Reva-
luation
reserve
Other
reserves
9,193
2,722
198
(5,493)
(3,806)
4,330
3,042
7,372
–
684
684
332
1,016
–
–
–
–
–
–
–
–
9,193
9,193
–
–
–
–
–
–
–
180
225
(45)
–
180
–
–
2,902
2,902
–
–
–
43
43
–
(29)
–
–
(29)
(29)
–
–
169
169
–
(16)
(16)
–
–
–
(430)
–
–
(430)
(430)
–
–
–
–
–
–
(279)
225
(45)
(459)
684
405
–
–
(1,579)
(1,579)
(5,923)
(3,122)
(5,923)
(3,122)
–
362
362
–
–
–
2,142
–
2,142
73
15
15
3,156
3,156
2,142
346
2,488
73
58
58
(465)
5
(1)
(469)
(133)
–
–
2,909
2,909
1,392
281
1,673
(744)
230
(46)
(928)
272
(1,579)
(1,579)
6,065
6,065
3,534
627
4,161
56
129
(102)
(102)
4,536
(44)
(44)
10,311
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Balance 31 December 2021
1,516
(1,579)
9,193
2,945
153
(5,561)
(892)
5,775
The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements set out on pages 15 to 85.
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the consolidated financial statements set out on pages 150 to 215.
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
1.
Background
(a) Organisation
EN+ GROUP IPJSC (the “Parent Company”) was established as a limited liability company according to the
legislation of the British Virgin Islands on 30 April 2002 under the name of Baufinanz Limited. On 24 December
2003 the Parent Company registered a change of its legal name to Sibir Power Metal Limited. On 18 March
2004 the Parent Company registered a change of its legal name to Eagle Capital Group Limited. On 25 August
2005 the Parent Company changed its domicile to Jersey and was renamed to En+ Group Limited. On 1 June
2017 the Parent Company changed its status to a public company and was renamed to EN+ GROUP PLC.
On 9 July 2019 the Parent Company changed its domicile to the Russian Federation with a registration as
EN+ GROUP International public joint-stock company (EN+ GROUP IPJSC). As at 31 December 2021 the
Parent Company’s registered office is Oktyabrskaya st. 8, office 34, Kaliningrad, Kaliningrad Region,
236006, Russian Federation.
On 8 November 2017, the Parent Company successfully completed an initial public offering of global
depositary receipts on the London Stock Exchange. On 17 February 2020, the Parent Company’s ordinary
shares were included into the “Level 1” part of the list of securities admitted to trading on Moscow Exchange.
EN+ GROUP IPJSC is the parent company for a vertically integrated aluminium and power group, engaged in
aluminium production and energy generation (together with the Parent Company referred to as “the Group”).
As at 31 December 2021 Mr. Oleg Deripaska beneficially controls and exercises voting rights in respect
of 35% of the voting shares of the Parent Company and his direct or indirect shareholding cannot exceed
44.95% of the shares of the Parent Company.
The other significant holders as at 31 December 2021 were as follows:
Parent Company’s subsidiary
Citi (Nominees), including
Glencore Group Funding Limited
Other shareholders
Independent trustees
Shareholding
Voting rights
21.37%
12.79%
10.55%
20.89%
–
7.04%
12.79%
10.55%
11.70%
33.47%
Glencore Group Funding Limited is a subsidiary of Glencore Plc.
Based on the information at the Group’s disposal at the reporting date, there is no individual that has an
indirect prevailing ownership interest in the Parent Company exceeding 50%, who could exercise voting
rights in respect of more than 35% of the Parent Company’s issued share capital or has an opportunity to
exercise control over the Parent Company.
Related party transactions are detailed in note 23.
(b) Operations
The Group is a leading vertically integrated aluminium and power producer, which combines the assets and
results of its Metals and Power segments.
The Metals segment operates in the aluminium industry primarily in the Russian Federation, Ukraine,
Guinea, Jamaica, Ireland, Italy and Sweden and is principally engaged in the mining and refining of bauxite
and nepheline ore into alumina, the smelting of primary aluminium from alumina and the fabrication of
aluminium and aluminium alloys into semi-fabricated and finished products.
The Power segment engages in all major areas of the power industry, including electric power generation,
power trading and supply. It also includes supporting operations engaged in the supply of coal resources to
the Group. The Group’s principal power plants are located in East Siberia and Volga Region, the Russian
Federation.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(c)
Business environment in emerging economies
The Russian Federation, Ukraine, Jamaica and Guinea have been experiencing political and economic
changes that have affected, and may continue to affect, the activities of enterprises operating in these
environments. Consequently, operations in these countries involve risks that typically do not exist in other
markets, including reconsideration of privatisation terms in certain countries where the Group operates
following changes in governing political powers.
Starting in 2014, the United States of America, the European Union and some other countries have imposed
and gradually expanded economic sanctions against a number of Russian individuals and legal entities. The
imposition of the sanctions has led to increased economic uncertainty, including more volatile equity
markets, a depreciation of the Russian rouble, a reduction in both local and foreign direct investment inflows
and a significant tightening in the availability of credit. As a result, some Russian entities may experience
difficulties accessing the international equity and debt markets and may become increasingly dependent on
state support for their operations. The longer-term effects of the imposed and possible additional sanctions
are difficult to determine. The COVID-19 coronavirus pandemic has further increased uncertainty in the
business environment (note 1(e)).
The consolidated financial statements reflect management’s assessment of the impact of the Russian,
Ukrainian, Jamaican and Guinean business environments on the operations and the financial position of the
Group. The future business environment may differ from management’s assessment.
(d) OFAC sanctions
On 6 April 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated,
amongst others, the Parent Company, JSC EuroSibEnergo (“EuroSibEnergo”) and UC RUSAL Plc (from
25 September 2020 UC RUSAL IPJSC, “UC RUSAL”) as Specially Designated Nationals (“SDN”)
(the “OFAC Sanctions”).
As a result, all property or interests in property of the Parent Company and its subsidiaries located in the
United States or in the possession of U.S. Persons were blocked, frozen, and could not have been transferred,
paid, exported, withdrawn, or otherwise dealt in. Several general licenses were issued at the time of the
designation and subsequently certain transactions were authorised with the Parent Company, EuroSibEnergo
and UC RUSAL, and with their respective debt and equity.
On 27 January 2019, OFAC announced the removal of the Parent Company and its subsidiaries, including
UC RUSAL and EuroSibEnergo, from OFAC’s SDN list and Blocked Persons with immediate effect.
The removal was subject to and conditional upon the satisfaction of a number of conditions including, but
not limited to:
•
•
•
Ending Mr Oleg Deripaska’s control of the Group, through the reduction of his direct and indirect
ownership interest in the Parent Company to below 50%;
Establishing independent voting arrangements for the Parent Company’s shares held by certain
shareholders;
Corporate governance changes, including, inter alia, overhauling the composition of the EN+ Board
to ensure that independent directors constitute the majority of the Board, and ongoing reporting and
certifications by the Parent Company and UC RUSAL to OFAC concerning compliance with the
conditions for sanctions’ removal.
(e)
COVID-19
During the 2021, the Russian and global economies continue to recover from the pandemic as a result of an
increase in business activities and due to certain government support measures. However at the date of the
financial information, the Group thoroughly monitors the COVID-19 spread and maintain a number of
measures to mitigate the operational risks associated with it.
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
2.
Basis of preparation
(a)
Statement of compliance
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRSs”), which collective term includes all International Accounting Standards and
related interpretations promulgated by the International Accounting Standards Board (“IASB”).
Preparation of these consolidated financial statements is also regulated by Russian Federal Law 208-FZ dated
27 July 2010 On Consolidated Financial Statements in all aspects, except for language and functional and
presentation currencies, which are regulated by Russian Federal Law 290-FZ dated 3 August 2018
On International Companies and International Funds.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not
yet effective. The following amended standards became effective from 1 January 2021: Interest Rate
Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16.
The amendments provide temporary reliefs which address the financial reporting effects related to
replacement of interbank offered rates (IBOR) with alternative risk-free rates (RFR). These amendments had
no impact on the consolidated interim condensed financial information of the Group. The Group intends to
use the practical expedients in future periods if they become applicable.
(b)
Standards issued but not effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of
issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these new and
amended standards and interpretations, if applicable, when they become effective.
•
•
•
•
•
•
•
•
IFRS 17 Insurance Contracts;
Reference to the Conceptual Framework – Amendments to IFRS 3;
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16;
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37;
IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a
first-time adopter;
Definition of Accounting Estimates – Amendments to IAS 8;
IFRS 9 Financial Instruments – Fees in the ‘10 per cent’ test for derecognition of financial liabilities;
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2.
These amendments are not expected to have a material impact on the Group.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements
for classifying liabilities as current or non-current. The amendments clarify:
•
•
•
•
What is meant by a right to defer settlement;
That a right to defer must exist at the end of the reporting period;
That classification is unaffected by the likelihood that an entity will exercise its deferral right;
That only if an embedded derivative in a convertible liability is itself an equity instrument would the
terms of a liability not impact its classification.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must
be applied retrospectively. The Group is currently assessing the impact the amendments will have on current
practice.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(c)
Basis of measurement
The consolidated financial statements have been prepared in accordance with the historical cost basis except
as set out in the significant accounting policies in notes 11 and 19.
(d)
Functional and presentation currency
The functional currencies of the Parent Company and Group’s significant subsidiaries are the currencies of
the primary economic environment and key business processes of these subsidiaries and include USD,
Russian roubles (“RUB”), Ukrainian hryvna and euros (“EUR”). The consolidated financial statements are
presented in USD, rounded to the nearest million, except as otherwise stated herein.
The functional currencies of investments in associates and joint ventures are RUB, Kazakhstani tenge and
Australian dollar.
(e)
Use of judgements, estimates and assumptions
The preparation of consolidated financial statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and reported
amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated
financial statements, and the reported revenue and costs during the relevant period.
Management bases its judgements and estimates on historical experience and various other factors that are
believed to be appropriate and reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different assumptions and conditions.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRSs that have a significant effect on the
consolidated financial statements and estimates with a significant risk of material adjustment in the next year
are discussed in note 25.
3.
Significant accounting policies
Significant accounting policies are described in the related notes to the consolidated financial statements
captions and in this note.
The accounting policies and judgements applied by the Group in these consolidated financial statements are
the same as those applied by the Group in its consolidated financial statements as at and for the year ended
31 December 2020.
(a)
Basis of consolidation
(i)
Subsidiaries and non-controlling interests
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. When assessing control, potential voting rights that presently are
exercisable are taken into account.
The consolidated financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases. The accounting policies of
subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
Non-controlling interests represent the portion of the net assets of subsidiaries attributable to interests that are
not owned by the Group, whether directly or indirectly through subsidiaries, and in respect of which the Group
has not agreed any additional terms with the holders of those interests which would result in the Group as a whole
having a contractual obligation in respect of those interests that meets the definition of a financial liability.
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Non-controlling interests are presented in the consolidated statement of financial position within equity,
separately from equity attributable to the equity shareholders of the Group. Non-controlling interests in the
results of the Group are presented on the face of the consolidated statement of profit or loss and other
comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year
between non-controlling interests and the equity shareholders of the Group.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests
even if doing so causes the non-controlling interests to have a deficit balance.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as
equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling-
interests within consolidated equity to reflect the change in relative interests, but no adjustments are made to
goodwill and no gain or loss is recognised.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that
subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former
subsidiary at the date when control is lost is recognised at fair value and this amount is regarded as the fair
value on initial recognition of a financial asset (refer to note 15) or, when appropriate, the cost on initial
recognition of an investment in an associate or joint venture (refer to note 13).
(ii)
Acquisitions of non-controlling interests
The acquisition of an additional non-controlling interest in an existing subsidiary after control has been obtained
is accounted for as an equity transaction with any difference between the cost of the additional investment
and the carrying amount of the net assets acquired at the date of exchange recognised directly in equity.
The issue of a put option (a mandatory offer) to acquire a non-controlling interest in subsidiary, after control
has been obtained and accounted for by the Group as an equity transaction, results in the recognition of a
liability for the present value of the expected exercise price and the derecognition of non-controlling interests
within consolidated equity. Subsequent to initial recognition, changes in the carrying amount of the put
liability are recognised within equity. If the put option expires unexercised then the put liability is
derecognised and non-controlling interests are recognised.
For a written put or forward option with the non-controlling shareholders in an existing subsidiary on their
equity interest in that subsidiary, if the non-controlling shareholders do not have present access to the returns
associated with the underlying ownership interest, the contract is accounted for as an anticipated acquisition
of the underlying non-controlling interests, as if the put option had been exercised already or the forward had
been satisfied by the non-controlling shareholders.
(iii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from
transactions with equity accounted investees are eliminated against the investment to the extent of the
Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but
only to the extent that there is no evidence of impairment.
(b)
Foreign currencies
(i)
Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of Group entities at
the exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that
date. The foreign currency gain or loss on monetary items is the difference between the amortised cost in the
functional currency at the beginning of the period, adjusted for effective interest and payments during the
period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting
period. Non-monetary items in a foreign currency are measured based on historical cost and are translated
using the exchange rate at the date of transaction. Foreign currency differences arising on retranslation are
recognised in profit or loss, except for differences arising on the retranslation of qualifying cash flow hedges
to the extent the hedge is effective, which is recognised in other comprehensive income.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(ii)
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated from their functional currencies to USD at the exchange rates ruling at the reporting
date. The income and expenses of foreign operations are translated to USD at exchange rates approximating
exchange rates at the dates of the transactions.
Foreign currency differences arising on translation are recognised in other comprehensive income and
presented in the currency translation reserve in equity. For the purposes of foreign currency translation, the
net investment in a foreign operation includes foreign currency intra-group balances for which settlement is
neither planned nor likely in the foreseeable future and foreign currency differences arising from such a
monetary item are recognised in the statement of profit or loss and other comprehensive income.
When a foreign operation is disposed of, such that control, significant influence or joint control is lost, the
cumulative amount of the currency translation reserve is transferred to profit or loss as part of the gain or
loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign
operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-
controlling interests. When the Group disposes of only part of its investment in an associate or joint venture
that includes a foreign operation while retaining significant influence or joint control, the relevant proportion
of the cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are
considered to form part of a net investment in a foreign operation and are recognised in other comprehensive
income, and presented in the translation reserve in equity.
4.
Segment reporting
(a) Reportable segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenue and incur expenses, including revenue and expenses that relate to transactions with any of the
Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s
key executive management to make decisions about resources to be allocated to the segment and assess its
performance and for which discrete consolidated financial statements are available.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and
services, the nature of production processes, the type or class of customers, the methods used to distribute
the products or provide the services and the nature of the regulatory environment. Operating segments which
are not individually material may be aggregated if they share a majority of these criteria.
Based on the current management structure and internal reporting the Group has identified two operating
segments:
a)
Metals. The Metals segment comprises UC RUSAL with disclosures being based on the public
financial statements of UC RUSAL. All adjustments made to UC RUSAL, including any adjustments
arising from different timing of IFRS first time adoption, are included in “Adjustments” column.
The Power assets of UC RUSAL are included within the Metals segment.
b)
Power. The Power segment mainly comprises the power assets, as described in note 1(b).
These business units are managed separately and the results of their operations are reviewed by the key
executive management personnel and Board of Directors on a regular basis.
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(b)
Segment results, assets and liabilities
For the purposes of assessing segment performance and allocating resources between segments, the Group’s
senior executive management monitor the results, assets and liabilities and cash flows attributable to each
reportable segment on the following bases:
•
•
•
•
•
Total segment assets include all tangible, intangible assets and current assets.
Total segment liabilities include all current and non-current liabilities.
Revenue and expenses are allocated to the reportable segments with reference to sales generated by
those segments and the expenses incurred by those segments or which otherwise arise from the
depreciation or amortisation of assets attributable to those segments.
The measure used for reporting segment results is the net profit and Adjusted EBITDA (key non-IFRS
financial measure used by the Group as reference for assessing operating effectiveness). Segment
profit or loss and Adjusted EBITDA are used to measure performance as management believes that
such information is the most relevant in evaluating the results of certain segments relative to other
entities that operate within these industries.
Adjusted EBITDA for any period represents the results from operating activities adjusted for
amortisation and depreciation, impairment charges and gain/(losses) on disposal of property, plant and
equipment for the relevant period.
In addition to receiving segment information concerning segment results, management is provided with
segment information concerning revenue (including inter-segment revenue), the carrying value of
investments and share of profits/(losses) of associates and joint ventures, depreciation, amortisation, interest
income and expenses, other finance income and costs, income tax, gains/(losses) on disposal of property,
plant and equipment, impairment of non-current assets and additions of non-current segment assets used by
the segments in their operations. Inter-segment pricing is determined primarily on a consistent basis using
market benchmarks.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Year ended 31 December 2021
USD million
Consolidated statement of profit or loss and other comprehensive income
Revenue from external customers
Primary aluminium and alloys
Alumina and bauxite
Semi-finished products and foil
Electricity
Heat
Other
Inter-segment revenue
Total segment revenue
Operating expenses (excluding depreciation and loss on disposal of PPE)
Adjusted EBITDA
Depreciation and amortisation
(Loss)/gain on disposal of PPE
Impairment of non-current assets
Results from operating activities
Share of profits of associates and joint ventures
Gain from partial disposal of investment in associate
Interest expense, net
Other finance costs, net
Profit before tax
Income tax expense
Profit for the year
Additions to non-current segment assets during the year
Metals
Power
Adjustments
Total
11,790
9,766
612
515
159
53
685
204
11,994
(9,101)
2,893
(596)
(9)
(209)
2,079
1,807
492
(329)
(408)
3,641
(416)
3,225
(1,342)
2,336
–
–
252
1,366
412
306
802
3,138
(1,966)
1,172
(229)
4
(58)
889
(5)
–
(316)
(2)
566
(192)
374
(382)
–
–
–
–
–
–
–
(1,006)
(1,006)
933
(73)
3
–
–
(70)
–
–
1
–
(69)
4
(65)
7
14,126
9,766
612
767
1,525
465
991
–
14,126
(10,134)
3,992
(822)
(5)
(267)
2,898
1,802
492
(644)
(410)
4,138
(604)
3,534
(1,717)
USD million
Metals
Power
Adjustments
Total
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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Consolidated statement of financial position
Segment assets, excluding cash and cash equivalents and interests in associates
and jointly ventures
Investment in Metals segment
Cash and cash equivalents
Interests in associates and jointly ventures
Total segment assets
Segment liabilities, excluding loans and borrowings and bonds payable
Loans and borrowings
Total segment liabilities
Total segment equity
Total segment equity and liabilities
Consolidated statement of cash flows
Cash flows from operating activities
Cash flows from / (used in) investing activities
Acquisition of property, plant and equipment, intangible assets
Cash paid for investment in equity securities measured at fair value through
profit and loss
Cash (paid for) / received from other investments
Dividends from associates and joint ventures
Interest received
Proceeds from partial disposal of associate
Other investing activities
Cash flows used in financing activities
Interest paid
Restructuring fees and expenses related to issuance of shares
Settlements of derivative financial instruments
Other financing activities
Net change in cash and cash equivalents
14,908
–
1,984
4,014
20,906
3,649
6,733
10,382
10,524
20,906
1,146
490
(1,192)
(291)
(50)
620
37
1,421
(55)
(1,891)
(380)
(34)
(315)
(1,162)
(255)
5,594
4,595
346
14
10,549
1,404
4,178
5,582
4,967
10,549
1,022
(205)
(321)
–
89
–
26
–
1
(800)
(323)
(2)
–
(475)
17
(803)
(4,595)
–
–
(5,398)
(218)
–
(218)
(5,180)
(5,398)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
A
p
p
e
n
d
c
e
s
i
19,699
–
2,330
4,028
26,057
4,835
10,911
15,746
10,311
26,057
2,168
285
(1,513)
(291)
39
620
63
1,421
(54)
(2,691)
(703)
(36)
(315)
(1,637)
(238)
157
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FINANCIAL STATEMENTS
Year ended 31 December 2020
USD million
Consolidated statement of profit or loss and other comprehensive income
Revenue from external customers
Primary aluminium and alloys
Alumina and bauxite
Semi-finished products and foil
Electricity
Heat
Other
Inter-segment revenue
Total segment revenue
Operating expenses (excluding depreciation and loss on disposal of PPE)
Adjusted EBITDA
Depreciation and amortisation
(Loss)/gain on disposal of PPE
Impairment of non-current assets
Results from operating activities
Share of profits and impairment of associates and joint ventures
Interest expense, net
Other finance costs, net
Profit before tax
Income tax expense
Profit for the year
Additions to non-current segment assets during the year
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Metals
Power
Adjustments
Total
8,440
6,969
534
381
60
39
457
126
8,566
(7,695)
871
(570)
(13)
(9)
279
976
(431)
(108)
716
43
759
(987)
1,916
–
–
166
1,109
387
254
781
2,697
(1,704)
993
(214)
1
(49)
731
(5)
(298)
(19)
409
(152)
257
(262)
–
–
–
–
–
–
–
(907)
(907)
904
(3)
3
–
–
–
–
–
–
–
–
–
7
10,356
6,969
534
547
1,169
426
711
–
10,356
(8,495)
1,861
(781)
(12)
(58)
1,010
971
(729)
(127)
1,125
(109)
1,016
(1,242)
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
USD million
Metals
Power
Adjustments
Total
Consolidated statement of financial position
Segment assets, excluding cash and cash equivalents and interests in associates
and jointly ventures
Investment in Metals segment
Cash and cash equivalents
Interests in associates and jointly ventures
Total segment assets
Segment liabilities, excluding loans and borrowings and bonds payable
Loans and borrowings
Total segment liabilities
Total segment equity
Total segment equity and liabilities
Consolidated statement of cash flows
Cash flows from operating activities
Cash flows from / (used in) investing activities
Acquisition of property, plant and equipment, intangible assets
Other investments
Dividends from the jointly controlled entities and other associates
Interest received
Other investing activities
Cash flows used in financing activities
Interest paid
Restructuring fee and expenses related to issuance of shares
Settlements of derivative financial instruments
Other financing activities
Net change in cash and cash equivalents
11,327
–
2,229
3,822
17,378
3,043
7,792
10,835
6,543
17,378
1,091
128
(897)
(191)
1,170
26
20
(694)
(465)
(12)
(215)
(2)
525
5,632
4,595
333
10
10,570
1,340
4,596
5,936
4,634
10,570
805
(211)
(237)
(7)
–
30
3
(678)
(314)
(14)
–
(350)
(84)
(692)
(4,595)
–
–
(5,287)
(175)
–
(175)
(5,112)
(5,287)
(6)
6
6
–
–
–
–
–
–
–
–
–
–
16,267
–
2,562
3,832
22,661
4,208
12,388
16,596
6,065
22,661
1,890
(77)
(1,128)
(198)
1,170
56
23
(1,372)
(779)
(26)
(215)
(352)
441
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(i)
Geographic information
The Group’s operating segments are managed on a worldwide basis, but operate in four principal
geographical areas: the CIS, Europe, Africa and the Americas. In the CIS, production facilities operate in
Russia and Ukraine. In Europe, production facilities are located in Italy, Ireland and Sweden. African
production facilities are represented by the bauxite mines and an alumina refinery in Guinea. In the Americas
the Group operates one production facility in Jamaica, one in Guyana and a trading subsidiary in the United
States of America.
The following table sets out information about the geographical location of the Group’s revenue from
external customers and the Group’s property, plant and equipment, intangible assets, interests in associates
and joint ventures and goodwill (“specified non-current assets”). The geographical location of customers is
based on the location at which the services were provided or the goods delivered. The geographical location
of the specified non-current assets is based on the physical location of the asset. Unallocated specified non-
current assets comprise mainly goodwill and interests in associates and joint ventures.
Revenue from external customers
Year ended 31 December
2021
USD million
2020
USD million
I
S
T
R
A
T
E
G
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
5,437
1,108
772
744
744
443
367
356
330
314
280
266
267
247
236
2,215
3,873
956
615
471
471
727
236
211
338
329
103
228
134
164
185
1,315
14,126
10,356
31 December
2021
USD million
2020
USD million
13,294
232
82
68
6
3,408
17,090
11,870
225
606
–
229
3,132
16,062
A
p
p
e
n
d
c
e
s
i
Russia
Turkey
China
Japan
USA
Netherlands
Greece
Germany
Poland
South Korea
Mexico
Italy
Norway
France
Taiwan
Other countries
Specified non-current assets
Russia
Guinea
Ireland
Sweden
Ukraine
Unallocated
158
159
FINANCIAL STATEMENTS
5.
Revenues
6.
Other operating expenses, net
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is
recognised. The details of significant accounting policies in relation to the Group’s various goods and
services are set out below:
Sales of goods: comprise sale of primary aluminium, alloys, alumina, bauxite and other products. Customers
obtain control of the goods supplied when the goods are delivered to the point when risks are transferred
based on Incoterms delivery terms stated in the contract. Invoices are generated and revenue is recognised at
that point in time. Invoices are usually payable within 60 days or in advance. Under certain Group sale
contracts, the final price for the goods shipped is determined a few months later than the delivery took place.
Under current requirements the Group determines the amount of revenue at the moment of recognition based
on estimated selling price at the date of the invoice issued. At price finalisation the difference between
estimated price and actual one is recognised as other revenue.
Rendering of transportation services: as part of sales of goods the Group also performs transportation to
the customer under contract terms. In certain cases, the control of goods delivered is transferred to customers
prior to transportation being completed. In these cases rendering of transportation services from when the
control of goods has been transferred is considered as a separate performance obligation.
Rendering of electricity supply services: The Group is involved in sales of energy to third and related
parties. Invoices are issued once a month at the end of month and paid within 30 days. Revenue is recognised
over time during the month of energy supply.
Year ended 31 December
2021
USD million
2020
USD million
Sales of primary aluminium and alloys
Third parties
Related parties – companies capable of exerting significant influence
Related parties – other
Related parties – associates and joint ventures
Sales of alumina and bauxite
Third parties
Related parties – companies capable of exerting significant influence
Related parties – associates and joint ventures
Sales of semi-finished products and foil
Third parties
Sales of electricity
Third parties
Related parties – other
Related parties – associates and joint ventures
Sales of heat
Third parties
Related parties – companies capable of exerting significant influence
Related parties – other
Other revenues
Third parties
Related parties – companies capable of exerting significant influence
Related parties – other
Related parties – associates and joint ventures
9,766
9,445
307
12
2
612
388
–
224
767
767
1,525
1,487
5
33
465
444
2
19
991
818
11
11
151
6,969
6,660
298
9
2
534
314
12
208
547
547
1,169
1,137
5
27
426
407
2
17
711
587
5
8
111
In 2020 transactions with Glencore International AG (a member of Glencore International) have exceeded
10% of the Group’s revenue and amounted to USD1,259 million.
All revenue of the Group relates to revenue from contracts with customers.
14,126
10,356
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Year ended 31 December
2021
USD million
2020
USD million
(65)
(55)
(5)
(93)
(218)
(10)
(71)
(12)
(67)
(160)
Impairment of trade and other receivables
Charity
Loss on disposal of property, plant and equipment
Other operating expenses, net
7.
Personnel costs
Personnel costs comprise salaries, annual bonuses, annual leave and cost of non-monetary benefits. Salaries,
annual bonuses, paid annual leave and cost of non-monetary benefits are accrued in the year in which the
associated services are rendered by employees. Where payment or settlement is deferred and the effect would
be material, these amounts are stated at their present values.
The employees of the Group are also members of retirement schemes operated by local authorities.
The Group is required to contribute a certain percentage of their payroll to these schemes to fund the benefits.
The Group’s total contribution to those schemes charged to profit or loss during the years presented is shown
below.
The Group’s net obligation in respect of defined benefit pension and other post-retirement plans is calculated
separately for each plan by estimating the amount of future benefit that employees have earned in return for their
service in the current and prior periods. That benefit is discounted to determine its present value and the fair
value of any plan assets are deducted. The discount rate is the yield at the reporting date on government bonds
that have maturity dates approximating the terms of the Group’s obligations. The calculation is performed using
the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is
limited to the present value of any future refunds from the plan or reductions in future contributions to the plan.
Where there is a change in actuarial assumptions, the resulting actuarial gains and losses are recognised
directly in other comprehensive income.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by
employees is recognised in profit or loss immediately.
The Group recognises gains and losses on the curtailment or settlement of a defined benefit plan when the
curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair
value of plan assets, any change in the present value of the defined benefit obligation, any related actuarial
gains and losses.
The Group also makes contributions for the benefit of employees to Russia’s and the Ukrainian State’s
pension funds. The contributions are expensed as incurred.
Contributions to defined contribution retirement plans
Contributions to defined benefit retirement plans
Total retirement costs
Wages and salaries
8.
Finance income and costs
Year ended 31 December
2021
USD million
2020
USD million
(273)
(3)
(276)
(1,170)
(1,446)
(225)
(5)
(230)
(1,023)
(1,253)
Finance income comprises interest income on funds invested, dividend income and foreign currency gains.
Interest income is recognised as it accrues, using the effective interest method.
Finance costs comprise interest expense on borrowings, foreign currency losses and changes in the fair value
of financial assets at fair value through profit or loss. All borrowing costs are recognised in profit or loss
using the effective interest method, except for borrowing costs related to the acquisition, construction and
production of qualifying assets which are recognised as part of the cost of such assets.
I
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T
R
A
T
E
G
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
A
p
p
e
n
d
c
e
s
i
160
161
FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Foreign currency gains and losses are reported on a net basis. Foreign exchange loss on loans and borrowing
for the year ended 31 December 2021 amounted to USD 3 million (2020: gain of USD 291 million).
Finance income
Interest income
Dividend income
Net foreign exchange gain
Finance costs
Interest expense
Change in fair value of derivative financial instruments (note 19)
Revaluation of investments measured at fair value through profit or loss
Net foreign exchange loss
Other finance costs
Year ended 31 December
2021
USD million
2020
USD million
65
22
–
87
(709)
(352)
(47)
(33)
–
(1,141)
61
1
98
160
(788)
(226)
–
–
(2)
(1,016)
9.
Earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary equity shareholders
for the years ended 31 December 2021 and 31 December 2020.
Issued ordinary shares at beginning of the year
Acquisition of own shares
Weighted average number of shares
Profit for the year attributable to the shareholders of the Parent Company,
USD million
Basic and diluted earnings per share, USD
Year ended 31 December
2021
502,337,774
–
502,337,774
2,142
4.264
2020
638,848,896
(136,511,122)
518,002,985
684
1.320
Acquisition of own shares was accounted for in the weighted average numbers of shares calculation for the
year ended 31 December 2020 only.
There were no outstanding dilutive instruments during the years ended 31 December 2021 and 31 December 2020.
10.
Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the statement
of profit or loss and other comprehensive income except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition
of assets or liabilities in a transaction that is not a business combination and that affects neither accounting
nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will
not reverse in the foreseeable future. New information may become available that causes the Group to change
its judgement regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax
expenses in the period that such a determination is made. Deferred tax is measured at the tax rates that are
expected to be applied to the temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation authority and the Group has both the right and the intention
to settle its current tax assets and liabilities on a net or simultaneous basis.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the
liability to pay the related dividends is recognised.
(a)
Income tax expense
Current tax expense
Current tax for the year
Deferred tax expense
Origination and reversal of temporary differences
Year ended 31 December
2021
USD million
2020
USD million
(569)
(35)
(604)
(223)
114
(109)
The Parent Company is a tax resident of the Russian SAR (special administrative region). Companies which
register in the SAR as part of the continuance out of a foreign jurisdiction (such as the Parent Company) may
have a number of tax benefits, subject to certain conditions.
The Parent Company and subsidiaries pay income taxes in accordance with the legislative requirements of
their respective tax jurisdictions. For companies domiciled in Russia the applicable tax rate is 20%; in
Ukraine of 18%; Guinea of 0%; China of 25%; Kazakhstan of 20%; Australia of 30%; Jamaica of 25%;
Ireland of 12.5%, Sweden of 20.6% and Italy of 26.9%. For the Group’s subsidiaries domiciled in
Switzerland the applicable tax rate for the year is the corporate income tax rate in the Canton of Zug,
Switzerland, which differs depending on the company’s tax status. The rate consists of a federal income tax
and a cantonal/communal income and capital taxes. The latter includes a base rate and a multiplier, which
may change from year to year. Applicable income tax rates are 9.55% and 11.85% for Swiss subsidiaries.
For the UC RUSAL’s significant trading companies, the applicable tax rate is 0%. The applicable tax rates
for the year ended 31 December 2020 were the same as for the year ended 31 December 2021 except for tax
rates for subsidiaries domiciled in Switzerland which amounted to 9.1% and 11.91% subsequently and
subsidiary domiciled in Sweden which amounted to 21.4%.
Reconciliation of effective tax rate
Year ended 31 December
2021
2020
USD million
%
USD million
%
Profit before taxation
Income tax at tax rate applicable
for the Parent Company
Other non-deductible/taxable items, net
Effect of changes in investment in
Norilsk Nickel
Change in unrecognised deferred tax assets
Effect of reversal of impairment
Effect of different income tax rates
Income tax
4,138
(828)
(57)
451
(99)
42
(113)
(604)
(100)
20
1
(10)
2
(1)
3
15
1,125
(225)
115
186
(243)
30
28
(109)
(100)
20
(10)
(17)
22
(3)
(2)
10
162
163
I
S
T
R
A
T
E
G
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
A
p
p
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n
d
c
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s
i
FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(b) Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following items:
USD million
2021
2020
2021
2020
2021
2020
Assets
31 December
Liabilities
31 December
Net
31 December
Property, plant and equipment
Inventories
Trade and other receivables
Trade and other payables and
advances received
Financial instruments
Tax loss carry-forward
Others
Tax assets/(liabilities)
Set off of tax
Net deferred tax assets/(liabilities)
97
71
61
23
3
90
133
478
(328)
150
72
65
40
29
8
187
119
520
(276)
244
(1,250)
(13)
(32)
–
(5)
–
(92)
(1,392)
328
(1,064)
(1,287)
(15)
(24)
–
(6)
–
(83)
(1,415)
276
(1,139)
(1,153)
58
29
23
(2)
90
41
(914)
–
(914)
(1,215)
50
16
29
2
187
36
(895)
–
(895)
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(c) Movement in temporary differences during the year
USD million
Property, plant and equipment
Inventories
Trade and other receivables
Trade and other payables and
advances received
Financial instruments
Tax loss carry-forwards
Others
1 January
2021
Recognised in
profit or loss
Currency
translation
31 December
2021
(1,215)
50
16
29
2
187
36
(895)
50
7
13
(6)
(4)
(100)
5
(35)
12
1
–
–
–
3
–
16
(1,153)
58
29
23
(2)
90
41
(914)
USD million
Property, plant and
equipment
Inventories
Trade and other receivables
Trade and other payables
and advances received
Financial instruments
Tax loss carry-forwards
Others
1 January
2020
Recognised in
profit or loss
Recognised
in equity
Currency
translation
31 December
2020
(1,307)
87
15
29
(1)
78
21
(1,078)
12
(37)
2
1
3
113
20
114
(46)
–
–
–
–
–
–
(46)
126
–
(1)
(1)
–
(4)
(5)
115
(1,215)
50
16
29
2
187
36
(895)
Recognised tax losses expire in the following years:
Year of expiry
Without expiry
31 December
2021
USD million
31 December
2020
USD million
90
90
187
187
(d) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Tax loss carry-forwards
31 December
2021
USD million
31 December
2020
USD million
1,009
510
1,519
976
444
1,420
Deferred tax assets have not been recognised in respect of these items because it is not probable that future
taxable profits will be available against which the Group can utilise the benefits therefrom. Tax losses expire
in the following years:
Year of expiry
Without expiry
Up to 1 year
31 December
2021
USD million
31 December
2020
USD million
510
–
510
443
1
444
164
165
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A
T
E
G
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
S
T
A
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M
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p
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i
FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(e)
Unrecognised deferred tax liabilities
The Group’s subsidiaries have retained earnings where dividend distributions are subject to taxation, for
which deferred taxation has not been provided because remittance of the earnings has been indefinitely
postponed through reinvestment and, as a result, such amounts are considered to be permanently invested.
It was not practicable to determine the amount of temporary differences relating to investments in
subsidiaries where the Group is able to control the timing of reversal of the difference. Reversal is not
expected in the foreseeable future.
(f)
Current taxation in the consolidated statement of financial position represents
31 December
2021
USD million
31 December
2020
USD million
7
569
(529)
(3)
44
62
(18)
44
10
223
(226)
–
7
28
(21)
7
Net income tax payable at the beginning of the year
Income tax for the year
Income tax paid
Translation difference
Represented by:
Income tax payable (note 15(c))
Income tax receivable (note 15(b))
Net income tax payable/(receivable)
11.
Property, plant and equipment
(a) Accounting policy
(i)
Recognition and measurement
Until 1 January 2016 all items of property, plant and equipment were measured at cost less accumulated
depreciation and impairment losses. The cost of property, plant and equipment at 1 January 2004, the date of
transition to IFRSs, was determined by reference to its fair value at that date.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials and direct labour, any other costs directly attributable to
bringing the asset to a working condition for its intended use, the costs of dismantling and removing the items
and restoring the site on which they are located and capitalised borrowing costs. Purchased software that is
integral to the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
The cost of periodic relining of electrolysers is capitalised and depreciated over the expected production
period.
Gains or losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net
within gain/(loss) on disposal of property, plant and equipment in profit or loss.
Most of the hydro assets have long useful lives (up to 100 years) and their performance does not deteriorate
significantly. Considering changes in the regulation of the Russian power sector (100% liberalisation) and
the fact that hydropower is one of the most efficient sectors of the electric power industry, management
believes that hydropower assets were significantly undervalued prior to 1 January 2016.
On 1 January 2016 the Group identified a separate class of assets – hydro assets – and changed its accounting
policy for this class from the cost to the revaluation model to provide users with more relevant information
on the Group’s financial position.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Hydro assets are a class of property, plant and equipment with unique nature and use in their hydropower
plants. Since 1 January 2016 hydro assets are measured at a revalued amount, being their fair value at the
date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated
impairment losses. Revaluations are made based on periodic valuation by an external independent valuer.
A class of assets may be revalued on a rolling basis provided that revaluations of the class of assets are
completed within a short period and provided the revaluations are kept up to date.
After an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the
revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the
revalued amount of the asset.
A revaluation increase on hydro assets is recognised directly under the heading of revaluation surplus in other
comprehensive income. However, the increase is recognised in profit or loss to the extent that it reverses a
revaluation decrease of the same asset previously recognised in profit or loss. A revaluation decrease on
hydro assets is recognised in profit or loss. However, the decrease is recognised in other comprehensive
income to the extent of any credit balance existing in the revaluation surplus.
(ii)
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to the Group
and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of
the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Exploration and evaluation assets
Exploration and evaluation activities involve the search for mineral resources, the determination of technical
feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation
activities include:
•
•
•
•
•
•
Researching and analysing historical exploration data;
Gathering exploration data through topographical, geochemical and geophysical studies;
Exploratory drilling, trenching and sampling;
Determining and examining the volume and grade of the resource;
Surveying transportation and infrastructure requirements; and
Conducting market and finance studies.
Administration costs that are not directly attributable to a specific exploration area are charged to profit or loss.
License costs paid in connection with a right to explore in an existing exploration area are capitalised and
amortised over the term of the permit.
Exploration and evaluation expenditure is capitalised as exploration and evaluation assets when it is expected
that expenditure related to an area of interest will be recouped by future exploitation, sale, or, at the reporting
date, the exploration and evaluation activities have not reached a stage that permits a reasonable assessment of
the existence of commercially recoverable ore reserves. Capitalised exploration and evaluation expenditure is
recorded as a component of property, plant and equipment at cost less impairment losses. As the asset is not
available for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for
indications of impairment. Where there are indicators of potential impairment, an assessment is performed for
each area of interest in conjunction with the group of operating assets (representing a cash-generating unit,
CGU) to which the exploration is attributed. Exploration areas at which reserves have been discovered but
which require major capital expenditure before production can begin are continually evaluated to ensure that
commercial quantities of reserves exist or to ensure that additional exploration work is underway or planned.
To the extent that capitalised expenditure is not expected to be recovered it is charged to profit or loss.
Exploration and evaluation assets are transferred to mining property, plant and equipment or intangible assets
when development is sanctioned.
166
167
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A
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A
p
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c
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s
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FINANCIAL STATEMENTS
(iv)
Stripping costs
(b) Disclosure
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Expenditure relating to the stripping of overburden layers of ore, including estimated site restoration costs,
is included in the cost of production in the period in which it is incurred.
(v) Mining assets
Mining assets are recorded as construction in progress and transferred to mining property, plant and
equipment when a new mine reaches commercial production.
Mining assets include expenditure incurred for acquiring mineral and development rights and developing
new mining operations.
Mining assets include interest capitalised during the construction period, when financed by borrowings.
(vi) Depreciation
The carrying amounts of property, plant and equipment (including initial and any subsequent capital
expenditure) are depreciated to their estimated residual value over the estimated useful lives of the specific
assets concerned, or the estimated life of the associated mine or mineral lease, if shorter. Estimates of residual
values and useful lives are reassessed annually and any change in estimate is taken into account in the
determination of remaining depreciation charges. Leased assets are depreciated over the shorter of the lease
term and their useful lives. Land is not depreciated.
Any accumulated depreciation at the date of the revaluation is eliminated against the gross amount of the
assets, and the net amount is restated to the revalued amount of the asset.
The property, plant and equipment is depreciated on a straight-line or units of production basis over the
respective estimated useful lives as follows:
•
•
•
•
•
•
Hydro assets
Buildings and constructions
Machinery and equipment
Electrolysers
Mining assets
Other
predominantly 49 to 62 years;
predominantly 15 to 50 years;
4 to 50 years;
4 to 15 years;
units of production on proven and probable reserves;
1 to 30 years.
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R
E
P
O
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O
R
P
O
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A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
USD million
Cost/deemed cost
1 January 2020
Additions
Acquired through business
combinations
Disposals
Transfers
Revaluation of hydro assets as at
31 December 2020
Change in estimate of site restoration
provision
Translation difference
At 31 December 2020
Additions
Acquired through business
combinations
Disposals
Transfers
Change in estimate of site restoration
provision
Translation difference
At 31 December 2021
Land and
buildings
Machinery and
equipment
Electrolysers
Hydro assets
Mining assets
Construction
in progress
Other
Total
4,846
67
10
(14)
137
–
–
(256)
4,790
250
8
(60)
189
–
(26)
7,779
4
8
(97)
360
–
–
(262)
7,792
25
6
(95)
520
–
(21)
5,151
8,227
2,713
120
–
–
43
–
–
(8)
2,868
143
–
–
35
–
(14)
3,032
4,026
–
–
–
4
65
–
(652)
3,443
–
–
–
37
–
(20)
3,460
673
31
–
(10)
1
–
(2)
(77)
616
62
–
(3)
9
(2)
(10)
672
2,518
1,020
2
(18)
(684)
–
–
(145)
2,693
1,236
–
(26)
(697)
–
–
3,206
341
–
1
(6)
139
–
–
(42)
433
1
1
(6)
(93)
–
3
339
22,896
1,242
21
(145)
–
65
(2)
(1,442)
22,635
1,717
15
(190)
–
(2)
(88)
24,087
USD million
Depreciation and impairment losses
1 January 2020
Depreciation charge
(Impairment losses) / reversal of
impairment
Revaluation of hydro assets as at
31 December 2020
Disposals
Transfers
Translation difference
At 31 December 2020
Depreciation charge
(Impairment losses) / reversal of
impairment
Disposals
Transfers
Translation difference
At 31 December 2021
Net book value
At 1 January 2020
At 31 December 2020
At 31 December 2021
Land and
buildings
Machinery and
equipment
Electrolysers
Hydro assets
Mining assets
Construction
in progress
Other
Total
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(2,692)
(148)
26
6
1
–
133
(2,674)
(161)
(163)
8
1
24
(2,965)
2,154
2,116
2,186
(5,665)
(361)
(30)
86
1
–
169
(5,800)
(371)
(438)
80
(31)
24
(6,536)
2,114
1,992
1,691
(2,385)
(156)
(3)
–
–
–
8
(2,536)
(164)
15
–
–
13
(2,672)
328
332
360
(99)
(83)
–
–
(1)
165
18
–
(94)
–
–
–
1
(93)
3,927
3,443
3,367
(567)
(8)
(21)
3
–
–
65
(528)
(35)
(68)
1
–
11
(619)
106
88
53
(1,323)
–
17
–
–
–
60
(1,246)
–
432
4
–
5
(805)
1,195
1,447
2,401
(282)
(24)
3
4
–
–
25
(274)
(14)
(26)
4
30
–
(280)
59
159
59
A
p
p
e
n
d
c
e
s
i
(13,013)
(780)
(8)
99
1
165
478
(13,058)
(839)
(248)
97
–
78
(13,970)
9,883
9,577
10,117
169
FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Depreciation expense of USD 778 million (2020: USD 738 million) has been charged to cost of goods sold,
USD 8 million (2020: USD 6 million) to distribution expenses and USD 25 million (2020: USD 27 million)
to administrative expenses.
Interest capitalised for the years ended 31 December 2021 and 31 December 2020 was USD 9 million and
USD 12 million, respectively.
Included in construction in progress at 31 December 2021 and 31 December 2020 are advances to suppliers
of property, plant and equipment of USD 174 million and USD 145 million, respectively.
(c)
Impairment
Management reviewed the carrying amount of the Group’s non-financial assets at the reporting date to
determine whether there were any indicators of impairment or reversal of impairment.
Management identified several factors that indicated that for a number of the Group’s CGUs previously
recognised impairment losses may require reversal and for a number of CGUs impairment losses may need
to be recognised. These include significant increase of aluminium prices as a result of LME appreciation,
significant increase of oil and gas prices and overall market instability, fluctuations of coal sale prices and
additional volumes of electricity transmission set in further periods. For alumina cash generating units, the
major influence was unfavourable fluctuations in prices of energy resources which are a significant part of
cash cost. For bauxite cash generating units, sales prices and the cash cost of bauxite were relatively stable.
For the purposes of impairment testing, value in use of each cash generating unit was determined by
discounting expected future net cash flows of the cash generating unit. Values assigned to key assumptions
and estimates used to measure the units’ recoverable amount was based on external sources of information
and historical data. Management believes that the values assigned to the key assumptions and estimates
represented the most realistic assessment of future trends. The risk factors related to future COVID-19
uncertainties have been incorporated into the discount rates applied.
METALS
At 31 December 2021 and 31 December 2020 management identified several indicators that a number of the
Group’s CGUs may be impaired or that previously recognised impairment losses may need to be reversed.
Based on results of impairment testing as at 31 December 2021, management concluded that a reversal of
previously recognised impairment loss relating to property, plant and equipment should be recognised in
these consolidated financial statements in respect of KAZ, VgAZ, Kubal and Taishet aluminium smelters
(the latter aluminium smelter under construction) in the amount of USD 699 million. Additionally
management concluded that at the same date an impairment loss relating to property, plant and equipment of
Mykolaiv alumina refinery and Aughinish Alumina in the amount of USD 693 million should be recognised
in these consolidated financial statements.
Based on results of impairment testing as at 31 December 2020, management has concluded that a reversal
of previously recognised impairment loss relating to property, plant and equipment should be recognised in
those consolidated financial statements in respect of Taishet aluminium smelter (aluminium smelter under
construction) and Mykolaiv alumina refinery in the amount of USD 158 million.
The pre-tax discount rates applied to the above mentioned cash generating units, estimated in nominal terms
based on an industry weighted average cost of capital, are presented in the table below.
Taishet aluminium smelter
Mykolaiv alumina refinery
Kubikenborg Aluminium (Kubal)
KAZ (Kandalaksha aluminium smelter)
VgAZ (Volgograd aluminium smelter)
Aughinish Alumina
Year ended 31 December
2021
2020
11.2%
16.5%
14.3%
15.8%
15.2%
10.8%
11.8%
18.7%
19.8%
15.5%
14.8%
11.9%
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The recoverable amounts of a number of the cash generating units tested for impairment are particularly
sensitive to changes in forecast aluminium and alumina prices, foreign exchange rates and applicable
discount rates.
Additionally, management identified specific items of property, plant and equipment that are no longer in
use and therefore are not considered to be recoverable amounting to USD 190 million at 31 December 2021
(2020: USD 117 million). These assets have been impaired in full. No further impairments of property, plant
and equipment or reversal of previously recorded impairment were identified.
POWER
At 31 December 2021 and 2020 management identified several indicators that property, plant and equipment
of the Coal, Irkutsk GridCo and CHPs CGUs may be impaired or that previously recognised impairment
losses may need to be reversed.
Based on results of impairment testing as at 31 December 2021, management concluded that impairment
losses of USD 17 million should be recognized regarding Irkutsk GridCo CGU. As at 31 December 2020 no
impairment losses regarding CGUs described above were recognised.
The following key assumptions were used to determine the recoverable amount of the Coal CGU:
Year ended 31 December
2021
2020
Sales volumes of coal in 2022/2021
Expected growth of sales volumes of coal till 2031/2030
Weighted average price for coal in 2022/2021
Weighted average price growth after 2022/2021
Post-tax discount rate
13,889 ths tonnes
12%
USD 13 (RUB 930)
2%-4%
13.0%
12,885 ths tonnes
12%
USD 12 (RUB 890)
4%
12.5%
The recoverable amount of the Coal CGU is particularly sensitive to changes in forecast of sales volumes,
coal prices and applicable discount rates. A 1% increase of the discount rate applied would have resulted in
the decrease in the recoverable amount of Coal CGU but would not lead to an impairment.
The following key assumptions were used to determine the recoverable amount of the Irkutsk GridCo CGU:
Sales volumes of electricity transmission in 2022/2021
Expected growth of sales volumes till 2031/2030
Tariffs for electricity transmission in 2022/2021
Tariffs growth till 2031/2030
Post-tax discount rate
Year ended 31 December
2021
2020
51 mln MWh
10%
USD 6-9
(RUB 445-665)
42%
12.5%
50 mln MWh
10%
USD 6-9
(RUB 400-629)
42%
12.0%
The anticipated price/tariffs growth included in the cash flow projections for the years from 2022 to 2031
have been based on the publicly available forecasts of Ministry of Economic Development of the
Russian Federation.
The recoverable amounts estimated at 31 December 2021 and 31 December 2020 include cash flows from
sales of electricity transmission to Taishet aluminium smelter.
The recoverable amount of the Irkutsk GridCo CGU is also particularly sensitive to changes in forecast
electricity transmission volumes and tariffs, as well as applicable discount rates.
170
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The following key assumptions were used to determine the recoverable amount of the CHPs CGU:
Electricity sales volumes in 2022/2021
Electricity sales volumes growth till 2031/2030
Electricity sales prices in 2022/2021
Electricity sales prices growth till 2031/2030
Sales volumes of heat in 2021-2030/2022-2031
Heat tariffs in 2022/2021
Tariffs growth till 2031/2030
Post-tax discount rate
Year ended 31 December
2021
2020
29 mln MWh
5%
USD 7-27
(RUB 544-2,011)
37%-42%
20 mln Gcal
USD 16 (RUB 1,211)
42%
13.0%
27 mln MWh
5%
USD 8-26
(RUB 568-1,916)
40%-42%
20 mln Gcal
USD 16 (RUB 1,186)
67%
13.0%
The recoverable amount of CHP CGU is particularly sensitive to changes in forecast electricity sales prices
as well as applicable discount rates.
Additionally, management identified specific items of property, plant and equipment that are not considered
to be recoverable amounting to USD 41 million (2020: USD 49 million). No further impairment of property,
plant and equipment or reversal of previously recorded impairments was identified.
(d)
Security
The carrying value of property, plant and equipment which is subject to lien under loan agreements was
USD 1,048 million at 31 December 2021 (31 December 2020: USD 1,086 million) (note 17).
(e) Hydro assets
As disclosed in note 11(a)(i), the Group regularly performs an independent valuation of its hydro assets. As
at 31 December 2021 a valuation by external independent appraiser was not performed because based on
management’s analysis, the fair value of hydro assets approximated their carrying amount at that date. As at
31 December 2020 the independent appraiser estimated the fair value of hydro assets at USD 3,443 million
with an equity effect of USD 230 million and revaluation loss of USD nil million recognised in profit or loss.
The valuation analysis was primarily based on the cost approach to determine depreciated replacement cost
as it is the most reliable method to estimate value for assets that do not have an active market and do not
generate an identifiable revenue stream by asset. This method considers the cost to reproduce or replace the
property, plant and equipment, adjusted for physical depreciation, functional and economic obsolescence.
Depreciated replacement cost was estimated based on internal sources and, where available, analysis of the
Russian and international markets for similar property, plant and equipment. Various market data were
collected from published information, catalogues, statistical data etc.
In addition, cash flow testing was conducted to identify if there is any economic obsolescence of the hydro assets.
Forecasts of net cash flows were determined based on the actual results for the preceding years and approved
budgets. Based on the analysis results, there was no economic obsolescence as at 31 December 2021 or 2020.
The fair value measurement for hydro assets have been categorised as Level 3 fair values based on the inputs
to the valuation techniques used.
Net book value as at 31 December 2021 according to the cost model amounted to USD 358 million
(31 December 2020: USD 333 million).
(f)
Leases
The Group assesses whether a contract is or contains a lease based on whether the contract conveys a right
to control the use of an identified asset for a period of time in exchange for consideration. At inception or on
reassessment of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease and non-lease component on the basis of their relative stand-alone prices. However,
for the leases of properties in which Group acts as a lessee, the Group does not separate non-lease components
and account for the lease and non-lease components as a single lease component.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The Group applies judgement to determine the lease term for some lease contracts in which it is a lessee that
include renewal options, the assessment of whether the Group is reasonably certain to exercise such options
impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets
recognised.
In determining the enforceable period (i.e. the maximum lease term), the Group considers whether both it
and the lessor has a right to terminate the lease without permission from the other party and, if so, whether
that termination would result in more than an insignificant penalty. If a more than insignificant penalty exists,
then the enforceable period extends until the point at which a no more than an insignificant penalty exists.
The Group leases many assets, including land, properties and production equipment. The Group recognises
a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost and subsequently measured at cost less any accumulated depreciation and impairment losses
and adjusted for certain remeasurements of the lease liability as required by IFRS 16.
The cost comprises the initial amount of the lease liability adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and
remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by
the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase
option. In that case the right-of-use asset is depreciated over the useful life of the underlying asset, which is
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability.
The Group presents right-of-use assets as part of property plant and equipment, the same line item as it presents
underlying assets of the same nature that it owns. Additions to right-of-use assets were in the amount of
USD 43 million during the year ended 31 December 2021 (31 December 2020: USD 68 million). The
carrying amounts of right-of-use assets are presented below.
USD million
Balance at 1 January 2021
Balance at 31 December 2021
Land and
buildings
Property, plant and equipment
Machinery and
equipment
Total
67
36
4
6
71
42
Total depreciation charges related to the right-of-use assets for the year ended 31 December 2021 amount to
USD 15 million (31 December 2020: USD 20 million).
USD 15 million of right-of-use assets has been impaired during the year ended 31 December 2021
(31 December 2020: USD 2 million). The Group’s total cash outflow for leases was in the amount of
USD 26 million for the year ended 31 December 2021 (31 December 2020: USD 29 million).
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing
rate as the discount rate.
In accordance with IFRS 16 variable payments which do not depend on index or rate, e.g. which do not
reflect changes in market rental rates, should not be included in the measurement of lease liability. In respect
of municipal or federal land leases where lease payments are based on cadastral value of the land plot and do
not change until the next revision of that value or the applicable rates (or both) by the authorities, the Group
has determined that, under the current revision mechanism, the land lease payments cannot be considered as
either variable that depend on index or rate or in-substance fixed, and therefore these payments are not
included in the measurement of the lease liability. Future cash outflows to which the Group is potentially
exposed that are not recognised in right-to-use assets and are not reflected in the measurement of lease
liabilities and which arise from variable lease payments not linked to index or rate are in the amount of
USD 199 million as at 31 December 2021 (31 December 2020: USD 173 million).
172
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease
payment made. It is remeasured when there is a change in future lease payments arising from a change in an
index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee,
or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain
to be exercised or a termination option is reasonably certain not to be exercised.
The Group presents lease liabilities as part of other payables and other non-current liabilities in the statement
of financial position depending on the period to which future lease payments relate. The total non-current part
of lease liabilities as at 31 December 2021 amounted to USD 45 million (31 December 2020: USD 57 million).
Total interest costs on leases recognised for the year ended 31 December 2021 amount to USD 7 million
(31 December 2020: USD 9 million).
The Group does not recognise right-of-use assets and lease liabilities for some leases of low-value assets
and short-term leases. The Group recognises the lease payments associated with these leases as an expense
on a straight-line basis over the lease term. The expense relating to short-term leases in the amount of
USD 18 million is included in cost of sales or administrative expenses depending on type of underlying asset
for the year ended 31 December 2021 (31 December 2020: USD 18 million).
When the Group is an intermediate lessor the sub-leases are classified with reference to the right-of the use
asset arising from the head lease, not with reference to the underlying asset.
12. Goodwill and intangible assets
(a) Accounting policy
(i)
Goodwill
On the acquisition of a subsidiary, an interest in a joint venture or an associate or an interest in a joint arrangement
that comprises a business, the identifiable assets, liabilities and contingent liabilities of the acquired business
(or interest in a business) are recognised at their fair values unless the fair values cannot be measured reliably.
Where the fair values of assumed contingent liabilities cannot be measured reliably, no liability is recognised
but the contingent liability is disclosed in the same manner as for other contingent liabilities.
The Group accounts for business combinations using the acquisition method when the acquired set of
activities and assets meets the definition of a business and control is transferred to the Group. In determining
whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and
activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has
the ability to produce outputs.
The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an
acquired set of activities and assets is not a business. The optional concentration test is met if substantially
all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar
identifiable assets.
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
Goodwill arises when the cost of acquisition exceeds the fair value of the Group’s interest in the net fair
value of identifiable net assets acquired. The Group measures goodwill at the acquisition date as the fair
value of the consideration transferred; plus the recognised amount of any non-controlling interests in the
acquiree less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed. The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in profit or loss. Transaction costs, other than those
associated with the issue of debt or equity securities, that the Group incurs in connection with a business
combination are expensed as incurred.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Goodwill is not amortised but is tested for impairment annually. For this purpose, goodwill arising on a
business combination is allocated to the cash-generating units expected to benefit from the acquisition and
any impairment loss recognised is not reversed even where circumstances indicate a recovery in value.
In respect of associates or joint ventures, the carrying amount of goodwill is included in the carrying amount
of the interest in the associate and joint venture and the investment as a whole is tested for impairment
whenever there is objective evidence of impairment. Any impairment loss is allocated to the carrying amount
of the interest in the associate and joint venture.
When the fair value of the Group’s share of identifiable net assets acquired exceeds the cost of acquisition,
the difference is recognised immediately in profit or loss.
(ii)
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognised in profit or loss when incurred.
Development activities involve a plan or design for the production of new or substantially improved products
and processes. Development expenditure is capitalised only if development costs can be measured reliably,
the product or process is technically and commercially feasible, future economic benefits are probable and
the Group intends to and has sufficient resources to complete development and to use or sell the asset. The
expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly
attributable to preparing the asset for its intended use and capitalised borrowing costs. Other development
expenditure is recognised in profit or loss when incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated
impairment losses (refer to note 11(c)).
(iii) Other intangible assets
Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost
less accumulated amortisation and accumulated impairment losses (refer to note 11(c)).
(iv)
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, including expenditure on internally generated
goodwill and brands, is recognised in profit or loss when incurred.
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(v)
Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible
assets, other than goodwill, from the date that they are available for use. The estimated useful lives are as
follows:
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Other intangible assets
5 years;
2-8 years.
The amortisation method, useful lives and residual values are reviewed at each financial year end and
adjusted if appropriate.
174
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FINANCIAL STATEMENTS
(b) Disclosure
METALS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
USD million
Cost
Balance at 1 January 2020
Additions
Disposals
Foreign currency translation
Balance at 31 December 2020
Additions
Disposals
Foreign currency translation
Balance at 31 December 2021
Amortisation and impairment losses
Balance at 1 January 2020
Amortisation charge
Disposals
Foreign currency translation
Balance at 31 December 2020
Amortisation charge
Impairment
Foreign currency translation
Balance at 31 December 2021
Net book value
At 1 January 2020
At 31 December 2020
At 31 December 2021
Goodwill
Other intangible
assets
Total
2,686
33
–
(234)
2,485
14
–
(8)
2,491
(450)
–
–
–
(450)
–
–
–
(450)
2,236
2,035
2,041
645
27
(48)
(19)
605
40
(3)
3
645
(505)
(10)
48
8
(459)
(11)
(14)
(3)
(487)
140
146
158
3,331
60
(48)
(253)
3,090
54
(3)
(5)
3,136
(955)
(10)
48
8
(909)
(11)
(14)
(3)
(937)
2,376
2,181
2,199
Goodwill additions for the years ended 31 December 2021 and 31 December 2020 relate to acquisition of
certain companies engaged in production and infrastructure areas and was determined as the difference
between the consideration paid and the fair value of acquired assets and liabilities.
(c)
Amortisation charge
The amortisation charge is included in cost of sales and administrative expenses in consolidated statement of
profit or loss and other comprehensive income.
(d)
Impairment testing of goodwill and other intangible assets
For the purposes of impairment testing, goodwill is allocated to the following CGUs. These units represent
the lowest level within the Group at which the goodwill is monitored for internal management purposes.
The aggregate carrying amounts of goodwill allocated to each business, and the related impairment losses
recognised, are as follows:
USD million
UC RUSAL
Angara HPPs (Irkutskenergo)
Strikeforce Mining and
Resources Limited
Allocated
goodwill
2021
Accumulated
impairment
loss
2021
Allocated
goodwill
2020
Accumulated
impairment
loss
2020
2,269
221
1
2,491
(449)
–
(1)
(450)
2,273
211
1
2,485
(449)
–
(1)
(450)
The aluminium segment represents the lowest level within UC RUSAL at which goodwill is monitored for
internal management purposes. The recoverable amount represents value in use as determined by discounting
the future cash flows generated from the continuing use of the plants within UC RUSAL’s aluminium
segment.
Similar considerations to those described above in respect of assessing the recoverable amount of property,
plant and equipment apply to goodwill.
At 31 December 2021, management analysed changes in the economic environment and developments in the
aluminium industry and the Group’s operations since 31 December 2020 and performed an impairment test
for goodwill at 31 December 2021 using the following assumptions to determine the recoverable amount of
the segment:
•
•
Total production was estimated based on average sustainable production levels of 3.8 million metric
tonnes of primary aluminium, of 8.4 million metric tonnes of alumina and of 16.7 million metric tonnes
of bauxite. Bauxite and alumina will be used primarily internally for production of primary aluminium;
The aluminium and alumina prices were based on the long-term aluminium and alumina price outlook
derived from available industry and market sources and were as follows:
Aluminium sales prices, based on the long-term
aluminium price outlook, USD per tonne
Alumina sales prices, based on the long-term
alumina price outlook, USD per tonne
Nominal foreign currency exchange rates,
RUB per 1 USD
Inflation in RUB
Inflation in USD
2022
2023
2024
2025
2026
2,623
2,476
2,371
2,375
2,411
345
319
316
320
352
72.2
6.6%
4.0%
74.7
4.5%
2.1%
76.8
3.6%
2.1%
79.2
4.2%
2.0%
80.7
3.3%
2.1%
Operating costs were projected based on the historical performance adjusted for inflation;
•
•
•
Nominal foreign currency exchange rates applied to convert operating costs of the Group denominated
in RUB into USD and inflation in RUB and USD assumed in determining recoverable amounts were
as above;
The pre-tax discount rate was estimated in nominal terms based on the weighted average cost of capital
basis and was 11.5%;
A terminal value was derived following the forecast period assuming a 2.0% annual growth rate.
Values assigned to key assumptions and estimates used to measure the units’ recoverable amount were based
on external sources of information and historical data. Management believes that the values assigned to the
key assumptions and estimates represented the most realistic assessment of future trends. The results were
particularly sensitive to the following key assumptions:
•
•
•
A 5% reduction in the projected aluminium and alumina price levels would result in a decrease in the
recoverable amount by 18% but would not lead to an impairment;
A 5% increase in the projected level of electricity and alumina costs in the aluminium production
would have resulted in a 6% decrease in the recoverable amount but would not lead to an impairment;
A 1% increase in the discount rate would have resulted in a 9% decrease in the recoverable amount
but would not lead to an impairment.
Based on results of impairment testing of goodwill, management concluded that no impairment should be
recorded in the consolidated financial statements as at 31 December 2021.
176
177
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
At 31 December 2020, management analysed changes in the economic environment and developments in the
aluminium industry and the Group’s operations since 31 December 2019 and performed an impairment test
for goodwill at 31 December 2020 using the following assumptions to determine the recoverable amount of
the segment:
•
•
Total production was estimated based on average sustainable production levels of 3.8 million metric
tonnes of primary aluminium, of 8.5 million metric tonnes of alumina and of 15.7 million metric tonnes
of bauxite. Bauxite and alumina will be used primarily internally for production of primary aluminium;
The aluminium and alumina prices were based on the long-term aluminium and alumina price outlook
derived from available industry and market sources and were as follows:
Aluminium sales prices, based on the long-term
aluminium price outlook, USD per tonne
Alumina sales prices, based on the long-term
alumina price outlook, USD per tonne
Nominal foreign currency exchange rates,
RUB per 1USD
Inflation in RUB
Inflation in USD
2021
2022
2023
2024
2025
1,919
1,906
1,927
1,955
2,003
295
304
307
318
335
73.2
3.8%
1.5%
71.9
4.0%
1.8%
71.2
3.9%
2.2%
72.5
4.0%
1.9%
74.1
4.1%
2.1%
Operating costs were projected based on the historical performance adjusted for inflation. Nominal foreign
currency exchange rates applied to convert operating costs of the Group denominated in RUB into USD and
inflation in RUB and USD assumed in determining recoverable amounts were as above:
•
•
The pre-tax discount rate was estimated in nominal terms based on the weighted average cost of capital
basis and was 11.4%;
A terminal value was derived following the forecast period assuming a 2.0% annual growth rate.
Values assigned to key assumptions and estimates used to measure the units’ recoverable amount was based
on external sources of information and historical data. Management believes that the values assigned to the
key assumptions and estimates represented the most realistic assessment of future trends. The results were
particularly sensitive to the following key assumptions:
•
•
•
A 5% reduction in the projected aluminium and alumina price levels would result in a decrease in the
recoverable amount by 33% but would not lead to an impairment;
A 5% increase in the projected level of electricity and alumina costs in the aluminium production
would have resulted in a 25% decrease in the recoverable amount but would not lead to an impairment;
A 1% increase in the discount rate would have resulted in a 11% decrease in the recoverable amount
but would not lead to an impairment.
Based on results of impairment testing of goodwill, management concluded that no impairment should be
recorded as at 31 December 2020.
POWER
Goodwill primarily resulted from the acquisition of Irkutskenergo’s HPPs. For the purposes of impairment
testing, goodwill is allocated to the Angara HPPs CGU. It represents the lowest level within the Group at
which goodwill is monitored for internal management purposes.
Management performs impairment testing of goodwill annually at 31 December of the respective calendar year.
The recoverable amount of Angara HPPs in 2021 and 2020 was determined by reference to its value in use
derived by discounting of the future cash flows generated from continuing use of production facilities.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The following key assumptions were used to determine the recoverable amount of the Angara HPPs cash-
generating unit at 31 December 2021:
•
•
•
•
The sales volumes were projected based on the approved budgets for 2021. In particular, the sales volumes
of electricity in 2022 were planned at the level of 53 million MWh with a decline by 7% till 2031.
Sales prices were based on the long-term price outlook derived from the available industry and market
sources. The prices for electricity were estimated at the levels of USD 0.6-11.9 (RUB 45-875) per
MWh depending on market segment in 2022 and increased by 37-40% respectively till 2031. Operating
costs were projected based on the historical performance and the anticipated increase during the
projected period was in line with inflation.
The post-tax discount rate was estimated in nominal terms based on the weighted average cost of
capital amounted to 13.0%.
A terminal value was derived following the forecast period assuming a 4% annual growth rate.
The following key assumptions were used to determine the recoverable amount of the Angara HPPs cash-
generating unit at 31 December 2020:
•
•
•
•
The sales volumes were projected based on the approved budgets for 2021. In particular, the sales
volumes of electricity in 2021 were planned at the level of 48 million MWh with an insignificant
decline by 1% till 2030.
Sales prices were based on the long-term price outlook derived from the available industry and market
sources. The prices for electricity were estimated at the levels of USD 0.5-11.5 (RUB 39-846) per
MWh depending on market segment in 2021 and increased by 19-40% respectively till 2030. Operating
costs were projected based on the historical performance and the anticipated increase during the
projected period was in line with inflation.
The post-tax discount rate was estimated in nominal terms based on the weighted average cost of
capital amounted to 12.9%.
A terminal value was derived following the forecast period assuming a 4% annual growth rate.
Reasonable possible changes in key assumptions did not lead to an impairment in either 2021 or 2020.
13.
Interests in associates and joint ventures
An associate is an entity in which the Group has significant influence, but not control or joint control, over
its management, including participation in the financial and operating policy decisions.
A joint venture is an arrangement whereby the Group and other parties contractually agree to share control
of the arrangement and have rights to the net assets of the arrangement.
An investment in an associate or a joint venture is accounted for in the consolidated financial statements
under the equity method, unless it is classified as held for sale (or included in a disposal group that is classified
as held for sale). Under the equity method, the investment is initially recorded at cost, adjusted for any excess
of the Group’s share of the acquisition-date fair values of the investee’s identifiable net assets over the cost
of the investment (if any). Thereafter, the investment is adjusted for the post acquisition change in the
Group’s share of the investee’s net assets and any impairment losses relating to the investment. Any
acquisition-date excess over cost, the Group’s share of the post-acquisition, post-tax results of the investees
and any impairment losses for the year are recognised in the consolidated statement of profit or loss and other
comprehensive income, whereas the Group’s share of the post-acquisition post-tax items of the investees’
other comprehensive income is recognised in the consolidated statement of other comprehensive income, the
Group’s share of the post-acquisition results recorded directly in the statement of changes in equity is
recognized in the consolidated statement of changes in equity as the share of other changes in equity of
associate.
When the Group’s share of losses exceeds its interest in the associate or the joint venture, the Group’s interest
is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of the investee.
178
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Unrealised profits and losses resulting from transactions between the Group and its associates and joint
venture are eliminated to the extent of the Group’s interest in the investee, except where unrealised losses
provide evidence of an impairment of the asset transferred, in which case they are recognised immediately
in profit or loss.
If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is
not remeasured. Instead, the investment continues to be accounted for under the equity method.
In all other cases, when the Group ceases to have significant influence over an associate or joint control over
a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or
loss being recognised in profit or loss. Any interest retained in that former investee at the date when
significant influence or joint control is lost is recognised at fair value and this amount is regarded as the fair
value on initial recognition of a financial asset.
In the Group’s statement of financial position, investments in associates and joint ventures are stated at cost
less impairment losses, unless classified as held for sale (or included in a disposal group that is classified as
held for sale).
An impairment loss in respect of an investment in an associate or joint venture is calculated as the difference
between its carrying amount after application of the equity method of accounting and its recoverable amount.
The recoverable amount of such investment is the greater of its value in use and its fair value less cost to sell.
In determining the value in use of the investment the Group estimates: (a) its share of the present value of
the estimated future cash flows expected to be generated by the investee, including the cash flows from the
operations of the investee and the proceeds on the ultimate disposal of the investment; or (b) the present value
of the estimated future cash flows expected to arise from the dividends to be received from the investee and from
its ultimate disposal depending on which available information with respect to each investee is more reliable.
An impairment loss is reversed to the extent that the recoverable amount of the investment subsequently
increases and the resulting carrying amount does not exceed the carrying amount that would have been
determined, after application of the equity method, had no impairment loss previously been recognised.
Balance at the beginning of the year
Group’s share of profits, impairment and reversal of impairment
Group’s share of equity transactions
Acquisition and contribution to investments
Partial disposal of investment in associate
Return of prepayment for shares
Dividends
Foreign currency translation
Balance at the end of the year
Goodwill included in interests in associates
31 December
2021
USD million
2020
USD million
3,832
1,802
129
9
(313)
–
(1,452)
21
4,028
2,300
4,248
971
–
9
–
(11)
(718)
(667)
3,832
2,034
The following list contains only the particulars of associates, all of which are corporate entities, which
principally affected the results or assets of the Group.
Name of associate/
joint venture
Place of
incorporation
and operation
PJSC MMC Norilsk
Russian Federation
Nickel
Queensland Alumina
Australia
Limited
BEMO project
Cyprus,
Russian Federation
Particulars of issued
and paid up capital
153,654,624 shares,
RUB1 par value
2,212,000 shares,
AUD 2 par value
BOGES Limited and
BALP Limited – 10,000 shares
EUR 1.71 each
*
Interest attributable to the shareholders of the Parent Company.
Proportion of
ownership interest
Group’s
Group’s
nominal
effective
interest
interest*
15.01%
26.25%
11.38%
20%
28.44%
50%
Principal
activity
Nickel and other
metals production
Production of alumina
under a tolling agreement
Energy /
Aluminium production
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The summary of the consolidated financial statements of associates and joint ventures for the year ended
31 December 2021 is presented below:
PJSC MMC
Norilsk Nickel
Queensland Alumina
Limited
BEMO project
Other associates and
joint ventures
Group
share
USD
million
5,590
2,605
(2,788)
(2,133)
100%
USD
million
13,565
9,870
(10,564)
(8,083)
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
3,274
4,788
Group
share
USD
million
185
34
(103)
(116)
–
100%
USD
million
933
176
(448)
(580)
81
Group
share
USD
million
1,362
152
(862)
(57)
100%
USD
million
2,548
293
(1,724)
(115)
595
1,002
Group
share
USD
million
234
85
(91)
(69)
159
100%
USD
million
562
198
(182)
(143)
435
PJSC MMC
Norilsk Nickel
Queensland Alumina
Limited
BEMO project
Group
share
USD
million
100%
USD
million
Group
share
USD
million
100%
USD
million
Group
share
USD
million
100%
USD
million
Other associates and
joint ventures
Group
share
USD
million
100%
USD
million
4,711
17,852
111
555
487
974
260
761
1,762
6,974
24
98
1,786
7,072
–
–
–
(30)
(5)
(35)
58
(3)
55
97
(7)
90
(18)
–
(18)
68
(3)
65
Revenue
Profit/(loss) and
impairment from
continuing operations
Other comprehensive
income/(loss)
Total comprehensive
income/(loss)
The summary of the consolidated financial statements of associates and joint ventures for the year ended
31 December 2020 is presented below:
PJSC MMC
Norilsk Nickel
Queensland
Alumina Limited
BEMO project
Group
share
USD
million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
5,206
2,381
(2,959)
(1,506)
100%
USD
million
12,147
8,559
(10,619)
(5,412)
Net assets
3,122
4,675
Group
share
USD
million
199
35
(92)
(142)
–
100%
USD
million
777
181
(359)
(478)
121
Group
share
USD
million
1,420
132
(945)
(67)
540
100%
USD
million
2,680
255
(1,890)
(134)
911
PJSC MMC
Norilsk Nickel
Queensland
Alumina Limited
Group
share
USD
million
100%
USD
million
Group
share
USD
million
100%
USD
million
BEMO project
Group
share
USD
million
100%
USD
million
Other associates
and joint ventures
Group
share
USD
million
100%
USD
million
248
70
(101)
(47)
170
428
169
(201)
(117)
279
Other associates
and joint ventures
Group
share
USD
million
100%
USD
million
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4,325
15,545
123
617
364
728
258
748
Revenue
Profit/(loss) and
impairment from
continuing
operations
Other comprehensive
930
3,634
income/(loss)
(562)
(699)
Total comprehensive
income/(loss)
368
2,935
–
–
–
(20)
1
(19)
51
(95)
(44)
52
(189)
(137)
(10)
(10)
(20)
61
(20)
41
180
181
FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(a)
PJSC MMC Norilsk Nickel
In 2021 the Group has participated in the repurchase of Norilsk Nickel shares to raise additional funds to
finance its own investment programme. The Group sold 3,691,465 shares for RUB 27,780 per share, with
the aggregate consideration of USD 1,418 million. The carrying value of the shares sold amounted to
USD 313 million, and USD 613 million of currency translation reserve attributed to the shares sold was
reclassified to profit/(loss) for the period, resulting in net gain of USD 492 million recognised in the
consolidated statement of income. The effective interest in Norilsk Nickel held by the Metals segment after
the transaction comprised 26.39%, the average effective interest for the year 2021 was 27.11%.
The Group’s investment in Norilsk Nickel is accounted for using equity method and the carrying value as at
31 December 2021 and 31 December 2020 amounted USD 3,274 million and USD 3,122 million,
respectively. The Group’s share of profit of Norilsk Nickel was USD 1,762 million, other comprehensive
income was USD nil million, the foreign currency translation gain of USD 24 million, other effects related to
transactions with non-controlling interest owners of USD 129 million for the year ended 31 December 2021.
As at 31 December 2020 Group’s associate PJSC MMC Norilsk Nickel recognized a liability on the
execution of a put option held by owners of 13.3% non-controlling interest in the share capital in
LLC “GRK “Bystrinskoye” in the amount of USD 428 million. Since the non-controlling interest owners did
not exercise their right under the put option before its expiry date of 31 December 2021, PJSC MMC Norilsk
Nickel derecognised the liability on the execution of the put option as at 31 December 2021. PJSC MMC
Norilsk Nickel recorded derecognition of the liability directly in the consolidated statement of changes in
equity as Other effects related to transactions with non-controlling interest owners in the amount of
USD 490 million, which was its fair value at 31 December 2021 immediately before derecognition. The
Group recognized its share of this change of interest in the net assets of the associate directly in the
consolidated statement of changes in equity as Share of equity transactions of an associate in the amount
USD 129 million.
The market value amounted USD 12,395 million and USD 14,123 million as at 31 December 2021 and
31 December 2020, respectively, and is determined by multiplying the quoted bid price per share on the
Moscow Exchange on the year-end date by the number of shares held by the Group.
(b) Queensland Alumina Limited
The carrying value of the Group’s investment in Queensland Alumina Limited as at both 31 December 2021
and 31 December 2020 amounted to USD nil million. At 31 December 2021 management has not identified
any impairment reversal indicators relating to the Group’s investment in QAL and as a result no detailed
impairment testing was performed in relation to this investment.
(c)
BEMO project
The carrying values of the Group’s investment in BEMO project as at 31 December 2021 and 31 December
2020 amounted to USD 595 million and USD 540 million, respectively.
For the purposes of impairment testing, the BEMO project was separated into two cash generating units –
the Boguchansky Aluminium Smelter (“BoAZ’) and the Boguchansky Hydro Power Plant (“BoGES”).
The recoverable amount was determined by discounting the expected future net cash flows of each cash
generating unit.
At 31 December 2021 management did not identify any impairment indicators relating to the Group’s
investment in BoGES nor any impairment reversal indicators relating to investments in BoAZ and as a result
no detailed impairment testing was performed in relation to this investment.
At 31 December 2021, accumulated losses of USD 51million (2020: USD 443 million) related to impairment
charges at BoAZ have not been recognised because the Group’s investment has already been fully written
down to USD nil million.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Additional financial information of the Group’s effective interest in BEMO project for the year ended
31 December 2021 and 31 December 2020 is presented below:
Cash and cash equivalents
Current financial liabilities
Non-current financial liabilities
Depreciation and amortisation
Interest income
Interest expense
Income tax expense
14.
Inventories
31 December
2021
USD million
31 December
2020
USD million
32
(25)
(770)
(53)
1
(13)
(14)
30
(43)
(859)
(17)
1
(15)
(13)
Inventories are measured at the lower of cost or net realisable value.
The cost of inventories is determined under the weighted average cost method, and includes expenditure
incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing
them to their existing location and condition. In the case of manufactured inventories and work in progress,
cost includes an appropriate share of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost
of completion and selling expenses.
Production costs include mining and concentrating costs, smelting, treatment and refining costs, other cash
costs and depreciation and amortisation of operating assets.
Raw materials and consumables
Work in progress
Finished goods and goods for resale
Write-down to net realisable value
31 December
2021
USD million
2020
USD million
1,613
786
1,510
3,909
(178)
3,731
1,127
591
778
2,496
(157)
2,339
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Inventories at 31 December 2021 and 31 December 2020 are stated at cost.
Inventories with a carrying value of USD 781 million and USD 738 million were pledged as collateral for
secured bank loans at 31 December 2021 and 31 December 2020, respectively (note 17).
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15. Non-derivative financial instruments
Non-derivative financial instruments comprise investments in securities, trade and other receivables
(excluding prepayments and tax assets), cash and cash equivalents, loans and borrowings and trade and other
payables (excluding advances received and tax liabilities).
Non-derivative financial instruments, except for trade and other receivables, are recognised initially at fair value
plus any directly attributable transaction costs. Trade and other receivables are recognised at transaction price.
A financial instrument is recognised when the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the
financial assets expire or if the Group transfers the financial asset to another party without retaining control
or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the Group’s
obligations specified in the contract expire or are discharged or cancelled.
IFRS 9 Financial Instruments sets out requirements for recognising and measuring financial assets, financial
liabilities and some contracts to buy or sell non-financial items. The details of significant accounting policies
are set out below.
182
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Classification and measurement of financial assets and financial liabilities
IFRS 9 specifies three principal classification categories for financial assets: measured at amortised cost, fair
value through other comprehensive income (“FVOCI”) and fair value through profit or loss (“FVTPL”). The
classification of financial assets under IFRS 9 is generally based on the business model in which a financial
asset is managed and its contractual cash flow characteristics. Under IFRS 9, derivatives embedded in
contracts where the host is a financial asset in the scope of the standard are never bifurcated. Instead, the
hybrid financial instrument as a whole is assessed for classification.
The Group’s financial assets mostly fall within the category of financial assets measured at amortised cost.
The only exception is derivative financial assets measured at fair value through profit or loss and cash flow
hedges accounted through other comprehensive income (note 19) and other investments measured at fair
value through profit or loss (note 15(e)). The same applies to the Group’s financial liabilities.
(a)
Impairment of trade receivables
Under IFRS 9, loss allowances (expected credit losses – ECL) are measured on either of the following bases:
•
•
12-month ECLs: these are ECLs that result from possible default events within the 12 months after the
reporting date; and
lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a
financial instrument.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for bank balances for which
credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not
increased significantly since initial recognition. The Group measures loss allowances for trade receivables at
an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment and
including forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
30 days past due.
The Group considers a financial asset to be in default when:
•
•
The borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the
Group to actions such as realising security (if any is held); or
The financial asset is more than 90 days past due, but additional analysis is conducted for each such
receivable and assessment is updated accordingly.
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of
all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract
and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of
the financial asset in case of long-term assets.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount
of the assets. Impairment losses related to trade and other receivables are presented as part of net other
operating expenses.
The following analysis provides further detail about the calculation of ECLs related to trade receivables.
The Group uses an allowance matrix to measure the ECLs of trade receivables from the customers. Loss rates
are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through
successive stages of delinquency to write-off. The ECLs were calculated based on actual credit loss
experience over the past two years. The Group performed the calculation of ECL rates separately for the
customers of each key trading company of the Group. Exposures within each trading company were not
further segmented except for individually significant customers which bear specific credit risk depending on
the repayment history of the customer and relationship with the Group.
METALS
The following table provides information about determined ECLs rates for trade receivables both as at
1 January 2021 and 31 December 2021.
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
POWER
Weighted-average loss rate
31 December
2021
1 January
2021
1%
18%
45%
52%
63%
1%
4%
10%
71%
86%
Credit-
impaired
No
No
No
No
Yes
The following table provides information about determined ECLs rates for trade receivables both as at
1 January 2021 and 31 December 2021.
Current (not past due)
1-90 days past due
90-180 days past due
More than 180 days past due
Weighted-average loss rate
31 December
2021
1 January
2021
1%
1%
30%
100%
1%
1%
30%
100%
Credit-
impaired
No
No
No
Yes
Fluctuations reflect differences between economic conditions during the period over which the historical data
has been collected, current conditions and the Group’s view of economic conditions over the expected lives
of the receivables.
Impairment losses in respect of trade receivables are recorded using an allowance account unless the Group
is satisfied that recovery of the amount is remote, in which case the impairment loss is written off against
trade receivables directly.
184
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FINANCIAL STATEMENTS
(b)
Trade and other receivables and advances paid
Trade receivables from third parties
Trade receivables from related parties, including
Related parties – companies capable of exerting significant influence
Related parties – other
Related parties – associates and joint ventures
VAT recoverable
Advances paid to third parties
Advances paid to related parties, including
Related parties – companies capable of exerting significant influence
Related parties – associates and joint ventures
Other receivables from third parties
Other taxes receivable
Income tax receivable
Dividends receivable from related parties
Related parties – associates and joint ventures
Other current assets
Impairment of receivables
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
31 December
2021
USD million
2020
USD million
949
126
105
2
19
419
137
109
–
109
171
19
18
827
827
9
2,784
(129)
2,655
610
63
50
2
11
364
120
67
1
66
224
30
21
–
–
8
1,507
(76)
1,431
(i)
Ageing analysis
Included in trade and other receivables are trade receivables (net of allowance for doubtful debts) with the
following ageing analysis as of the statement of financial position dates:
METALS
Current
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due over 90 days
Amounts past due
POWER
Current
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-180 days
Past due over 180 days
Amounts past due
31 December
2021
USD million
2020
USD million
833
16
–
1
11
28
861
372
77
2
1
11
91
463
31 December
2021
USD million
2020
USD million
160
11
6
4
7
3
31
191
146
14
6
6
6
1
33
179
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Trade receivables are on average due within 60 days from the date of billing. The receivables that are neither
past due nor impaired (i.e. current) relate to a wide range of customers for whom there was no recent history
of default.
The Group has concluded that there is no material impact of COVID-19 related matters described in note 1(e)
on the expected credit losses assessment as at 31 December 2021.
Further details of the Group’s credit policy are set out in note 20(e).
(c)
Trade and other payables and advances received
Accounts payable to third parties
Accounts payable to related parties, including
Related parties – companies capable of exerting significant influence
Related parties – associates and joint ventures
Advances received from third parties
Other payables and accrued liabilities
Income tax payable
Other taxes payable
31 December
2021
USD million
2020
USD million
896
103
6
97
1,163
267
62
315
2,806
687
52
3
49
903
224
28
262
2,156
All of the trade and other payables are expected to be settled or recognised as income within one year or are
repayable on demand.
(d) Cash and cash equivalents
Bank balances, USD
Bank balances, RUB
Bank balances, EUR
Bank balances, other currencies
Short-term bank deposits
Other cash equivalents
Cash and cash equivalents in the consolidated statement
of cash flows
Restricted cash
Cash and cash equivalents in the consolidated statement
of financial position
31 December
2021
USD million
2020
USD million
549
402
85
75
1,213
4
2,328
2
2,330
1,027
701
109
33
679
–
2,549
13
2,562
As at 31 December 2021 and 31 December 2020 included in cash and cash equivalents was restricted cash
of USD 2 million and USD 13 million, respectively.
(e) Other non-current assets
Long-term deposits
Prepayment for subsidiary acquisition
Other non-current assets
31 December
2021
USD million
31 December
2020
USD million
139
73
46
258
111
–
22
133
In September 2020 the Group obtained control of PGLZ LLC by acquiring 99.9% of its shares. The Group
has determined that together the acquired inputs and processes significantly contribute to the ability to create
revenue and has concluded that the acquired set is a business. Total consideration paid amounted to
USD 71 million and was paid in cash as at 1 January 2020. Fair value of acquired assets and liabilities
amounted to USD 24 million from which USD 21 million related to property, plant and equipment.
186
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FINANCIAL STATEMENTS
(f)
Investments in equity securities measured at fair value through profit and loss
(g) Non-controlling interests
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The following table summarises the information relating to each of the Group`s subsidiaries that has material non-controlling interest:
As at 31 December 2021 the Group owns circa 7% of RusHydro shares, most of which were acquired by Rusal
subsidiaries through several transactions consummated from July 2020 till April 2021, for a total consideration
of USD 366 million, of which USD 291 million was incurred in 2021. The Group treats them as equity
securities measured at fair value through profit and loss.
16. Equity
(a)
Share capital, additional paid-in capital and transactions with shareholders
As at 31 December 2021 the Parent Company’s share capital is divided into 638,848,896 ordinary shares with
a nominal value of USD 0.00007 each. The Parent Company may also issue 75,436,818.286 ordinary shares.
As at 31 December 2021 and 31 December 2020 all issued ordinary shares were fully paid.
Change in effective interest in subsidiaries
In 2021, through certain transactions, the Group increased its effective interest in Irkutskenergo from 93.2%
to 98.03% for USD 44 million.
(b)
Treasury share reserve
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes
directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares
are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold
or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus
or deficit on the transaction is presented in additional paid-in capital.
The reserve for the Group’s treasury shares comprises the cost of the Parent Company’s shares held by the
Group. As at 31 December 2021 and 31 December 2020 the Group held 136,511,122 of its own shares.
(c)
Currency translation reserve
The currency translation reserve comprises all foreign exchange differences arising from the translation of
the consolidated financial statements of foreign operations. The reserve is dealt with in accordance with the
accounting policies set out in note 3(b).
(d) Other reserves
Other reserves include the cumulative unrealised actuarial gains and losses on the Group’s defined post-
retirement benefit plans, the effective portion of the accumulative net change in fair value of cash flow
hedges, the Group’s share of other comprehensive income of associates and cumulative unrealised gains and
losses on Group’s financial assets which have been recognised directly in other comprehensive income.
(e)
Dividends
During the years ended 31 December 2021 and 31 December 2020 the Group did not declare and pay dividends.
The Parent Company may distribute dividends from retained earnings and profit for the reporting period in
compliance with the current legislation of the Russian Federation and the provisions of its Charter.
(f)
Revaluation reserve
The revaluation reserve comprises the cumulative net change in the fair value of hydro assets at the reporting
date and is dealt with in accordance with the accounting policies set out in note 11(a)(i).
An independent valuation analysis of hydro assets was carried out as at 31 December 2020, the fair value of
hydro assets was estimated at USD 3,443 million (note 11(e)). As a result of this fair value valuation, the
Group recognised an additional revaluation reserve in the amount of USD 184 million net of tax (including
USD 180 million attributable to shareholders of the Parent Company).
31 December 2021
NCI percentage
Assets
Liabilities
Net assets
Carrying amount of NCI
Revenue
Profit
Other comprehensive income
Total comprehensive income
Profit attributable to NCI
Other comprehensive income attributable to NCI
Cash flows generated from operating activities
Cash flows generated from / (used in) investing activities
Cash flows (used in) / generated from financing activities
Net increase in cash and cash equivalents
31 December 2020
NCI percentage
Assets
Liabilities
Net assets
Carrying amount of NCI
Revenue
Profit
Other comprehensive income
Total comprehensive income
Profit attributable to NCI
Other comprehensive income attributable to NCI
Cash flows generated from operating activities
Cash flows generated from / (used in) investing activities
Cash flows used in financing activities
Net increase/(decrease) in cash and cash equivalents
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UC RUSAL
Irkutskenergo
Group
OJSC Irkutsk
Electric Grid
Company
Total
43.1%
20,422
(10,382)
10,040
4,329
11,994
3,225
627
3,852
1,391
269
1,146
490
(1,891)
(255)
1.97%
5,772
(3,462)
2,310
46
1,790
17
172
189
4
12
398
(409)
79
68
46.6%
534
(175)
359
161
345
(9)
–
(9)
(3)
–
36
(60)
26
2
4,536
1,392
281
1,673
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
UC RUSAL
Irkutskenergo
Group
OJSC Irkutsk
Electric Grid
Company
Total
43.1%
16,894
(10,835)
6,059
2,613
8,566
759
(963)
(204)
327
(415)
1,091
128
(694)
525
6.8%
5,176
(3,200)
1,976
129
1,598
24
104
128
2
(18)
178
(1,688)
1,539
29
47.6%
517
(165)
352
167
309
8
–
8
3
(32)
60
(64)
4
–
A
p
p
e
n
d
c
e
s
i
2,909
332
(465)
(133)
188
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FINANCIAL STATEMENTS
17. Loans and borrowings
(a)
Loans and borrowings
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
This note provides information about the contractual terms of the Group’s loans and borrowings.
For more information about the Group’s exposure to interest rate and foreign currency risk refer to
notes 20(c)(ii) and 20(c)(iii), respectively.
Non-current liabilities
Secured bank loans
Unsecured bank loans
Bonds
Current liabilities
Current portion of secured bank loans
Current portion of unsecured bank loans
Secured bank loans
Unsecured bank loans
Accrued interest
Bonds
31 December
2021
USD million
2020
USD million
6,291
567
1,316
8,174
7,756
22
2,437
10,215
31 December
2021
USD million
2020
USD million
675
5
680
–
871
68
1,118
2,057
2,737
462
3
465
260
1,387
60
1
1,708
2,173
Non-current liabilities
Secured bank loans
Variable
USD – 3M Libor + 1.7%
USD – 3M Libor + 2.1%
USD – 3M Libor + 3.0%
RUB – CBR + 1.50-2.00%
RUB – CBR + 3.15%
Fixed
RUB – fixed at 10.00%
Unsecured bank loans
Variable
RUB – CBR + 1.15-1.8%
RUB – other
EUR – 6M Euribor + 0.67%
Bonds
Current liabilities
Current portion of secured bank loans
Variable
USD – 1M Libor + 3.60%
USD – 3M Libor + 1.7%
USD – 3M Libor + 2.1%
RUB – CBR + 1.5-2.00%
Fixed
RUB – fixed at 8.75-11.5%
Current portion of unsecured bank loans
Variable
EUR – 6M Euribor + 0.67%
RUB – other
Secured bank loans
Variable
USD – 3M Libor + 1.35-1.65%
Unsecured bank loans
Variable
USD – 1M Libor + 2.40%
RUB – CBR + 1.0-2.0%
Fixed
USD – fixed at 2.15-2.97%
RUB – fixed at 5.75-10.5%
Accrued interest
Bonds
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
31 December
2021
USD million
2020
USD million
125
718
2,098
3,041
309
–
6,291
534
–
33
567
1,316
8,174
–
75
268
332
–
675
5
–
5
–
–
–
481
375
15
871
68
1,118
2,057
2,737
–
1,073
2,097
4,585
–
1
7,756
–
13
9
22
2,437
10,215
54
–
–
367
41
462
1
2
3
260
260
200
967
200
20
1,387
60
1
1,708
2,173
190
191
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The bank loans are secured as at 31 December 2021 and 31 December 2020 by the following:
•
•
•
•
Rights, including all monies and claims, arising out of certain sales contracts between the Group’s
trading subsidiaries and its ultimate customers, were assigned to secure the syndicated Pre-Export
Finance Term Facility Agreements (PXFs) dated 25 October 2019 and dated 28 January 2021;
Properties, plant and equipment – refer to note 11(d);
Inventories – refer to note 14;
Shares of the Group companies as described below.
METALS
On 28 January 2021, the Metals segment entered into a new three-year sustainability-linked pre-export
finance facility for up to USD 200 million. The interest rate is subject to a sustainability discount or premium
depending on UC RUSAL’s fulfilment of the sustainability key performance indicators (KPIs). The proceeds
were used to refinance the principal outstanding under the existing debt.
The nominal value of UC RUSAL’s loans and borrowings was USD 4,266 million at 31 December 2021
(31 December 2020: USD 5,329 million).
As at 31 December 2021 and 31 December 2020 the secured bank loans are secured by certain pledges of
shares of a number of UC RUSAL’s subsidiaries and 25% +1 share of Norilsk Nickel (Group’s associate).
POWER
In February 2020, the Group entered into 2 loan agreements with Sberbank:
Loan 1 – 3-year RUB 100.8 billion loan agreement to finance the acquisition of a 21.37% stake in the
Parent Company for USD 1.6 billion from VTB (note 1(a)).
Loan 2 – loan agreement allowing the extension of the final maturity of the Loan 1 by 4 years during 2022.
The nominal value of Power loans and borrowings was USD 4,182 million at 31 December 2021
(31 December 2020: USD 4,610 million).
As at 31 December 2021 and 31 December 2020 the secured bank loans are secured by certain pledges of
shares of a number of Parent Company’s subsidiaries, including LLC ESE–Hydrogeneration – 100%
(2020: 100%), JSС Krasnoyarsk Hydro-Power Plant – 100% (2020: 100%), PJSC Irkutskenergo – 73.18%
(2020: 77.43%) and JSC EuroSibEnergo – 50% + 1 share (2020: 50% + 1 share). As at 31 December 2021
and 31 December 2020 21.37% shares of the Parent Company were pledged under RUB 100.8 billion loan
agreement described above.
The fair value of the Group’s liabilities measured at amortised cost approximate their carrying values as at
31 December 2021 and 31 December 2020.
(b)
Bonds
As at 31 December 2021, the Group had bonds denominated in RUB and eurobonds denominated in USD as
follows:
Type
Bond
Bond
Bond
Bond
Bond
Bond
Eurobond
Eurobond
Eurobond
Series
BО-01
BО-001P-01
BО-001P-02
BО-001P-03
BО-001P-04
BО-002P-01
–
–
–
The number
of bonds traded
in the market
Nominal
value,
USD million
Nominal
interest rate
30,263
15,000,000
15,000,000
15,000,000
15,000,000
10,000,000
511,998
481,985
497,642
–
202
202
202
202
134
512
482
498
0.01%
9.00%
8.60%
8.25%
7.45%
6.50%
5.125%
5.3%
4.85%
Put-option
date
18.04.2019
27.04.2022
25.01.2023
12.09.2022
14.11.2022
09.06.2023
–
–
–
Maturity
date
07.04.2026
16.04.2029
28.06.2029
30.08.2029
01.11.2029
28.05.2030
02.02.2022
03.05.2023
01.02.2023
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
As at 31 December 2021, the amount of accrued interest on these bonds was 44 million (31 December 2020:
USD 44 million).
The total foreign exchange gain on bonds for the year ended 31 December 2021 accounted in other
comprehensive income as part of the cash flow hedge result amounted to USD 4 million (USD 167 million
for the year ended 31 December 2020).
18.
Provisions
(a) Accounting policy
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognised as finance costs.
(i)
Site restoration
The mining, refining and smelting activities of the Group can give rise to obligations for site restoration and
rehabilitation. Restoration and rehabilitation works can include facility decommissioning and dismantling,
removal or treatment of waste materials, land rehabilitation, and site restoration. The extent of work required
and the associated costs are dependent on the requirements of law and the interpretations of the relevant
authorities.
Provisions for the cost of each restoration and rehabilitation program are recognised at the time that
environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the
provision is increased accordingly. Costs included in the provision encompass obligated and reasonably
estimable restoration and rehabilitation activities expected to occur progressively over the life of the
operation and at the time of closure in connection with disturbances at the reporting date.
Routine operating costs that may impact the ultimate restoration and rehabilitation activities, such as waste
material handling conducted as an integral part of a mining or production process, are not included in the
provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned
discharges, are recognised as an expense and liability when the event gives rise to an obligation which is
probable and capable of reliable estimation.
Restoration and rehabilitation provisions are measured at the expected value of future cash flows, discounted
to their present value and determined according to the probability of alternative estimates of cash flows
occurring for each operation. Discount rates used are specific to the country in which the operation is located.
Significant judgements and estimates are involved in forming expectations of future activities and the amount
and timing of the associated cash flows. Those expectations are formed based on existing environmental and
regulatory requirements.
When provisions for restoration and rehabilitation are initially recognised, the corresponding cost is
capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation.
The capitalised cost of restoration and rehabilitation activities is amortised over the estimated economic life of
the operation on a units of production or straight-line basis. The value of the provision is progressively increased
over time as the effect of discounting unwinds, creating an expense recognised as part of finance expenses.
Restoration and rehabilitation provisions are also adjusted for changes in estimates. Those adjustments are
accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is
greater than the unamortised capitalised cost, in which case the capitalised cost is reduced to nil and the
remaining adjustment is recognised in profit or loss. Changes to the capitalised cost result in an adjustment
to future amortisation charges. Adjustments to the estimated amount and timing of future restoration and
rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates
involved. Factors influencing those changes include revisions to estimated reserves, resources and lives of
operations; developments in technology; regulatory requirements and environmental management strategies;
changes in the estimated costs of anticipated activities, including the effects of inflation and movements in
foreign exchange rates; and movements in general interest rates affecting the discount rate applied.
192
193
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G
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
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T
A
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E
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p
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(ii)
Legal claim
In the normal course of business, the Group may be involved in legal proceedings. Where management
considers that it is more likely than not that proceedings will result in the Group compensating third parties,
a provision is recognised for the best estimate of the amount expected to be paid. Where management
considers that it is more likely than not that proceedings will not result in the Group compensating third
parties or where, in rare circumstances, it is not considered possible to provide a sufficiently reliable estimate
of the amount expected to be paid, no provision is made for any potential liability under the litigation but the
circumstances and uncertainties involved are disclosed as contingent liabilities. The assessment of the likely
outcome of legal proceedings and the amount of any potential liability involves significant judgement. As law
and regulations in many of the countries in which the Group operates are continuing to evolve, particularly
in the areas of taxation, sub-soil rights and protection of the environment, uncertainties regarding litigation
and regulation are greater than those typically found in countries with more developed legal and regulatory
frameworks.
(b) Disclosure
USD million
Balance at 1 January 2020
Non-current
Current
Provisions made during the year
Provisions reversed during the year
Actuarial losses
Provisions used during the year
Change in estimates
Translation difference
Balance at 31 December 2020
Non-current
Current
Provisions made during the year
Provisions reversed during the year
Actuarial loss
Provisions used during the year
Change in estimates
Translation difference
Balance at 31 December 2021
Non-current
Current
Pension
liabilities
Site
restoration
Provisions for
legal claims
Total
111
104
7
13
(1)
(3)
(7)
–
(14)
99
91
8
10
–
4
(7)
–
–
106
98
8
106
459
432
27
59
(23)
–
(3)
(1)
(15)
476
427
49
96
(23)
–
(2)
(8)
(21)
518
387
131
518
37
–
37
10
–
–
(9)
–
(6)
32
–
32
14
(4)
–
(20)
–
–
22
–
22
22
607
536
71
82
(24)
(3)
(19)
(1)
(35)
607
518
89
120
(27)
4
(29)
(8)
(21)
646
485
161
646
(c)
Pension liabilities
As at 31 December 2021, the pension liability is represented by UC RUSAL of USD 66 million
(31 December 2020: USD 55 million) and Power of USD 40 million (31 December 2020: USD 43 million).
The provision for pensions mainly comprises lump sum payments at retirement by aluminium plants located
in Russia and Ukraine, and by electricity generating companies. The Group also provides pension benefits to
eligible participants at facilities located outside of the Russian Federation and Ukraine.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
METALS
Group subsidiaries in the Russian Federation
The Group voluntarily provides long-term and post-employment benefits to its former and existing
employees including death-in-service, jubilee, lump sum upon retirement, material support for pensioners
and death-in-pension benefits. Furthermore, the Group provides regular social support payments to some of
its veterans of World War II.
The above employee benefit programs are of a defined benefit nature. The Group finances these programs
on a pay-as-you-go basis, so plan assets are equal to zero.
Group subsidiaries in Ukraine
Due to legal requirements, the Ukrainian subsidiaries are responsible for partial financing of the state
hardship pensions for those of its employees who worked, or still work, under severe and hazardous labour
conditions (hardship early retirement pensions). These pensions are paid until the recipient reaches the age
of entitlement to the State old age pension (55-60 years for female (dependent on year of birth) and 60 years for
male employees). In Ukraine, the Group also voluntarily provides long-term and post-employment benefits
to its employees including death-in-service, lump sum benefits upon retirement and death-in-pension benefits.
The above employee benefit programs are of a defined benefit nature. The Group finances these programs
on a pay-as-you-go basis, so plan assets are equal to zero.
Group subsidiaries outside the Russian Federation and Ukraine
At its Guinean entities, the Group provides a death-in-service benefit and lump-sum benefits upon disability
and old-age retirement.
At its Guyana subsidiary, the Group provides a death-in-service benefit.
At its Italian subsidiary (Eurallumina) the Group only provides lump sum benefits upon retirement, which
relate to service up to 1 January 2007.
In Sweden (Kubikenborg Aluminium AB), the Group provides defined benefit lifelong and temporary
pension benefits. The lifelong benefits are dependent on the past service and average salary level of the
employee, with an accrual rate that depends on the salary bracket the employee is in. The liability relates
only to benefits accrued before 1 January 2004.
The number of employees in all jurisdictions eligible for the plans as at 31 December 2021 and 2020 was
50,518 and 48,548, respectively. The number of pensioners in all jurisdictions as at 31 December 2021 and
2020 was 42,086 and 43,422, respectively.
Actuarial valuation of pension liabilities
The actuarial valuations of UC RUSAL and the portion of UC RUSAL’s funds specifically designated for
the UC RUSAL’s employees were completed by a qualified actuary, Robert van Leeuwen AAG, as at
31 December 2021, using the projected unit credit method as stipulated by IAS 19.
The key actuarial assumptions (weighted average, weighted by DBO) are as follows:
Discount rate
Future salary increases
Future pension increases
Staff turnover
Mortality
Disability
31 December 2021
% per annum
31 December 2020
% per annum
7.9
8.7
4.2
4.7
USSR population table
for 1985,
Ukrainian population table
for 2000
70% Munich Re for Russia;
40% of death probability
for Ukraine
5.7
7.1
3.6
4.7
USSR population table
for 1985,
Ukrainian population table
for 2000
70% Munich Re for Russia;
40% of death probability
for Ukraine
194
195
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C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
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T
A
T
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M
E
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
As at 31 December 2021 and 31 December 2020 the Group’s obligations were fully uncovered as the Group
has only wholly unfunded plans.
POWER
The principal assumptions used in determining pension obligations for the pension plans are shown below:
Discount rate
Future salary increases
Pension and inflation rate increases
(d)
Site restoration and environmental provisions
31 December 2021
31 December 2020
8.5%
5.7%
4.2%
6.0%
5.5%
4.0%
The Group provides for site restoration obligations when there is a specific legal or constructive obligation
for mine reclamation, landfill closure (primarily comprising red mud basin disposal sites) or specific lease
restoration requirements. The Group does not record any obligations with respect to decommissioning of its
refining or smelting facilities and restoration and rehabilitation of the surrounding areas unless there is a
specific plan to discontinue operations at a facility. This is because any significant costs in connection with
decommissioning of refining or smelting facilities and restoration and rehabilitation of the surrounding areas
would be incurred no earlier than when the facility is closed and the facilities are currently expected to operate
over a term in excess of 50-100 years due to the perpetual nature of the refineries and smelters and continuous
maintenance and upgrade programs resulting in the fair values of any such liabilities being negligible.
The site restoration provision relates primarily to mine reclamation and red mud basin disposal sites at
alumina refineries and ash dumps removal at coal burning electricity and heat generation stations.
The principal assumptions used in determining site restoration provision are:
Timing of cash outflows
Years required to fill the ash dumps
Discount rate for Irkutskenergo and Coal segment
assets after adjusting for inflation
Risk free discount rate for UC RUSAL after
adjusting for inflation
31 December 2021
31 December 2020
2022: USD 130 million
2023-2027: USD 30 million
2028-2038: USD 150 million
after 2038: USD 405 million
26.5
2021: USD 49 million
2022-2026: USD 33 million
2027-2037: USD 131 million
after 2037: USD 374 million
18.1
4.2%
1.19%
2.8%
0.73%
The risk free rate for the year 2020-2021 represents an effective rate, which comprises rates differentiated by
years of obligation settlement and by currencies in which the provisions were calculated.
At each reporting date management have assessed the provisions for site restoration and concluded that the
provisions and disclosures are adequate.
(e)
Provisions for legal claims
The Group’s subsidiaries are subject to a variety of lawsuits and claims in the ordinary course of its business.
As at 31 December 2021, there were several claims filed against the Group’s subsidiaries contesting breaches
of contract terms and non-payment of existing obligations. Management has reviewed the circumstances and
estimated that the amount of probable outflow related to these claims should not exceed USD 22 million
(31 December 2020: USD 32 million).
At each reporting date management has assessed the provisions for litigation and claims and concluded that
the provisions and disclosures are adequate.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
19. Derivative financial assets and liabilities
Accounting policies
The Group enters, from time to time, into various derivative financial instruments to manage its exposure to
commodity price risk, foreign currency risk and interest rate risk.
Embedded derivatives are separated from the host contract and accounted for separately if the economic
characteristics and risks of the host contract and the embedded derivative are not closely related, a separate
instrument with the same terms as the embedded derivative would meet the definition of a derivative and the
combined instrument is not measured at fair value through profit or loss.
On initial designation of the derivative as a hedging instrument, the Group formally documents the
relationship between the hedging instrument and hedged item, including the risk management objectives and
strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used
to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception
of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are expected to
be highly effective in offsetting the changes in the fair value or cash flows of the respective hedged items
attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80-125%.
For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should
present an exposure to variation in cash flows that ultimately could affect reported profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss
when incurred. Subsequent to initial recognition, derivatives are measured at fair value.
The measurement of fair value of derivative financial instruments, including embedded derivatives, is based
on quoted market prices. Where no price information is available from a quoted market source, alternative
market mechanisms or recent comparable transactions, fair value is estimated based on the Group’s views on
relevant future prices, net of valuation allowances to accommodate liquidity, modelling and other risks
implicit in such estimates. Changes in the fair value therein are accounted for as described below.
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows
attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast
transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative
is recognised in other comprehensive income and presented in the hedging reserve in equity. Any ineffective
portion of changes in the fair value of a derivative is recognised in profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying
amount of the asset when the asset is recognised. In other cases, the amount accumulated in equity is
reclassified to profit or loss in the same period that the hedged item affects profit or loss. If the hedging
instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, or
the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is
no longer expected to occur, then the balance in equity is reclassified to profit or loss.
Changes in the fair value of separated embedded derivatives and derivative financial instruments not
designated for hedge accounting are recognised immediately in profit or loss.
Disclosures
Petroleum coke supply contracts
and other raw materials
Forward contracts for aluminium
and other instruments
Cross currency swap
Total
Non-current
Current
31 December 2021
USD million
31 December 2020
USD million
Derivative
assets
Derivative
liabilities
Derivative
assets
Derivative
liabilities
24
118
–
142
22
120
15
26
165
206
61
145
31
19
–
50
20
30
43
9
133
185
28
157
196
197
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G
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
S
T
A
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FINANCIAL STATEMENTS
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Long-term loans and borrowings, other non-current liabilities: the fair values of other non-current
liabilities are based on the present value of the anticipated cash flows and approximate carrying value, other
than Eurobonds and RUSAL Bratsk bonds issued. The fair value of the loans and borrowings with fixed and
floating interest rate as at 31 December 2021 and 31 December 2020 was calculated based on the present value
of future principal and interest cash flows, using discount interest rate that take into account the currency of the
debt, expected maturity dates and credit risks associated with the Group that existed at the reporting date.
Derivatives: the fair value of derivative financial instruments, including embedded derivatives, is based on
quoted market prices. Where no price information is available from a quoted market source, alternative
market mechanisms or recent comparable transactions, fair value is estimated based on the Group’s views on
relevant future prices, net of valuation allowances to accommodate liquidity, modelling and other risks
implicit in such estimates. Option-based derivatives are valued using Black-Scholes models and Monte-Carlo
simulations. The derivative financial instruments are recorded at their fair value at each reporting date.
The following table presents the fair value of Group’s financial instruments measured at the end of the
reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined by
IFRS 13, Fair Value Measurement. The level into which a fair value measurement is classified is determined
with reference to the observability and significance of the inputs used in the valuation technique as follows:
•
•
•
Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in
active markets for identical assets or liabilities at the measurement date.
Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet
Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which
market data are not available.
Level 3 valuations: Fair value measured using significant unobservable inputs.
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Derivative financial instruments are recorded at their fair value at each reporting date. Fair value is estimated
in accordance with Level 3 of the fair value hierarchy based on management estimates and consensus
economic forecasts of relevant future prices, net of valuation allowances to accommodate liquidity,
modelling and other risks implicit in such estimates. The Group’s policy is to recognise transfers between
levels of fair value hierarchy as at the date of the event or change in circumstances that caused the transfer.
The following significant assumptions were used in estimating derivative instruments:
2022
2023
2024
2025
2026
LME Al Cash, USD per tonne
Platt’s FOB Brent, USD per barrel
2,795
76
2,658
71
2,466
68
2,315
66
2,272
65
The movement in the balance of Level 3 fair value measurements of derivatives is as follows:
31 December
2021
USD million
2020
USD million
Balance at the beginning of the year
Unrealised changes in fair value recognised in statement of profit
or loss (finance expense) during the year
Unrealised changes in fair value recognised in other comprehensive
income (cash flow hedge) during the year
Realised portion of electricity, coke and raw material contracts and
cross currency swap
Balance at the end of the year
(135)
(352)
(28)
451
(64)
54
(226)
(53)
90
(135)
During the year 2021 there have been no changes in valuation techniques used to calculate the derivative
financial instruments compared to prior year.
Management believes that the values assigned to the key assumptions and estimates represented the most
realistic assessment of future trends. The results for the derivative instruments are not particularly sensitive
to any factors other than the assumptions disclosed above.
UC RUSAL entered into various petroleum coke supply contracts and other raw materials where the price of
coke is determined with reference to the Brent oil price, LME aluminium price and average monthly
aluminium quotations. UC RUSAL also sells products to various third parties at prices that are influenced by
changes in London Metal Exchange aluminium prices. From time to time UC RUSAL enters into forward
sales and purchase contracts for a portion of its anticipated primary aluminium sales and purchases to reduce
the risk of fluctuating prices on these sales. During the year ended 31 December 2021 the Group recognised
a total net loss of USD 352 million in relation to the above contracts (31 December 2020: loss of
USD 226 million). Unrealised changes in fair value recognised in other comprehensive income (cash flow
hedge) during the period are fully attributable to cross currency swaps (note 17(b)).
20.
Financial risk management and fair values
(a)
Fair values
Management believes that the fair values of financial assets and liabilities approximate their carrying
amounts.
The methods used to estimate the fair values of the financial instruments are as follows:
Trade and other receivables, short-term investments, cash and cash equivalents, current loans and
borrowings and trade and other payables: the carrying amounts approximate fair value because of the
short maturity period of the instruments.
Investments in equity securities: measured at fair value through profit and loss, so, its carrying amount is
equal its fair value.
198
199
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A
T
E
G
C
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
A
p
p
e
n
d
c
e
s
i
FINANCIAL STATEMENTS
As at 31 December 2021
(b)
Financial risk management objectives and policies
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Carrying amount
Fair value
Designated at
fair value
Note USD million
Financial
assets at
amortised cost
USD million
Other
financial
assets/
(liabilities)
USD million
Total
USD million
Level 1
USD million
Level 2
USD million
Level 3
USD million
Total
USD million
Financial assets measured at
fair value
Petroleum coke supply contracts
and other raw materials
Forward contracts for aluminium
and other instruments
Investments in equity securities
measured at fair value through
profit and loss
19
19
Financial assets not measured
at fair value*
Trade and other receivables
Short-term investments
Cash and cash equivalents
15(b)
15(d)
Financial liabilities measured
at fair value
Cross currency swaps
Petroleum coke supply contracts
and other raw materials
Forward contracts for aluminium
and other instruments
19
19
19
Financial liabilities not
measured at fair value*
Loans and borrowings
Unsecured bond issue
Trade and other payables
17(a)
17(b)
15(c)
24
118
–
142
–
–
–
–
(165)
(15)
(26)
(206)
–
–
–
–
–
–
–
–
2,410
131
2,330
4,871
–
–
–
–
–
–
–
–
–
–
316
316
–
–
–
–
–
–
–
–
24
118
316
458
2,410
131
2,330
4,871
(165)
(15)
(26)
(206)
(8,477)
(2,434)
(1,643)
(8,477)
(2,434)
(1,643)
(12,554)
(12,554)
–
–
316
316
–
–
–
–
–
–
–
–
–
(941)
–
(941)
–
–
–
–
2,410
131
2,330
4,871
–
–
–
–
(8,614)
(1,524)
(1,643)
(11,781)
24
118
–
142
–
–
–
–
(165)
(15)
(26)
(206)
–
–
–
–
24
118
316
458
2,410
131
2,330
4,871
(165)
(15)
(26)
(206)
(8,614)
(2,465)
(1,643)
(12,722)
* The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values.
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
As at 31 December 2020
Carrying amount
Fair value
The Group’s principal financial instruments comprise bank loans and trade payables. The main purpose of
these financial instruments is to raise finance for the Group’s operations. The Group has various financial
assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk,
foreign currency risk and credit risk. Management reviews and agrees policies for managing each of these
risks which are summarised below.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group,
to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group, through its training and management standards and procedures, aims to develop a disciplined
and constructive control environment in which all employees understand their roles and obligations.
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising returns.
(i)
Tariffs and commodity price risk
During the years ended 31 December 2021 and 31 December 2020, the Group has entered into certain
commodity derivatives contracts in order to manage its exposure of commodity price risks.
The tariffs for electricity, heat and transmission services applied by the Group’s significant subsidiaries are
currently partially determined by government bodies. The Group cannot directly influence or mitigate the
risks in relation to the change in tariffs.
A significant portion of the Group’s generation activities is based on coal burning stations. A change in coal
prices may have a significant impact on the Group’s operations. To mitigate the risk of fluctuations in coal
prices, the Group has historically increased its internal coal production through acquisition of coal mines and
licences in the Eastern Siberia region.
Designated at
fair value
Note USD million
Financial
assets at
amortised cost
USD million
Other
financial
assets/
(liabilities)
USD million
Total
USD million
Level 1
USD million
Level 2
USD million
Level 3
USD million
Total
USD million
(ii)
Interest rate risk
Financial assets measured
at fair value
Petroleum coke supply contracts
and other raw materials
Forward contracts for aluminium
and other instruments
Other non-current assets
Financial assets not measured
at fair value*
Trade and other receivables
Short-term investments
Cash and cash equivalents
19
19
15(e)
15(b)
15(d)
Financial liabilities measured
at fair value
Cross currency swaps
Petroleum coke supply contracts
and other raw materials
Forward contracts for aluminium
and other instruments
19
19
19
Financial liabilities not
measured at fair value*
Loans and borrowings
Unsecured bond issue
Trade and other payables
17(a)
17(b)
15(c)
31
19
–
50
–
–
–
–
(133)
(43)
(9)
(185)
–
–
–
–
–
–
–
–
1,247
237
2,562
4,046
–
–
–
–
–
–
–
–
–
–
75
75
–
–
–
–
–
–
–
–
31
19
75
125
1,247
237
2,562
4,046
(133)
(43)
(9)
(185)
–
–
75
75
–
–
–
–
–
–
–
–
–
–
–
–
1,247
237
2,562
4,046
–
–
–
–
(9,950)
(2,438)
(1,253)
(9,950)
(2,438)
(1,253)
(13,641)
(13,641)
–
(972)
–
(972)
(9,788)
(1,574)
(1,253)
(12,615)
31
19
–
50
–
–
–
–
(133)
(43)
(9)
(185)
–
–
–
–
31
19
75
125
1,247
237
2,562
4,046
(133)
(43)
(9)
(185)
(9,788)
(2,546)
(1,253)
(13,587)
* The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values.
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-
term debt obligations with floating interest rates (note 17). The Group’s policy is to manage its interest costs
by monitoring changes in interest rates with respect to its borrowings.
The following table details the interest rate profile of the Group’s and the Company’s borrowings at the
reporting date.
31 December 2021
31 December 2020
Effective
interest rate
%
USD
million
Fixed rate loans and borrowings
Loans and borrowings (note 17(a))
0.01%-10.5%
Variable rate loans and borrowings
Loans and borrowings (note 17(a))
0.45%-10.5%
2,824
2,824
8,019
8,019
10,843
Effective
interest rate
%
0.01%-10.5%
0.67%-6.25%
USD
million
2,700
2,700
9,628
9,628
12,328
200
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The following table demonstrates the sensitivity to cash flows from interest rate risk arising from floating
rate non-derivative instruments held by the Group at the reporting date in respect of a reasonably possible
change in interest rates, with all other variables held constant. The impact on the Group’s profit before
taxation and equity and retained profits/accumulated losses is estimated as an annualised input on interest
expense or income of such a change in interest rates. The analysis has been performed on the same basis for
all years presented.
As at 31 December 2021
Basis percentage points
Basis percentage points
As at 31 December 2020
Basis percentage points
Basis percentage points
(iii) Foreign currency risk
Increase/
decrease in
basis points
Effect on profit
before taxation
for the year
USD million
Effect on equity
for the year
USD million
+100
-100
+100
-100
(80)
80
(96)
96
(64)
64
(77)
77
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency
other than the respective functional currencies of group entities, primarily USD but also the Russian Rouble,
Ukrainian Hryvna and Euros. The currencies in which these transactions primarily are denominated are RUB,
USD and EUR.
Borrowings are primarily denominated in currencies that match the cash flows generated by the underlying
operations of the Group, primarily USD but also RUB and EUR. This provides an economic hedge.
In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that
its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when
necessary to address short-term imbalances or entering into currency swap arrangements.
The Group’s exposure at the reporting date to foreign currency risk arising from recognised assets and
liabilities denominated in a currency other than the functional currency of the entity to which they relate is
set out in the table below. Differences resulting from the translation of the financial statements of foreign
operations into the Group’s presentation currency are ignored.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
USD-denominated
vs. RUB functional
currency
31 December
RUB-denominated
vs. USD functional
currency
31 December
EUR-denominated
vs. USD functional
currency
31 December
Denominated in other
currencies vs. USD
functional currency
31 December
USD million
2021
2020
2021
2020
2021
2020
2021
2020
Non-current assets
Derivative financial assets
Trade and other receivables
Cash and cash equivalents
Loans and borrowings
Provisions
Derivative financial liabilities
Income tax
Non-current liabilities
Short-term bonds
Trade and other payables
Net exposure arising from
recognised assets and liabilities
–
–
2
–
–
–
–
–
–
–
(1)
1
–
–
1
1
(314)
–
–
–
–
–
–
(312)
38
–
821
428
(549)
(84)
(16)
(24)
(1)
(1)
(1,080)
–
31
582
508
(1,433)
(78)
(32)
(2)
(1)
(1)
(404)
(468)
(830)
–
–
184
81
(19)
(21)
–
–
(6)
–
(104)
115
1
–
64
104
–
(27)
(6)
–
(6)
–
(49)
81
–
–
69
50
–
(18)
–
(1)
–
–
(135)
(35)
–
–
31
25
–
(12)
–
(6)
–
–
(88)
(50)
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(iv) Foreign currency sensitivity analysis
The following tables indicate the change in the Group’s profit before taxation (and accumulated losses) and
other comprehensive income that could arise if foreign exchange rates to which the Group has significant
exposure at the reporting date had changed at that date, assuming all other risk variables remained constant.
Year ended 31 December 2021
USD million
Effect on profit
before taxation
for the year
USD million
Effect on equity
for the year
Change in
exchange rates
Depreciation of USD vs. RUB
Depreciation of USD vs. EUR
Depreciation of USD vs. other currencies
15%
10%
5%
(70)
11
(2)
(70)
11
(2)
Year ended 31 December 2020
USD million
Effect on profit
before taxation
for the year
USD million
Effect on equity
for the year
Change in
exchange rates
Depreciation of USD vs. RUB
Depreciation of USD vs. EUR
Depreciation of USD vs. other currencies
15%
10%
5%
(78)
8
(3)
(79)
8
(3)
Results of the analysis as presented in the above tables represent an aggregation of the effects on the Group
entities’ profit before taxation and other comprehensive income measured in the respective functional
currencies, translated into USD at the exchange rates ruling at the reporting date for presentation purposes.
The sensitivity analysis assumes that the change in foreign exchange rates had been applied to re-measure
those financial instruments held by the Group which expose the Group to foreign currency risk at the
reporting date. The analysis excludes differences that would result from the translation of other financial
statements of foreign operations into the Group’s presentation currency. The analysis has been performed on
the same basis for all years presented.
(d)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s policy is to maintain sufficient cash and cash equivalents or have available funding through an
adequate amount of committed credit facilities to meet its operating and financial commitments.
The following tables show the remaining contractual maturities at the reporting date of the Group’s
non-derivative financial liabilities, which are based on contractual undiscounted cash flows (including interest
payment computed using contractual rates, or if floating, based on rates current at the reporting date) and the
earliest the Group can be required to pay, except loans presented as payable on demand due to breach of covenant:
31 December 2021
Contractual undiscounted cash outflow
More than
More than
2 years but
1 year but
less than
less than
5 years
2 years
USD
USD
million
million
More than
5 years
USD
million
–
–
1,354
2,652
4,006
–
–
–
–
–
–
3,947
3,947
1,704
1,704
Within
1 year or
on demand
USD
million
1,540
103
1,234
2,170
5,047
Total
USD
million
Carrying
amount
USD
million
1,540
103
2,588
10,473
14,704
1,540
103
2,434
8,477
12,554
44
69
–
–
113
–
Trade and other payables to
third parties
Trade and other payables to
related parties
Bonds
Loans and borrowings, including
interest payable
Financial guarantees issued:
Maximum amount guaranteed
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
31 December 2020
Contractual undiscounted cash outflow
More than
More than
2 years but
1 year but
less than
less than
5 years
2 years
USD
USD
million
million
More than
5 years
USD
million
–
–
1,251
2,433
3,684
–
–
1,356
3,282
4,638
–
–
–
3,260
3,260
Within
1 year or
on demand
USD
million
1,201
52
153
2,541
3,947
Total
USD
million
Carrying
amount
USD
million
1,201
52
2,760
11,516
15,529
1,201
52
2,438
9,950
13,641
69
45
–
–
114
–
Trade and other payables to
third parties
Trade and other payables to
related parties
Bonds
Loans and borrowings, including
interest payable
Financial guarantees issued:
Maximum amount guaranteed
At 31 December 2021 and 31 December 2020 the Group’s contractual undertaking to provide loans under
the loan agreement between the Group, PJSC RusHydro and BoAZ is included at maximum exposure for the
Group in the liquidity risk disclosure above.
(e)
Credit risk
The Group trades only with recognised, creditworthy third parties. It is the Group’s policy that all customers
who wish to trade on credit terms are subject to credit verification procedures. The majority of the Group’s
third party trade receivables represent balances with the world’s leading international corporations operating
in the metals industry. In addition, receivable balances are monitored on an ongoing basis with the result that
the Group’s exposure to credit loss is not significant. Goods are normally sold subject to retention of title
clauses, so that in the event of non-payment the Group may have a secured claim. The Group does not require
collateral in respect of trade and other receivables. The details of impairment of trade and other receivables
are disclosed in note 15. Cash balances are held with high credit quality financial institutions. The extent of
the Group’s credit exposure is represented by the aggregate balance of financial assets and financial
guarantees and loan commitments given.
At 31 December 2021 and 31 December 2020, the Group has no concentration of credit risk within any single
largest customer but 12.6% and 5.2% of the total trade receivables were due from the Group’s five largest
customers.
(f)
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitors the return on
capital, which the Group defines as net operating income divided by total shareholders’ equity, excluding
non-controlling interests. The Board of Directors also monitors the level of dividends to ordinary
shareholders.
The Board seeks to maintain a balance between higher returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position.
There were no changes in the Group’s approach to capital management during the year.
The Parent Company and its subsidiaries were subject to externally imposed capital requirements in the
both years presented in these consolidated financial statements.
204
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(g) Master netting or similar agreements
(d)
Social commitments
The Group may enter into sales and purchase agreements with the same counterparty in the normal course of
business. The related amounts receivable and payable do not always meet the criteria for offsetting in the
statement of financial position.
The following table sets out the carrying amounts of recognised financial instruments that are subject to the
above agreements.
The Group contributes to the maintenance and upkeep of the local infrastructure and the welfare of its
employees, including contributions toward the development and maintenance of housing, hospitals, transport
services, recreation and other social needs of the regions of the Russian Federation where the Group’s
production entities are located. The funding of such assistance is periodically determined by management
and is appropriately capitalised or expensed as incurred.
Year ended 31 December 2021
USD million
Trade receivables
USD million
Trade payables
22. Contingencies
(a)
Taxation
Gross amounts
Net amounts presented in the statement of financial position
Amounts related to recognised financial instruments that do not meet
some or all of the offsetting criteria
Net amount
114
114
(36)
78
(90)
(90)
36
(54)
Gross amounts
Net amounts presented in the statement of financial position
Amounts related to recognised financial instruments that do not meet
some or all of the offsetting criteria
Net amount
21. Commitments
(a) Capital commitments
Year ended 31 December 2020
USD million
Trade receivables
USD million
Trade payables
71
71
(23)
48
(61)
(61)
23
(38)
The Group had outstanding capital commitments which had been contracted for at 31 December 2021 and
31 December 2020 in the amount of USD 655 million and USD 813 million, including VAT, respectively.
These commitments are due over a number of years.
(b)
Purchase commitments
Commitments with third parties for purchases of alumina, bauxite, other raw materials and other purchases
in 2022-2034 under supply agreements are estimated from USD 2,517 million to USD 4,534 million at
31 December 2021 (31 December 2020: USD 3,256 million to USD 4,644) depending on the actual purchase
volumes and applicable prices.
Commitments with related parties for purchases of primary aluminium, alloys and other purchases in
2022-2030 under supply agreements are estimated from USD 5,733 million to USD 7,540 million at
31 December 2021 (31 December 2020: USD 4,741 million to USD 6,964 million) depending on the actual
purchase volumes and applicable prices.
(c)
Sale commitments
Commitments with third parties for sales of alumina and other raw materials in 2022-2034 are estimated from
USD 1,187 million to USD 1,596 million at 31 December 2021 (31 December 2020: from USD 865 million to
USD 1,375 million) and will be settled at market prices at the date of delivery. There are no commitments
with related parties for sales of alumina as at 31 December 2021 and 31 December 2020.
Commitments with related parties for sales of primary aluminium and alloys in 2022 are estimated from
USD 337 million to USD 412 million at 31 December 2021 (31 December 2020: from USD 224 million to
USD 269 million). Commitments with third parties for sales of primary aluminium and alloys in 2022-2025
are estimated to range from USD 8,842 million to USD 12,148 million at 31 December 2021 (31 December
2020: from USD 1,738 million to USD 11,602 million).
Russian tax, currency and customs legislation is subject to varying interpretations, and changes, which can
occur frequently. Management’s interpretation of such legislation as applied to the transactions and activities
of the Group may be challenged by the relevant local, regional and federal authorities. Notably recent
developments in the Russian environment suggest that the authorities in this country are becoming more
active in seeking to enforce, through the Russian court system, interpretations of the tax legislation, in
particular in relation to the use of certain commercial trading structures, which may be selective for particular
tax payers and different from the authorities’ previous interpretations or practices. Recent events within the
Russian Federation suggest that the tax authorities are taking a more assertive and substance-based position
in their interpretation and enforcement of tax legislation.
The Russian taxation system is continually evolving and is subject to frequent changes, starting from
1 January 2015, changes aimed at regulating tax consequences of transactions with foreign companies and
their activities were introduced, such as the concept of beneficial ownership of income, taxation of controlled
foreign companies, tax residency rules, country-by-country reporting etc. This legislation and practice of its
application is still evolving and the impact of legislative changes should be considered based on the actual
circumstances.
All these circumstances may create tax risks in the Russian Federation that are substantially more significant
than in other countries. Management believes that it has provided adequately for tax liabilities based on its
interpretations of applicable Russian tax legislation, official pronouncements and court decisions. However,
the interpretations of the tax authorities and courts, especially due to reform of the supreme courts that are
resolving tax disputes, could differ and the effect on these consolidated financial statements, if the authorities
were successful in enforcing their interpretations, could be significant.
In addition to the amounts of income tax the Group has provided, there are certain tax positions taken by the
Group where it is reasonably possible (though less than 50% likely) that additional tax may be payable upon
examination by the tax authorities or in connection with ongoing disputes with tax authorities. The Group’s
best estimate of the aggregate maximum of additional amounts that it is reasonably possible may become
payable if these tax positions were not sustained at 31 December 2021 is USD 26 million (31 December
2020: USD 36 million).
(b)
Environmental contingencies
The Group and its predecessor entities have operated in the Russian Federation, Ukraine, Jamaica, Guyana,
the Republic of Guinea and the European Union for many years and certain environmental problems have
developed. Governmental authorities are continually considering environmental regulations and their
enforcement and the Group periodically evaluates its obligations related thereto. As obligations are
determined, they are recognised immediately. The outcome of environmental liabilities under proposed or
any future legislation, or as a result of stricter enforcement of existing legislation, cannot reasonably be
estimated. Under current levels of enforcement of existing legislation, management believes there are no
possible liabilities, which will have a material adverse effect on the financial position or the operating results
of the Group. However, the Group anticipates undertaking significant capital projects to improve its future
environmental performance.
206
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(c)
Legal contingencies
Purchases of raw materials and services from related parties for the period were as follows:
The Group’s business activities expose it to a variety of lawsuits and claims which are monitored, assessed
and contested on an ongoing basis. Where management believes that a lawsuit or another claim would result
in the outflow of the economic benefits for the Group, a best estimate of such outflow is included in
provisions in the consolidated financial statements (note 18(e)). As at 31 December 2021, the amount of
claims, where management assesses outflow as possible approximates USD 21 million (31 December 2020:
USD 21 million).
(d) Other contingent liabilities
Where the Group enters into financial guarantee contracts to guarantee the indebtedness of related parties,
the Group considers these to be insurance arrangements and accounts for them as such. In this respect, the
Group treats the guarantee contract as a contingent liability until such time as it becomes probable that the
Group will be required to make a payment under the guarantee.
In September 2013, UC RUSAL and PJSC RusHydro entered into an agreement with BoAZ to provide loans,
if the latter is unable to fulfil its obligations under its credit facilities. The aggregate exposure under the
agreement is limited to RUB 16.8 billion (31 December 2021 and 31 December 2020 USD 226 million and
USD 227 million, respectively) and is split between the Group and PJSC RusHydro in equal proportion.
23. Related party transactions
(a) Accounting policy
(a)
A person, or a close member of that person’s family, is related to the Group if that person:
(i)
Has control or joint control over the Group;
(ii) Has significant influence over the Group; or
(iii)
Is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i)
The entity and the Group are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v)
The entity is a post-employment benefit plan for the benefit of employees of either the Group
or an entity related to the Group.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel
services to the group or to the group’s parent.
Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity.
(b)
Transactions with related parties
The Group transacts with related parties, the majority of which are under control of SUAL Partners Limited
or its shareholders, associates and joint ventures and other related parties.
Sales to related parties for the year are disclosed in note 5, trade receivables from related parties are disclosed
in note 15(b), accounts payable to related parties are disclosed in note 15(c).
Purchase of raw materials
Companies capable of exerting significant influence
Associates and joint ventures
Energy costs
Companies capable of exerting significant influence
Other related parties
Associates and joint ventures
Other services
Other related parties
Associates and joint ventures
Year ended 31 December
2021
USD million
2020
USD million
(738)
(24)
(714)
(76)
(33)
(1)
(42)
(111)
–
(111)
(925)
(480)
(15)
(465)
(63)
(27)
(1)
(35)
(114)
(2)
(112)
(657)
(c)
Related parties balances
At 31 December 2021, included in non-current assets are balances of related parties – associates and joint
ventures of USD 2 million (31 December 2020: USD 4 million). At 31 December 2021, included in
non-current liabilities are balances of related parties – associates and joint ventures of USD 14 million
(31 December 2020: USD 12 million).
(d) Remuneration to key management
For the year ended 31 December 2021 remuneration to key management personnel comprised short-term
benefits and amounted to USD 26 million from which Board members received USD 10 million (year ended
31 December 2020: USD 19 million from which Board members received USD 7 million).
24. Events subsequent to the reporting date
The growing geopolitical tensions and the recent developments in Ukraine have had a negative impact on the
Russian economy, including difficulties in obtaining international funding, significant increase in volatility
on the securities and currency markets as well as significant devaluation of national currency and high
inflation.
In 2022, the United States of America and the European Union have imposed sanctions against a number of
Russian banks, which restrict their access to European financial markets, foreign assets were frozen for
certain banks, and sanctions were introduced that restrict the access of Russian organisations to Euro and US
dollar markets.
A number of other countries announced new packages of sanctions against certain Russian legal entities and
personal sanctions against a number of individuals.
In March 2022, new temporary restrictive economic measures were introduced in Russian Federation, which
include, amongst others, a prohibition for residents to issue loans to non-residents in foreign currency or to
deposit foreign currency in their own bank accounts, and limitations on dividends and other payments on
securities to foreign investors.
In March 2022, Australia banned the export of alumina and bauxite to Russia. At the beginning of March
2022, the Group has temporarily suspended the production at Mykolaiv Alumina Refinery Company Ltd in
view of developments in Ukraine. These measures and events may influence the availability of alumina and
bauxite or increase the purchase prices for Group. Major international shippers have suspended bookings to
and from Russia which will require the Group to rebuild the supply and sales chains and may lead to
additional logistics costs.
If the situation persists or continues to develop significantly, including with the loss of significant parts of
foreign markets which cannot be reallocated to new markets, this may affect the Group’s business, financial
condition, prospects and results of operations.
208
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The Group regards these events as non-adjusting events after the reporting period, the quantitative impact, in
relation to all significant assets and liabilities, of which cannot be estimated as at the date of issue of these
consolidated financial statements with a sufficient degree of confidence.
Additional sanctions and restrictions on the business activity of Russian legal entities and individuals, as well
as counter-measures from Russian authorities might be introduced, the full range and possible consequences
of which cannot be assessed.
25. Accounting estimates and judgements
The Group has identified the following critical accounting policies under which significant judgements,
estimates and assumptions are made and where actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results of the financial position reported in
future periods.
Property, plant and equipment – recoverable amount
In accordance with the Group’s accounting policy, each asset or cash generating unit is evaluated every
reporting period to determine whether there are any indications of impairment. If any such indication exists,
a formal estimate of recoverable amount is performed and an impairment loss is recognised to the extent that
carrying amount exceeds recoverable amount. The recoverable amount of an asset or cash generating group
of assets is measured at the higher of fair value less costs to sell and value in use.
Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length
transaction between knowledgeable and willing parties, and is generally determined as the present value of
the estimated future cash flows expected to arise from the continued use of the asset, including any expansion
prospects, and its eventual disposal.
Value in use is also generally determined as the present value of the estimated future cash flows, but only
those expected to arise from the continued use of the asset in its present form and its eventual disposal.
Present values are determined using a risk-adjusted pre-tax discount rate appropriate to the risks inherent in
the asset. Future cash flow estimates are based on expected production and sales volumes, commodity prices
(considering current and historical prices, price trends and related factors), reserves (refer “Reserve
estimates” below), operating costs, restoration and rehabilitation costs and future capital expenditure. This
policy requires management to make these estimates and assumptions which are subject to risk and
uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may
impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the
assets may be impaired and the impairment would be charged against the profit or loss.
Property, plant and equipment – hydro assets – fair value
In accordance with the Group’s accounting policy, hydro assets are carried at a revalued amount, being their fair
value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated
impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amount does not
differ materially from that which would be determined using fair value at the end of the reporting period.
The valuation analysis is primarily based on the cost approach to determine depreciated replacement cost.
This method considers the cost to reproduce or replace the property, plant and equipment, adjusted for
physical depreciation, functional and economic obsolescence.
This policy requires management to make estimates and assumptions regarding both costs, as there is no active
market for used assets of that type, and macroeconomic indicators to assess economic obsolescence which are
subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these estimates,
which may impact the fair value of hydro assets. In such circumstances, the fair value of hydro assets may be
lower with any consequential decrease in revaluation reserve recognised through other comprehensive income.
Inventories – net realisable value
The Group recognises write-downs of inventories based on an assessment of the net realisable value of the
inventories. A write-down is applied to the inventories where events or changes in circumstances indicate
that the net realisable value is less than cost. The determination of net realisable value requires the use of
judgement and estimates. Where the expectation is different from the original estimates, such a difference
will impact the carrying value of the inventories and the write-down of inventories charged to the profit or
loss in the periods in which such estimate has been changed.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Goodwill – recoverable amount
In accordance with the Group’s accounting policy, goodwill is allocated to the Group’s reportable business
segments as they represent the lowest level within the Group at which the goodwill is monitored for internal
management purposes and is tested for impairment annually at 31 December by preparing a formal estimate
of recoverable amount. Recoverable amount is estimated as the value in use of the business segment.
Similar considerations to those described above in respect of assessing the recoverable amount of property,
plant and equipment apply to goodwill.
Investments in associates and joint ventures – recoverable amount
In accordance with the Group’s accounting policies, each investment in an associate or joint venture is
evaluated every reporting period to determine whether there are any indications of impairment after
application of the equity method of accounting. If any such indication exists, a formal estimate of recoverable
amount is performed and an impairment loss recognised to the extent that the carrying amount exceeds the
recoverable amount. The recoverable amount of an investment in an associate or joint venture is measured
at the higher of fair value less costs to sell and value in use.
Similar considerations to those described above in respect of assessing the recoverable amount of property,
plant and equipment apply to investments in associates or joint ventures. In addition to the considerations
described above the Group may also assess the estimated future cash flows expected to arise from dividends
to be received from the investment, if such information is available and considered reliable.
Legal proceedings
In the normal course of business, the Group may be involved in legal proceedings. Where management
considers that it more likely than not that proceedings will result in the Group compensating third parties a
provision is recognised for the best estimate of the amount expected to be paid. Where management considers
that it is more likely than not that proceedings will not result in the Group compensating third parties or
where, in rare circumstances, it is not considered possible to provide a sufficiently reliable estimate of the
amount expected to be paid, no provision is made for any potential liability under the litigation but the
circumstances and uncertainties involved are disclosed as contingent liabilities.
The assessment of the likely outcome of legal proceedings and the amount of any potential liability involves
significant judgement. As law and regulations in many of the countries in which the Group operates are
continuing to evolve, particularly in the areas of taxation, sub-soil rights and protection of the environment,
uncertainties regarding litigation and regulation are greater than those typically found in countries with more
developed legal and regulatory frameworks.
Provision for restoration and rehabilitation
The Group’s accounting policy requires the recognition of provisions for the restoration and rehabilitation of
each site when a legal or constructive obligation exists to dismantle the assets and restore the site. The
provision recognised represents management’s best estimate of the present value of the future costs required.
Significant estimates and assumptions are made in determining the amount of restoration and rehabilitation
provisions. Those estimates and assumptions deal with uncertainties such as: changes to the relevant legal
and regulatory framework; the magnitude of possible contamination and the timing, extent and costs of
required restoration and rehabilitation activity. These uncertainties may result in future actual expenditure
differing from the amounts currently provided.
The provision recognised for each site is periodically reviewed and updated based on the facts and
circumstances available at the time. Changes to the estimated future costs for operating sites are recognised
in the statement of financial position by adjusting both the restoration and rehabilitation asset and provision.
Such changes give rise to a change in future depreciation and interest charges. For closed sites, changes to
estimated costs are recognised immediately in profit or loss.
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Taxation
The Group’s accounting policy for taxation requires management’s judgement in assessing whether deferred
tax assets and certain deferred tax liabilities are recognised on the statement of financial position. Deferred
tax assets, including those arising from carried forward tax losses, capital losses and temporary differences,
are recognised only where it is considered more likely than not that they will be recovered, which is dependent
on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary
differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are
recognised unless repatriation of retained earnings can be controlled and is not expected to occur in the
foreseeable future.
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on
management’s estimates of future cash flows. These depend on estimates of future production and sales
volumes, commodity prices, reserves, operating costs, restoration and rehabilitation costs, capital
expenditure, dividends and other capital management transactions. Assumptions are also required about the
application of income tax legislation. These estimates and assumptions are subject to risk and uncertainty,
hence there is a possibility that changes in circumstances will alter expectations, which may impact the
amount of deferred tax assets and deferred tax liabilities recognised on the statement of financial position
and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some
or all of the carrying amount of recognised deferred tax assets and liabilities may require adjustment, resulting
in a corresponding credit or charge to profit or loss.
The Group generally provides for current tax based on positions taken (or expected to be taken) in its tax
returns. Where it is more likely than not that upon examination by the tax authorities of the positions taken
by the Group additional tax will be payable, the Group provides for its best estimate of the amount expected
to be paid (including any interest and/or penalties) as part of the tax charge.
Reserve estimates
Reserves are estimates of the amount of product that can be economically and legally extracted from the
Group’s properties. In order to calculate reserves, estimates and assumptions are required about a range of
geological, technical and economic factors, including quantities, grades, production techniques, recovery
rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.
The Group determines ore reserves under the Australasian Code for Reporting of Mineral Resources and
Ore Reserves September 1999, known as the JORC Code. The JORC Code requires the use of reasonable
investment assumptions to calculate reserves.
Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies or fields to
be determined by analysing geological data such as drilling samples. This process may require complex and
difficult geological judgements and calculations to interpret the data.
Since economic assumptions used to estimate reserves change from period to period, and since additional
geological data is generated during the course of operations, estimates of reserves may change from period
to period.
Changes in reported reserves may affect the Group’s financial results and financial position in a number of
ways, including the following:
•
•
•
Asset carrying values may be affected due to changes in estimated future cash flows.
Depletion charged in profit or loss may change where such charges are determined by the units of
production basis, or where the useful economic lives of assets change.
Decommissioning, site restoration and environmental provisions may change where changes in
estimated reserves affect expectations about the timing or cost of these activities.
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Exploration and evaluation expenditure
The Group’s accounting policy for exploration and evaluation expenditure results in certain items of
expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future
exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment
of the existence of reserves. This policy requires management to make certain estimates and assumptions as
to future events and circumstances, in particular whether an economically viable extraction operation can be
established. Any such estimates and assumptions may change as new information becomes available. If, after
having capitalised the expenditure under the policy, a judgement is made that recovery of the expenditure is
unlikely, the relevant capitalised amount will be written off to profit or loss.
Development expenditure
Development activities commence after project sanctioning by the appropriate level of management. Judgement
is applied by management in determining when a project has reached a stage at which economically recoverable
reserves exist such that development may be sanctioned. In exercising this judgement, management is required
to make certain estimates and assumptions similar to those described above for capitalised exploration and
evaluation expenditure. Any such estimates and assumptions may change as new information becomes
available. If, after having commenced the development activity, a judgement is made that a development asset
is impaired, the appropriate amount will be written off to profit or loss.
Defined benefit retirement and other post retirement schemes
For defined benefit pension schemes, the cost of benefits charged to the profit or loss includes current and
past service costs, interest costs on defined benefit obligations and the effect of any curtailments or
settlements, net of expected returns on plan assets. An asset or liability is consequently recognised in the
statement of financial position based on the present value of defined obligations, less any unrecognised past
service costs and the fair value of plan assets.
The accounting policy requires management to make judgements as to the nature of benefits provided by
each scheme and thereby determine the classification of each scheme. For defined benefit pension schemes,
management is required to make annual estimates and assumptions about future returns on classes of scheme
assets, future remuneration changes, employee attrition rates, administration costs, changes in benefits,
inflation rates, exchange rates, life expectancy and expected remaining periods of service of employees.
In making these estimates and assumptions, management considers advice provided by external advisers,
such as actuaries. Where actual experience differs to these estimates, actuarial gains and losses are recognised
directly in the statement of profit or loss and other comprehensive income.
Impairment of assets
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that are
not yet available for use, the recoverable amount is estimated at each reporting date.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows
that are largely independent from other asset groups. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in
the unit (group of units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
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FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Goodwill that forms part of the carrying amount of an investment in an associate or a joint venture is not
recognised separately and, therefore, is not tested for impairment separately. Instead, the entire amount of
the investment is tested for impairment as a single asset when there is objective evidence that the investment
in an associate or a joint venture may be impaired.
26.
Significant subsidiaries
The significant entities of the Group, included in these consolidated financial statements, are as follows:
Place
of incorporation
and operation
Principal
activities
Ownership and
equity interest
31 December
2021
2020
Name
UC RUSAL
United Company RUSAL IPJSC
Compagnie Des Bauxites De Kindia S.A.
Friguia SA
JSC RUSAL Achinsk
Mykolaiv Alumina Refunery Company Ltd
JSC RUSAL Boxitogorsk Alumina
Eurallumina SpA
PJSC RUSAL Bratsk
JSC RUSAL Krasnoyarsk
JSC RUSAL Novokuznetsk
JSC RUSAL Sayanogorsk
LLC RUSAL RESAL
JSC RUSAL SAYANAL
CJSC RUSAL ARMENAL
LLC RUS-Engineering
JSC Russian Aluminium
Rusal Global Management B.V.
JSC United Company RUSAL Trading House
Rusal America Corp.
RS International GmbH
Rusal Marketing GmbH
RTI Limited
Alumina & Bauxite Company Limited
JSC Bauxite-Timana
JSC Severo-Uralsky Bauxite Mine
JSC RUSAL URAL
LLC SUAL-PM
JSC Kremniy
LLC RUSAL-Kremniy-Ural
UC RUSAL Alumina Jamaica Limited
Kubikenborg Aluminium AB
RFCL Limited (formerly RFCL S.ar.l)
ILLC AKTIVIUM
Aughinish Alumina Ltd
LLC RUSAL Energo
Limerick Alumina Refining Ltd.
JSC RUSAL Management
LLC RUSAL Taishet
LLC UC RUSAL Anode Plant
RUSAL Products GmbH
Russian Federation
Guinea
Guinea
Russian Federation
Ukraine
Russian Federation
Italy
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Armenia
Russian Federation
Russian Federation
Netherlands
Russian Federation
USA
Switzerland
Switzerland
Jersey
British Virgin Islands
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Jamaica
Sweden
Cyprus (formerly
Luxembourg)
Russian Federation
Ireland
Russian Federation
Ireland
Russian Federation
Russian Federation
Russian Federation
Switzerland
Casting and mechanical plant “SKAD” Ltd.
LLC PGLZ
Russian Federation
Russian Federation
Holding company
Bauxite mining
Alumina
Alumina
Alumina
Alumina
Alumina
Smelting
Smelting
Smelting
Smelting
Processing
Foil
Foil
Repairs and maintenance
Holding company
Management company
Trading
Trading
Trading
Trading
Trading
Trading
Bauxite mining
Bauxite mining
Primary aluminium and
alumina production
Aluminium powders
production
Silicon production
Silicon production
Alumina
Smelting
Finance services
Holding and investment
company
Alumina
Electric power
Alumina
Management company
Smelting
Anodes
Trading
Other aluminum
production
Alumina
56.9%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
56.9%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
75.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
80.0%
99.9%
99.9%
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Place
of incorporation
and operation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Principal
activities
Holding company
Management company
Power generation
Power trading
Power generation
Power transmission and
distribution
Power generation
Power generation
Engineering services
Coal production
Coal production
Manufacturing
of semi-finished products
from primary aluminium
Ownership and
equity interest
31 December
2021
2020
100.0%
100.0%
100.0%
100.0%
98.0%
53.4%
100.0%
99.0%
100.0%
98.0%
98.0%
98.3%
100.0%
100.0%
100.0%
99.95%
93.2%
52.4%
100.0%
96.5%
100.0%
93.2%
93.2%
94.0%
Name
POWER
ILLC EN+ HOLDING
JSC EuroSibEnergo
JSC Krasnoyarsk Hydro-Power Plant
LLC MAREM +
PJSC Irkutskenergo
OJSC Irkutsk Electric Grid Company
LLC EuroSibEnergo – Hydrogeneration
LLC Avtozavodskaya TEC
LLC EuroSibEnergo-engineering
LLC Kompaniya VostSibUgol
LLC Razrez Cheremkhovugol
LLC KRAMZ
The nominal ownerships indicated in the table above are the effective holdings, except for UC RUSAL
shareholdings where 56.88% is held by the Parent Company.
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215
FINANCIAL STATEMENTS
GLOSSARY
Units of measurement
bn
EUR
Gcal
Gcal/h
GW
GWh
kA
km
koz
kt
ktpa
kV
kW
kWh
mn
mt
mtpa
MW
MWh
pp
RUB
ths
Billion
Euro
Gigacalorie, a unit of measurement for heating energy
Gigacalorie per hour, a unit of measurement for heating power capacity
Gigawatt (one million kilowatts)
Gigawatt-hour (one million kilowatt-hours)
Kilo-amperes
Kilometre
thousand troy ounces
Thousand metric tonnes
Thousand tonnes per annum
Kilovolt
Kilowatt
Kilowatt-hour, a unit of measurement for produced electricity
Million
Million metric tonnes
Million tonnes per annum
Megawatt (one thousand kilowatt), a unit of measurement for electrical power capacity
Megawatt-hour (one thousand kilowatt-hours), a unit of measurement for produced electricity
Percentage point
Rouble
Thousand
t, tonne
One metric tonne (one thousand kilograms)
tpa
TW
TWh
USD
Tonnes per annum
Terawatt (one billion kilowatts)
Terawatt-hour (one billion kilowatt-hours)
United States dollar
Terms and abbreviations
For any period represents the results from operating activities adjusted for amortisation and depreciation,
impairment charges and loss on disposal of property, plant and equipment for the relevant period
For any period is defined as the net (loss)/profit adjusted for the net effect of the Company’s investment
in Norilsk Nickel, the net effect of derivative financial instruments and the net effect of non-current assets
impairment
Aluminium Smelter Company of Nigeria Ltd., a company incorporated in Nigeria and in which UC RUSAL
indirectly holds an 85% interest
The Audit and Risk Committee of the Board
Joint-stock company “Administrator of the trading system of the wholesale electricity market”
Basic Element Limited, a company incorporated in Jersey, of which Mr. Oleg Deripaska is the ultimate
beneficial owner
Boguchany Energy and Metals Complex, involving the construction of the Boguchany Hydro Power Plant
(Boguchany HPP) and the Boguchany Aluminium Smelter (BoAZ, Boguchany AS), a joint 50/50 project of
UC RUSAL and RusHydro.
BoAZ project involves the construction of a 600 thousand tpa greenfield aluminium smelter on a 230
hectare site, located approximately 8 km to the south-east of the settlement of Tayozhny in the Krasnoyarsk
Region and approximately 160 km (212 km by road) from the Boguchany HPP
Board of Directors of the Company
Bratsk Aluminium Smelter or PJSC “RUSAL Bratsk”, a company incorporated under the laws of the Russian
Federation, which is a wholly owned subsidiary of UC RUSAL
Compliance Committee of the Board
Competitive capacity outtake
Adjusted
EBITDA
Adjusted
net profit
ALSCON
ARC
ATS
Basic
Element
BEMO,
BEMO project
Board
BrAZ
CC
CCO
216
En+ Group Annual Report 2021
CGC
CHP
CIS
CO2
CO2e
Continuance
Date
DAM,
day-ahead
market
DTRs
The Corporate Governance Committee of the Board
Combined heat and power plant
The Commonwealth of Independent States
Carbon dioxide
CO2 equivalent
9 July 2019, when:
• The Company was registered as an international public joint-stock company in the Unified State Register
of Legal Entities of the Russian Federation and changed its legal jurisdiction of incorporation from Jersey
to Russia (the “Continuance”)
• The Company’s name was changed from EN+ GROUP PLC to EN+ GROUP IPJSC
The competitive selection of price bids of suppliers and buyers conducted by ATS a day before the
actual delivery of electricity with the determination of prices and volumes of delivery for each hour
of the day
The FCA’s Disclosure Guidance and Transparency Rules
En+,
En+ Group¸we,
the Company,
the Group
EN+ GROUP International public joint-stock company / EN+ GROUP IPJSC and its subsidiaries whose
results are included in the consolidated financial statements prepared in accordance with the International
Financial Reporting Standards (or, where relevant, in relation to the Company prior to the Continuance,
EN+ GROUP PLC)
EuroSibEnergo
JSC EuroSibEnergo is a 100% subsidiary of En+ Group, managing its power assets
FCA
FCF
GDR
GHG
GHG
emissions
Scope 1
GHG
emissions
Scope 2
GSM
HPP
HSE
The UK’s Financial Conduct Authority
Free Cash Flow
Global depositary receipt
Greenhouse gas emissions
Direct GHG emissions occur from sources that are owned or controlled by the company, for example,
emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical
production in owned or controlled process equipment. Direct CO2 emissions from the combustion of
biomass shall not be included in scope 1 but reported separately. GHG emissions not covered by the Kyoto
Protocol, e.g. CFCs, NOx, etc. shall not be included in scope 1 but may be reported separately
Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the
company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the
organizational boundary of the company. Scope 2 emissions physically occur at the facility where electricity
is generated
General shareholders meeting
Hydropower plant
Health, safety and environment
HSE Committee
The Health, Safety and Environment Committee
ICS
IES
IFRS
IPO
Internal Control System
Integrated energy system – an aggregated production and other electricity property assets, connected via
a unified production process (including production in the form of the combined generation of electrical
and heat) and the supply of electrical energy under the conditions of a centralised operating and dispatch
management
The International Financial Reporting Standards
Initial public offering
Irkutskenergo
Irkutsk Public Joint Stock Company of Energetics and Electrification, a power generating company
controlled by En+ as to more than 30% of its issued share capital
IrkAZ
ISO 9001
ISO 14001
ISO 45001
Irkutsk Aluminium Smelter, a branch of RUSAL Bratsk in Shelekhov
ISO 9001:2015 is an international standard “Quality management systems – Requirements” by International
Organization for Standardization that sets out the criteria for a quality management system and is the only
standard in the family that can be certified to
ISO 14001:2015 is a standard “Environmental management systems – Requirements with guidance for use”
by International Organization for Standardization that sets out the criteria for an environmental management
system and can be certified to
ISO 45001:2018 is a standard “Occupational health and safety management systems – Requirements with
guidance for use” by International Organization for Standardization that sets out the criteria for a health and
safety management systems and can be certified to
217
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APPENDICES
JORC
KrAZ
KUBAL
LIBOR
Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute
of Geoscientists & the Minerals Council of Australia
Krasnoyarsk aluminium smelter or JSC “RUSAL Krasnoyarsk Aluminium Smelter”, a company incorporated
under the laws of the Russian Federation, which is an indirect whollyowned subsidiary of UC RUSAL
Kubikenborg Aluminium AB, a company incorporated in Sweden, which is a wholly owned subsidiary
of UC RUSAL
In relation to any loan:
• the applicable screen rate (being the British Bankers’ Association Interest Settlement Rate for dollars
for the relevant period, displayed on the appropriate page of the Reuters screen); or
• (if no screen rate is available for dollars for the interest period of a particular loan) the arithmetic mean
of the rates (rounded upwards to four decimal places) as supplied to the agent at its request quoted
by the reference banks to leading banks in the London interbank market, as of the specified time
(11:00 am in most cases) on the quotation day (generally two business days before the first day of that
period unless market practice differs in the Relevant Interbank Market, in which case the quotation day
will be determined by the agent in accordance with market practice in the Relevant Interbank Market)
for the offering of deposits in dollars and for a period comparable to the interest period for that loan.
LME
London Metal Exchange
LME
aluminium price
LR
LSE
LTIFR
Market Council
Represents the average daily closing official LME spot prices for each period
The Listing Rules published by the UK’s Financial Conduct Authority in its capacity as competent authority
under the Financial Services and Markets Act 2000 (as amended) and the FCA’s Disclosure Guidance
and Transparency Rules
London Stock Exchange
The Lost Time Injury Frequency Rate which was calculated by the Group as a sum of fatalities and lost time
injuries per million man-hours
The non-commercial organisation formed as a result of a non-commercial partnership, which is intended
to unite energy market participants and major consumers of electrical energy through membership of that
body. The council is intended to ensure the proper functioning of commercial market infrastructure and
effective exchanges between the wholesale and retail electrical energy markets. Additionally, it is intended
to promote investment in the electrical energy industry by creating a healthy market and even playing field
for participants of both the wholesale and retail electrical energy markets, when drafting new rules and
regulations concerning the electrical energy industry, and facilitate self-regulation of the wholesale and retail
trade in electrical energy, power and other products and services which is permissible in the wholesale and
retail electrical energy markets. The council’s aim is to ensure the security of energy supply in the Russian
Federation, unity within the economic space, economic freedom and competition in the wholesale and retail
electrical energy markets, by striking a balance between the interests of suppliers and buyers and the needs
of society in general in terms of having a reliable and stable source of electrical energy
Metals segment
The Metals segment is comprised of UC RUSAL (56.88% owned by En+ Group). The power assets
of UC RUSAL are included into the Metals segment
A concentration or occurrence of material of intrinsic economic interest in or on the earth’s crust in
such form, quality and quantity that there are reasonable prospects for eventual economic extraction.
The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-
divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
INFERRED MINERAL RESOURCE
Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level
of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade
continuity. It is based on information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability
INDICATED MINERAL RESOURCE
The part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade
and mineral content can be estimated with a reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm
geological and/or grade continuity but are spaced closely enough for continuity to be assumed
MEASURED MINERAL RESOURCE
A Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content
can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade
continuity
The Moscow Exchange
Not applicable
The Nominations Committee of the Board
The sum of loans and borrowings and bonds outstanding less total cash and cash equivalents as at the end
of the relevant period, in each case attributable to the Group, Power or Metals segment, as the case may be
Mineral
Resource
MOEX
N\A
NC
Net debt
218
En+ Group Annual Report 2021
NkAZ
OFAC
Novokuznetsk Aluminium Smelter or JSC “RUSAL Novokuznetsk”, a company incorporated under the laws
of the Russian Federation, which is a wholly owned subsidiary of UC RUSAL
The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury
OFAC Sanctions
The designation by OFAC of certain persons and certain companies which are controlled or deemed
to be controlled by some of these persons into the Specially Designated Nationals List
OHSAS 18001
Ore Reserves
Occupational Health and Safety Assessment Series 18001:2007 is a standard, that sets out the criteria for
a health and safety management systems. OHSAS 18001 has been withdrawn and replaced by ISO 45001
The economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting
materials and allowances for losses, which may occur when the material is mined. Appropriate assessments
and studies have been carried out, and include consideration of and modification by realistically assumed
mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors.
These assessments demonstrate at the time of reporting that extraction could reasonably be justified.
Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved
Ore Reserves.
PROBABLE ORE RESERVE
The economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource.
It includes diluting materials and allowances for losses which may occur when the coraterial is mined.
Appropriate assessments and studies have been carried out, and include consideration of and modification
by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and
governmental factors. These assessments demonstrate at the time of reporting that extraction could
reasonably be justified
PROVED ORE RESERVE
The economically mineable part of a Measured Mineral Resource. It includes diluting materials and
allowances for losses which may occur when the material is mined. Appropriate assessments and
studies have been carried out, and include consideration of and modification by realistically assumed
mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors.
These assessments demonstrate at the time of reporting that extraction could reasonably be justified
pcs.
Pieces
PM
Krasnoturyinsk
Power segment
QAL
R&D
RemCom
RoW
RUSAL,
the Metals
segment
SDN list,
Specially
Designated
Nationals List
SAZ
SPP
Taskforce
TPP
UES
VAP
Wholesale
electricity and
capacity market
SUAL-PM-Krasnoturyinsk, a branch of LLC «SUAL-PM»
The Power segment is predominantly comprised of power assets and operations, owned by En+ Group.
The Power segment engages in all aspects of the power industry, including electric power generation,
power trading and supply
Queensland Alumina Limited, a company incorporated in Queensland, Australia, in which UC RUSAL
indirectly holds a 20% equity interest
Research and development
The Remuneration Committee of the Board
Rest of the World ex-China
United Company RUSAL Plc, incorporated under the laws of Jersey with limited liability
(56.88% owned by En+ Group)
List of Specially Designated Nationals and Blocked Persons, published by OFAC. US persons are generally
prohibited from dealing with assets of persons designated in the SDN List which are subject to the
US jurisdiction, subject to certain exemptions and exclusions set out in licenses issued by OFAC
Sayanogorsk Aluminium Smelter or RUSAL Sayanogorsk or Sayanogorsk smelter or JSC “RUSAL
Sayanogorsk”, a company incorporated under the laws of the Russian Federation, which is a wholly owned
subsidiary of UC RUSAL
Solar power plant
En+ Climate Change Taskforce led by Chief Operating Officer Vyacheslav Solomin will be responsible for
the planning and implementation of the Company’s climate change strategy. The Taskforce will report
to the Executive Chairman, Lord Barker
Thermal power plant
Unified Energy System
Value-added products. Includes wire rod, foundry alloys, billets, slabs, high purity and others
Sphere for the turnover of electric energy and capacity within the framework of Russia’s integrated energy
system within the country’s unified economic space with the participation of large electricity producers and
consumers that have the status of wholesale market objects, confirmed in full accordance with the Russian
Federal Law “On the electric power industry” (by the Russian Government). The criteria for including large
electricity producers and consumers in the category of large producers and large consumers are also
established by the Russian government
y-o-y
Year-on-year
219
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APPENDICES
ABOUT THE
REPORT
Unless stated otherwise, financial results
included in the Annual Report 2021
are presented and calculated based on
the consolidated financial statements
prepared in accordance with the IFRS.
Due to rounding, some totals in the
tables, charts and diagrams in this
Report may not correspond with the
sum of the separate figures. This Report
may also contain discrepancies in the
calculation of shares, percentages,
and total amounts as a result of the
application of different rounding methods.
Data provided in the Annual Report
may differ marginally from previous
disclosures, also as a result of rounding.
Approval of the Report
This Annual Report was preliminarily
approved by the Company’s Board
of Directors (the “Board” or the
“Board of Directors”) on 29 April 2022
(Minutes No. 51 dated 29 April 2022).
This date is referred to below
as the date of this Report.
In this annual report (the “Annual Report”
or the “Report”), the terms “En+”, “En+
Group”, “we”, the “Company” and the
“Group” in various forms shall mean EN+
GROUP International public joint-stock
company/EN+ GROUP IPJSC (or, where
relevant, in relation to the Company
prior to the Continuance (as defined in
the Corporate Governance section of
this Report), EN+ GROUP PLC) and its
subsidiaries whose results are included
in the Group’s consolidated financial
statements prepared in accordance
with the International Financial
Reporting Standards (the “IFRS”).
The Annual Report outlines, inter alia,
the Company’s strategy, business model
and corporate governance structure,
as well as its internal control and risk
management processes. The Group’s
consolidated financial statements for the
year ended and as at 31 December 2021,
prepared in accordance with IFRS and
accompanied by a report from the Group’s
auditors, are included in the Report.
This Report has been prepared
in accordance with the following
laws and regulations:
• Federal Law No. 39-FZ On Securities
Market dated 22 April 1996
• Regulations No. 714-P On
Disclosing Information by Securities
Issuers dated 27 March 2020
• The Code of Corporate Governance,
recommended for use by joint-
stock companies by the Bank of
Russia Letter No. 06-52/2463
dated 10 April 2014 (the “Russian
Corporate Governance Code”)
• The Listing Rules (the “LRs”) published
by the UK’s Financial Conduct
Authority (the “FCA”) in its capacity
as a competent authority under the
Financial Services and Markets Act
2000 (as amended) (the “FSMA”)
and the FCA’s Disclosure Guidance
and Transparency Rules (the “DTRs”).
The LRs and the DTRs are hereinafter
together referred to as the “Rules”,
unless otherwise specified
DISCLAIMER
The information presented in this Annual
Report only reflects the Company’s
position during the review period from
1 January 2021 to 31 December 2021
(the “Review Period”), unless otherwise
specified. Accordingly, all forward-
looking statements, analyses, reviews,
discussions, commentaries, and risks
presented in this Annual Report (excluding
this disclaimer and the Corporate
Governance section, or unless otherwise
specified) are based on the financial
information available to the Company
covering the Review Period only.
This Report may include statements
that are, or may be deemed to be,
“forward-looking statements”. These
forward-looking statements may
be identified by the use of forward-
looking terminology, including the terms
“believes”, “estimates”, “plans”, “projects”,
“anticipates”, “expects”, “intends”,
“may”, “will” or “should” or, in each case,
their negative or other variations or
comparable terminology, or by discussions
of strategy, plans, objectives, goals,
future events or intentions. Forward-
looking statements may, and often do,
differ materially from actual results.
Any forward-looking statements reflect
the Company’s current view with respect
to future events and are subject to risks
relating to future events and other
risks, uncertainties and assumptions
relating to the Group’s business, results
of operations, financial position, liquidity,
prospects, growth or strategies. Many
factors could cause the actual results
of the Group to differ materially from
those set forth in the forward looking
statements contained herein, including,
among others, macroeconomic conditions,
political events, the competitive
environment in which the Group operates,
the impact of the COVID-19 pandemic
and any other outbreaks, epidemics or
pandemics, foreign exchange fluctuations
and changes in financial and equity
markets, as well as many other risks
specifically related to the Group and its
operations. Forward-looking statements
speak only as of the date they are made.
To the extent available, the industry,
market and competitive position data
contained in this Report comes from
official or third-party sources. Third-
party industry publications, studies
and surveys generally state that the data
contained therein has been obtained
from sources believed to be reliable,
but that there is no guarantee
of the accuracy or completeness
of such data. While the Company
reasonably believes that each of these
publications, studies and surveys has been
prepared by a reputable party, neither
the Company nor any of its respective
directors, officers, employees, affiliates,
advisors or agents, have independently
verified the data contained therein.
In addition, certain industry, market
and competitive position data contained
in this Report comes from the Company’s
internal research and estimates based
on the knowledge and experience
of the Company’s management
in the markets in which the Company
operates. While the Company
reasonably believes that such research
and estimates are reasonable, they,
and their underlying methodology
and assumptions, have not been verified
by any independent source for accuracy
or completeness and are subject
to change. Accordingly, reliance should
not be placed on any of the industry,
market or competitive position
data contained in this Report.
En+ Group Annual Report 2021
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APPENDICES
CONTACTS
Kaliningrad
8 Oktyabrskaya St., office 34, Kaliningrad,
Kaliningrad Region, 236006, Russia
Tel.: +7 401 269 7436
Fax: +7 401 269 7437
Moscow
1 Vasilisy Kozhinoy St., Moscow, 121096,
Russia
Tel: +7 495 642 7937
Fax: +7 495 642 7938
London
8 Cleveland Row, London SW1A 1DH, UK
Tel: +44 207 747 4900
Fax: +44 207 747 4910
Website
www.enplusgroup.com
For investors
IR Department
Tel: +7 495 642 7937
Email: ir@enplus.ru
Media enquiries
PR Department
Tel: +7 495 642 7937
Email: press-center@enplus.ru
Registrar
JSC “IRC”
Tel: +7 495 234 4470
Email: info@mrz.ru
Website: www.mrz.ru
Depository Bank
Citibank, N.A.
Tel: +1 212 723 5435
Email: CitiADR@Citi.com
Website: https://citiadr.factsetdigitalsolutions.com/www/drfront_page.idms
All necessary contacts can also be found on the Company’s website:
https://enplusgroup.com/en/
222
FINANCIAL STATEMENTS