Consolidated Report
2022
POWER
OF TRANSFORMATION
S
T
N
E
T
N
O
C
Strategic report
Sustainable development
Financial statements
Appendices
STRATEGIC REPORT
4
Governance
Key figures
Our presence and scale
Industry positioning
Chairman’s and Chief Executive Officer’s
statement
Business model
Strategy
Bisiness review
Financial review
12
14
16
18
20
22
24
36
Investment programme and modernisation 58
SUSTAINABLE DEVELOPMENT
Sustainability management
62
62
Approach to sustainability management
62
Contribution to Sustainable Development
Goals
Materiality assessment
Climate and environment
Climate leadership
Energy management
Environmental stewardship
People
Health and safety
Employees
Community engagement
64
68
74
74
82
84
108
108
115
126
Corporate governance
Information for shareholders and investors 155
Internal control and risk management
160
Ethics and compliance
Stakeholder engagement
Responsible business practices
FINANCIAL STATEMENTS
Consolidated financial statements
APPENDICES
Additional ESG Data
Independent assurance report
Glossary
Contacts
167
170
182
198
198
276
276
317
319
327
APPENDICES
(provided as a separate document)
Appendix No.1:
Report on compliance wih the Russian Corporate
Governance Code
Appendix No.2:
List of the Company’s branches
For more on our Company
please visit our webpage at
www.enplusgroup.com/en
Read more at p.6
136
136
Quality
management
system
Environment
Efficiency &
reliability
Green
energy
Supply chain
management
Climate
PRODUCT
En+
TRANSFORMS
P
E
O
P
L
E
Suppliers &
contractors
Employees
Local
communities
B U
Geographical
proximity
Digital
transformation
Read more at p.4
Read more at p.8
S
S
E
C
O
R
S I N ESS P
Business
system
Vertical integration
& self-sufficiency
Energy
management
2
1
Strategic report
Sustainable development
Financial statements
Appendices
The Company’s
reports are available
on the corporate
website
Additional information
about sustainability
performance
is available here
ABOUT THE REPORT
GRI: 2-3
We are pleased to present the first Consolidated
Report of En+ (the ”Report”). It reflects the key
achievements of En+ and covers its financial
and sustainability performance from 1 January
2022 to 31 December 2022.
Previously, En+ has published both Sustainability
and Annual Reports on a regular basis annually.
In subsequent reporting periods, the Company
will adhere to the practice of issuing Consolidated
Reports in order to optimise sustainability
and financial reporting, providing information more
conveniently for stakeholders.
By publishing the Report, En+ underlines
its commitment to transparency as the Report
presents the most reliable and complete
information about the Company. En+ pays great
attention to the operational and financial efficiency
as well as the environmental, social and governance
(ESG) agenda.
By preparing the Report, En+ seeks to provide
accurate and relevant information, and to improve
the quality of the information provided. Topics
are included in the report if the Company believes
they are significant within the stakeholder
and business impact issues.
The Report outlines, inter alia, the Company’s
strategy, business model and corporate governance
structure, as well as its sustainability management
and internal control and risk management processes.
The En+’s consolidated financial statements
for the year ended as at 31 December 2022, are
prepared in accordance with IFRS and accompanied
by a report from the Group’s auditors, included
in the document.
In order to reflect the ongoing progress
of the Company’s sustainable development activities,
En+ provides balanced, comparable, understandable
complete, reliable and accurate information
in the Report. The information in Sustainable
development section and in Additional ESG data
section is presented for 2020, 2021 and 2022
that is independently verified by B1. Moreover,
the Health, Safety, and Environment Committee
(the “HSE Committee”) has reviewed and approved
the Consolidated Report to ensure that all material
ESG topics related to the Group’s activities have been
covered.
Read more about indepent verification of ESG
data in Independent assurance report, p.317
GRI: 2-14
The Report was preliminarily approved by the
Company’s Board of Directors on 27 April 2023
(Minutes No. 63 dated 27 April 2023).
This Report was approved by the general shareholders
meeting of the Company on 29 June 2023
(Minutes No.4 dated 29 June 2023).
The Report is prepared in accordance
with the following laws and regulations, standards
and recommendations:
- 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;
- Global Reporting Initiative (GRI) Standards;
- The Sustainability Accounting Standards Board
(SASB), including standards for the Metals
& Mining and the Electric Utilities & Power
Generators industries;
- The recommendations of the Task Force
on Climate-Related Financial Disclosures (TCFD);
- The Streamlined Energy and Carbon Reporting
(SECR) technical guidelines;
- The EU Taxonomy for Sustainable Finance metrics;
- The requirements and recommendations
of the London Stock Exchange;
- The requirements of Directive 2014/95/EU
implemented through the UK Companies,
Partnerships and Groups (Accounts and Non-
Financial Reporting) Regulations 2016 No.1245;
- The Aluminium Carbon Footprint Technical
Support Document;
- Moscow Stock Exchange guidance for issuers
on how to comply with best sustainability
practices.
Additionally, throughout the Report the Company
has disclosed the progress of its sustainability-
related activities towards attaining the United
Nations Sustainable Development Goals (UN SDGs).
GRI: 2-4
During the reporting period, a number of changes
took place in the methodology for calculating
sustainable development indicators. The report
contains a number of adjustments to data from
previous years, comments on changes and updated
methods are included in the text. 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 Report may
differ marginally from previous disclosures, also as
a result of rounding.
2
BOUNDARIES
OF THE REPORT
GRI: 2-1
GRI: 2-2
In the Report, the terms “En+”, “the Company”
in various forms refer to EN+ GROUP IPJSC
and its subsidiaries whose results are included
in the Company’s consolidated financial statements
prepared in accordance with the International
Financial Reporting Standards (IFRS).
The Report reflects information about the Company’s
two segments – the Metals segment comprising
RUSAL, including the power assets of RUSAL,
and the Power segment, mainly comprising power
assets. The Report also contains consolidated
information about the Company’s entities. Financial
information included in the Report is presented
and calculated based on the consolidated financial
statements of the Company as of 31 December 2022,
prepared in accordance with IFRS unless the notes
indicate otherwise. Sustainable development
section and Additional ESG data include results
of the Company’s and its subsidiaries included
in the Group’s consolidated financial statements
prepared in accordance with IFRS, which have
significant ESG impact.
In the reporting period, the Aluminum Rheinfelden
enterprises located in Germany and acquired
by RUSAL in April 2021 are included in the reporting
boundaries. Queensland Alumina Limited, a joint
venture (Australia) is excluded from the reporting
boundaries due to the fact that since April 2022,
the Australian government has imposed a ban
on the export of alumina and bauxite to Russia. Data
on the Nikolaev Alumina Refinery (Ukraine) is not
considered in the Report1, since production at it has
been suspended. KRAMZ LLC and Strikeforce Mining
and Resources PLC (SMR) were included as part
of the Metals segment for the health and safety data.
1 / Except HR and health and safety data.
LIMITATION OF LIABILITY
Unless otherwise stated, the information presented
in the Report reflects the Company’s status
during the review period from 1 January 2022
to 31 December 2022 (the “Review Period“) and,
in some instances, discloses significant events that
took place up to the moment of publication of this
report. Therefore, all forward-looking statements,
analyses, reviews, discussions, commentaries
and risks presented in the Report (save for this
section, or unless otherwise specified) are based
upon information on the Company covering
the Review Period only.
The Report includes statements that are, or may
be deemed to be, forward-looking statements.
In the Report, information about Company’s strategy,
plans, objectives, goals, future events, or intentions
as well as the terms “believes”, “estimates”, “plans”,
“projects”, “anticipates”, “expects”, “intends”,
“may”, “will” or “should” in various forms shall
indicate forward-looking statements. Nevertheless,
forward-looking statements may and often do vary
from the Company’s actual results. Any forward-
looking statements are exposed to risks relating
to future events and other risks, uncertainties
and assumptions relating to the Company’s
business, results of operations, financial position,
liquidity, prospects, growth, or strategies.
The data presented in the Report on industry,
market and competitive position comes from official
or third-party sources. It is generally stated that
the data from any third-party industry publications,
studies and surveys was obtained from the sources
believed to be reliable, but that there is no guarantee
of the accuracy or completeness of such data.
Although the Company reasonably believes that
each of these publications, studies and surveys
was prepared by a reputable party, neither
the Company nor any of its respective directors,
officers, employees, agents, affiliates, advisors,
or agents, have independently verified the data
contained therein. Moreover, certain industry,
market and competitive position data reflected
in the Report comes from the Company’s internal
research and estimates based on the knowledge
and expertise of the Company’s management.
Although the Company reasonably believes
that such research and estimates are accurate,
they and their fundamental methodology
and assumptions have not been verified
for accuracy by any independent source.
After the Report was prepared, the Company’s
operations, its operating and financial results may
have been affected by external or other factors,
including the geopolitical conflict in Ukraine and
sanctions imposed by the other nations against
the Russian Federation, Russian individuals and legal
entities. These and other factors are beyond
the Company’s control and may have a negative
impact on the producing capabilities of En+.
Read more
on Asset Disclosure
at Consolidated
Financial Statements
for the year end
31 December 2022
GRI 2-3
To provide your
feedback, suggest
a comment or ask
a question, please
contact:
IR and ESG Department
Tel.: +7 495 642 7937
Email: ir@enplus.ru
3
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
• People Transformation
STRATEGIC REPORT
Digital
transformation
Geographical
proximity
Energy
management
R O C ESS
Vertical integration
& Self-sufficiency
Business
system
SINES S P
U
B
En+
TRANSFORMS
E
L
P
O
E
P
Supply chain
management
P
R
ODUCT
Green
energy
Efficiency &
reliability
Quality
management
system
Environment
Climate
En+ celebrated its 20th anniversary in 2022. Through
the years the main focus of the Group’s social agenda
has been the comprehensive development of Russian
regions and the improvement of the living standards
of the Company’s employees.
WAGES AND SALARIES,
USD mn
2022
2021
2020
1,898
1,446
1,253
LOCAL COMMUNITIES
EN+ TRANSFORMS WELL-BEING AND SOCIAL
LIFE OF ALL THE REGIONS WHERE THE
COMPANY OPERATES BY:
Developing infrastructure
Investing in regional environmental projects
Supporting active lifestyle
More than
USD53 mn
were allocated for social investments and
charitable projects
Promoting education for future generations
Read more about Community engagement at p.126
EMPLOYEES
EN+ TRANSFORMS WORKING CONDITIONS FOR
EMPLOYEES THROUGH:
Expanding and developing social and labour relations
through collective bargaining agreements
Solving housing problems: building microdistricts and
providing corporate preferential mortgage programme
Proving access to high-quality medical centres
Improving of the corporate safety management
system, built on the best global practices and
development of the corporate safety culture
Investing in training and development of professional
skills
73.8%
is satisfaction level of employees according
to survey conducted
over96,000 employees
on 5 continents
Read more about Employees at p.115
SUPPLIERS & CONTRACTORS
En+ transforms suppliers and contractors by
implementing obligatory H&S requirements for all
suppliers and contractors in 2022
Read more about Supply chain management at p.176
40
audits of new business partners
were organised
4
4
5
5
En+ Group Consolidated Report 2022
• STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
• Product Transformation
Suppliers &
Contractors
E
L
P
Employees
PE O
Local
communities
En+
TRANSFORMS
T
C
U
D
O
R
P
B
U
S
I
N
E
Geographical
proximity
Digital
transformation
SS PROCES S
Energy
management
Vertical integration
& Self-sufficiency
Business
system
INDUSTRY AVERAGE
Industry average emissions in 2021
EN+ TODAY
ALLOW has a guaranteed low-carbon footprint
of less than
EN+ EXPECTS
13.7 t of CO2e/t Al
(Level1)
4
(Level1)
t of CO2e/t Al
2.3
2022, Level1
t of CO2e/t Al 0.01t of CO2e/t Al
(Level1)
6
6
ALUMINIUM PRODUCED
BY INDUSTRY TODAY
ALLOW
INERTA
ENVIRONMENT
CLIMATE
Carrying out environmental friendly modernisation
using best available environmental technologies
Realising climate strategy measures to achieve net zero
GHG emissions by 2050
EN+ PARTICIPATES IN THE CLEAN AIR
NATIONAL ECOLOGY PROJECT SINCE 2018
36%
decrease in volatile organic compound emissions
in 2022 (compared to 2020)
IN 2022, EN+ RELEASED THE FIRST PATHWAY
TO NET ZERO PROGRESS REPORT
Read more about climate leadership at p.74
12.5%
decrease in intensity of GHG emissions from
electrolysis operations from 2.28 t of CO2e/t Al
(compared to 2014 baseline)
QUALITY MANAGEMENT SYSTEM
Constantly improving internal quality management
system
Read more about Quality management system at p.182
13
ASI certified plants
EFFICIENCY & RELIABILITY
IMPROVING RELIABILITY AND SAFETY OF
EQUIPMENT:
Participating in the state programmes for CHP
modernisation, providing En+ with a guaranteed
return on investment
New Energy programme aimed at modernising
the power plants of the Angara and Yenisei HPP
cascade
Read more about Investment programme
and modernisation at p.58-61
Reliability and safety of
33.7%
of total Group’s CHP capacity will be
improved through CHP modernisation
programme
USD298.6 mn
is total investments in New Energy
programme until 2026
SUPPLY CHAIN MANAGEMENT
GREEN ENERGY
Creating sustainable supply chain to improve quality
of the product by implementing ESG principles and
responsibly selecting contractors and suppliers
100%
new suppliers were screened
using social criteria
Read more about Supply chain management at p.176
Hydrogen Options Research: developing opportunities
of giga-scale green hydrogen production using
electricity from captive new-build renewable projects
(hydro and wind) both in Siberia and in the Far East of
Russia
Analysing opportunities for the extension of the
Abakan Solar Power Plant by approximately 15 MW
backed by the Capacity Allocation Contracts
Supporting development of domestic Renewable
Energy Certificates
1 / Level 1 in accordance with Aluminium Carbon Footprint Technical Support Document (2018), www.international-aluminium.org/wp-content/uploads/2021/08/AL31DA1-1.pdf.
7
7
En+ Group Consolidated Report 2022
• STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
• Business Process Transformation
Green
energy
Supply chain
management
Efficiency &
reliability
Quality
management
system
Ecology
C T
U
D
PR O
Climate
En+
TRANSFORMS
S
S
E
C
O
R
P
S
S
E
N
SI
U
B
P
EOPLE
Suppliers &
Contractors
Employees
Local
communities
En+ constantly transforms business processes
to maintain resilient operating activities and support
stable financial results.
BUSINESS SYSTEM
En+ supports initiatives from its employees for Business
system’s improvement projects. This allows the Company
to improve efficiency and decrease costs.
Read more about Business system at p.194
USD50.6 mn
total economic effect of business
system projects
VERTICAL INTEGRATION & SELF-SUFFICIENCY
En+ was established 20 years ago with a predominant
focus on the production of aluminium and alumina.
Over time, the Company fully integrated world-class
hydro power assets that reliably and sustainably
supply the energy required to produce aluminium
and has developed into a global leader in aluminium
production and renewable energy.
The Company enjoys high level of self-sufficiency
when it comes to alumina (c.75%)1 and more than
85%1 in terms of bauxite and nepheline.
The main source of electricity for aluminium
production is the Group’s hydro power plants.
~99%
of the aluminium produced by En+ is made
using renewable energy sources
Read more about En+ history at p.10-11
ENERGY MANAGEMENT
En+ implements various energy efficiency measures
that reduce energy and process fuel costs.
Read more about Energy management at p.82
2.233 mt of СО2e
emissions prevented due to the partial
replacement of prior thermal power
generation volumes
DIGITAL TRANSFORMATION
GEOGRAPHICAL PROXIMITY
En+ applies advanced digital solutions to improve
business processes efficiency.
A well-thought-out geography of assets
located on
In 2022, En+ updated its Digital transformation
strategy .
Read more about Digital transformation at p.184
5 continents
with strong operational hub in Siberia
allows En+ to achieve a unique synergy
effect
1 / Taking into account the shutdown of alumina production at the Nikolaev Alumina Refinery and the ban of the Australian government on the
export of alumina and aluminium ores to Russia.
8
8
9
9
En+ Group Consolidated Report 2022
• STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
COMPANY
ACROSS THE DECADES
20 YEARS’ HISTORY OF EN+
RUSAL AND RUSHYDRO
ENTERED INTO A
COOPERATION AGREEMENT
to jointly launch the BEMO Project,
which include the construction of the
Boguchany HPP on the Angara river
and the Boguchany aluminium smelter
in the Krasnoyarsk Region.
EN+ ACQUIRED A CONTROLLING
STAKE IN IRKUTSKENERGO,
a power company that owns the Irkutsk (0.7 GW),
Bratsk (4.5 GW) and Ust-Ilimsk (3.8 GW) HPPs
and several CHPs in the Irkutsk Region of Russia.
RUSAL completed the acquisition of a 25% plus
one share interest in Norilsk Nickel, the world’s
second largest producer of nickel, the world’s
largest producer of palladium and one of the
world’s leading producers of platinum and
copper. This is a strategic investment for the
Company.
In 2012, the first
hydropower units were
put into operation at
the Boguchany HPP. On
1 December 2012, the
HPP began commercial
supplies of electricity to
the wholesale electricity
and capacity market. In the
period from 2012 to 2014,
all nine hydropower units
were put into operation and
are currently operating with
a total capacity of 3.0 GW.
THE GROUP SUCCESSFULLY
COMPLETED THE BIGGEST
IPO AMONG RUSSIAN
COMPANIES ON THE
LONDON STOCK EXCHANGE
DURING THE PREVIOUS FIVE
YEARS.
The offer price was set at USD 14 per
share.
The total amount of
attracted capital accounted
for
USD1.5 bn
RUSAL launched ALLOW, its low-
carbon aluminium brand, which
significantly reduces the carbon
footprint of customer’s products.
2018
In the period
from April 2018
to January 2019,
the Company
operated under
OFAC sanctions.
At the end of 2018,
an agreement
was reached with
OFAC to remove
the Company from
an SDN List. The
Company made
substantial changes
to its corporate
governance
practices as part of
this agreement.
2017
2016
Under the operation
management of
RUSAL, the first half
of the first stage of
Boguchany Aluminium
Smelter launched its
operations with the
production capacity
of 149 kt. The second
half of the first stage
was launched in 2019.
Current production
capacity is 298 ktpa.
En+ had acquired 66%
of the Krasnoyarsk
HPP with 6 GW of
installed electricity
capacity. In 2016, En+
fully consolidated the
Krasnoyarsk HPP, the
HPP is currently the tenth
largest globally.
2012-
2014
2010
RUSAL conducted
an IPO and listed its
shares and global
depositary receipts on
the Hong Kong Stock
Exchange and NYSE
Euronext in Paris. Later
in 2010, RUSAL listed
its Russian depositary
receipts on Russian
stock exchanges. In
2015, the RUSAL shares
were permitted to list
on Moscow Exchange
(MOEX).
2
0
2008
2006
2003
EN+ WAS CREATED
to bring aluminium and
power assets together. Over
time, through a process of
strategic acquisitions, asset
consolidations and organic
growth, the Company has
developed into a leading global
vertically integrated aluminium
and hydropower producer.
0
2
10
10
En+ re-domiciled in
Kaliningrad, Russia.
RUSAL signed the first
sustainability-linked
syndicated pre-export
finance facility
in Russia for over
USD 1 bn. Improvement
of its sustainable
development KPIs
allowed the Company
to reduce the costs of
borrowing.
2020
2019
2
2
0
2
Geopolitical tensions since the beginning of the
year have affected the Company’s operations
and priorities. In the Metals segment, 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. Moreover, RUSAL noted that on 20 March
the Australian Government imposed an immediate
ban on exports of alumina and aluminium ores,
including bauxite, to Russia. This action affected
the alumina export from Australia that comprises
almost 20% of RUSAL’s total alumina demand.
The London Stock Exchange suspended the
admission to trading of En+ GDRs.
The Company continued to adhere to its climate
goals, held an event in September and reported on
its first year on the Pathway to Net Zero.
TARGET:
NET ZERO
by 2050
2021
The Company announced its target to
reduce greenhouse gas emissions by
at least 35% by 2030 and to achieve
net zero by 2050 (compared to 2018).
En+ also published Pathway to net zero
report that provides a full and detailed
decarbonisation roadmap.
Metals segment announced the launch
of the first stage of Taishet aluminium
smelter with production capacity
428.5 ktpa.
The Metals segment of En+ successfully
produced aluminium with the industry’s
lowest carbon footprint.
<0.01
tonnes of CO2 per 1
tonne of aluminium
applying inert anode technology
RUSAL became the first company to issue Yuan
bonds in Russia.
The Company simplified its ownership structure
through the USD 1.58 bn acquisition of VTB
Group’s 21.37% stake in En+.
EN+ COMMENCED TRADING OF
INTERNATIONAL RENEWABLE
ENERGY CERTIFICATES (I-RECS).
In 2021, En+ signed Russia’s largest ever one-
million certificates supply deal for I-RECs and
became a full-service provider and trader of
these certificates.
En+ completed the listing of ordinary shares on
MOEX (ticker: ENPG).
In May, En+ became one of the initiators of the
creation of the Baikal Plastic Free Association.
RUSAL launched several aluminium products:
aluminium alloy for space, “SAYANA“ premium
foil, “Wheels Up“ alloy wheels, aluminium panels
for facade cladding and aluminium alloy for
anodized coils and sheets.
In September, En+ announced the possibility of
building an export-oriented wind farm in the Amur
Region. The technology partner of the project will
be the Chinese state corporation, PowerChina.
www.baikalplasticfree.ru
11
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
En+ Group Consolidated Report 2022
KEY FIGURES
Current geopolitical tensions and the introduction of
restrictive economic measures are facilitating the growth
of volatility in financial, commodities, and currency
markets, changes in supply chains and the refusal of some
suppliers to fulfil previously undertaken obligations.
Nevertheless, thanks to an efficient management model,
the Company was able to quickly restructure raw material
supplies and supply chains, as well as successfully diversify
sales channels.
OPERATING FINANCIAL
POWER SEGMENT
Power segment Metals segment
Electricity production1, TWh
Revenue, USD mn
Net profit, USD mn
69.0
77.7
69.3
2022
2021
2020
14.9
12.7
12.9
83.9
90.4
82.2
3,885
3,138
13,974
11,994
2,697
8,566
2022
2021
2020
16,549
14,126
10,356
1,793
384
374
257 759
2022
2021
2020
3,225
1,846
3,534
1,016
HPPs
CHPs
Heat production, mn Gcal
Adjusted EBITDA2, USD mn
Capital expenditure, USD mn
2022
2021
2020
27.6
28.5
26.9
1,254
1,172
993
871
2022
2021
2020
2,028
2,893
3,119
3,992
1,861
474
321
237
2022
2021
2020
1,239
1,192
897
1,711
1,513
1,128
METALS SEGMENT
Aluminium production and sales, kt
Adjusted EBITDA margin, %
2022
2021
2020
3,835
3,896
3,764
3,904
3,755
3,926
2022
2021
2020
Aluminium production
Aluminium sales
18.8
28.3
18.0
Read more at pp.24-35 / Bisiness review
Read more at pp.36-57 / Financial review
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.
12
ESG
t
n
e
m
n
o
r
i
v
n
E
l
i
a
c
o
S
e
c
n
a
n
r
e
v
o
G
12.5%
reduction
in greenhouse gas
intensity of primary
aluminium in 2022
compared to 2014
97%
of hazardous waste
used and recycled
~99%
of energy used
for primary aluminium
production are made
with hydropower
45 %
increase in environmental
investments (RUB 16.6 bn
in 2022, compared
to 2021)
25%
reduction in volatile
organic compound
emissions (compared
to 2021)
13 ASI
certified production
facilities
ESG RATINGS
Systainalitics
ESG risk rating – 27.5 (“Medium”
risk), where 1 is the lowest risk, 100
is the highest risk as at 6 March 2023
CDP Climate
RUSAL “A-”
Eurosibenergo “C”, as at 2021
ISS Quality Disclosure rating
4-Social, 2-Environmental, where
1 is the highest level of disclosure
and 10 is the lowest level of disclosure
as at 1 December 2022
ESG RANKINGS
AND INDEXES
27.6%
women in Company
0.16
Lost time injury
frequency rate (LTIFR)1
86.3%
of employees
were covered by collective
bargaining agreements
Russian Union of Industrialists
and Entrepreneurs Indexes
“A” in the Sustainability Vector
Index, “B +” in the Responsibility
and Openness Index
USD 53 mn
amount of social
investments
12%
increase in government
payments (compared
to 2021)
31%
increase in total wages
and salaries (compared
to 2021)
64%
share of independent
directors as
at 31 December 2022
36.3%
female representation
on the Board
of Directors as
at 31 December 2022
USD 3.1 mn
(RUB 216.1 mn) allocated
to R&D projects2
398 total
employee’s
messages
on the Signal Hotline
39.1%
of purchases from
local suppliers
USD 50.6 mn
(RUB 3,476.3 mn)
overall economic
effect of implementing
improvement projects2
1 / Per 200,000 hours worked.
2 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
National credit ratings
High level at ESG index of Russian
business
Expert RA
One of the leaders at “ESG
transparency ranking among Russian
companies and banks”. Company
received a diploma in the category
“Higher level of ESG transparency”
ESG AWARDS
RAEX Analytics
Sustainable Development Report 2021
was recognised as the best at “XIX
Annual Practical Conference Annual
reports: the experience of leaders”
Moscow Stock Exchange
Sustainable Development Report 2021
took 3rd place at “Best Disclosure
of information on Sustainable
Development” of the XXV Annual
Reports Competition 2022
13
• STRATEGIC REPORT
Sustainable development
Financial statements
Financial statements
Appendices
Appendices
STRATEGIC REPORT:
OUR PRESENCE
AND SCALE
GRI: 2-1
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 opportunities arising from its world-class assets and scale.
The Group’s Metals segment has a well-diversified sales platform which allows
it to access and operate efficiently in all key aluminium markets. The Group has
a world-class market research and analytics platform which provides valuable input
to the Group’s long-term operational and financial planning.
At the same time, our Power segment operates the largest and the most cost
efficient network of power plants in the Siberian region, which allows it to cater
efficiently and reliably to its core clients in Siberia, including the largest
smelters operated by our Metals segment.
En+ is the largest
producer of low-carbon
aluminium globally.
No. 1
aluminium producer
(excluding China)
5.6%
of the world’s aluminium
production
69.0 TWh
low-carbon hydropower
generation
19.4 GW
Total installed electricity
capacity6
FY 2022 Revenue7, %
Read more
at p.36
by region
by product
USD
16,549 mn
37.9
25.9
6.0
19.8
10.4
CIS
Europe
South and North
America
Asia
Other
68.8
3.4
5.6
Primary aluminium
and alloys
Alumina and bauxite
Semi-finished
products and foil
11.1
3.2
8.0
Electricity
Heat
Other
11 9
Aluminium
smelters1
Alumina
refineries2
7
Bauxite
production sites
Russia
5
Hydropower
plants6
16
Combined heat
and power plant
Abakan solar
power plant
T
N
E
M
G
E
S
S
L
A
T
E
M
Sweden
Ukraine9
Moscow
Angara
river
Ireland
Italy4
Yenisei
river
Armenia
Jamaica
Guyana
Guinea
Nigeria5
Krasnoyarsk
Irkutsk
P
O
W
E
R
S
E
G
M
E
N
T
Baikal
lake
15.1 GW6
4.3 GW
5.2 MW
y
t
i
c
a
p
a
c
l
a
t
o
T
2
2
0
2
,
l
e
v
e
l
n
o
i
t
c
u
d
o
r
P
4.2 mtpa
10.7 mtpa3
20.6 mtpa
3.8 mt
6.0 mt
12.3 mt
Read more at p.24 / Our Metals segment
1 / Excluding Boguchany Aluminium Smelter (BoAZ), a joint 50/50 project of RUSAL and RusHydro, is not
included.
2 / Eurallumina in Italy is mothballed. Since March 2022, production at Nikolaev (Ukraine) has been suspended. In
addition, the Company owns a 20% participation share in QAL, located in Australia. The Australian government
banned alumina and bauxite exports to Russia since April 2022.
3 / RUSAL attributable capacity.
4 / Eurallumina in Italy is mothballed.
14
Aluminium
smelters
Alumina
refineries
Bauxite
production
sites
Hydropower
plants
Combined
heat and
power plant
Solar power
plant
Australia10
69.0 TWh8
14.9 TWh 5.9 GWh
Read more at p.32 / Our Power segment
5 / Alscon in Nigeria is mothballed.
6 / Including Onda HPP with installed power capacity of 0.08 GW (located in European part of
Russia, leased to UC RUSAL).
7 / From external customers
8 / Excluding Onda HPP.
9 / Since March 2022, production at Nikolaev has been suspended.
10 / The Australian government banned alumina and bauxite exports to Russia since April 2022.
15
T
o
t
a
l
i
n
s
t
a
l
l
e
d
c
a
p
a
c
i
t
y
P
r
o
d
u
c
t
i
o
n
l
e
v
e
l
,
2
0
2
2
En+ Group Consolidated Report 2022
• STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
INDUSTRY POSITIONING
POWER SEGMENT
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. Its 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:
Power segment:
Comprising RUSAL, including
the power assets of RUSAL
Mainly comprising power
assets
METALS SEGMENT
En+ Group’s Metals segment, represented by RUSAL, produced
approximately 5.6% of global aluminium output in 2022, and around
4.5% of the world’s alumina. In 2022, RUSAL remained among the
largest producers of primary aluminium and alloys globally.
RUSAL is about 75%1 self-sufficient in alumina capacity and more than
85%1 self-sufficient in bauxites and nephelines.
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 Value
Added Products (VAP) in the portfolio (1.70 mtpa out of 3.90 mt of
total sales in 2022).
In terms of RUSAL’s sales geography, the Company delivers aluminium
products to the domestic market and across all key global consuming
regions (Europe, South and North America and Asia).
1 / Taking into account the shutdown of alumina production at the Nikolaev Alumina Refinery and the
ban of the Australian government on the export of alumina and aluminium ores to Russia.
2 / Based on the Company’s internal data and peer companies’ publicly available results,
announcements, reports and other information.
3 / Since 2019, Chinalco has consolidated production of Chalco and Yunnan Aluminium Co., Limited.
16
To achieve the Group’s ambitious carbon
neutrality commitment, RUSAL plans to
upgrade all of its production facilities, and
introduce innovative technologies throughout
the production chain. This involves conversion
to pre-baked anode technology across
half of the capacity at Krasnoyarsk, Bratsk,
Irkutsk and Novokuznetsk smelters during
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%.
RUSAL is actively developing 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. These efficient
smelting technologies together with low-cost
input material and utilities mix secure the
Company’s global leadership on the cost curve.
Top aluminium producers globally2, mt
7.1
6.0
3.8
3.6
3.0
2.7
2.5
2.3
2.2
2.1
Chinalco3
Hongqiao Group
RUSAL
Xinfra Group
Rio Tinto
Emirates Global Alumnium
SPIC
Vedanta
East Hope
Norsk Hydro
En+’s Power segment is the largest independent
power producer in Russia by installed capacity
and the largest independent hydropower
generator in the world.
Russia has a well-developed power sector,
essential for the country’s high energy-
consuming economy. The total installed
capacity of the Unified Energy System of Russia
was 247.6 GW in 2022, with total electricity
production of 1,121.5 TWh. The Russian
electricity market is dominated 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 (50.7%),
with a minor share of solar (0.8%).
Power companies by installed hydro
capacity globally4, GW
71.8
46.3
36.9
29.5
27.9
22.6
20.8
15.1
13.8
8.3
7.1
6.4
CYPC
100% / State5
Eletrobas
92% / State
HydroQuebec
99% / State
RusHydro
77% / State
Enel
32% / State
EDF
18% / State
SDIC Power
57% / State
En+ Group
78% / Private
Iberdrola
23% / Private
Verbund
95% / State
EDP
29% / State6
Engie Brasil
76% / State
Company / Hydro share / Ownership
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 2022, En+
remained the largest producer in Siberia, with
a 36% share of installed capacity. Furthermore,
77.8% 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 for its Power segment
is to provide a low-carbon hydropower supply
to further reduce 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 Krapivinskaya HPP,
Nizhneboguchanskaya HPP and Telmamskaya
HPP. 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
capacity7, GW
3.8
15.0
En+ Group8
SGK
RusHydro
InterRAO
BEMO HPP9
18.8
12.3
7.2
3.9
3.0
Thermal
Hydro
36%
share of En+ in
installed capacity of
Siberia
77.8%
share of hydro in En+
total capacity
4 / Based on latest filings.
5 / Subsidiary of China Three
Gorges Corporation.
6 / State owned China Three
Gorges Corporation owns
21.08% stake.
7 / Based on the Company’s
internal data and peer
companies’ publicly available
results, announcements,
reports and other information.
8 / The Company’s assets
capacity provided for Siberia
only. The Company’s total
capacity is 19.4 GW, including
15.1 GW in hydropower.
9 / BEMO (Boguchany HPP) is a
50:50 JV between UC RUSAL
and RusHydro. It is operated by
RusHydro.
17
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
CHAIRMAN’S AND
CHIEF EXECUTIVE
OFFICER’S STATEMENT
The Honorable Christopher B. Burnham,
Chairman of the Board
Vladimir Kiriukhin,
Chief Executive Officer
GRI: 2-22
En+ remains the world’s leading independent hydropower
company, the largest aluminium producer outside of China, and
the third largest in the world. We produce more than six percent of
the world’s aluminium and consistently offer recyclable aluminium
with the least carbon footprint.
We do this with more than 96,000 employees scattered across five
continents.
At En+, we are committed to producing the lowest-carbon
aluminium, and our premium low-carbon brand, ALLOW, leads
the world in responsible and sustainable aluminium production.
We also are working assiduously to develop leading inert anode
technology, which is crucial to producing zero-carbon aluminium.
Our commitment to net-zero emissions is not just our deep
responsibility, but also our commitment to the highest level of
corporate stewardship, and reflects our passion to ensure a
cleaner and more sustainable environment for future generations.
Amid great uncertainty in the midst of this global geopolitical
crisis, we continue in this mission. In January 2021, En+ was
one of the first Russian companies to set the goal of becoming
carbon-neutral by 2050. Its mid-term targets we believe to be the
most ambitious climate change targets in the aluminium industry.
Despite growing external challenges related to disrupted supply
chains, severed ties with international organisations, and limited
access to sources of green finance, we remain committed to
our carbon-neutrality goals and follow the pathway our previous
Chairman, Lord Barker, presented a year ago.
Decarbonisation projects are being implemented across all
segments – more than 99% of our metal is now made using
hydropower. However, with almost all our smelting entirely
powered by renewable energy, our biggest decarbonisation
challenge as a Group is in alumina refining, and here, work is
underway in all areas: from improving the thermal insulation and
energy efficiency of equipment and pipelines to measures to
improve production processes.
An example of this effort is the implementation of the project
for the transfer of the electric boiler from hydrocarbon fuel to
renewable energy sources at Aughinish Alumina in Ireland. At
Windalco in Jamaica, RUSAL is implementing projects to convert
outdoor lighting to solar panels and modernise the lighting system
of production sites, warehouses and premises.
At our plant in Achinsk, Russia, experimental developments are
underway to capture carbon dioxide using alkaline bottom-sludge
water. Injection of liquid CO2 into reliable underground geological
formations holds strong potential for use and recovery in our
power businesses.
TRANSFORMING HOW WE OPERATE
To say the least, operational challenges have been extensive this
year as the macroeconomic environment impacted us, but we
have successfully persevered through these major challenges
through ongoing restrictions to business operations. This involved
replenishing alumina volumes which decreased due to the ban on
alumina and bauxite exports to Russia imposed by the Australian
government, together with the suspension of production at
Nikolaev Alumina Refinery as a result of the terrible conflict in
Ukraine.
Protecting shareholder interests, fulfilling our fiduciary duty, and
duty of loyalty to our tens of thousands of employees remains
our top priority at En+. It goes without saying that along with that
duty is our unwavering commitment to heating the homes and
businesses of millions of people across greater Siberia.
We were the first in the Russian market to place bonds in yuan,
and as of the end of the year had approximately 34% of our debt
portfolio denominated in yuan, which diversifies the currency
structure of our corporate debt while diversifying currency risk.
We deeply value the contribution of all our employees across five
continents and around the world. It is by mobilising and supporting
the extraordinary skills of our committed global workforce, that
the Group has flourished through the extreme challenges this past
year.
TRANSFORMING MARKETS
Overall, aluminium demand stayed relatively healthy, supported
largely by new demand in electromobility, renewable energy
infrastructure, and packaging. Global demand for primary
aluminium in 2022 increased by 0.3% to 69 mt, with the automotive
industry being the largest sector of aluminium consumption,
accounting for around 24% of global aluminium demand. The
sector recorded 2.7% growth and was driven mainly by the rapidly
increasing demand for electric vehicles (EVs), particularly in the
sport utility vehicle segment, where aluminium content is higher
due to the requirement to lower weight to meet mileage goals on a
single charge.
Aluminium consumption in construction, the second-largest
sector of aluminium demand, decreased by 3.9% globally, with
price pressures, rising interest rates, and supply chain issues all
weighing heavily on construction volumes. However, demand in
the packaging and container sector increased by 4.6% globally,
as the use of aluminium in the packaging industry expands
as environmentally friendly, sustainable, and fully recyclable
packaging solutions become a core strategy of global brands.
In addition, aluminium demand in the electric sector grew 9.4%,
driven by the expansion of renewable energy capacity, particularly
solar and wind power generation, and updating aging transmission
infrastructure.
TRANSFORMING COMMUNITIES
In honour of its twentieth anniversary, the Group organised
a three-day festival of culture called “Energy” in Irkutsk. The
outstanding space of the festival brought together a constellation
of distinguished writers, actors, musicians, and talented creators.
More than 10,000 people visited the festival, which became the
biggest cultural event for the capital of Eastern Siberia.
The festival marked the start of a new segment of the Company’s
social investment – supporting culture and the arts. En+ has
actively supported cultural and artistic projects across the many
communities in which we operate. This has included supporting
the country’s leading theatre award, the ‘Golden Mask’, supporting
the Baikal Dance Festival, the Jazz on Baikal Festival, and many
other cultural events and institutions.
The Company also finances and supports charitable projects and
systematically provides assistance to those who need it most –
adults and children with disabilities, children from needy families,
and to children without parental care or with serious illnesses. We
do this in all the countries in which we have facilities.
For example, in the Republic of Guinea, we provided charitable
assistance and supported local infrastructure projects in the Fria
prefecture. For our employees at KUBAL in Sweden, we donated
to the Children’s Oncology Fund and to Doctors Without Borders
(MSF), as well as medical and humanitarian aid to children from
vulnerable families. In Ireland at Auginish, fundraising events
resulted in more than 500 families receiving food parcels for
Christmas and New Year.
TRANSFORMING OUR FUTURE
Again, as we navigate the uncertainties and challenges of
today’s world, we want to stress our sincere gratitude to all our
stakeholders, including our employees, customers, partners, and
shareholders. Your unwavering support and loyalty have been
essential to the En+ Group overcoming the challenges of 2022.
Thank you.
18
19
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
BUSINESS MODEL
SASB: IF-EU-000.C
IF-EU-000.D
CAPITAL
NATURAL
20.6 mtpa
total bauxite
capacity
10.8 mtpa
total alumina
capacity1
664.4 m3
water consumption
BUSINESS
19.4 GW
total installed
electricity
capacity
4.2 mtpa
aluminium
production
capacity2
41,792 km
of power lines
in our networks
FINANCIAL
USD 30.7 bn
Total assets
USD1.7 bn
Capital expenditure
INTELLECTUAL
100
professional training and
development programmes
to En+ employees
“A”
Sustainable corporate
governance rating by
Da-Strategy consulting firm
HUMAN
>96,000
employees
on 5 continents
73.8%
level of employees
satisfaction
SOCIAL AND RELATIONSHIP
A–
Credit rating
27.5
(“Medium”) ESG risk
rating by Systainalitics
OUTPUT
POWER SEGMENT
METALS SEGMENT
PRODUCTION
Hydropower
69.0 TWh
ELECTRICITY
TRANSMISSION
AND
DISTRIBUTION
54.9 TWh
of electricity distributed
ELECTRICITY
TRADING AND
RETAIL
23.1 TWh
sales
Heat
27.6 mn Gcal
Thermal
14.9 TWh
Read more about value chain
creation at pp.278-279
PRODUCTION
Bauxite
12.3 mt
Nepheline
4.4 mt
Alumina
6.0 mt
Aluminium
3.8 mt
SALES
3.9 mt
aluminium sales
1.7 mt
VAP sales
VALUE FOR
STAKEHOLDERS
EMPLOYEES
USD 351 mn
retirement costs
USD 1,898 mn
employee wages
CUSTOMERS
1.2 mt
low-carbon ALLOW
aluminium sold
4.17
(out of 5) average
customer satisfaction
score
SUPPLIERS
C. USD 9,649 mn
total amount of
purchases
C. 39.1%
purchases from
local suppliers
SHAREHOLDERS AND INVESTORS
USD 3.3 bn
market
capitalisation
USD 3.1 bn
Adjusted EBITDA
LOCAL COMMUNITY AND NGOS
USD 53 mn
social
investments
USD 697 mn
payments
to government
Read more about Stakeholder
engagement at p.170
STRATEGY
1
2
ENSURING MAXIMUM
EFFICIENCY
INCREASING
PRODUCTION CAPACITY
3
IMPLEMENTING
INNOVATIONS
20
1 / RUSAL attributable capacity.
4
5
ENSURING A STABLE
FINANCIAL POSITION
COMMITTING
TO SUSTAINABILITY
Read more about key risks at p.164
and about strategy at p.22
2 / Excluding Boguchany Aluminium Smelter (BoAZ), a joint 50:50 project of RUSAL and RusHydro. 10 aluminium smelters in operation (Alscon in Nigeria
is mothballed).
21
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
STRATEGY
GROWTH
AND LEADERSHIP
STRATEGIC OBJECTIVES
GRI: 3-3
ENSURING MAXIMUM
EFFICIENCY
INCREASING
PRODUCTION CAPACITY
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 energy used for smelting is renewable.
ALUMINIUM PRODUCTION
CAPACITY RAMP-UP
The first phase of the Taishet aluminium
smelter was partly commissioned during 2022,
becoming the Group’s most modern and high-
tech aluminium smelter equipped with cutting-
edge electrolysis facilities.
~99%
level of hydropower supply for
aluminium smelting in 2022
78 kt
of metal produced on Taishet
aluminium smelter
DEVELOPMENT OF GENERATING
CAPACITY
The Company has continued to pursue the
development of new hydropower generation capacity.
The project portfolio includes four HPPs, i.e.,
Nizhneboguchanskaya, Motyginskaya, Telmamskaya
and Krapivinskaya, with a 2.5 GW aggregate capacity.
The Company also continues development of both
solar and wind power projects.
2.5 GW
the aggregate capacity of the new
hydropower projects
5.9 MWh
electricity produced at Abakan
solar plant in 2022
PRODUCTION COST SAVING
We pursue cost-cutting initiatives across the Group. A high-level of self-
reliance in both bauxite and nepheline is achieved in the Metals segment.
We develop and implement new projects for inhouse production of alumina.
In addition, the second phase of the Taishet anode plant is meanwhile under
active construction.
>85%
self sufficiency in bauxites and nepheline1
c.75%
self-sufficiency in alumina1
HIGHER PROFITABILITY
The Metals segment’s development priority is raising VAP production capacity.
To achieve that, the Aluminium division expands its VAP manufacturing
facilities with new capacities in wire rod. The Downstream division produces
foil, extrusion and car wheels which are sold at a high premium.
44%
the share of VAP in
aluminium sales in 2022
111.3 Kt
of foil produced in 2022
ENSURING A STABLE
FINANCIAL POSITION
ENSURING STABLE FCF
The Metals segment managed to achieve strong
sales revenue at the level of 2021 despite the
aluminium market price falling almost twice
between Q1 and Q3. The Power segment
outperformed the previous year and earned record
high revenues.
USD 14.0 bn
sales revenue of Metals segment2
USD 3.9 bn
sales revenue of Power segment2
IMPLEMENTING
INNOVATIONS
The Group’s strategy aims to lead the Company to become
the world’s largest vertically integrated producer of high
value-added products from low-carbon aluminium using our
own renewable energy and raw materials.
We adhere to the Group’s sustainable development strategy aligning with
the international agenda through improvement of production technology
and asset modernisation in both Metals and Power segments while at the
same time raising the output of low-cost aluminium, which positively
affects margins, financial stability and deleveraging.
COMMITTING
TO SUSTAINABILITY
ALIGNING WITH SDGS
The Group’s sustainability focus extends to climate leadership, environmental
stewardship, human development, and collaboration with stakeholders in
support of sustainability principles both nationally and internationally. From
programmes aimed at reducing the Group’s environmental impact, 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.
INNOVATIONS IN METALS
SEGMENT
SDG 11 was included
in the priority SDGs
The Metals segment is seeking to introduce inert
anode technology on an industrial scale, which is
the key technological development vector for the
segment. Inert anode difference from conventional
technology in that electrolytic smelting of one
tonne of aluminium produces 2 tonnes of oxygen
instead of carbon dioxide emissions. Tests on
inert anode electrolysis cells are underway at the
Krasnoyarsk aluminium smelter; the electrolytic
cells are supposed to emit no greenhouse gases
(GHGs) upon transition.
0.01 tonnes of CO2e
per tonne of aluminium
produced with inert anode
in accordance with Scope 1
and Scope 2
R&D PROJECTS IN POWER
SEGMENT
The Power segment’s R&D projects involved into
development of tank containers for transportation
of liquid hydrogen and a small-capacity nuclear
reactor.
NET ZERO TRANSITION
In early 2021, the Company announced its ambition to achieve a reduction
in GHG emissions by at least 35% by 2030, and net zero GHG emissions by
2050 (compared with 2018). In September 2022, the Company reported for
the first time on progress in achieving these climate targets.
Pathway to net zero progress report
was published
CLOSED LOOP ECONOMY DEVELOPMENT
The Metals segment is developing new products to be manufactured from
secondary aluminium alloys to further reduce carbon footprint in 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
22
1 / Taking into account the shutdown of alumina production at the Nikolaev Alumina Refinery and the
ban of the Australian government on the export of alumina and aluminium ores to Russia.
2 / Including intra-group revenue.
23
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
BISINESS REVIEW
METALS SEGMENT REVIEW
68.1mt
worldwide supply
of primary aluminium
in 2022
MARKET OVERVIEW
Global aluminium demand
2022 was a year full of challenges
for the aluminium industry. Whilst the global
economy had not yet recovered fully after the
pandemic, continued struggling with rising
inflation, the energy crisis, which started
to emerge in Europe in autumn 2021, clouded
prospects of economic growth. The conflict
in Ukraine and political tensions have since
then added uncertainty in sustainable
power supply and sent the price of natural
gas into a skyrocketing rise. Power costs
became a trigger for rapidly growing costs
of production for energy intensive industries
and logistics, boosting inflation. Also, the
Zero-COVID policy1, drought and power
shortage in China continued to constrain
global supply chains. Fears of an approaching
recession became more and more widespread
globally in the second half of the year.
Amid the negative macro environment,
aluminium demand stayed relatively healthy,
supported by new demand in electromobility,
renewable energy infrastructure, packaging
and all applications related to the
green energy transition and sustainable
development. Global demand for primary
aluminium in 2022 increased by 0.3%
y-o-y to 69 mt, where China contributed
to 0.3% y-o-y to 40.6 mt and the Rest of
the World (World ex-China, the “RoW”)
to 0.3% y-o-y to 28.4 mt.
In 2022, the automotive industry reconfirmed
its status of the largest sector of aluminium
consumption, amounted to approximately
24% of global aluminium demand. The
sector recorded 2.7% growth and was
driven mainly by rapid increasing of electric
vehicle production and gaining share by SUV
segment, where aluminium content is above
industry average.
Aluminium consumption in the construction,
second largest sector of aluminium demand,
decreased by 3.9% globally. Price pressures,
rising interest rates and supply chain issues
have all weighed heavily on construction
volumes, leading to delays and higher costs of
new projects.
The demand in packaging sector has
increased by 4.6% globally, reflecting on
ongoing process of industry transition from
plastic and glass to aluminium along with
general increasing consumption of bottled
or canned drinks per capita. The use of
aluminium in the packaging industry is
expanding as environmentally friendly and
sustainable packaging solutions become a
core strategy of global brands, supported by
end consumers preferences, and stimulated
by regulators.
Aluminium demand in the electric sector
grew 9.4%, driven by expanding of renewable
energy capacity, particularly solar and wind
power generation, and updating the old
transmission infrastructure. REPowerEU
programme and the Inflation Reduction Act
(IRA) in the USA aim to reduce dependence
on gas and stimulate investments into green
technology starting from power generation
and transmission to charging infrastructure
for electrical vehicle. Those initiatives create
a solid ground for further aluminium demand
growth in electrical sector.
Global aluminium supply
The worldwide supply of primary aluminium
rose by 1.4% y-o-y in 2022 to 68.1 mt.
The RoW production declined by 0.8%
to 28.0 mt. High gas prices in Europe caused
significant disruption to the aluminium
1 / ZERO-COVID policy – Zero-COVID, also known as COVID-Zero and “Find, Test, Trace, Isolate, and Support” (FTTIS), is a public health policy that has been implemented
by some countries, especially China, during the COVID-19 pandemic.
24
This result was largely due to attractive
export arbitrage, rising overseas demand
and tightened global supply. At the same
time, China’s imports of unwrought aluminium
and alloy fell during 11M 2022 by 31.6% y-o-y
to approximately 1.7 mt.
297 kt
of metal held outside
of LME warehouses
at the end
of December 2022
During August 2022, aluminium inventories
in the LME dropped to their lowest level
since 1990, and after rising in October, ended
the year at 447 kt, also a multi-year low. Metal
held outside of LME warehouses (off-warrant
reported stocks) wavered during the year
and fell to 189 kt by the end of November
and rebounded to 297 kt at the end
of December 2022.
Overall, regional aluminium premiums
rose during 1H 2022, but during 2H 2022
mostly fell due to bearish sentiment amid
LME prices falling added to rising fears of a
global economic recession. In December
2022, premiums stabilised and rose
to approximately USD 200-230 per tonne
for European P1020 Duty Unpaid premium
at Rotterdam warehouse and approximately
23-25 c/lb for the U.S. Midwest aluminium
premium amid improving sentiment, low LME
stocks and high near-by contango on the LME.
smelting production due to smelters’ negative
cash margins. Nine European smelters
with 1.63 mt per annum capacity executed
or announced approximately 1 million
of operating aluminium capacity cuts starting
from the fourth quarter of 2021. At the same
time, since EU gas prices had declined
significantly by the end of 2022, with current
aluminium price levels and lower costs,
some smelters might consider restarts in 1H
2023.
Aluminium production in China increased
by 3% y-o-y in 2022 at 40.1 mt and is
expected to grow further in 2023 as
new capacity comes online. In China,
despite power supply tightness in certain
provinces, the Chinese aluminium industry
registered around 2.6 mt of net capacity
increase by the end of 2022 due to 2.1 mt
of new capacity and the additional restart
of previously closed production.
Overall, the global aluminium market
was 0.9 mt in deficit during 2022
with 0.4 mt deficit in the RoW and 0.5 mt
in China.
China shipped a record volume of aluminium
to the RoW in 2022. China’s exports
of unwrought aluminium, alloy and aluminium
products rose 17.6% y-o-y to 6.6 mt in 2022.
LME aluminium price dynamics2, USD/t
4,000
3,500
3,000
2,500
2,000
1,500
1,000
Jan21
2 / LME data.
Mar21 May21 Jul21 Sep21 Nov21
Jan22
Mar22 May22 Jul22 Sep22 Nov22 Dec22
25
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
BUSINESS REVIEW
GRI: 2-6
SASB: EM-MM-000.A
OPERATIONAL PERFORMANCE
Aluminium
RUSAL owns 111 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 accounted
for approximately 93% of the Company’s
aluminium output in 2022. Among those,
BrAZ and KrAZ together accounted for more
than half of RUSAL’s aluminium production.
The Company also owns an 85% stake
in a smelter located in Nigeria.
During 2022, RUSAL continued to implement
a comprehensive programme designed
to control costs and optimise production
processes 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 2022
was stable compared to the previous year
and totalled 3,835 kt. During 2022, VAP sales
decreased 16.3% y-o-y to 1,702 kt, with VAP
share in total sales mix at 44%, compared
to 52% in 2021.
44%
VAP share in total
sales mix
Alumina
The Group owned nine2 alumina refineries
as of the end of 2022. 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 held a 20% equity
stake in QAL, an alumina refinery located
in Australia.
RUSAL’s total attributable alumina output
decreased 28.3% y-o-y to 5,953 kt in 2022
mostly due to:
- Stopping the production of alumina
at the Nikolaev Alumina Refinery,
in connection with the introduction
of martial law on the territory of Ukraine;
- The introduction of sanctions
by the Australian government, which
resulted in the inability to supply
alumina from Queensland Alumina Ltd
to the Company’s enterprises.
Aluminium production, kt
2022
2021
2020
3,581
134
120
3,507
133
124
3,499
139
117
Russia (Siberia)
Russia (other than Siberia)
Other countries
Alumina production3, kt
1,629 422 300
3,080 340 182
1,878 448
1,769
3,053 414
742
1,883 523
1,725
2,873 439 740
2022
2021
2020
3,835
3,764
3,755
5,953
8,304
8,182
Ireland
Jamaica
Ukraine
Russia
Guinea
Australia (JV)
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.
26
Bauxites and nephelines
Bauxites and nephelines are key raw materials for alumina production.
In 2022, the Group was more than 85%4 self-sufficient in both.
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 output5 was 12,319 kt in 2022,
as compared to 15,031 kt in 2021. The main reason for the decline
in production was the decrease in the need for bauxite with a drop
in alumina production (the suspension of alumina production
at the Nikolaev Alumina Refinery).
Nephelines
RUSAL’s nepheline syenite production was 4,363 kt in 2022, as compared
to 4,390 kt in 2021.
Bauxite production6, kt
1,631
5,780
4,909
1,863
5,679
7,489
1,752
5,570
7,435
81
2022
2021
2020
12,319
15,031
14,838
Downstream projects
Foil and packaging
The volume of foil produced by the Group’s
facilities in 2022 amounted to 111.3 kt,
a 2.47 kt or 2.3% increase from 2021. Domestic
supply of plain foil, converted foil and tape
increased by 3.97 kt or 6.0% due to increased
demand. At the same time, the output of plain
foil for export fell by 1.53 kt or 3.7% compared
to 2021, due to a decrease in demand for foil
from the manufacturer of the Russian
Federation.
Wheel business
The output of wheels in 2022 decreased
by 46% due to a sharp demand drop in the main
consumption channels.
Production drop paired with disruption of spare
parts supply chains, which continued in 2022,
reduced new passenger car sales by 59%
in 2022. Sales of new cars are the main driver
for the consumption of wheels, thus the after-
market demand dropped by 49%.
Despite the above, thanks to diversification
of the product mix (new products), SKAD
increased its share in the Russian after-market
from 45% in 2021 to 56% in 2022.
Foil production, kt
70.10
66.13
41.18
42.71
46.65
56.79
2022
2021
2020
111.30
108.83
103.44
Jamaica
Russia
Guinea
Guyana
Domestic market (RF and CIS)
Export
Nepheline mines (Achinsk), kt Wet
Wheel business, ths pcs
2022
2021
2020
4,363
4,390
4,599
2022
2021
2020
1,667
3,034
2,140
4 / Taking into account the shutdown of alumina production at the Nikolaev Alumina Refinery and the ban of the Australian government on the export of alumina and
aluminium ores to Russia.
5 / 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).
6 / Pro-rata share of production attributable to the Group.
27
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
Compared to 2021,
in 2022, the silicon
production volumes
increased by
27.5%
BUSINESS REVIEW
Other business
Powders
Powder production volumes in 2022
decreased by 4.0% compared with 2021
due to a decrease in market demand
for powders and gas-forming agents.
EBITDA exceeded the previous year by 29.5%
due to the sale of high-margin products
and the growth of product premiums.
Secondary alloys
The amount of dross and aluminium-
containing waste converted into secondary
aluminium increased in 2022 by 0.4 kt
or 3.3% compared to the previous year
due to the growth of the volume of waste
received for processing from the Company’s
enterprises.
Silicon production
Compared to 2021, production volumes in
2022 increased by 27.5% to 44.0 kt
due to the resumption of silicon production
at RUSAL Kremny Ural LLC from 1 July 2021.
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.
Bogatyr Coal LLP
Bogatyr Coal LLP, located in Kazakhstan,
is a 50/50 joint venture between RUSAL
and Samruk-Energo.
Bogatyr Coal LLP produced approximately
42.47 mt of coal in 2022.
As of 31 December 2022, the volume
of balance coal reserves of 1,2,3 layers
by Bogatyr Komir LLP was at the level
of 1.997 billion tonnes. Bogatyr Coal LLP
generated sales of approximately
USD 241 million in 2021 and USD 247 million
in 2022. Russian and Kazakh customers
contributed to approximately 33% and 67%
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 26.39% shareholding stake in Norilsk Nickel
as at the latest practicable date1.
RUSAL’s shareholding in Norilsk Nickel allows
for significant diversification of earnings
through Norilsk Nickel’s exposure to PGMs2
and non-ferrous metals (nickel, copper,
cobalt), and broadens RUSAL’s strategic
opportunities.
Norilsk Nickel’s profile and financial results3
As of 31 December 2021, Norilsk Nickel’s
resource base on the Taimyr and Kola
Peninsulas consisted of 1,293 mt of Proven
and Probable Ore Reserves and 1,824 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, Proven and Probable Ore Reserves
26.39%
RUSAL’s shareholding
in Norilsk Nickel
in Taimyr and Kola Peninsula increased
significantly mainly due to new mining project
launches and the development of design
documents.
In 2022, Norilsk Nickel produced 219 kt
of nickel (up 13% compared to 2021),
433 kt of copper (up 6% compared to 2021),
2,790 koz of palladium (up 7% compared
to 2021) and 651 koz of platinum (up 2%
compared to 2021). Metals production
in 2022, compared with 2021, increased
mainly due to the low production base
of previous year as a result of natural
groundwater inflow at Oktyabrsky
and Taimyrsky underground mines
and accident at Norilsk Concentrator4.
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 8,775 million as of 31 December
2022, which decreased in comparison
with the market value as at 31 December
2021 (USD 12,395 million). The significant
decrease in the market value of Norilsk
Nickel was due to geopolitical tensions
and economic restrictions imposed
on Russia.
BEMO project
The Boguchany 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 2022, 298 kt
of aluminium and alloys were produced, which
is an increase of 6 kt compared to 2021.
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 a 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 hydropower 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 2022, the hydropower plant produced
and delivered 20.040 TWh to the wholesale
electricity and capacity market, which
is 16.9%, or 2.9 TWh, higher than in 2021.
1 / Latest Practicable Date means 31 March 2023.
2 / PGMs are platinum group metals.
3 / Production, financial and operational data in this section are derived from https://nornickel.com/.
4 / Norilsk Concentrator is one of the production units of Norilsk Nickel.
28
29
En+ Group Consolidated Report 2022 Sustainable development
Financial statements
Appendices
En+ Group Consolidated Report 2022
• STRATEGIC REPORT
BUSINESS REVIEW
ASSETS OVERVIEW
Location
Installed
capacity
2021
production
2022
production
Capacity
utilisation rate
ALUMINIUM SMELTERS
Bratsk Aluminium Smelter
Russia (Irkutsk Region)
1,009 ktpa
Krasnoyarsk Aluminium Smelter
Russia (Krasnoyarsk Territory)
1,019 ktpa
Sayanogorsk Aluminium Smelter
Russia (Republic
of Khakassia)
Novokuznetsk Aluminium Smelter
Russia (Kemerovo Region)
Khakas Aluminium Smelter
Russia (Republic
of Khakassia)
Irkutsk Aluminium Smelter
Russia (Irkutsk Region)
Taishet Aluminium Smelter1
Russia (Irkutsk Region)
Kandalaksha Aluminium Smelter
Russia (Murmansk Region)
Volgograd Aluminium Smelter
Russia (Volgograd Region)
542 ktpa
215 ktpa
297 ktpa
422 ktpa
428 ktpa
76 ktpa
69 ktpa
1,009 kt
1,019 kt
536 kt
215 kt
303 kt
1,005 kt
1,017 kt
539 kt
213 kt
306 kt
424 kt
424 kt
0
63 kt
70 kt
78 kt
64 kt
70 kt
KUBAL
ALSCON2
Boguchany
Aluminium Smelter3
ALUMINA REFINERIES
Sweden
Nigeria
128 ktpa
124 kt
120 kt
-
-
-
Russia (Krasnoyarsk Territory)
298 ktpa
292 kt
298 kt
Achinsk Alumina Refinery
Russia (Krasnoyarsk Territory)
1,069 ktpa
Bogoslovsk Alumina Refinery
Russia (Sverdlovsk Region)
1,030 ktpa
Ural Alumina Refinery
Russia (Sverdlovsk Region)
PGLZ Alumina Refinery
Russia (Leningrad Region)
Friguia Alumina Refinery
Queensland Alumina Ltd.4
Eurallumina2
Aughinish Alumina Refinery
Windalco
Nikolaev Alumina Refinery5
BAUXITE MINES
Timan Bauxite
Guinea
Australia
Italy
Ireland
Jamaica
Ukraine
Russia (Republic of Komi)
3,300 ktpa
North Urals Bauxite Mine
Russia (Sverdlovsk Region)
3,000 ktpa
Kindia Bauxite Company
Friguia Bauxite & Alumina
Complex
Guinea
Guinea
Bauxite Company of Guyana Inc.2
Guyana
Windalco
Jamaica
Bauxite Company of Dian-Dian
Guinea
3,500 ktpa
2,100 ktpa
1,700 ktpa
4,000 ktpa
3,000 ktpa
900 ktpa
265 ktpa
650 ktpa
3,950 ktpa
1,085 ktpa
1,210 ktpa
1,759 ktpa
1,990 ktpa
1,878 kt
1,629 kt
907 kt
977 kt
917 kt
253 kt
414 kt
742 kt
-
913 kt
994 kt
917 kt
256 kt
340 kt
182 kt
-
448 kt
1,769 kt
3,405 kt
2,274 kt
2,652 kt
1,544 kt
-
1,863 kt
3,293 kt
422 kt
300 kt
3,542 kt
2,238 kt
831 kt
1,253 kt
-
1,631 kt
2,825 kt
1 / Pre-operation verifications and testing began in December 2021.
2 / 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. The Australian government banned alumina and bauxite exports to Russia since
April 2022.
5 / Since March 2022, production at Nikolaev (Ukraine) has been suspended.
100%
100%
99%
99%
103%
100%
18%
84%
107%
94%
0%
100%
85%
96%
102%
97%
52%
5%
0%
82%
35%
17%
107%
75%
24%
60%
0%
41%
94%
RUSAL STARTS PRODUCTION
OF MASTER ALLOYS FOR HIGH-TECH
ALLOYS
In February 2023, RUSAL announced that it had started its own
production of master alloys which are used to make alloys; master alloy
is an alloy of two or more components designed for adding high-melting
elements to liquid metal. Master alloys are used in the production
of alloys with an accurate chemical composition to achieve desired
properties. For example, aluminium-scandium master alloy is used to
produce alloys used in shipbuilding. With zirconium – for electrical
industry. Strontium master alloys – for casting alloys modifications.
The new production was launched at Krasnoyarsk Aluminium Smelter;
investment in the project amounted to USD 7.5 million. The capacity of
the production facility is over 5 kt of melted master alloys per year.
Customers of the new production are primarily RUSAL’s own smelters.
The new project will cover half of the Company’s need for master
alloys and is also intended for supply to external customers. RUSAL
is the largest consumer of master alloys in Russia and previously, the
company had purchased alloying components in Europe and China.
External clients are major Russian metal makers.
Employees of the RUSAL Engineering and Technology Centre have been
working on the master alloy production project for several years. The
project started with the creation of a technology to produce aluminium-
scandium master alloys, which are the most technologically complex
among melted master alloys. A unique, unparalleled technology was
developed, Russian and international patents were obtained. RUSAL
launched the production of commercial batches of aluminium-scandium
master alloys in 2019, and today it leads in production and sales of
this type of master alloys. The next stage of development was creating
technologies to produce other types of master alloys. They include
master alloys with strontium, manganese, titanium, nickel, iron, cobalt,
and rare earth metals.
RUSAL BEGINS
PRODUCTION
OF LOW-CARBON
ALLOYS FOR CAR
MANUFACTURERS
In February 2023, RUSAL announced that it
had started using end of life aluminium scrap
in the production of foundry alloys for the
automotive industry. This production enabled
RUSAL to reduce the full scope carbon footprint
of the new product by nearly 20%.
RUSAL’s Primary Equivalent Foundry Alloys
(PEFA) contain 20% of aluminium scrap,
which is added into molten aluminium during
the production process. The Company plans
to expand production of PEFA during the second
half of 2023 and increase recycled content up
to 30%. Thе new product is in full alignment
with OEMs’ requirements, meeting both
the need for low-carbon footprint, and recycled
content. This product will address the strategic
requirements linked to carbon neutrality
commitments and ensure active participation
of RUSAL, partners and customers in the circular
economy of automotive industry.
30
31
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En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
BUSINESS REVIEW
POWER SEGMENT REVIEW
247.6 GW
installed electricity
capacity of the UES
of Russia in 2022
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 247.6 GW in 2022,
and electricity output of 1,121.6 TWh. The UES
of Russia covers the most populated areas of
the country. Grid interconnections between
different energy systems are limited by long
distances, with the Russian wholesale power
and capacity market split into two market
pricing zones 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.
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 120 power
plants with an aggregate installed capacity
of 52.2 GW, with 25.3 GW (48.5%) provided
by HPPs, 26.5 GW (50.7%) by CHPs
and 400.2 MW (0.8%) 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 2022 increased by 1.5% y-o-y to 1,106.3 TWh.
Electricity consumption in the European-Ural
zone grew 0.8% to 837.1 TWh, and by 3.4%
to 224.7 TWh in the Siberian IES.
Electricity supply
The total installed electricity capacity
of the UES of Russia as of 1 January
2023 amounted to 247.6 GW and increased
by 1.0 GW in 2022. The increase can
be explained by the commissioning of 1.6 GW
of new capacity, decommissioning of 1.0 GW
of old capacity, and a 0.4 GW capacity
increase linked to remarking, corrections, etc.
In 2022, electricity output in the UES of Russia
increased by 0.6% y-o-y to 1,121.6 TWh.
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 significantly fluctuate
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.
Due to its long-term nature, the capacity market functions rather
differently from 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
Capacity prices
Price determined in capacity auctions (ex. CPI, RUB ‘000/MW/month):
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.
Second pricing zone
2021
225
2022
264
2023
267
2024
279
2025
303
2026
299
CAPACITY PRICE (INCL. CPI MINUS 0.1% INDEXATION):
First pricing zone
Second pricing zone
RUB ‘000/MW/month
2022
190.4
299.9
2021
151.0
253.2
Change, %
+26.1
+18.4
The CCO price for the European-Ural (first) pricing zone grew by 26.1%
y-o-y in 2022 (including CPI minus 0.1% indexation). The capacity price
for the Siberian IES (second) zone increased by 18.4% y-o-y in 2022
(including CPI minus 0.1% indexation).
An increase in demand (+15%), considered
for CCO procedure, was the key factor
of the CCO price y-o-y growth in 2022.
Electricity prices
SPOT PRICES OF ELECTRICITY4:
First pricing zone
Second pricing zone
Nizhny Novgorod Region
Irkutsk Region
Krasnoyarsk Region
RUB/MWh
RUB/MWh
RUB/MWh
RUB/MWh
RUB/MWh
2022
1,444
1,162
1,470
987
1157
2021
1,406
934
1,454
807
857
Change, %
+2.7
+24.4
+1.1
+22.3
+35.0
In 2022, the average electricity spot price on the day-ahead market
in the second price zone increased by 24.4% to 1,162 RUB/ MWh y-o-y.
This dynamic was driven by lower HPP generation volumes, the increase
in the supply of CHPs, CHP price bids levels, and a change in market
demand structures on the market along with electricity consumption
growth amid remaining transmission constraints on the transit between
East and West Siberia.
In 2022, average electricity spot prices
in the Irkutsk Region and Krasnoyarsk Territory
increased by 22.3% to 987 RUB/ MWh
and by 35.0% to 1,157 RUB MWh, respectively.
Lower price growth rates in the Irkutsk Region
reflected ongoing transmission constraints
on the transit between East and West Siberia.
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
4 / Day ahead market prices, data from ATS and Association “NP Market Council”.
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/).
32
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En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
BUSINESS REVIEW
OPERATIONAL PERFORMANCE
GRI: 2-6
As at 31 December 2022, the total installed electricity
capacity of the Group’s power assets amounted
to 19.4 GW1, while its total installed heat capacity
amounted to 14.6 Gcal/h. As of 31 December 2022,
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 83.9 TWh2 of electricity in 2022,
which represented 7.5% of total electricity generation
in the UES of Russia.
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 terms of installed electricity
capacity. In 2022, the Power segment’s HPPs produced
69.0 TWh of electricity, which accounted for 82.24%
of the total electricity generated by the Group.
Total electricity output by the Angara cascade HPPs
(Irkutsk, Bratsk and Ust-Ilimsk HPPs) increased
by 2.3% y-o-y to 54.2 TWh in 2022, due to existing water
reserves in Lake Baikal, the Bratsk reservoir and high water
levels in the HPPs’ reservoirs of the Angara cascade. Water
levels in Lake Baikal reached 456.86 metres (which is 9 cm
higher than long-term average) in 2022 vs. 457.23 metres
in 2021. Water levels in the Bratsk reservoir reached
401.28 metres in 2022 (which is 2.3 metres higher than
long-term average) vs. 402.03 metres in 2021.
In 2022, Krasnoyarsk HPP’s total power generation
decreased by 40.1%, from 24.7 TWh in 2021 to 14.8 TWh.
The decrease was the result of a less intensive state-
regulated drawdown in the Krasnoyarsk reservoir
due to low water reserves, which resulted from abnormally
low water inflows in the Yenisei River. The maximum
mark of the headwater level of the Krasnoyarsk reservoir
was 8.6 metres lower than last year and 5.7 metres lower
than long-term average.
Total Electricity Production4, TWh
54.2
53.0
47.3
2022
2021
2020
14.8
14.9
24.7
12.7
22.0
12.9
83.9
90.4
82.2
34
Angara cascade HPPs5
Yenisei cascade HPP6
CHPs
Combined heat and power plants
The Group’s СHPs increased electricity output in 2022
by 17.3% y-o-y to 14.9 TWh, mainly due to an 8.8% increase
in power consumption in the Irkutsk energy system compared
to the same period last year. Heat generation amounted
to 27.6 million Gcal (down 3.2% y-o-y) reflecting weather
conditions – the average temperature during 2022 was 1.2°С
higher than during 2021 as well as due to the reduction
of steam consumption by large consumers.
Abakan Solar Power Plant generated 5.9 GWh in 2022
(down 3.3% y-o-y) due to a fewer number of sunny days
during the reporting period.
Heat generation, mn Gcal
2022
2021
2020
27.6
28.5
26.9
Retail
The Company, through its subsidiaries Irkutskenergosbyt LLC,
Volgaenergosbyt JSC and MAREM+ LLC, 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.
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 2,997 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 of 0.08 GW (located
in European part of Russia, leased to UC RUSAL); excluding Boguchany
HPP, with installed power capacity of 2,997 MW (50%/50% JV of UC RUSAL
and RusHydro).
5 / Includes Irkutsk, Bratsk, Ust-Ilimsk HPPs.
6 / Krasnoyarsk HPP.
Electricity transmission and distribution
As at 31 December 2022, the Group operated a transmission
and distribution system of approximately 41,800 km
of high and low voltage lines with an annual output
of approximately 54.9 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+’s internal
coal demand. A portion of the coal production is sold
to third parties.
GRI: EU-1
ASSETS OVERVIEW
Location
Installed capacity
2021 production
2022 production
HYDROPOWER PLANTS
Irkutsk HPP
Bratsk HPP
Russia (Irkutsk Region)
Russia (Irkutsk Region)
Ust-Ilimsk HPP
Russia (Irkutsk Region)
705.7 MW
4,500 MW
3,840 MW
Krasnoyarsk HPP
Russia (Krasnoyarsk Territory)
6,000 MW
4.8 TWh
28.5 TWh
19.6 TWh
24.7 TWh
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)
- Electricity
- Heat
SOLAR POWER PLANT
1,110 MW
3.0 TWh
571.3 Gcal/h
0.3 mn Gcal
540.0 MW
1.8 TWh
2,398.6 Gcal/h
6.2 mn Gcal
726 MW
2.7 TWh
2,056.3 Gcal/h
5.8 mn Gcal
515 MW
0.8 TWh
1,015.0 Gcal/h
1.8 mn Gcal
320.3 MW
0.5 TWh
1,056.9 Gcal/h
1.0 mn Gcal
282 MW
0.7 TWh
1,995.1 Gcal/h
3.7 mn Gcal
260 MW
1.1 TWh
818.7 Gcal/h
1.6 mn Gcal
480 MW
1.8 TWh
2,172.0 Gcal/h
3.7 mn Gcal
Abakan solar power plant
Russia (Republic of Khakassia)
5.2 MW
6.1 mn kWh
OTHER ASSETS7
- Electricity
- Heat
142.4 MW
0.7 TWh
2,804.7 Gcal/h
4.5 mn Gcal
4.7 TWh
25.9 TWh
23.7 TWh
14.8 TWh
4.6 TWh
0.4 mn Gcal
2.0 TWh
5.8 mn Gcal
2.8 TWh
5.8 mn Gcal
0.9 TWh
2.0 mn Gcal
0.8 TWh
1.0 mn Gcal
0.7 TWh
3.5 mn Gcal
1.2 TWh
1.5 mn Gcal
1.6 TWh
3.3 mn Gcal
5.9 mn kWh
0.7 TWh
4.5 mn Gcal
7 / Other assets include Onda HPP and small scale generators and heat producers.
35
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
FINANCIAL REVIEW
KEY HIGHLIGHTS
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
2022
16,549
4,493
27.1%
2,006
12.1%
2,453
1,846
11.2%
3,119
18.8%
10,123
4,474
(633)
2.156
7,480
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
USD 16,549 mn
the Group’s
Revenues in 2022
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 2022, RUSAL accounted for approximately
5.6% of the world’s aluminium output,
and about 4.5% of the world’s alumina
production. RUSAL’s offices are operating
across 5 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
(USD mn)
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
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 inter-segmental 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 inter-segmental 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
2022
11,384
1,844
557
921
525
1,318
16,549
2021
9,766
1,525
612
767
465
991
14,126
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 non-current 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 short-term 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 weighted average number of shares in 2022 and 2021.
36
37
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
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 inter-segmental revenues
Total revenues
Year ended 31 December
2021
11,994
3,138
15,132
(1,006)
14,126
2022
13,974
3,885
17,859
(1,310)
16,549
The Group’s revenue is mainly attributable to the Metals segment’s
operations. In 2022 and 2021, its revenue (before inter-segmental
elimination) accounted for 78.2% and 79.3% of the Group’s revenue,
respectively. In 2022 and 2021, the Power segment’s revenue
(before inter-segmental elimination) accounted for 21.8% and 20.7%
of the Group’s revenue, respectively.
was also affected by an increase in the Power
segment’s revenue, mainly following
the increase of average electricity spot price
on the day-ahead market in the second price
zone.
The Group’s revenue increased by USD 2,423 million, or 17.2%, from
USD 14,126 million in 2021 to USD 16,549 million in 2022. This increase
was primarily due to a rise in RUSAL’s revenue, following a 9.4%
increase in the LME aluminium price to an average of USD 2,707 per
tonne in 2022, from USD 2,475 per tonne in 2021. The Group’s revenue
COST OF SALES
The following table sets forth the Group’s cost
of sales by business segment for the years
indicated:
(USD mn)
Metals segment
Power segment
Business segment cost of sales
Elimination of inter-segmental cost of sales
Total cost of sales
Year ended 31 December
2022
10,770
2,422
13,192
(1,136)
12,056
2021
8,273
1,821
10,094
(920)
9,174
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 2,882 million, or 31.4%,
from USD 9,174 million in 2021
to USD 12,056 million in 2022.
The increase was primarily attributable
to the increase in the cost of sales
of RUSAL by USD 2,497 million, or by 30.2%,
to USD 10,770 million for the year
ended 31 December 2022, as compared
to USD 8,273 million for the year ended
31 December 2021. The increase
was primarily driven by increase
in alumina purchase price by 14.9%
as well as the increase in alumina purchase
volume by 263.4% between the periods
following the ban of Australian government
for the export of alumina and bauxite
to Russia introduced in March 2022
and suspension of production at Nikolaev
Alumina Refinery due to developments
in Ukraine starting from 1 March 2022.
In addition, in 2021 and 2022, En+ gradually
increased employee wages in both segments.
USD 3,119 mn
the Group’s
adjusted EBITDA
in 2022
GROSS PROFIT
The Group’s gross profit for 2022
decreased by USD 459 million, or 9.3%,
to USD 4,493 million from USD 4,952 million
in 2021.
The Group’s gross profit margin decreased
from 35.1% in 2021 to 27.1% in 2022.
DISTRIBUTION, GENERAL
AND ADMINISTRATIVE EXPENSES
The Group’s distribution, general
and administrative expenses for 2022
increased by USD 295 million, or 18.8%,
to USD 1,864 million from USD 1,569 million
in 2021 following the 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)
RECONCILIATION OF ADJUSTED EBITDA
Results from operating activities
Add:
Amortisation and depreciation
Loss on disposal of property, plant and equipment
Impairment of non-current assets
Adjusted EBITDA
Year ended 31 December
2022
2,006
720
23
370
3,119
2021
2,898
822
5
267
3,992
38
39
FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
The Group’s results from operating activities for 2022 decreased
by USD 892 million, or 30.8%, to USD 2,006 million from
USD 2,898 million for 2021.
Results from operating activities attributable to Metals segment
decreased by USD 763 million, or 36.7%, from USD 2,079 million
in 2021 to USD 1,316 million in 2022; results from operating activities
attributable to the Power segment decreased by USD 40 million, or 4.5%,
from USD 889 million in 2021, to USD 849 million in 2022.
The Group’s operating profit margin decreased from 20.5% in 2021
to 12.1% in 2022.
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 inter-segmental
elimination) for the years indicated:
(USD mn)
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
Year ended 31 December
2021
2,893
1,172
(73)
3,992
24.1%
37.3%
28.3%
2022
2,028
1,254
(163)
3,119
14.5%
32.3%
18.8%
In 2022, the Group’s adjusted EBITDA decreased
by USD 873 million, or 21.9%, to USD 3,119 million
from USD 3,992 million in 2021. The decrease in 2022
as compared to 2021 was mainly due to the same factors
that influenced the operating results of the Group.
SHARE OF PROFITS OF ASSOCIATES AND JOINT VENTURES
(USD mn)
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
Year ended 31 December
2022
1,440
15.01%
102
28.44%
11
1,553
2021
1,762
15.01%
58
28.44%
(18)
1,802
USD 1,553 mn
the Group’s
share of profits
of associates
and joint ventures
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 profit
of its associates and joint ventures
decreased by USD 249 million, or 13.8%,
to USD 1,553 million in 2022 from
USD 1,802 million in 2021.
The deviation in the share of the profits
of the associates and joint ventures
in 2022 as compared to 2021 can primarily
be attributed to the decrease of profit from
the Group’s investment in 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 profit or loss
and other comprehensive income.
The fair value of the investment in Norilsk
Nickel amounted to USD 8,775 million
and USD 12,395 million as at 31 December
2022 and 31 December 2021, 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.
FINANCE INCOME AND COSTS
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 interest-bearing
liabilities and net foreign exchange loss.
(USD mn)
FINANCE INCOME
Interest income
Dividend income
Revaluation of financial assets and liabilities
Total finance income
FINANCE COSTS
Interest expense
Net foreign exchange loss
Change in fair value of derivative financial instruments
Revaluation of financial assets and liabilities
Total finance costs
Year ended 31 December
2022
2021
115
38
31
184
(988)
(111)
(191)
-
(1,290)
65
22
-
87
(709)
(33)
(352)
(47)
(1,141)
40
41
FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
INCOME TAX EXPENSE
The Group’s income tax expense was flat
in comparable periods.
PROFIT FOR THE YEAR
For the reasons inscribed above, the Group’s
profit for the year ended 31 December 2022
was USD 1,846 million, as compared to profit
for the year ended 31 December 2021
of USD 3,534 million.
The Group’s finance income for 2022 increased by USD 97 million,
or 111.5%, to USD 184 million from USD 87 million in 2021, mainly
as result of interest income increase driven by change of the Bank of
Russia key rate.
The Group’s finance costs for 2022 increased by USD 149 million,
or 13.1%, from USD 1,141 million in 2021 to USD 1,290 million in 2022
as a result of interest expense increase driven by change of the Bank of
Russia key rate.
PROFIT BEFORE TAXATION
For the reasons inscribed above, the Group recorded a profit before
taxation of USD 2,453 million in 2022 as compared to USD 4,138 million
in 2021. In 2022, the Power segment generated a profit before taxation
of USD 619 million compared to USD 566 million in 2021. In 2022,
Metals segment generated a profit before taxation of USD 2,166 million
as compared to USD 3,641 million in 2021.
METALS SEGMENT
In 2022 and 2021, Metals segment accounted for 78.2% and 79.3%
of the business segments’ revenues (before adjustments), respectively.
As at 31 December 2022 and 31 December 2021, the assets
of the Metals segment accounted for 68.0% and 66.5% of the Group’s
total assets (before adjustments), respectively.
SELECTED FINANCIAL DATA
The following table sets forth selected data
of Metals segment (before inter-segmental
elimination) for the periods indicated:
(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
11,994
3,721
31.0%
3,641
3,225
26.9%
2,893
24.1%
1,536
3,298
27.5%
2022
13,974
3,204
22.9%
2,166
1,793
12.8%
2,028
14.5%
725
2,165
15.5%
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 non-current 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.
42
REVENUES
The following table sets forth components
of Metals segment’s sales data (before
inter-segmental elimination) for the years
indicated:
USD 13,974 mn
Metals segment
revenues in 2022
SALES OF PRIMARY ALUMINIUM AND ALLOYS
Revenue (USD mn)
Sales volumes (kt)
Average sales price (USD/t)
SALES OF PRIMARY 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)
Total revenues
Year ended 31 December
2022
11,593
3,896
2,976
550
1,169
470
581
1,250
13,974
2021
9,966
3,904
2,553
610
1,677
364
515
903
11,994
Metals segment’s revenue increased
in 2022 by USD 1,980 million,
or by 16.5%, to USD 13,974 million from
USD 11,994 million in 2021.
Revenue from sales of primary aluminium
and alloys increased by USD 1,627 million,
or by 16.3%, to USD 11,593 million
in 2022, as compared to USD 9,966 million
in 2021, primarily due to 16.6% increase
in the weighted-average realised aluminium
price per tonne (to an average of USD 2,976
per tonne in 2022 from USD 2,553 per tonne
in 2021) driven by an increase in the LME
aluminium price (to an average of USD 2,707
per tonne in 2022 from USD 2,475 per tonne
in 2021), while sales volumes remained
almost flat in the compared periods.
Revenue from sales of alumina decreased
by 9.8% to USD 550 million for the year ended
31 December 2022 from USD 610 million
for the year ended 31 December 2021,
due to a decrease in the alumina sales
volume by 30.3% which was partially offset
by a 29.1% increase in the average sales
price.
Revenue from sales of foil and other
aluminium products increased
by USD 66 million, or by 12.8%,
to USD 581 million in 2022, as compared
to USD 515 million in 2021 due to an increase
in revenue from sales of foil by 26.2%
between the comparable periods.
Revenue from other sales, including
sales of other products, bauxite
and energy services increased by 38.4%
to USD 1,250 million for the year ended
31 December 2022 as compared
to USD 903 million for the previous year,
due to a 40.9% increase in sales of other
materials (such as anode blocks by 73.6%,
aluminium powder 20.7%, silicon by 22.2%,
hydrate by 19.0%) that was a result both
by the increase in sales volumes along
with the increase in average sales price.
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FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
COST OF SALES
The following table sets forth components of Metals segment’s cost
of sales (before inter-segmental 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
3,387
696
2,070
572
618
407
28
(752)
8,273
2022
1,847
331
3,835
940
2,658
481
781
532
171
(806)
10,770
ADJUSTED EBITDA AND ADJUSTED
EBITDA MARGIN
In 2022, Metals segment’s s adjusted EBITDA
(before inter-segmental elimination) decreased
by USD 865 million, or 29.9%, to USD 2,028 million
from USD 2,893 million in 2021. The factors that
contributed to the decrease in adjusted EBITDA
margin were the same as those influenced
the operating results.
(USD mn)
RECONCILIATION OF ADJUSTED EBITDA
Results from operating activities
Add:
Amortisation and depreciation
Loss on disposal of property, plant and equipment
Impairment of non-current assets
Adjusted EBITDA
The following table sets forth a reconciliation
of Metals segment’s adjusted EBITDA
to its results from operating activities
for the periods indicated:
USD 2,028 mn
Metals segment
Adjusted EBITDA
in 2022
Year ended 31 December
2022
1,316
503
13
196
2,028
2021
2,079
596
9
209
2,893
Metals segment’s cost of sales increased by USD 2,497 million,
or by 30.2%, to USD 10,770 million for the year ended 31 December
2022, as compared to USD 8,273 million for the year ended
31 December 2021.
The cost of alumina increased by USD 1,106 million, or by 149.3%,
to USD 1,847 million in 2022 as compared to USD 741 million in 2021
primarily due to the increase in alumina purchase price by 14.9%
as well as the increase in alumina purchase volume by 263.4%
between the periods following the ban of Australian government
on the export of alumina and bauxite to Russia introduced in March,
2022 and suspension of production at Nikolaev Alumina Refinery
due to developments in Ukraine starting from 1 March 2022.
The cost of bauxite decreased by USD 175 million, or by 34.6%,
to USD 331 million in 2022 as compared to USD 506 million in 2021.
The cost of raw materials (other than alumina and bauxite) and other
costs increased by 13.2% for the year ended 31 December 2022
as compared to the same period of 2021, due to an increase in raw
materials purchase price (price for the raw petroleum coke increased
by 52.9%, pitch by 33.7%, anode blocks by 63.8% and caustic soda
by 87.9%).
Energy costs increased by USD 588 million,
or by 28.4%, to USD 2,658 million for the year
ended 31 December 2022, as compared
to USD 2,070 million for the year ended
31 December 2021 due to increase by 23.2%
in the average electricity tariff between
the comparable periods that was caused
by both a 14.7% change in electricity tariffs
in rouble equivalent and a 6.9% strengthening
of the rouble exchange rate against the US
dollar during the reporting period.
The finished goods mainly consisted
of primary aluminium and alloys (c.96%).
The dynamic of change between
the reporting periods was driven
by the fluctuations of primary aluminium
and alloys physical inventory between
the reporting dates: 33.3% increase in 2022
and 96.9% increase in 2021.
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)
RECONCILIATION OF ADJUSTED NET PROFIT
Net profit for the period
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 non-current assets, net of tax
Adjusted net profit
Add back:
Share of profits of Norilsk Nickel, net of tax
Recurring net profit
Year ended 31 December
2022
1,793
2021
3,225
(1,440)
(1,762)
176
-
196
725
1,440
2,165
356
(492)
209
1,536
1,762
3,298
44
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 impairment of non-current assets.
Recurring net profit for any period
is defined as adjusted net (loss)/profit plus
the Company’s net effective share in Norilsk
Nickel results.
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FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
POWER SEGMENT
REVENUES
In 2022 and 2021, the Power segment accounted for 21.8% and 20.7%
of the business segments’ revenues (before adjustments), respectively.
As at 31 December 2022 and 31 December 2021, the assets
of the Power segment accounted for 32.0% and 33.5% of the Group’s
total assets (before adjustments), respectively.
SELECTED FINANCIAL DATA
The following table sets forth selected data
of the Power segment (before inter-segmental
elimination) for the periods indicated:
The following table sets forth components
of the Power segment’s sales data (before
inter-segmental elimination) for the years
indicated:
Year ended 31 December
USD 3,885 mn
Power segment
Revenues in 2022
(USD mn)
Revenues
Gross profit
Gross profit margin
Results from operating activities (EBIT)
Operating profit margin
Pre-tax profit
Profit for the period
Net profit margin
Adjusted EBITDA
Adjusted EBITDA margin
Year ended 31 December
2021
3,138
1,317
42.0%
889
28.3%
566
374
11.9%
1,172
37.3%
2022
3,885
1,463
37.7%
849
21.9%
619
384
9.9%
1,254
32.3%
(USD mn)
Average rate RUB/USD
SALES OF ELECTRICITY
Revenue (USD mn)
Sales volumes (TWh)
Average sales price (RUB/MWh)
SALES OF CAPACITY
Revenue (USD mn)
Sales volumes (GW/year)
Average sales price (RUB ‘000/MW)
SALES OF HEAT
Revenue (USD mn)
Sales volumes (mn Gcal)
Average sales price (RUB/Gcal)
Sales of semi-finished products (USD mn)
Other revenues (USD mn)
Total (USD mn)
2022
68.55
1,861
105.5
1,209
598
163.3
251
471
24.0
1,322
341
614
3,885
2021
73.65
1,453
108.4
988
500
172.8
213
417
24.5
1,257
268
500
3,138
The Power segment’s revenue
increased by USD 747 million, or 23.8%,
to USD 3,885 million in 2022 from
USD 3,138 million in 2021, mainly reflecting
increase in average electricity price.
Revenue from electricity sales increased
by 28.1% y-o-y to USD 1,861 million in 2022.
The increase was driven mainly by an increase
in the average electricity spot price on the day-
ahead market in the second price zone.
Capacity sales increased by 19.6% y-o-y
to USD 598 million in 2022. The increase
was mainly driven by higher capacity sales
prices compared to 2021.
Heat sales increased by 12.9% y-o-y
to USD 471 million in 2022 reflecting growth
in heat prices.
The Power segment’s electricity generation
decreased from 90.4 TWh in 2021 to 83.9 TWh
in 2022. In 2021, HPPs generated 77.7 TWh
of electricity, or 86.0% of the total electricity
generated by the Power segment, while
in 2022 they generated 69.0 TWh of electricity,
or 82.2% of the total electricity generated
by the Power segment. The decrease in HPP
generation can be primarily explained
by less intensive state-regulated drawdown
in the Krasnoyarsk reservoir due to low water
reserves, which resulted from abnormally low
water inflows in the Yenisei River.
46
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FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
COST OF SALES
The following table sets forth components of the Power segment’s cost
of sales (before inter-segmental 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
2022
641
498
211
363
217
194
298
2,422
2021
427
354
216
257
182
160
225
1,821
The Power segment’s cost of sales increased by USD 601 million,
or by 33.0%, to USD 2,422 million for the year ended 31 December 2022,
as compared to USD 1,821 million for the year ended 31 December
2021.
Growth in the Power segment’s cost of sales
was driven mainly by increase in personnel
costs in 2021 and 2022 and increase in raw
materials purchase price due to inflationary
pressure.
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 (Other and unallocated)
Adjusted EBITDA (Power segment)
Adjusted EBITDA margin (HPP’s)
Adjusted EBITDA margin (CHP’s)
Adjusted EBITDA margin (Power segment)
Year ended 31 December
2021
1,076
38
58
1,172
86.4%
5.2%
37.3%
2022
1,257
42
(45)
1,254
84.0%
5.0%
32.3%
USD 1,254 mn
Power segment
Adjusted EBITDA
in 2022
In 2022, the Power segment’s adjusted
EBITDA (before inter-segmental elimination)
increased by USD 82 million, or 7.0%,
to USD 1,254 million, from USD 1,172 million
in 2021. The change was largely driven
by rouble appreciation (the average USD/
RUB exchange rate for the reporting period
decreased by 6.9%).
As power operations account for a sizeable
portion of the revenues, assets and liabilities
attributable to the Power segment, and are,
therefore, a predominant contributor
to the adjusted EBITDA of the Power
segment, the low-cost operation of HPPs
will positively affect the overall adjusted
EBITDA of the Power segment. The proportion
of HPPs’ contribution to the adjusted
EBITDA of the Power segment in particular
was 100.3% in 2022 and 91.8% in 2021.
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)
2022
2021
Year ended 31 December
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
849
221
10
174
889
229
(4)
58
1,254
1,172
48
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FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
NET ASSETS
(USD mn)
GROUP
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
METALS SEGMENT
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
Year ended 31 December
2022
20,176
10,502
(11,479)
(6,467)
12,732
14,516
10,115
(7,733)
(4,591)
12,307
10,770
816
(3,758)
(2,065)
5,763
2021
17,090
8,967
(9,897)
(5,849)
10,311
12,470
8,436
(5,790)
(4,592)
10,524
9,725
824
(4,121)
(1,461)
4,967
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 4,474 mn
the Group’s net
working capital
as at 31 December
2022
(USD mn)
GROUP
Inventories
Short-term trade and other receivables
Dividends receivable
Trade and other payables
Net working capital
METALS SEGMENT
Inventories
Short-term trade and other receivables
Dividends receivable
Trade and other payables
Net working capital
POWER SEGMENT
Inventories
Short-term trade and other receivables
Trade and other payables
Net working capital
As at 31 December
2021
3,731
2,655
(827)
(2,806)
2,753
3,692
2,473
(827)
(2,408)
2,930
158
306
(602)
(138)
2022
4,383
2,514
-
(2,423)
4,474
4,489
2,263
-
(1,919)
4,833
161
363
(693)
(169)
In 2022, the Group’s net assets increased by USD 2,421 million
to USD 12,732 million as at 31 December 2022, from USD 10,311 million
as at 31 December 2021.
In 2022, Metals segment’s net assets increased by USD 1,783 million,
or by 16.9%, to USD 12,307 million as at 31 December 2022, from
USD 10,524 million as at 31 December 2021. This was mainly
caused by an increase in total assets, driven primarily by the increase
in interests in associates, inventories, trade and other receivables,
cash and cash equivalents and increase in total liabilities mainly
due to the increase in outstanding financial debts.
In 2022, the Power segment’s net
assets as at 31 December 2022
increased by USD 796 million,
or by 16.0%, to USD 5,763 million, from
USD 4,967 million as at 31 December 2021
mainly due to increase in property, plant
and equipment following investing activities
as well as appreciation of rouble against
US dollar by 5% as at 31 December 2022
compared to 31 December 2021.
As at 31 December 2022, the Group’s
net working capital amounted
to USD 4,474 million, compared
to USD 2,753 million as at 31 December 2021.
In 2022, net working capital increased by 63%
compared to 2021 mainly due to restrictive
measures against the Russian Federation
which resulted in decrease in advances
received from customers, and accumulation
of finished metal products.
50
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FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
DIVIDENDS
In 2022, 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 long-term funding sources included
predominantly the rouble and foreign currency
denominated secured and unsecured loans
from Russian and international banks,
as well as debt instruments issued in both
the Russian and international capital markets.
Liquidity was managed separately in both
segments – Power and Metals.
During the years ended 31 December 2022 and 31 December 2021, the
Company did not declare and pay dividends.
In 2022, Metals segment declared dividends. In November 2022,
dividends of USD 131 million were paid to Metals segment’s non-
controlling shareholders.
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 from/(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
2,168
285
(2,691)
(238)
2,549
17
2,328
1,705
2022
572
47
742
1,361
2,328
(215)
3,474
(633)
Cash flows from operating activities
The Group’s cash flows from operating
activities for 2022 were USD 572 million,
a decrease of USD 1,596 million, or 73.6%,
compared to USD 2,168 million in 2021
caused by an increase in working capital.
Cash flows generated from/(used in) investing activities
The Company generated USD 47 million net cash from investing
activities for the year ended 31 December 2022 as compared
to USD 285 million in the previous year primarily due to increase
of CAPEX by 13%. Another factor is the proceeds from a partial disposal
of Norilsk Nickel shares of USD 1,421 million in 2021.
1 / Restricted cash of USD 3 million and USD 2 million is included in cash and cash equivalents as at 31 December 2022 and as at 31 December 2021, respectively.
52
Free cash flow
The following table sets forth a reconciliation
of the free cash flow to the cash flows from
operating activities for the periods indicated:
Cash flows generated from/(used in)
financing activities
The Group’s cash flows from financing
activities for 2022 were USD 742 million,
an increase by USD 3,433 million (in 2021
cash flows used in financing activities
were USD 2,691 million) was primarily
due to the net proceeds from borrowings
of USD 2,122 million for the year ended
31 December 2022 as compared to net
repayment of borrowings of USD 1,593 million
for the preceding year.
(USD mn)
RECONCILIATION OF FREE CASH FLOW
GROUP
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
Proceeds from partial disposal of associate
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
Year ended 31 December
2021
2,168
(1,513)
620
1,421
63
(703)
(36)
(315)
1,705
2022
572
(1,711)
1,639
-
104
(987)
(21)
(229)
(633)
Cash flows generated from operating activities
(412)
1,146
Adjusted for:
Capital expenditures (acquisition of property, plant and equipment
and acquisition of intangible assets)
Dividends from associates and joint ventures
Proceeds from partial disposal of associate
Interest received
Interest paid
Restructuring fees
Settlement of derivative financial instruments
Free cash flow
(1,239)
1,639
-
70
(428)
(17)
(229)
(616)
(1,192)
620
1,421
37
(380)
(34)
(315)
1,303
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FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
RECONCILIATION OF 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
986
(474)
34
(559)
(4)
(17)
1,022
(321)
26
(323)
(2)
402
Capital expenditures
In 2022 and 2021, the Group’s capital expenditures
(comprising the acquisition of property, plant and equipment,
as well as the acquisition of intangible assets) were USD 1,711 million1
and USD 1,513 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
Metals segment recorded a total capital expenditure
of USD 1,239 million for the year ended 31 December 2022. Metals
segment’s capital expenditure in 2022 was aimed at maintaining
existing production facilities. Maintenance CAPEX amounted to 67%
of the aggregate CAPEX in 2022.
In 2022, capital expenditure by the Power segment amounted
to USD 474 million. Maintenance CAPEX accounted for 42% of total
capital expenditure.
Year ended 31 December
2022
1,239
474
2021
1,192
321
Cash
As at 31 December 2022 and 31 December
2021, the Group’s cash and cash
equivalents, excluding restricted cash,
were USD 3,474 million and USD 2,328 million,
respectively. As at 31 December 2022
and 31 December 2021, the Power
segment’s cash and cash equivalents
were USD 281 million and USD 346 million,
respectively. Meanwhile, the Metals
segment’s cash and cash equivalents
were USD 3,196 million and USD 1,984 million,
respectively.
LOANS AND BORROWINGS
The nominal value of the Group’s loans and borrowings
was USD 8,764 million as at 31 December 2022, not including bonds,
which amounted to an additional USD 4,859 million.
Set out below is an overview of certain key
terms of selected facilities in the Group’s loan
portfolio as at 31 December 2022:
Principal amount outstanding
as at 31 December 2022
Tenor/Repayment schedule
Pricing
Facility /Lender
METALS SEGMENT
Credit facilities
PXF facilities
USD 848 mn
Russian Bank Loans1
CNY 8.2 bn
USD 2.1 bn
RUB 31.2 bn
USD 943 mn
Bonds
Eurobonds2
RUB bonds
RUB 28.5 bn
CNY bonds
CNY 22.9 bn
POWER SEGMENT
Credit facilities – Corporate loans
Russian Bank Loans
RUB 205.4 bn
Until November 2024, equal
quarterly repayments starting
from January 2022
3 month LIBOR plus 1.7% –
2.1% p.a.
Bullet repayments at final
maturity dates, the last
repayment – July 2025
December 2027, quarterly
repayments starting
from September 2024
3.75% – 4.2% p.a.
3 month LIBOR plus
3.0% p.a.
Quarterly repayments, the last
repayment – December 2035
Key rate of the Bank of Russia
plus 1.9% – 3.15% p.a.
2023, repayment at final
redemption date
3 tranches, the last repayment
is May 2030, repayments
at final redemption dates,
subject to bondholders’ put
option
9 tranches, the last repayment
is July 2027, repayments
at final redemption dates
4.85% – 5.3% p.a.
6.5% – 9.5%
3.75% – 3.9% p.a. /
LPR1Y+0.2% p.a.
Quarterly repayments, the last
repayment – December 2026
The key rate of the Bank
of Russia +1.5% – 2.0% p.a.
Bonds
CNY bonds
CNY 2.1 bn
December 2025
4.45% p.a.
1 / After inter-segmental elimination.
54
1 / In February 2023, RUSAL entered into a new credit facility with the Russian bank in the total amount of up to USD 4.4 billion and maturity – 24 December 2027.
On 3 February 2023, the funds in the amount of 15.8 billion Chinese yuan were partially drawdown with an interest rate of 4.75% and were used to refinance the principal
outstanding under the existing debt with the Russian bank.
2 / On 8 February 2023, pursuant to the extraordinary resolution of the noteholders RUSAL redeemed the Eurobond with a coupon of 4.85% to noteholders who hold
Eurobond through NSD and other Russian custodians being the NSD direct participants in the amount of USD 418 million.
55
FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
SECURITY
LEGAL CONTINGENCIES
GOING CONCERN
As of 31 December 2022, 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
and interest of a number of the Group’s subsidiaries, designated
accounts, shares in Norilsk Nickel (representing 25% +1 share of Norilsk
Nickel’s total nominal issued share capital).
As of 31 December 2022, 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.
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 2022, the amount of claims
where management assesses outflow
as possible approximates USD 33 million
(31 December 2021: USD 21 million).
The summary of the Group’s principal contingencies is set out below.
For a detailed discussion of the Group’s contingencies in 2022, including
environmental contingencies, risks, and considerations, see Note 22
of the Annual Financial Statements.
FINANCIAL RATIOS
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. 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.
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.
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 2022
and 31 December 2021, was 44.3% and 41.9%,
respectively.
RETURN ON EQUITY
The Group’s return on equity – the amount
of net profit as a percentage of total equity
– was 14.5% and 34.3% as at 31 December
2022 and 31 December 2021, 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
2022 and 31 December 2021, was 2.3x
and 4.5x, respectively.
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 rates,
production rates and costs. These forecasts
and sensitivity analyses allow management
to mitigate liquidity or covenant compliance
risks in a timely manner. The situation
with Australian government and situation
in Ukraine, as well as the volatility
of commodity markets, stock, currency markets and interest rates,
create material uncertainty in the Group’s ability to meet its financial
obligations on time and continue as a going concern entity.
Management constantly evaluates the current situation and prepares
forecasts taking into account different scenarios of the events
and conditions development. The Group’s management expects
that prices on the world commodity markets will grow and improve
the results of operating activities. The Group is also revising its supply
and sales chains, ensuring an optimal equity and debt ratio, searching
for resolutions of logistic difficulties, as well as the ways to survive
its obligations in order to adapt the current economic changes
to maintain the continuance of the Group’s operations. For a detailed
discussion of the Group’s going concern in 2022, see Note 1(e)
of the Annual Financial Statements.
REPORT ON PAYMENTS TO GOVERNMENTS
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 2022
(USD ‘000)
Production fees
Taxes or levies on corporate
sales, production or profits
Royalties
Dividends
Signing-on, discovery and
production bonuses
Licence fees, rental charges,
entry fees and other
consideration for licences
and/or concessions
Infrastructure improvement
payments
Russia
Kazakhstan
Ukraine
Guinea
Guyana
Jamaica
-
72,392
-
28,209
-
-
-
-
-
-
-
149
-
-
-
5,772
1,059
48
1,337
255
-
-
4,891
-
-
-
-
-
Total
-
-
7,925
113,569
610
610
-
-
-
-
-
3
-
-
-
169
100
7,148
-
-
1,592
TOTAL
79,501
29,523
197
4,891
172
8,635
122,919
56
57
FINANCIAL REVIEWEn+ Group Consolidated Report 2022Financial statementAppendice • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
INVESTMENT PROGRAMME
AND MODERNISATION
Please see detailed
information about
strategy at Strategy
section p.22
The investment programme and modernisation
are being implemented in accordance
with the strategic objectives of the Group
METALS SEGMENT
TAISHET
GOALS
RESULTS
- To increase production capacity
- To reach raw material security
- To reduce primary aluminium
production costs
428.5 ktpa
aluminium production capacity
of the TAZ’s first stage
One of RUSAL’s major projects is the Taishet aluminium smelter (TAZ)
in the Irkutsk Region. The first stage of the smelter was launched at the end
of 2021.
The Company is also continuing its investment project to construct the
Taishet Anode Factory (TAF-1) with a capacity of approximately
400 kt of prebaked anodes per year.
Key sustainability benefits:
- Use of pre-baked anode technology
- 100% of its required electrical power will be derived from the HPP,
therefore it will produce clean “green” aluminium
- A closed-loop water cycle which helps to reduce costs and environmental
impact
- Use of modern gas cleaning equipment represented by dry alumina
scrubbers with purification efficiency of 99.5%
IN-HOUSE FLAME
RETARDANT PRODUCTION
GOAL
RESULTS
To replace imports with domestic
production of flame retardants
RUSAL completed the implementation of a project to build
a plant for the production of environmentally friendly flame
retardants. The Company started industrial production
of VOGA 205 commercial products. These products are high-
quality, eco-friendly, halogen-free flame retardants. They
suppress combustion and smoke formation in cables widely
used in nuclear, aviation, shipbuilding and automotive
industries.
58
CONVERSION TO PRE-BAKED
ANODE TECHNOLOGY
GOALS
- To significantly reduce power consumption
- To reduce GHG emissions, such as fluoride and benzo(a)pyrene
- To improve gas removal efficiency
- To reduce pollutant emissions into the environment
of the potroom by 30%
Successfully tested RA-550 engineering solutions are currently
deployed across existing pre-baked pots. The plan envisages
the construction of new facilities using modern technology
for baked and pre-baked anodes, with the simultaneous
dismantling or modernisation of old workshops.
RESULTS
In 2022, energy-efficient
and environmentally friendly
modernisation of aluminium plants
in Bratsk, Shelekhov, Krasnoyarsk,
and Novokuznetsk continued and received
positive conclusions from state
environmental experts. Construction
of the new buildings is to start in 2023
and will continue in the medium term.
100%
reduction of benzo(a)pyrene
emissions
CONVERSION
TO ECO-SODERBERG TECHNOLOGY
GOALS
- To improve the post-combustion treatment of the anodic gas
- To ensure the tightness of the electrolysis
- To significantly improve the air quality due to the improved
automated alumina feed system
14%
average reduction in pollutant emissions
RESULTS
The conversion of electrolysers to Eco-
Søderberg technology is underway at Bratsk,
Irkutsk, Novokuznetsk and Volgograd
aluminium smelters and has already been
completed at Krasnoyarsk Aluminium
Smelter. Switching to Eco-Søderberg allows
the significant reduction of emissions
of perfluorocarbons (PFCs).
59
En+ Group Consolidated Report 2022 • STRATEGIC REPORT
Sustainable development
Financial statements
Appendices
POWER SEGMENT
THE NEW ENERGY
MODERNISATION PROGRAMME
GOALS
- To modernise the power plants of the Angara and Yenisei HPP cascade
- To ramp up the energy output from the same volume of water passing through
the hydropower turbines
- To improve safety and reliability of the HPPs, which will mitigate the risks associated
with cavitation and address the HPP generator wear problem
Starting from 2026:
2.4 TWh per year
additional generation
- To reduce the Company’s environmental footprint by curbing the greenhouse gas
at least
2.8 mt of СО2e
per year
the GHG emissions from
coal fired power generation
prevented annually
emissions of the Company’s coal-fired power plants
The New Energy Programme assumes large-
scale overhaul and replacement of the core
equipment at the Company’s largest Siberian
HPPs, i.e., Krasnoyarsk, Bratsk, Irkutsk
and Ust-Ilimsk. The programme envisages the
modernisation of hydropower 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.
The New Energy Programme, when completed,
will provide better reliability and higher
quality power supply to our Siberian
consumers. On top of the expected economic
improvement, the New Energy Programme
RESULTS IN 2022
will positively impact the environment
in the Siberian regions where we operate.
Hydropower energy is used to partially
replace the energy generated by coal-
fired power plants, and thus prevent GHG
emissions. The modernised turbines also
incorporate an up-to-date runner design
that prevents the leakage of turbine oil
into water.
The modernisation programme investment
is expected to total RUB 21 billion in the
period to 2026 (around USD 298.6 million1),
including funds already invested in the
project (RUB 16 billion2).
In 2022, the Company launched a new hydropower unit at Irkutsk
HPP. The Company replaced one runner and started works
for the replacement of another runner at Bratsk HPP. Two new
runners were replaced at Krasnoyarsk HPP, and works on the next
runner replacement began.
Increase in power
output
Prevented GHG
emissions
2 TWh
2.233
mt of СО2e
Generation units
Runners replaced
Bratsk HPP
Ust-Ilimsk HPP
Krasnoyarsk HPP
Irkutsk HPP
18
16
12
8
14 (2007–2022)
4 (2014–2018)
4 (2016–2022)
3 (2019–2022)
Remaining runners to be replaced
4 by 2026
0 (100% of planned
work completed)
4 by 2025
1 by 2023
Total amount of additional power
generation by hydraulic units
with new impellers, MWh
1,204,194
345,161
253,496
123,861
1 / Calculated based on USD/RUB exchange rate of 70.3375 as at 31 December 2022.
2 / USD 227.5 million, calculated based on USD/RUB exchange rate of 70.3375 as at 31 December 2022.
60
SMALL HPP PROJECTS
GOALS
Segozerskaya HPP
- To increase in energy generation produced by small HPP
Expected generating capacity
As part of the strategic goal of developing generating
HPP capacity, En+ has formed a portfolio of projects
with 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.
As part of the state programme backed by the CAC
mechanism for renewable projects, En+ Group
is implementing the small-scale Segozerskaya HPP
in Karelia (Russia).
Total expected CAPEX for small HPP сonstruction is
approximately RUB 2 billion (USD 29 million1).
8.1MW
RESULTS IN 2022
In 2022, construction and installation work
on the Segozerskaya HPP are continued:
the excavation of the HPP building pits (70%
of the design volume) and the discharge channel
(50% of the design volume). In 2023, construction
work building a HPP is planned.
CHP MODERNISATION PROGRAMME
GOALS
RESULTS IN 2022
- To improve the reliability and safety of 1,445 MW of
En+’s CHP capacity (33.7% of total CHP capacity)
- To improve the environmental situation in the Irkutsk
Region
The Group participated in 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.
The current approved generating facilities
should be completed and launched by 2026,
with the project’s internal rate of return at 14%.
Total expected CAPEX for CHPs
is RUB 19.7 billion (USD 280 million1)
in the period to 2026.
Modernising
33.7%
of total CHP capacity
- Construction, installation and commissioning work were carried
out, preparations are underway for a comprehensive testing
on the upgraded TA-1 at CHP-6.
- A new turbogenerator was put into operation at power unit
No. 2, and the furnace and superheaters of KA-4 were replaced
at CHP-10.
- Work on the boiler unit was completed and the equipment
was put into operation at Novo-Irkutsk CHP.
- Work continues on other modernisation facilities (including
Novo-Irkutsk CHP, CHP-9, CHP-10, CHP-11 and Ust-Ilimsk CHP).
Building an export-oriented wind farm in the Amur Region
En+ announced the possibility of building an export-oriented wind farm
with Russian and Chinese partners in the Priamurskaya advanced socio-
economic development zone, with the support of the Far East and Arctic
Development Corporation and the Government of the Amur Region.
The technology partner for the project will be the Chinese state-owned
company PowerChina. The partners are currently assessing the wind
potential of the region to select the optimal configuration of the wind farm
and the capital costs for the implementation of the project in different
configurations. The construction period will be about two years.
Read more about Company’s research and development
projects at R&D management at p.192
61
En+ Group Consolidated Report 2022
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
SUSTAINABILITY
MANAGEMENT
APPROACH TO SUSTAINABILITY MANAGEMENT
THE BOARD
OF DIRECTORS
- strategic sustainability management
- consideration of issues and identification of the most
significant areas related to the environmental impact, social
policy and corporate governance of the Company
- approval of the Company’s Report on sustainable development
GRI: 2-12
2-14
Sustainability management is an integral
part of the En+ corporate governance
system. Relevant responsibility is divided
across all the levels of the Company’s
management.
HSE (HEALTH, SAFETY AND
ENVIRONMENT) COMMITTEE
- takes part in the development of HSE policies
- prepares recommendations to the Board on formulating
HSE strategies, policies, and task setting
- controls the Company’s compliance with the international
HSE standards and applicable laws
- oversees the Group’s HSE performance
CEO
- overall sustainability management
SUSTAINABLE DEVELOPMENT
DIRECTORATE
- performs initial assessment of sustainability issues
- prepares draft decisions and measures to minimise
environmental and climate risks
- initiatiates projects in the field of biodiversity
conservation
- collaborates with sustainability oriented stakeholders
(associations, partnerships, NGOs, international
organisations)
- performs sustainability data analysis
Sustainability achievements at En+ are monitored
through the system of key performance indicators
(KPIs) related to various areas of activity – growth
of economic profit, increase in labour productivity,
minimisation of accidents at work, improvement
of energy efficiency and the reduction of GHG
emissions in CO2 equivalent.
GRI: 2-13
GRI: 2-23
En+ systematically manages all ESG impacts and
implements responsible practices in its business
processes. The Company made a significant
contribution to the implementation of Russia's
national projects in the field of healthcare, ecology,
urban environment, employment support, science
and supports leading international and Russian
initiatives in the field of sustainable development.
En+ continues to demonstrate significant progress
towards achieving the UN SDGs.
Read more at page 62-65
and on the Company’s website:
https://www.enplusgroup.com/en/
sustainability/un-sdgs/
13
RUSAL production
and office sites
have been
successfully
re-audited
against the ASI
Performance
Standard and ASI
Chain of Custody
Standard by 2022
WHY SUSTAINABILITY IS IMPORTANT FOR EN+
GENERATING LONG-TERM VALUE
MITIGATING OUR RISKS
As part of strategic planning and risk
management, En+ separately identifies
ESG risks, the management of which takes
into account the Company's economic,
environmental and social impacts.
ESG risks include risks associated with
occupational health and safety, climate
change, environmental and legal risks, etc.
Risk management in the field of sustainable
development is carried out according to the
vertical principle based on the identification
of risks of business processes of individual
enterprises with subsequent consolidation
at the segment level, and then at the
Company level.
Read more at p.160-166
MEETING INTERESTS
AND EXPECTATIONS OF
STAKEHOLDERS
The sustainable development of En+ is
based on compliance with the principles
of fair business conduct and responsible
behaviour towards all stakeholders.
Moving towards strengthening and
building capacity in the field of sustainable
development, En+ demonstrates the
seriousness of intentions in achieving
important tasks for all stakeholders.
Read more at p.170-173
En+ develops sustainable solutions and
uses advanced best available technologies
to create long-term value. RUSAL offers its
customers low-carbon aluminium ALLOW,
which significantly reduces the carbon
footprint of products. ALLOW is produced
using carbon-free energy sources, primarily,
hydropower, and helps customers to achieve
the global climate goals.
Read more at p.75
SUPPORTING OUR BUSINESS
MODEL
En+ strives to use the principles of sustainable
development in all areas of its activity.
Commitment to the highest standards of
corporate governance and social responsibility
strengthens both the Group’s strategy and
business model and provides the Company
with a competitive advantage.
Implementing the ASI standards that cover
the entire value chain – from ore mining to
aluminium production – is one of the tools
for adapting the best world practices in
sustainable development. By 2022, 13 RUSAL
production and office sites were successfully
re-audited against the ASI Performance
Standard and ASI Chain of Custody Standard.
PART OF OUR CULTURE
In operations, En+ adheres to globally
accepted moral and ethical standards,
ensures transparency of activities, respects
human rights and supports environmental
initiatives. Compliance with the principles
of sustainable development is an integral
part of operations and development of En+.
Read more at p.167-169
62
62
63
63
En+ Group Consolidated Report 2022
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
En+ Group Consolidated Report 2022
CONTRIBUTION TO SUSTAINABLE DEVELOPMENT GOALS
GRI: 2-23
En+ systematically promotes the global sustainability agenda laid out by the UN SDGs.
The Company has integrated SDGs into its business strategy and set measurable targets
for a sustainable future. Progress across the targets is monitored by the HSE Committee.
KEY PROGRESS
KEY
SDGs
2019
- Joined the UN Global Compact and Business
Ambition for 1.5°C
- Priority SDGs defined and approved by the Board
of Directors. Seven SDGs were selected based
on the specific nature of the business and particular
focus of primary stakeholders
The first SDG Report published, and
now it is published annually
2020
2022
2021
- Goal 17 added to the priority SDGs,
demonstrating the Company’s
commitment to working
together with other stakeholders
to advance sustainable practices
across the industry
- Participated in the SDG Ambition Accelerator, through which
the Company:
– determined priority sustainability benchmarks
– set specific SDG-related goals
– integrated said goals into corporate strategy
- Goal 11 added to the priority SDGs,
reflecting how regional development
remains at the core of the sustainability
strategy
- Reported on progress regarding corporate
SDG-related goals
Read more in the
SDG Report 2020,
pp.2-3
- Presented goals to the HSE committee under the Board
of Directors, obtained approval for further goal integration
into the Company’s strategy
Read more in the
SDG Report 2022, pp.8-9
- Became a global partner of the UN Global Compact Climate
Ambition Accelerator, the initiative to advance corporate
alignment with the Science Based Targets initiative (SBTi)
Read more in the
SDG Report 2021, p.4
64
65
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
The Company’s priority SDGs are grouped into four thematic tracks of action. Each
track also aligns with the National Development Goals of the Russian Federation.
By analysing the key parameters, En+ regularly monitors progress against the SDGs
and adjusts its activities accordingly.
The SDG Report 2022
is available on the website
www.enplusgroup.com
Learn more on En+ support
for human rights related to
its key SDGs at p.120
GRI: 2-25
TRACK
National Development
Goals
UN SDGs
CLIMATE LEADERSHIP
ENVIRONMENTAL STEWARDSHIP
HUMAN DEVELOPMENT
COLLABORATION
AND PARTNERSHIPS
- Preservation of the Population,
- Preservation of the Population, the Health and Welfare
the Health and Welfare
of the People
- Comfortable and Safe Environment
- Digital Transformation
of the People
- Comfortable and Safe Environment
- Preservation of the Population, the Health and Welfare of the People
- Conditions for Self-Fulfilment and the Unlocking of Talent
- Comfortable and Safe Environment
- Decent and Effective Jobs and Successful Enterprise
- Digital Transformation
SDG Targets
7.1, 7.2, 7.3, 7.a
13.1, 13.2
6.3, 6.4, 6.5, 6.6,
6.b
12.2, 12.5, 12.6,
12.7, 12.8, 12.b
15.1, 15.2, 15.4,
15.5, 15.9, 15.a
3.2, 3.4, 3.8, 3.9, 3.b, 3.c, 3.d
8.2, 8.3, 8.6, 8.8, 8.9
11.1, 11.2, 11.3, 11.4, 11.6,
11.7, 11.a, 11.c
17.4, 17.5, 17.6, 17.14, 17.15, 17.16
GRI
GRI 302
GRI 302, 305
GRI 303, 304, 306
GRI 302, 303,
305, 306, 417
GRI 304, 305
GRI 203, 305, 306, 401, 403
GRI 2-7, 201, 202, 203, 204,
401, 403, 404, 405, 408, 409,
414
GRI 203, 207
GRI 2-25, 2-26
SASB
EM-MM-130a.1
IF-EU-000.E
EM-MM-110a.1
EM-MM-110a.2
IF-EU-110a.1
IF-EU-110a.2
IF-EU-110a.3
IF-EU-110a.4
EM-MM-140a.1
EM-MM-140a.2
IF-EU-140a.1
IF-EU-140a.2
IF-EU-140a.3
EM-MM-150a.4 –
EM-MM-150a.10
EM-MM-160a.3
EM-MM-120a.1
EM-MM-320a.1
IF-EU-120a.1
IF-EU-320a.1
EM-MM-310a.1
EM-MM-000.B
IF-EU-320a.1
EM-MM-210a.3
EM-MM-210b.1
Description
Projects
Key results
En+ has committed to achieve net
zero GHG emissions by 2050 and has
published one of the industry’s
most ambitious net zero strategies.
The nature of the business ensures
a tight link between clean energy
and decarbonisation of the Metals
sector.
- ALLOW
-
Inert Anode technology
- Advancing Solar Energy
- Green Hydrogen Development
- Forest aerial protection
- GHG Inventory of Hydro Reservoirs
- New Energy Programme
over 3,960 tonnes
of aluminium with the lowest carbon
footprint in the world produced
using inert anode technology for the
entire duration of the project
505,000 ha
of the Krasnoyarsk Territory wild
forests are under aerial protection
The Group recognises its broader impacts on ecosystems
today. This is why En+ is dedicated to define, assess
and measure its impact, setting scientifically justified
corporate commitments.
- Clean Air Federal Ecology Project
- CHP Modernisation
- Transition to Closed Water Supply System
- Reconstruction of Wastewater Treatment Facilities
- Reclamation, Reuse and Repurpose of Bauxite Residue
- Grants Supporting Innovative Ecological Projects
RUB 16.6 bn
(USD 243 mn) environmental
investments in 20221
4
HPPs were certified in
accordance with the
international ISO 14001
standard in 2022
36%
decrease in volatile
organic compound
emissions in 2022
(compared to 2020)
97%
of hazardous waste
are reused and recycled
in 2022
En+ ensures that its people remain at the forefront of all decisions across the whole
management structure. The Company cares about the well-being of employees and local
communities and invests in the communities and cities where it operates. Social investments
by En+ are aimed at promoting public health, creating conditions for physical activity,
providing equal access to quality and innovative education, providing accessible infrastructure,
and supporting individuals in difficult situations.
To support the UN Sustainable
Development Goals more
effectively, En+ boosts cooperation
and partnerships for sustainable
development. The Company actively
engages with local and international
stakeholders as well as the scientific
community.
- Leading Medical and Emergency Healthcare
- Preferential Mortgage lending and Housing
Programme
- Sport programmes
Investing in Local Communities
-
- Corporate University
- Responsible Tourism
- Regional Development
- Advocacy
- Transparency and Certification
- Energy Transition
- Climate
130 employees
have purchased flat/house or
refinanced a dwelling under
preferential mortage lending
RUB 3.6 bn
(USD 53 mn) total social
investments1
RUB 157 mn
(USD 2.3 mn) allocated in 2022
to purchase recreation vouchers
for employees and their families
in the Power segment1
more than100
professional retraining and
development programmes are
available for En+ employees
Co-founded Association
“Baikal Plastic Free”
Among founding members of
the national ESG Alliance
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
66
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
MATERIALITY ASSESSMENT
GRI: 3-1
3-2
3-3
2-14
En+ conducts regular materiality assessments based on its
own methodology. It includes a comprehensive analysis
of the organisational context and multi-channel communications
with Stakeholders. In 2022, the Company modified its approach
to materiality assessment following the revised GRI Standard.
The Company moved the focus from identifying material topics
to defining impacts its business has on the economy, environment
and people, including impacts on their human rights.
The Company conducted an online survey to assess and prioritise
its impacts. Stakeholders were asked to assess the scale of En+
impacts: from no impact to the critical negative or significant
positive impact. Overall, 475 stakeholder representatives
participated in the survey.
MATERIAL TOPICS
PRIORITY 1
- Economic performance
- Sustainable supply chain
- Business ethics
- Corporate governance
- Human rights
- Employees management and
engagement
- Local community engagement
- Health and safety
Read more about materiality assessment process in Additional ESG
data p.277-279
PRIORITY 2
The results grouped the impacts into 17 topics, divided by three
distinct priority levels based on their significance. Relative to the
previous year, two material topics ‘Environmental compliance and
the best available technologies (BAT)’ and ‘Innovation management’
were added to the list. The material topic ‘Compliance with
legislation and anti-corruption’ was merged with ‘Business ethics’.
The HSE Committee of the Board reviewed and approved the final
list of material topics.
- Social and cultural diversity and equal
opportunity
- Innovation management
- Environmental compliance and BAT
- Energy management
- Water and wastewater management
- Safe waste management
- Air quality
PRIORITY 3
- Climate change
- Biodiversity
EN+ STAGES OF MATERIALITY ASSESSMENT
IDENTIFYING THE COMPANY’S IMPACTS
Outcome: Actual and potential impacts listed
Steps
- analysing En+ business activities by
the Company’s experts: bauxite mining,
alumina refining, energy and heat
production, aluminium production key
inputs, outputs, effects, and measures
to mitigate negative effects
- analysing feedback from stakeholders,
including suggestions and concerns
raised through grievances mechanisms
Read more about
Value creation
model at p.278
Read more in
the Additional ESG
data p.277-279
- conducting comparative analysis
(benchmark) of material topics
and related impacts disclosed
in the reports of Russian
and international metals and mining,
and energy companies
- analysing the requirements
of international industry standards
and recommendations
ASSESSING THE SIGNIFICANCE OF THE IMPACTS
Outcome: The impacts assessed involving stakeholders
- selecting the most convenient interaction
- conducting an online survey involving stakeholders
forms with stakeholders
to determine the most significant negative
and positive impact
PRIORITISING THE IMPACTS AND GROUPING THEM INTO TOPICS
Outcome: The most significant impacts determined and grouped into material topics
- setting a threshold to exclude less
significant impacts
- grouping impacts into material topics
- prioritising the material topics based on their significance
- testing the material topics against international
standards, best sector practices, and recommendations
APPROVING THE LIST OF MATERIAL TOPICS
Outcome: The list of material topics approved
- reviewing and approving the final list of material
topics by senior management and Board of Directors
68
68
69
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GRI: 3-3
Management of material topics
Material topic
Importance for En+
Policies
Related SDGs
Goals, targets and commitments
Progress toward the goals and
targets in 2022
Actions to manage the topic and related
impacts
Priority 1
Economic
performance
The Company’s priority is ensuring business continuity,
making strategic and commercial progress, increasing
sales volumes of value-added products, improving cost
efficiency.
Quality Policy
Stakeholder Engagement
Policy
Sustainable
supply chain
Building a sustainable and transparent supply chain
is an essential element of En+ long-term success.
Supplier Standards
Business ethics
En+ values its business reputation and strives
to promote high standards of business conduct both
among its employees and business partners.
Corporate Code of Ethics
Anti-bribery and Corruption
Policy
Corporate
governance
Strong corporate governance is a crucial element
for gaining trust of the Company’s stakeholders,
attracting new investment and protecting its reputation.
Human rights
Respect for human rights is a fundamental value
for the Company in ensuring its sustainable
development.
Regulations on the Board
of Directors
Board of Directors
Diversity Policy
Corporate Code of Ethics
Anti-bribery and Corruption
Policy
Policy on Human Rights
Employee
management
and engagement
Local
communities
engagement
Health
and safety
Human capital is a key factor in the Company’s
successful development.
Corporate Code of Ethics
En+ pays special attention to ensuring the sustainable
economic development of regions.
Stakeholder Engagement
Policy
Safety is the core value at the heart of performance
across the Company. En+ manages impacts
of its activities and maintains a safe working
environment for employees, contractors and partners.
Health, Occupational,
Industrial and Fire Safety
Policy
Priority 2
Social
and cultural
diversity
and equal
opportunities
Promoting social and cultural diversity and equal
opportunity plays a crucial role in establishing
a comfortable environment for all En+ employees.
This includes ensuring equal opportunities
for representatives of vulnerable groups of people.
Diversity and Equal
Opportunities Policy
- To raise the effectiveness of activities
and achievement of strategic objectives
USD 16,549 Revenue
(+17.2% y-o-y)1
Financial review, p.36
- To work in partnership with the suppliers,
contractors and others with whom the Company
does business to ensure adherence to Supplier
Standard’s principles
100% of new suppliers
having no significant actual
and potential negative social
impacts
Supply chain management, p.176
- To prohibit and prevent the Company,
employees and third parties from engaging
in bribery and corruption
- To create a consistent perception
of the Company and employees as committed
to the principles of zero tolerance towards
corruption in all forms and manifestations
- To build mutually beneficial relationships
with all stakeholders based on the principles
of partnership and mutual respect
- To maintain high standards of corporate
governance
No confirmed cases
of corruption
No terminations of contracts
with business partners
as a result of corruption
violations
Ethics and compliance, p.167
www.enplusgroup.com/en/sustainability/
ethics/
64% of independents directors
on the Board of Directors of En+
Group as at 31 December 2022
Corporate governance, p.136
- To support the principles reflected
in the Human Rights Policy
No incidents of child labour
No incidents of forced
or compulsory labour
Employees, p.115
- To comply with all requirements
of the employment laws and terms
and conditions of employment contracts
No significant incidents of non-
compliance with labour laws
and regulations in the Company
resulting in legal action
- To ensure that all communities in operating
regions benefit from the Company’s presence
- To establish close cooperation with local
communities, government agencies and non-
profit organisations
USD 53 mn social investment1
RUSAL developed an analytical
tool ‘the Sustainable Cities
Responsibility Index’ to assess
the appeal of cities and prioritise
the projects
- To achieve zero fatalities as well as zero serious
work-related injuries related to production
processes
5 employee’s fatalities
0.16 LTIFR per 200,000 hours
worked
- To promote and maintain diversity, create
conditions for effective performance and provide
equal opportunities for all En+ employees
- To maintain zero tolerance of any form
of discrimination, workplace harassment,
or any other conduct that could be considered
offensive and unacceptable
No incidents of discrimination
1.13 ratio of the basic salary
of men to women at Russian
enterprises in the Power
segment and 1.26 in the Metals
segment
www.enplusgroup.com/en/sustainability/
people/
Employees, p.115
www.enplusgroup.com/en/sustainability/
people/
Community engagement, p.126
www.enplusgroup.com/en/investors/esg/
social/
Health and safety, p.108
www.enplusgroup.com/en/sustainability/
health-and-safety/
Employees, p.115
Innovation
management
En+ constantly strives to improve its performance
by implementing new technologies and continuing
constant improvement projects.
R&D Policy
Patent Policy
- To introduce new technologies and develop
green energy projects
RUB 216.1 mn (USD 3.2 mn)
allocated for R&D projects1
Innovation management, p.192
70
71
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
Material topic
Importance for En+
Policies
Related SDGs
Goals, targets and commitments
Progress toward the goals and
targets in 2022
Actions to manage the topic and related
impacts
Priority 2
Environmental
compliance and
BAT
To reduce the negative impact on the environment
and increase production efficiency the Company
invests in the development of new technologies,
implementation of BAT, and modernisation
of equipment throughout the production chain.
Environmental Policy
- To provide BAT to meet the Company’s
environmental goals
- To ensure environmental security
and compliance with all relevant environmental
legislation
In 2022, projects for the
environmental modernisation
of aluminium smelters were
assessed for compliance with
best available technologies
Environmental stewardship, p.84
Energy
management
En+ actively develops new ways to generate electricity,
optimise power generation, and make production
processes more efficient to address its carbon footprint
and other issues related to the environment and climate
change.
Environmental Policy
Water
and wastewater
management
A key area of En+ water resource management is aimed
at increasing the efficiency of water resource usage
and preventing the pollution of water bodies to reduce
the environmental impact.
Environmental Policy
- To increase the use of alternative energy sources
by 2030
- To reduce the average carbon intensity
of generated and consumed electricity
- To increase clean electricity generation
by improving hydropower plant efficiency
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
- To purchase at least 95% of electricity from
HPPs and other carbon-free sources of power
generation for aluminium smelters by 2025
- To reduce specific electric power consumption
by aluminium smelters by 7% vs. the 2011 level
by 2025
- To eliminate untreated wastewater discharge
generated by the Power segment by 2030
- To minimise non-production water losses
through technological optimisation by 2030
- To deploy recycled water systems for main
processes in the Metals segment by 2025
Safe waste
management
En+ increases waste recycling and ensures the safe
disposal of waste at disposal facilities to reduce
environmental impact.
Environmental Policy
- To decommission equipment with PCBs
(polychlorinated biphenyls) and ensure their safe
disposal by 2025
Air quality
The Company strives to minimise emissions of air
pollutants to reduce the impact on the environment
and climate change.
Environmental Policy
- To comply with the requirements
of environmental legislation
~ 99% share of alternative
energy sources used
for aluminium smelters
of the Metals segment
2,486 Energy intensity of Power
segment (GJ/MWh)
2.233 mt of CO2e prevented
GHG emissions due to partial
replacement of thermal energy
~99% aluminium is produced
using hydropower
4.1% reduction of average
specific electric power
consumption by aluminium
smelters
Started developing
a comprehensive programme
to minimise wastewater
discharges and losses
Started an inventory of water
consumption
Transferred RUSAL Kamensk-
Uralsky Aluminium Smelter
to a water recycling system
Developed plans for the complete
decommissioning of equipment
and disposal of waste containing
PCBs for all RUSAL enterprises
Completed withdrawal
of equipment containing PCBs
at Power segment
36% reduction in volatile organic
compound emissions compared
to 2020
Climate leadership and energy efficiency,
p.74
www.enplusgroup.com/upload/iblock/c6b/EN_-
Pathway-to-net-zero.pdf
www.enplusgroup.com/upload/iblock/c6b/EN_-
Pathway-to-net-zero.pdf
Environmental stewardship, p.84
www.enplusgroup.com/en/investors/esg/
environment/
Environmental stewardship, p.84
www.enplusgroup.com/en/investors/esg/
environment/
Environmental stewardship, p.84
www.enplusgroup.com/en/investors/esg/
environment/
Priority 3
Climate change
The Company is constantly expanding renewable
energy sources, improving production efficiency,
and reducing its impact on the environment and climate
change.
Environmental Policy
- To become net zero by 2050 and to reduce
greenhouse gas emissions by at least 35%
by 2030
~1 increase in GHG emissions
(compared to 2018)
Climate leadership and energy efficiency,
p.74
Biodiversity
The Company strictly complies with environmental
legislation and cooperates with research institutes
and non-governmental organisations to develop
effective measures to preserve ecosystems where
impacts occur.
Environmental Policy
Biodiversity policy
- To assess and minimise biodiversity risks
Power segment began work
on its Biodiversity Conservation
programme for the Irkutsk,
Bratsk and Ust-Ilimsk HPPs up
to 2030
72
www.enplusgroup.com/en/investors/esg/
environment/
www.enplusgroup.com/upload/iblock/c6b/EN_-
Pathway-to-net-zero.pdf
Environmental stewardship, p.84
www.enplusgroup.com/en/investors/esg/
environment/
73
En+ Group Consolidated Report 2022
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
CLIMATE LEADERSHIP
AND ENERGY EFFICIENCY
CLIMATE LEADERSHIP
KEY FACTS
~99%
aluminium is produced using
hydropower
2.233 mt
of СО2e emissions
avoided due to the partial
replacement of prior thermal
power generation volumes
12.5%
decrease in intensity of GHG
emissions from electrolysis
operations from 2.28 t of CO2 e/t Al
(compared to 2014 baseline)
KEY GOALS
REGULATORY
DOCUMENT
GOALS
STATUS
PROGRESS MADE IN 2022
To purchase at least 95% of electricity from
hydropower plants and other carbon-free
sources of power generation for aluminium
smelters
Completed
The energy mix at RUSAL aluminium smelters
was as follows:
- hydropower (HPP): 99.03%
- nuclear (NPP): 0.03%
- wind: 0.57%
-
fossil fuels (СHP): 0.37%
GOVERNANCE
GRI: 3-3
The Company’s governing bodies continue to engage in the climate
change agenda. The Board of Directors controls the implementation
of all ESG-related corporate policies, oversees the progress on achieving
the Company’s environmental protection and climate-related goals.
The HSE Committee assists the Board in managing climate change issues.
Read more in Sustainable Development
Report 2021 at pp.64-65
GRI: 2-13
Climate Change Taskforce manages the pathway to net zero
and provides incentives to the transformation in the Group.
The Taskforce is headed by the Chief Operating Officer and reports
to the HSE Committee. Each of the transformational verticals is led
by a senior executive from the top management team.
Climate Change Taskforce
Board of Directors
HSE Committee
Chief Operating Officer, En+
Reports
To reduce direct specific greenhouse gas
emissions by 15% at existing aluminium
smelters (compared to 2014 baseline)
To reduce direct specific GHG emissions
by 10% in existing alumina refineries
(compared to 2014)
On track
There was a 12.5% reduction in the specific
GHG emissions as compared to the 2014 level
Head of Climate Change Taskforce
Completed
The reduction in the specific GHG emissions
was 10% compared to the 2014 level
Directors for Sustainable Development, En+ and RUSAL
To reduce specific electric power
consumption by aluminium smelters by 7%
(compared to 2011)
To use an internal carbon price when
making strategic and investment decisions,
starting in 2017
On track
On track
The reduction of average specific electric
power consumption by aluminium smelters
stood at 4.1%
Since 2017, the Company has been applying
an internal carbon price in the process
of making strategic and investment decisions
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
On track
The Company actively participates in a number
of climate initiatives
To reduce GHG emissions by 35% by 2030
(compared to 2018)
On track
~1% increase in GHG
emissions (compared to 2018)
To achieve net zero GHG emissions by 2050
On track
Deputy Heads of Climate Change Taskforce
Chief Technical Officer,
En+ and RUSAL
Director of Alumina
Business, RUSAL
Director of Strategy,
Business Development
and Financial Markets, En+
and RUSAL
Director for Sales
and Marketing,
RUSAL
Director for International
Cooperation, En+
Official representative
for External Relations,
RUSAL
- Environmental
Policy
MATERIAL
TOPICS
- Climate change
- Energy
management
En+ continued
its efforts
to combat climate
change in 2022.
The approach
to tackling this
problem was also
preserved –
the Metals
segment relies
on renewable, clean
energy generated
by the Power
segment.
74
The Environmental Policy of En+ remains
the main regulatory document. In order
to prevent climate change, the Company
takes actions according to the task
outlined in the Policy. En+ implements
a number of programmes and strategies
to reduce negative impact on climate
through the reduction of direct and indirect
greenhouse gas emissions, the increase
of their absorption, and the increase
in energy efficiency, in order to minimise
the carbon footprint of products. The internal
document that regulates its activities
related to climate is Risk Management
Regulation describing the main stages, tools
and methods of identification, analysis,
assessment and mitigation of risks.
Read more about climate-related risks at pp.80-81
The ALLOW brand of aluminium with a low-
carbon footprint has been developed
and is promoted on the market. The start of
PEFA casting alloys production using ALLOW
aluminium helps customers to introduce
sustainable procurement into their supply
chains. The use of ALLOW aluminium has
made it possible to achieve a reduction
in the carbon footprint of new products
by almost 20%. The Company sold 1.2 mt of
low-carbon ALLOW aluminium
in 2022.
The use of ALLOW
aluminium has
made it possible
to achieve a reduction
in the carbon footprint
of new products
by almost 20%
75
75
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
STRATEGY
GRI: 3-3
SASB: EM-MM-110a.2
SASB: IF-EU-110a.3
KEY STEPS TAKEN BY EN+
GRI: 305-5
En+ facilitates the transformation process within the hard-to-abate
sectors on the way to a low-carbon business model and adheres
to its strategic Pathway to net zero plan, which outlines measures
to be taken to achieve climate goals.
The main priorities in the Metals segment:
- A gradual transition to the primary use
of electricity obtained only from renewable
sources is carried out
Metals segment’s progress in achieving net zero emissions
Project
Project status
To reduce GHG emissions and achieve carbon neutrality, En+ adheres
to the Strategy. To achieve the climate goals as outlined in the Strategy,
En+ relies on the following basic principles:
- reduction of emissions
- prevention of emissions
- compensation and neutralisation of impacts
The Company annually discloses progress in achieving climate goals
in Pathway to Net Zero report, in the Carbon Disclosure Project (CDP)
report, as well as in the Annual Report, the Sustainability Report1
and the SDG Report.
Decarbonisation Roadmap
- Measures are taken to reduce
perfluorocarbon emissions from
aluminium production
- Aluminium production technologies
with low specific energy consumption
are developed and implemented
- Environmentally safe aluminium
production technology using an inert
anode is on R&D stage
64.9
25.2
61.1
61.5
22.9
23.0
25.2
59
23.1
65.3
39.7
38.6
38.9
40.5
41.5
41.4
17.0
31.3
36.5
0
–0.44
–0.44
–0.44
–5.6
–12.1
16.1
32.2
–17
15.6
9.7
0
–25
2018
2020
2021
2022
2025
2030
2040
2050
Metals segment
Power segment
Compensation
Balance
Read more on the Company’s decarbonisation
approach and mitigation strategy in the Pathway
to net zero Report and in the Pathway to net zero
progress report available on the Company’s website
1 / Starting from 2023, En+ transferred from Annual Report and Sustainability Report to Consolidated Report.
76
Measures to capture
СО2
Alumina division
Energy efficiency
measures
At the Achinsk Alumina Refinery (AGK) and at other alumina
refineries, experimental developments are underway to capture CO2
using alkaline bottom-sludge water; using different options for wet
scrubbing of gases.
The implementation of such measures is primarily considered
for the calcination process, as well as for CHP’s emissions.
-
-
Implementation of measure plans to improve energy efficiency
in all business units of the division.
Implementation of a project for the transfer of steam production
from hydrocarbon fuel to electricity using renewable energy
sources (electric boiler construction) at Aughinish (Ireland)
continues.
- Windalco (Jamaica) is implementing projects to convert outdoor
lighting to solar panels and modernise the lighting system
of production sites, warehouses and premises. The effect
is a reduction of up to 200 tonnes of CO2 annually.
Target year
2050
2050
Switching
to Eco-Søderberg
The conversion of electrolysers to Eco-Søderberg technology
is underway.
2025
Aluminium plants
Read more at p.59
Transition to pre-
baked anode
technology
Conversion
of capacities to inert
anode technology
The conversion of electrolysers to pre-baked anode technology
is underway.
2030
Read more at p.58
- Achieved further improvements in electrolysis technology
at the pilot site for aluminium electrolysis on inert anodes.
- Registered ALLOW INERTA trademark.
Industrial pots with inert anodes at KraZ have already produced
over 3,960 tonnes of aluminium with the lowest carbon footprint
in the world.
2050
- RUSAL initiated the creation of a recycling
2050
and sustainable development sector within the framework
of the Aluminium Association.
- During 2021, RUSAL, together with Ecoplatform and Legends
of Baikal, participated in a joint project to place reversible vending
machines in retail stores.
- Pilot projects have been launched at two RUSAL plants: KUBAL
in Sweden and the Volgograd Aluminium Smelter.
Recycling
Transportation
Decarbonisation
of logistics
In 2021, RUSAL entered into an agreement with Transcontainer PJSC
on strategic cooperation for the purpose of low-carbon development
in logistics. The companies are committed to jointly develop
and implement new low-carbon technologies for the transportation
of raw materials and aluminium products.
2050
77
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
The main priorities in the Power segment:
- modernisation of HPPs under the New Energy programme. It is aimed
to increase electricity production, thereby replacing electricity
production from coal-fired generation CHP and reducing greenhouse
gas emissions
- development and construction of new
renewable sources of electricity and heat
production: hydropower, biofuels
and hydrogen fuel
GRI: 305-5
Taken together, the following measures will help
reduce the absolute GHG emissions of Scope 1,
2 and 3 at En+ enterprises by 60% from current
levels by 2050. About 40% of emissions cannot
be eliminated using current technologies
and costs – these emissions need
to be compensated by various technical
and nature-based solutions:
The following measures
will help reduce
the absolute GHG
emissions of Scope 1, 2
and 3 at En+ enterprises
by 60% from current
levels by 2050
The Power segment’s progress in achieving net zero emissions
Project
Project status
HPP
modernisation
Hydrogen
production
Project
New Energy
Programme
Measurement
of GHG emissions
from HPP
reservoirs
Construction
of HPPs
Development
of cryogenic
tank containers
for transportation
of liquid hydrogen
Development
of the concept
of hydrogen
transport
infrastructure
for Krasnoyarsk
Hydrogen
production
by electrolysers
Project status
-
In 2022, the New Energy Programme allowed prevention of 2.233 mt of CO2e GHG
emissions due to partial replacement of thermal energy.
Period
2026
Read more at p.60
In 2022, as part of the long-term programme, instrumental measurements of GHG
emissions from the Bratsk and Irkutsk HPP reservoirs were carried out to confirm
the comparability and reliability of the results of previously performed measurement
cycles (monitoring results carried out for at least three years are considered reliable).
The emission coefficients obtained are among the lowest in the range of global averages
for boreal reservoirs.
In 2023, based on the results of the studies performed, it is planned to initiate
the development of national Tier 2 GHG emission factors with the involvement
of the Institute of Global Ecology and Climate and further use of the factors in the national
inventory of GHG emissions.
At the small-scale Segozerskaya HPP, the installation of outlet and inlet channels
is underway. Execution of construction works is scheduled for 2023.
The Nizhne-Boguchanskaya, Motyginskaya, Krapivinskaya and Telmamskaya HPP projects
are at different stages of development. The Company is assessing possible financing
mechanisms, environmental and social risks for the projects.
Construction of the Motyginskaya HPP is tied to the implementation of plans
for the development of green hydrogen.
- Assessment of sales markets.
- Development the layout of the technological line for the small series production.
- R&D to develop the design of a tank container.
- Completed preliminary feasibility study of the project.
- Assessed the possibility of public-private partnership (attracting subsidies).
2050
2027
2027
- Due to restrictions on export markets and limited access to technology, the Company
is working on projects on hydrogen transportation and consumption technologies.
2050
CHP conversion
to gas
- Gasification of the region requires significant investments.
- A dialogue to assess the feasibility of implementing the project, which includes relevant
2050
CHP
modernisation
СHP
and distribution
infrastructure
modernisation
Energy efficiency
measures
negotiations with authorities, is underway.
- A decision is required on the value of the tariff and a solution to the social problem
of monotowns that are dependent on the extraction of coal used in CHPs is needed.
-
-
In 2022, under the Energy Efficiency Improvement Programme, 116,366,000 kWh
were saved due to reduction of electricity losses (total losses were 6.8%) through
technical measures and organisational measures.
In 2022, as part of optimising the energy consumption of pumping stations of heating
networks for the period GHG emissions reduced by 7,480 t of CO2e.
– An increase in the throughput capacity of heat networks made it possible
to transfer the heat load from an inefficient boiler house to a thermal power plant
with significantly better technical and economic indicators, thereby reducing
emissions by 49,201 t of CO2e in 2022.
– The implementation of a set of measures for optimal loading, exclusion from
operation of low-cost CHP equipment allowed to reduce emissions by 82,201 t
of CO2e in 2022.
2050
78
Carbon capture,
use and storage
technology (CCUS)
Forestry projects
Together with partners, the Company is exploring
the possibility of implementing the project in Irkutsk
Region that has a proper potential for СO2 storage.
Period
2050
- 505,000 hectares in the Krasnoyarsk Territory are under
2050
aerial forest protection.
- 1.1 million trees planted in Krasnoyarsk Territory
and Irkutsk Region.
- 440 kt of CO2 offset annually.
- Forest projects related to effective forest management
are being considered.
- En+ Forest Climate Strategy is underway to form.
National green
certificates
- En+ actively participates in projects to support
the development of voluntary green instrument markets
and encourages the introduction of national legislation
to create a national certificate system.
ESG ASPECTS OF A POTENTIAL DEMERGER
OF RELATIVELY HIGH CARBON ASSETS WITHIN RUSAL
While the perimeter of the potential demerger of a low
and relatively high carbon assets within RUSAL are still
being determined, two fundamental approaches seem
to be the cornerstone for decision-making in this context:
- assets with a relatively low-carbon footprint at this
stage (total GHG emissions of 8.1 mt per year1,
a carbon footprint of no more than 5.2 tonnes of CO2e
per tonne of aluminium) will allow monetisation
of green characteristics of such products in export
markets, minimising the risks of cross-border
carbon taxation
- assets currently characterised by a relatively higher
carbon footprint (total GHG emissions of 20.2 mt
per year1, a carbon footprint of 12.5 tonnes of CO2e
per tonne of aluminium, which is much lower than
industry averages, 16.6 tonnes of CO2e per tonne
of aluminium)2 will allow focusing efforts on fulfilling
social and environmental obligations, supported
by relevant programmes and action plans
1 / Scope 1, 2 and 3.
2 / According to the data for 2021 by International Aluminium
Institute at https://international-aluminium.org/statistics/
greenhouse-gas-emissions-intensity-primary-aluminium/.
79
79
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
RISK MANAGEMENT
Climate risk governance structure
HSE COMMITTEE
Sustainable Development Directorate
Board of Directors
Department of Environmental and Climate Risk
Management
Business units
AUDIT AND RISK COMMITTEE
Directorate for Control and Internal Audit
Climate risk
assessment
was carried out
for more than
50 enterprises
The HSE Committee within the agenda
oversees the management of the climate-
related risks and reports them to the Board
of Directors for expeditious consideration.
The risk assessment is carried out
by the Department of Environmental
and Climate Risk Management and includes
the following stages:
1/ Matching and integration of any data
associated with climate-related risks
and opportunities
2/ Assessment of the climate-related risks
and opportunities, and their priority:
– consideration of current/emerging
regulations, technologies,
legislation, markets, reputation, risks
and opportunities, focusing on higher-risk
areas and regions
– prioritisation of risks and opportunities
that may have significant financial
and strategic impacts on En+ operations
– using a scenario approach to create
reliable factual base on the time frame
of risks, opportunities and the range
of potential effects
3/ Analysis of compliance of identified
risks with the general risk management
in the Company. Planning of measures
if the identified risks are prioritised
jointly with the Directorate for Control
and Internal Audit as part of a unified risk
management approach
Read more about risk management at pp.160-167
As prescribed by the TCFD disclosure
requirements, the analysis of the climate-
related risks of the Metals and Power
segments was implemented on the scale
of the Company’s consolidated activities
in 2021. A scenario analysis based on climate
models developed by the Intergovernmental
Panel on Climate Change (IPCC)
was conducted.
The following scenarios for climate risk
assessment were chosen:
- SSP 126 “Sustainability scenario”
corresponds to a warming of 1.5–2 °C;
- SSP 245 “Middle of the road scenario”
corresponds to a warming of 2–4 °C;
- SSP 585 “Fossil Fuel Economy scenario”
corresponds to a warming of 4–7 °C.
Climate risk assessment was carried out
for more than 50 enterprises of the Company
in different climatic regions, including assets
in the CIS countries, Africa, and Jamaica.
Climate-associated risks and factors have
been identified, analysed and evaluated
to make strategic decisions related to global
climate change.
En+ has identified the climate-related risks
and opportunities in the short, medium,
and long term. The short term is defined
as 0–1 year. The medium term stands
for 2–3 years. The long term is up to 10 years.
80
TRANSITIONAL RISKS
AND OPPORTUNITIES
Depending on the nature, speed, and focus
of these changes, transition risks may pose
varying levels of financial and reputational
risks to the Company’s business processes.
Read more about
transition risks
in Additional ESG
data at p.285
Read information
on the Company’s
governance, strategy
and risk management
in the field of climate
change problem
in the Sustainable
Development Report
for 2021 at pp.70-71
In 2022, the Company analysed the most
significant potential and occurred risks which
include:
1/ Revision of the ASI standards
2/ Development of IAI Aluminium sectors
Pathway
3/ Development of legislation of the Russian
Federation in the field of carbon dioxide
emissions management
4/ Introduction of the EU Taxonomy, the draft
ISO 14030-3 standard and Cross-Border
Adjustment Mechanism (CBAM)
A significant transition risk is the introduction
of new regulations. It may lead to non-
observance and increase compliance costs.
New legislation may result in carbon pricing
which in turn leads to increase in production
costs due to investments in modernisation.
The Company constantly monitors all
changes in legislation in all countries
of operations and actively participates
in public hearings.
The development and implementation
of new technologies have the risk of unstable
production or an increase in greenhouse
gas emissions associated with the use
of new materials or solutions. This risk
was considered as significant due to the high
potential financial consequences.
The Company has identified and assessed
the most significant potential risks and the risks
that have materialised and developed corrective
action plans to minimise consequences
of those risks which have materialised
plus preventive action plans to prevent
the occurrence of risks in the future. Based on
a qualitative risk assessment in the long term,
there will be physical and transitional risks with a
significant impact.
PHYSICAL RISKS AND OPPORTUNITIES
The En+ physical risk register contains risks
that may potentially affect En+ operations
and supply chain. The register will be updated
on a regular basis. Among the physical
risk factors, the Company has considered
the likelihood 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 Company’s activities such as increased
average annual temperature and precipitation.
In 2022, the Company analysed
the occurred physical risk, destruction
of railway embankment and road from
Kiya-Shaltyrsky nepheline mine and AGK
due to heavy precipitation.
Measures to reduce climate-related risk:
1/ Design documentation for modernisation
and new building construction necessarily
includes analysis of possible effects
of natural hazards. The impact of such risks
is considered in the short and long term
2/ Also, climate-related risks are mandatorily
considered when developing emergency
response plans. For example, heavy
precipitation is now included in the risk
analysis for modernisation projects, after
the case when the destruction of the railway
track on the railway on which nepheline
is transported, as well as after other cases
of flooding in Siberia
In addition, En+ has identified some opportunities,
such as reduced fuel and energy consumption
and decreased need for heating energy capacity
because of a shorter heating season, increased
amount of low-carbon electricity supply using
solar energy, increased demand for heat supply
to heat dwellings due to abnormal cold causing
profit growth, etc.
Read more about physical risks in Additional ESG
data at p.283
81
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
METRICS AND TARGETS
En+ discloses the metrics used to assess and manage relevant climate-
related risks and opportunities where such information is material.
Additional metrics are also provided and aligned to SASB and GRI
as appropriate in Additional ESG data p.280-282.
The Company continues to reduce direct specific GHG emission
by 15% relative to the 2014 baseline (2.28 t of CO2 e/t Al) at aluminium
smelters by 2025. In 2022, the intensity of GHG emissions under Scope
1 from electrolysis operations was 2.0 t of CO2 e/t Al – 12.5% down from
the 2014 baseline due to implementation of a targeted programme to
reduce anode paste consumption (reducing CO2 emissions), as well as
frequency and duration of anode effects (reducing PFCs emissions).
GRI: 305-4
Intensity of GHG emissions from electrolysis operations for the Metals
segment, t CO2e/ t Al
2022
2021
2020
2019
2018
2014
2.00
2.02
2.04
2.04
2.11
2.28
GHG emissions of En+ increased by 6% compared to 2021 mainly due
to the hydrological situation and the decrease in electricity generation at
the Group's HPPs, and it's replacement by CHP's generation in 2022.
GRI: 305-1
GRI: 305-2
GRI: 305-3
SASB: IF-EU-110a.3
GHG emissions of Metals segment increased
by 4% compared to 2021 mainly due to
increase in Scope 3 emissions. The decrease
in the Scope 1 and Scope 2 emissions in the
Metals segment is caused by modernisation
of equipment, as well as rationalisation of fuel
and energy resource consumption.
The increase of GHG emissions in the Power
segment was due to a 40% decrease
in electricity generation at Krasnoyarsk HPP
due to low water storage in the reservoir.
CHP plants generated 17.3% more electricity,
resulting in a 9% increase in GHG emissions of
Power segment.
En+ estimates Scope 3 greenhouse
gas emissions for category associated
with the production and transportation of fossil
fuels categories under the GHG Protocol
Corporate Value Chain (Scope 3) Accounting
and Reporting Standard.
The introduction of a special climate-
related KPI system for all operational
management is the most significant decision
taken in this area of the climate strategy
of the Company. KPIs are cascaded, starting
with the goals and objectives of the highest
level of the Company, up to the lowest level
of management and personnel (if necessary)
based on the analysis of the impact of specific
processes and personnel on achieving climate
goals at the Company and plant level.
SASB: EM-MM-110a.1
SASB IF-EU-110a.1
SASB: IF-EU-110a.2
Direct (Scope 1) and indirect (Scope 2 and Scope 3) greenhouse gas
emissions, mt CO2e
ENERGY MANAGEMENT
2022
2021
2020
28.3
1.2
11.0
23.7
0.5 1.0
28.6
1.4
8.9
21.6
0.5 0.9
26.8
1.8
10.0
21.5
0.5 0.9
65.7
61.9
61.5
The Company continuously improves its energy
efficiency practices in electricity generation
and aluminium production to address
environmental and climate change issues.
GRI: 3-3
Metals, Scope 1
Metals, Scope 2
Metals, Scope 3
Power, Scope 1
Power, Scope 2
Power, Scope 3
En+ takes steps to improve its energy
consumption management system at all
its assets. The issues of energy efficiency
are considered at the level of senior
management and the Board of Directors
of the Company within the HSE Committee.
Each employee takes responsibility for achieving
energy efficiency goals through KPIs and other
indicators recorded in internal documents.
82
En+ strategy on energy production and consumption
Uninterrupted
supply of electricy
and heat to third-
party consumers
Increasing
electricity
generation
at HPPs
Reducing network losses
and internal energy
consumption of energy
at generating facilities
GRI: 302-4
GRI: 302-1
Energy consumption, mn GJ1
2022
2021
2020
367.2
326.2
332.2
In 2022, the Company’s energy
consumption totalled 367.2 million GJ
increased by 10.5% compared to 2020
due to the reduction in the amount
of energy generated by HPPs and its
compensation by CHPs.
Read more at p.280-281
METALS SEGMENT
GRI: 3-3
SASB: EM-MM-130a.1
Over 99% of the Company’s aluminium is produced using renewable
hydropower. Aughinish has an ISO 50001 certificate, which allows
the organisation to follow a systematic approach in achieving
consistent improvement of the energy system, including energy
efficiency, energy security and energy consumption.
Reduction in energy intensity of Metals segment was achieved due
to implementation of energy efficiency measures. Energy efficiency
measures are currently being implemented at all business units
of the Metals segment which has already undertaken plans of energy
efficiency improvement at Russian alumina plants, and continues
projects for the modernisation of aluminium smelters.
Read more at p.58
GRI: 302-3
Energy intensity, GJ/t2
Sources of electricity used
for aluminium smelters
of the Metals segment, %
2022
2021
2020
64.6
65.3
65.1
GOALS FOR 2023
AND ONWARDS
In the medium term,
the Company intends to
continue to implement
measures stipulated
in the roadmap to achieve
zero emissions.
POWER SEGMENT
In 2022, the Company continued to improve
energy efficiency and develop electricity
production derived from renewable
energy sources. By implementing the New
Energy modernisation programme – one
of the most advanced energy management
programmes – En+ increases energy
production from the same amount of water
passing through the turbines.
Read more at p.60
Further promising outcomes are
the reduction of electricity losses during
energy transmission from power plants
to consumption facilities and optimisation
of energy consumption of pumping stations.
Read more at p.78
GRI: 302-3
Increase in energy intensity of Power segment is
explained by increase of CHPs generation in 2022.
Energy intensity, GJ/MWh
1 / Hereinafter energy data does not include
Onda HPP. The energy consumption
for 2020 and 2021 was restated
due to corrections in fuel and electricity
consumption and improvement
of methodology.
2 / The energy data used in calculation
includes purchased electricity and heating.
Hydropower
99.03
Nuclear
Wind
Fossil fuels
0.57
0.37
0.3
2022
2021
2020
2,486
2,132
2,262
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
ENVIRONMENTAL
STEWARDSHIP
KEY FACTS
36%
reduction in volatile
organic emissions
(compared to 2020)
RUB16.6 bn
(USD 243 mn) total
environmental investments in
20221
63%
of total waste
reused and recycled
6%
decrease in total
waste generated
(compared to 2020)
KEY GOALS
GOALS
AIR QUALITY
STATUS
PROGRESS MADE IN 2022
To reduce air emissions in the Metals segment
by 2025 in accordance with regulatory requirements
(a 100% reduction in excess air emissions)
On track
- participated in the implementation of comprehensive plans
for Krasnoyarsk, Bratsk and Novokuznetsk under federal Clean Air
project
- continued conversion to Eco-Søderberg technology
To perform technical re-equipment of ash dust
collector units at Novo-Irkutsk and Ust-Ilimsk CHPs,
and at CHP-6
By 2030, to ensure air quality and an acceptable level
of pollutants for the health of residents in the regions
where the Company operates in the Metals segment
WATER USE
On track
- continued re-equipment of ash collectors at Ust-Ilimsk CHP
and CHP-6
On track
- continued the transition of aluminium plants to pre-baked anode
technology
By 2025, to implement water recycling systems
for the main processes in the Metals segment
On track
-
transferred RUSAL Kamensk-Uralsky Aluminium Smelter to a water
recycling system
By 2030, to eliminate the discharge of untreated
wastewater generated by the Power segment
On track
- started developing a comprehensive programme to minimise
wastewater discharges and losses
- completed engineering assessments for the Angarsk HPPs
to determine the required technical solutions and implementation
methods, and started technical and operational design
- carried out preliminary feasibility studies for the Onda
and Krasnoyarsk HPP, started cost calculation and implementation
planning
By 2030, to minimise non-productive water losses
by optimising technological systems in the Power
segment
On track
WASTE AND TAILINGS
By 2025, to decommission equipment with PCBs
ensuring that they have been disposed of safely
On track
- developed plans for the complete decommissioning of equipment
and disposal of waste containing PCBs for all RUSAL enterprises
- completed withdrawal of equipment containing PCBs at Irkutsk
Electric Grid Company (IESK)
REGULATORY
DOCUMENT
MANAGEMENT APPROACH
- Environmental
GRI: 3-3
policy
- Biodiversity
policy
MATERIAL
TOPICS
- Air quality
- Water
and wastewater
management
- Safe waste
management
- Biodiversity
- Environmental
compliance and
BAT
The Company is aware of the impact
of its production activities on biodiversity,
air quality, and water and land resources.
Environmental protection remained a key focus
for the Group in 2022.
En+ conducted R&D, implemented best-
available technologies and performed
equipment upgrades to prevent or minimise
its environmental impact in all areas
of its activity. The Company continued
implementing environmental federal projects
such as the Clean Air project, Improvement
of the Volga project, the project on preservation
of Lake Baikal, the federal Clean Water project,
the Preservation of Unique Water Bodies
project, and the Clean Country project.
To meet the requirements of government
authorities, En+, among other things, carries
out an environmental impact assessment
at each of its production sites.
The main document that regulates
environmental management issues
at the Group is the Environmental Policy,
developed according to international
ISO 14001 standard. The policy is binding on all
corporate governance bodies of the Company
and relevant bodies of its entities.
In addition, contracts that the Company’s
manufacturing facilities sign with contractors
require the contractors to comply
with the Company’s Environmental Policy.
In the Metals segment, environmental
management issues are also governed
by RUSAL’s Environmental Policy, which
was updated in 2022 to reflect its corporate
ESG strategy. Additionally, in 2022, a set
of policies was developed and prepared
for approval that formalise the RUSAL’s
responsible approach to environmental
protection and sustainability:
- Policy on safe management of sludge
storage facilities
- Policy on decommissioning
and reclamation of disturbed lands
- Policy on water management and related
risks
Another instrument that governs
Company’s environmental protection
activities is the Regulations
on the Consolidated Strategic Plan
for Environmental Risk Management
for Power segment. This plan
includes key areas of the Company’s
environmental policy, as well as a list
of actions and deadlines for their
implementation. It stipulates conditions
for the systematisation of information
about significant environmental risks
and the development of plans
to eliminate or minimise them.
To implement initiatives according to the plan
of Baikal Energy Company LLC (BEK)
for the introduction of large-scale use of ash and slag
waste in the Power segment
On track
-
implemented the environmental assessment phase of the project
to use waste for mines restoration
- completed testing of canvas under the project on using waste
as a material in road construction
By 2030, to ensure safe disposal of waste that cannot
be returned to the economic cycle, reuse and recycle
at least 15% of alumina waste and at least 95%
of aluminium and silicon waste, bring at least 20%
of post-consumer scrap back to cycle (for the Metals
segment)
On track
- approved Waste Management Strategy until 2030 for RUSAL
- obtained documentation on placement and recycling of dismantling
and operating waste of the KraZ, BraZ, IrkaZ and NkaZ (as part
of the environmental modernisation projects)
implemented the project for dry storage of large-capacity waste
-
84
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
The Company’s
Environmental
Policy is available
on the Company’s
website
85
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
Strategic Plan for Environmental Risk Management of Power segment
Key actions
Risk assessment
- Comprehensive audit of environmental risk assessment (completed)
- Development and implementation of a plan of corrective measures, its regular monitoring
- Updating of the environmental risk plan and register based on the results of audits and other circumstances
where risks are identified
Term
2021–2032
Minimisation of air emissions
- Continuous monitoring of changes in environmental regulations
- Minimisation of risks of exceeding the acceptable level of air emissions and reduction of sulphur dioxide
2023–2032
emissions
- Gasification of major CHPs
Minimisation of water consumption and discharge
- Development and implementation of a long-term programme to reduce discharge of untreated wastewater
2021–2031
-
-
and lower non-production losses of water
Implementation of projects to upgrade the sewage treatment facilities of BEK and to modernise the local
treatment facilities of Zavodskie Seti LLC and at HPPs
Implementation of projects to achieve technological indicators of the best available technologies
at Vostsibugol facilities
Increase in the share of waste recycling and reuse and its safe disposal, accumulation and recovery
- Development and implementation of a long-term waste management programme
-
- Maximisation of ash waste recovery and assurance of the absence of ash dumps with a residual capacity
Improvement of the environmental safety of Company’s own waste accumulation and disposal sites
of less than three years
-
Implementation of measures to handle ash waste and their large-capacity use
-
Introduction of environmental criteria for purchasing goods and services to minimise waste generation
- Prioritisation of the acquisition of materials and goods made from secondary raw materials or capable
of being processed or recycled to obtain secondary raw materials
Decommissioning of equipment with PCBs and their safe recovery or destruction
Minimisation of negative impacts on biodiversity and promotion of biodiversity conservation across
operating regions
Read more at p.100-105
Consistent improvement of the environmental management system
-
Implementation and certification of the environmental management system to ISO 14001 requirements:
En+ Management Company, Eurosibenergo-Hydrogeneration, IESK, Volgaenergo, BEK, Kompaniya
Vostsibugol LLC
2022–2029
2023
2021–2032
2022–2026
Active participation in initiatives on environmental protection
- Using partnerships to promote the Company’s priority SDGs by 2030, to position En+ as an industry leader
2022–2032
in sustainable development
- Adaptation of the Company’s public reporting to the new reporting requirements of the UN Global Compact
- Preparation of the annual SDG report
Read more at p.173-175
Increased involvement of management and personnel in environmental protection and climate change
mitigation activities and raising awareness among personnel
- Assessment of the initial level of employee’s knowledge
-
- Holding of educational workshops for environmental officers and other personnel
Improvement of the competence of environmental officers and other personnel in subsidiaries
2022–2032
Increased involvement of suppliers and consumers in environmental protection and climate change
mitigation activities
- Development of recommendations on environmental and climate risk management for service suppliers
2022–2032
In 2022, En+ updated its approach
to environmental management by adopting
the Waste Management Standard that applies
to all enterprises in the Power segment.
Read more at pp.94-97
GRI: 2-13
The Company’s structure provides
for management bodies to deal
with environmental protection, both
at the level of the Board of Directors
and at the level of executive management.
On behalf of the Board of Directors, HSE
Committee considers issues associated
with the functioning of an appropriate
risk management system, including those
pertaining to environmental protection.
The committee’s functions are described
in detail in the relevant regulations
on the committee.
Read more at p.62-63
Environmental protection activities
at the Metals and Power segments
of the Company are carried out
by environmental protection departments.
To prioritise the task of reducing
environmental risks within the Company,
En+ also includes environmental indicators
in the KPIs of managers at all levels who
are responsible for the implementation
of environmental measures
and investment programmes.
En+ implemented an environmental
management system based
on the international ISO 14001:2015
standard and the Russian national GOST R
ISO 14001-2016 standard, Environmental
Management Systems, in all entities that
are part of the Group or in which En+
is a major shareholder. In 2022, the Company
continued to expand the environmental
management system. The Company
implemented this system in IESK, subsidiary
of the Power segment.
In the reporting year, the Company
had its HPPs certified in accordance
with the international ISO 14001 standard.
In 2023, the Company plans to certify
this system and start similar activities
at Volgaenergo. In Metals segment,
21 plants are certified for compliance
with the ISO 14001 standard of their
environmental management systems.
The Company is also to introduce an
centralised information and reporting system
for environmental protection. In 2021, En+
negotiated with developers of the relevant
software and pre-tested the system,
and in 2022 implementation of the 1C system
at HPPs started.
During the reporting year, there were no
environmental incidents (accidents,
violations) at the Company’s facilities
that, if occurred, could have significantly
contaminated the soil, air and water
and also lead to fines imposed by court
decision (after all stages of the appeal
process) with a compensation exceeding
USD 1 million. Neither were there official
complaints from the public
and interested parties.
In 2022, spending on environmental
protection increased compared
to the previous year. Total environmental
costs amounted to RUB 16.6 billion
(USD 243 million): RUB 1.8 billion
(USD 26.3 million) related to the Power
segment and RUB 14.85 billion
(USD 216.7 million)2 – to the Metals
segment. The main share of costs falls
on the protection of atmospheric air.
The Company continued to work to eliminate
all incidents identified by supervisory
authorities in previous periods.
1 / Due to rounding, some totals may not correspond with the
sum of the separate figures. Calculated based on average for
2022 USD/RUB exchange rate of 68.55.
2 / Calculated based on average for 2022 USD/RUB exchange
rate of 68.55.
Read more in the 2021
Sustainability Report,
pp.76-77
RUB
16.6 bn
total environmental
investments in 2022
Total environmental
protection costs1, %
Atmospheric air
protection
Waste
management
Water protection
Environmental
equipment
maintenance
Other
expenditures
Land
rehabilitation
PCB
management
49
37.5
6.5
4.2
1.9
0.8
0.1
86
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
AIR QUALITY
GRI: 3-3
Understanding that its activities affect air quality, En+ strives to reduce
and minimise the pollutant emissions into the atmosphere by realising
a range of initiatives and measures. RUSAL and BEK are responsible
for the majority of the Company’s emissions.
In order to comply with environmental legislation and reduce the burden
on the air, En+ focuses on the following measures:
construction and upgrade of highly-efficient gas
treatment and dust collection units
development and implementation of advanced technologies
and methods to reduce emissions
air quality monitoring
participation in emission reduction programmes
GRI: 305-7
SASB: EM-MM-120a.1
SASB: IF-EU-120a.1
Significant changes in performance
Changes
Explanations of the dynamics
↑3% increase in total air
emissions (excluding GHG
emissions compared to 2020)
The total amount of emissions (excluding
GHG emissions) into the atmosphere has
increased due to the growth of production
↓1% decrease in total air
emissions (excluding GHG
emissions compared to 2020)
The total amount of emissions (excluding
GHG emissions) into the atmosphere has
decreased due to measures to prevent sulpur
oxides pollutants
Metals segment
Power segment
The majority of the Metals segment’s air emissions
come from carbon monoxide (68% in 2022)
and for the Power segment – from sulphur oxides
(58% in 2022).
1 / In the section “Environmental stewardship – Air quality” hereof, data for the Friguia Bauxite
and Alumina Complex, which may be relevant for consolidated indicators, are excluded
due to the lack of measurement systems and relevant requirements in national legislation.
88
Metals segment
Power segment
Air emission intensity indicators2
Metals segment
Power segment
Total air emissions (excluding GHG)1, kt
299.6
362.6
2022
662.2
2021
2022
2020
2021
2020
368.9
362.6
352.4
368.9
352.4
274.4
299.6
302.6
274.4
302.6
643.3
662.2
655.0
643.3
655.0
NOx air emissions, kt
19.9
52.1
2022
2021
2020
22.7
20.1
45.7
47.1
72.0
68.4
67.2
SOx air emissions, kt
44.3
45.2
40.1
2022
2021
2020
172.3
160.5
216.6
205.7
229.9
189.8
Particulate matter (PM) air emissions, kt
36.1
67.3
2022
2021
2020
35.9
36.3
58.3
56.3
103.4
94.2
92.6
Volatile organic compounds (VOCs) air
emissions, kt
2022
2021
2020
0.9
0.3
1.2
0.4
1.5
0.4
1.2
1.6
1.9
Pollutant
NOx
SOx
PM
VOCs
Metals segment (kt/kt)
Power segment (kt/bn kWh)
2020
0.0054
0.0107
0.01
0.0004
2021
0.006
0.0120
0.01
0.0003
2022
0.0052
0.0116
0.01
0.0002
2020
0.4149
1.6721
0.4960
0.0035
2021
0.3698
1.2988
0.4718
0.0032
2022
0.4477
1.4806
0.5783
0.0026
METALS SEGMENT
RUSAL set the following goals under
RUSAL’s Sustainability Strategy:
- By 2027, to achieve full compliance of
the Company’s air pollutant emissions
with regulatory requirements (no excess
of the established limits)
- By 2025, to achieve a significant
reduction in air pollutant emissions per
tonne of aluminium, including a 25%
reduction in total fluoride emissions
GRI: 3-3
To achieve the goals, RUSAL is
implementing the ‘Atmospheric air
quality normalcy’ project. KraZ, BraZ,
and NkaZ are involved in the federal
Clean Air project. As part of the project3,
the Company is participating
in the implementation of comprehensive
plans approved by the Russia’s Ministry
of Natural Resources to reduce emissions
of pollutants in cities where the Company
operates.
In 2022, RUSAL presented its first
voluntary report on the contribution
to the implementation of the federal Clean
Air project. The report provides detailed
information on the progress and results
of RUSAL’s programmes implemented
under the project starting in 2019.
RUSAL is paying particular attention
to the modernisation of its aluminium
smelters. In 2022, projects
for the environmental modernisation
of aluminium smelters were assessed
for compliance with the best available
technologies. All projects received
positive conclusions from the state
environmental experts.
RUSAL is implementing the following key measures:
Project
INTRODUCING A NEW ANODIC MASS TECHNOLOGY
In partnership with pitch manufacturing companies,
RUSAL is replacing traditional coal-based raw
materials (the main source of tar emissions) with more
environmentally friendly raw materials (Eco Pitch) with no
or insignificant benzo[a]pyrene content. In the reporting
year, En+ proceeded with plans to fully convert
the electrolysers of the KrAZ to environmentally friendly
aluminium pitch by 2024.
BUILDING NEW AND UPGRADING EXISTING GAS
TREATMENT UNITS
RUSAL is implementing an advanced electrolytic gas
purification system of its own design. The system
consists of two stages: dry and moist. RUSAL is carrying
out a project to introduce its own more efficient “dry”
gas purification systems, which has been awarded
the V. I. Vernadsky Prize in the Innovative Eco-Efficient
Technologies in Industry and Energy category. In addition
to the best environmental performance, the new gas
treatment technology is also highly cost-effective.
Fourteen gas treatment systems are currently
in operation, of which one was commissioned
in the reporting year.
Moreover, RUSAL is implementing programmes to install
automatic emission control systems for all aluminium
gas treatment units.
EXPANDING THE USE OF THE ECO-SØDERBERG
TECHNOLOGY
Conversion to Eco-Søderberg technology helps to
massively reduce smelter’ emissions at aluminium plants.
EXPANDING THE USE OF PRE-BAKED ANODE
TECHNOLOGY
Conversion to pre-baked anode technology helps to
massively reduce smelters’ emissions at aluminium
plants.
Read more at p.60
Expected results
> 60% the reduction
of the harmful
benzo[a]pyrene
emissions
> 99.5% of hydrogen
fluoride and solid
fluorides
14% average
reduction in pollutant
emissions
> 32% reduction
in fluoride emissions
73% reduction
of fluoride emissions
100% reduction
of benzo(a)pyrene
emissions
2 / In order to track progress in reducing its negative impact on the environmental components,
the Company calculates intensity indicators linked to the volume of aluminium produced (for the Metals
segment) and the amount of heat and energy generated (for the Power segment). The denominator
data are indicated in the appendices and are common to all specific environmental indicators
of the segments in the section “Environmental stewardship”.
3 / The project aims to reduce emissions in 12 industrial centres in Russia by at least 20% by the end
of 2026 compared to 2017 (the project duration was extended by two years).
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Strategic report
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
EN+ SUPPORTS
ASSESSMENT
OF IMPACT
OF THE YENISEI RIVER
ON AIR QUALITY
As a section of the Yenisei River
downstream of the Krasnoyarsk HPP
does not freeze, polynya is formed
in the area. To determine the possible
impact of the polynyas on air
quality in Krasnoyarsk, the Institute
of Computational Modelling
of the Siberian Branch of the Russian
Academy of Sciences, supported by En+,
conducted a study. The study will
make it possible to develop solutions
to improve the quality of the environment
for people living downstream
of the Krasnoyarsk HPP.
Read more about at Company’s 2022
SDG Report, p.26
POWER SEGMENT
GRI: 3-3
Principal initiatives to reduce pollutant emissions from the Power
segment include the increase in efficiency of electricity generation
and upgrade of the technology of dust collection equipment.
The automatic emission control system of air emissions will
be installed at all CHPs subject to emission quotas. In the reporting
period, an automatic emission control system was installed
in chimney No. 1 at CHP-6. In 2022, the design of the same system
for chimney No. 2 was started. It is planned for completion in 2023,
with a possible launch of construction and installation works.
Project
Expected results
INSTALLING MORE EFFICIENT
ELECTROSTATIC PRECIPITATORS
over 99% of ash emissions
are captured
In 2022, the Company worked
on installing more efficient electrostatic
precipitators at CHP-6. The Company
installed one electrostatic precipitator
at CHP-6 in the reporting period
and aims to complete the installation
of two more in 2023. The project
is part of the federal Clean Air project.
The Industrial Development Fund
provided a preferential loan to BEK
under the Environmental Projects
Programme.
RE-EQUIPPING ASH COLLECTORS
The reduction of ash emissions
In 2022, activities initiated
in the previous period to re-equip ash
collectors at Ust-Ilimsk CHP and CHP-6
continued.
TRANSFERRING OF HEAT SUPPLY
FROM BOILER HOUSE
In 2022, the Company also completed
the transfer of heat supply from
the Galachinskaya boiler house
in Bratsk. Now, heat and hot water
in the homes of residents of the central
district of the city are supplied solely
from CHP-6.
The transfer of heat supply
to a more efficient CHP enabled
the reduction of pollutant
emissions.
WATER RESOURCES
GRI: 3-3
GRI: 303-2
SASB: IF-EU-140a.2
SASB: EM-MM-140a.2
An important task of En+ is to increase the proportion
of water reused in production and to improve the quality
of discharged wastewater.
GRI: 303-1
SASB: IF-EU-140a.1
SASB: EM-MM-140a.1
Aqueduct Water Risk Atlas En+ operates
According to the
mainly in regions where there is no issue of fresh water
scarcity, with the exception of facilities of the Metals
segment in Armenia and Italy1 and the entities of the Power
segment (EnSer JSC) in Miass (Chelyabinsk Region).
To reduce the pressure on water resources in these
regions, En+ uses modern technologies, such as closed
water supply systems, wastewater treatment units.
For instance, a closed water supply system was installed
at RUSAL Armenal in 2020. In 2022, Enser JSC decreased
the discharge of wastewater into the Miass river, increased
the degree of wastewater treatment and started to use
industrial water (after treatment) in production cycles
to reduce Enser’s impact on water scarcity in Miass.
SASB: IF-EU-140a.3
The Company works on minimising cases of non-
compliance with legal requirements in terms of the amount
of water collected and discharged, as well as its quality.
Particular attention is paid to compliance
with the maximum permissible concentrations
of pollutants during discharges into surface water bodies.
In the reporting year, there were no significant spills
or emergency discharges of pollutants into water bodies,
which caused significant financial losses for the Group2.
There were also no reports of serious violations
of environmental laws relating to water resources.
To reduce all the water-related risks at all stages
of the production process, En+ pays attention to:
- monitoring water quality (especially in natural water
bodies)
- increasing the amount of recycled water by modernising
the production processes and implementing water
recycling systems
- conducting regular inspections of water supply systems
to prevent leaks and losses as part of industrial
environmental control
- reducing the amount of waste water and the level
of hazardous substances in waste water by improving
the quality of treatment processes
Significant changes in performance
Changes
Explanations of the dynamics
↓36% decrease in
fresh water discharge
compared to 2020
↑16% increase in
total water withdrawal
(compared to 2020)
Decrease in freshwater discharge
compared to 2020 was achieved due
to implemention of best available
technologies
The increase in water withdrawal was
mainly due to an increase in electricity
generation by 22% in BEK LLC due to
the regime set by the system operator
To comply with the legislation, the Group is committed to:
Metals segment Power segment
Requirements:
- state requirements for wastewater quality
- sanitary and epidemiological requirements
- municipal requirements for water discharge
into public networks
Documents:
- Environmental impact declaration
- Decision on the granting of water bodies for use
- Standards for permissible discharges of pollutants
into water bodies
- Permission to discharge pollutants
and microorganisms into water bodies
GRI: 303-3
SASB: IF-EU-140a.1
SASB: EM-MM-140a.1
Total water withdrawal by source, 20223, mn m3
Surface water
724.3
Third-party
organisations
Ground water
Seawater
Other
177.0
53.1
22.8
15.7
1 / RUSAL Armenal and Eurallumina, the Italian asset on mothballing.
2 / More than USD 1 million.
3 / In the section “Environmental stewardship – Water resources” hereof, data for total and freshwater withdrawals and discharges exclude quarry, mine, drainage, storm,
and other water that is not used in the production process.
90
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
Metals segment
Power segment
GRI: 303-3
SASB: IF-EU-140a.1
SASB: EM-MM-140a.1
GRI: 303-4
Freshwater withdrawal1, mn m3
Total water discharge3, mn m3
149.9
155.4
154.0
2022
2021
2020
813.2
720.2
697.9
963.1
875.6
851.9
47.3
48.6
61.6
2022
2021
2020
509.7
446.3
425.8
557.0
494.9
487.4
METALS SEGMENT
GRI: 303-1
The Metals segment facilities regularly
assess water-related risks and impacts
on water resources. In 2022, RUSAL did not
identify any significant impacts and risks
related to water and problems with water
supply for production needs in the Metals
segment.
RUSAL set the following goal within its
Sustainability Strategy:
- By 2027, to bring the share
of water recycling in alumina
refining, aluminium smelting and
the manufacturing of finished
aluminium products up to 100%.
RUSAL plans to achieve this result
by implementing the best available
practices in two main directions:
GRI: 303-3
SASB: IF-EU-140a.1
SASB: EM-MM-140a.1
GRI: 303-4
Project
Expected results
Total water withdrawal, mn m3
Freshwater discharge, mn m3
172.7
178.4
176.8
2022
2021
2020
820.2
727.0
704.9
992.9
905.4
881.7
24.5
25.9
38.8
2022
2021
2020
509.7
446.3
425.8
534.2
472.2
464.6
GRI: 303-1
SASB: IF-EU-140a.1
SASB: EM-MM-140a.1
GRI: 303-5
SASB: IF-EU-140a.1
SASB: EM-MM-140a.1
Percentage of water withdrawn from all water
stressed areas, %
Total water consumption2, mn m3
0.9
0.6
0.6
0.6
0.3
0.6
2022
2021
2020
0.6
0.6
0.6
99.0
107.5
103.8
2022
2021
2020
565.4
478.4
473.2
664.4
585.9
577.0
Water-related intensity metrics
Metals segment (mn m3/kt)
Power segment (mn m3/bn kWh)
Indicator
Total water withdrawal
Total water discharge
2020
0.047
0.016
2021
0.047
0.013
2022
0.045
0.012
2020
6.21
3.75
2021
5.88
3.61
2022
7.05
4.38
1 / In the section “Environmental stewardship – Water resources” hereof, data for total water discharges exclude quarry, mine, drainage, storm, and other water that is not
used in the production process.
2 / Represents water for production needs.
3 / Data of Metals segment for 2021 were recalculated and included only water for production needs.
92
CLOSED WATER CIRCULATION WITHIN
THE MAIN PRODUCTION PROCESSES
The largest amount of water is consumed
by the Alumina division companies (84%
in 2022), due to the specifics of production.
To reduce the impact on water resources,
the Company is in the process of converting
its facilities to a closed water supply system
RUSAL has completed the transition
of the in RUSAL Krasnoturyinsk and AGK,
Armenal to a closed water supply system.
In 2022, the company also transferred
the RUSAL Kamensk-Uralsky alumina plant
to this system.
91.5% the share of reused and reusable
water at RUSAL
CONSTRUCTION AND RECONSTRUCTION
OF WASTEWATER TREATMENT PLANTS
RUSAL implements measures
for the construction and reconstruction
of treatment facilities
The launch of an ultraviolet disinfection
station at the RUSAL Krasnoturyinsk in 2018
has made it possible to abandon the use
of chlorine in the process of cleaning
domestic wastewater.
POWER SEGMENT
GRI: 303-1
To prevent impact on water bodies
in the form of changes in water
levels and the way they fluctuate, En+
regulates the water regime of HPPs
in accordance with the regulations
of the Russian Federal Water Resources
Agency. The Company carries out
industrial and environmental monitoring
of wastewater and surface water.
All water intake sources are included
in the assessment of the impact
of the Company’s Power segment
on water resources, which is conducted
one to three times a month. Special
attention is paid to the control
of pollutant concentrations in reservoirs
and discharged waters. Water sampling
and analysis upstream and downstream
of the HPPs is carried out by accredited
laboratories. The focus is on pollutants
specific to these plants (suspended
particles and petroleum products).
In order to prevent technical
malfunctions that could result
in water pollution, the condition
of generating and auxiliary
equipment is closely monitored at all
Company’s plants. This approach
contributes to the timely elimination
of threats, known as industrial
accidents, and minimises the risks.
In 2022, the Company started
developing a comprehensive
programme to minimise wastewater
discharges and losses. Treatment
units are currently in various stages
of implementation at the Power
segment’s facilities.
IMPROVING
WASTEWATER
TREATMENT
PROCESSES
PROJECTS
-
-
Improving HPP’s wastewater
treatment processes
Decrease in the water pollution
construction and installation
of modern treatment facilities
is scheduled at all the Company’s
HPPs (in Irkutsk, Bratsk, Ust-
Ilimsk, Krasnoyarsk and Onda).
In 2022, the Company completed
the design of the treatment
facilities at the Irkutsk HPP.
Improving CHP wastewater
treatment and coal’s mining
wastewater
The Company continues the
modernisation of wastewater
treatment at CHPs. The project
at the Kompaniya Vostsibugol LLC
enterprises is fully completed.
In 2022, the Company carried
out pilot tests of the installation
to achieve the regulatory
parameters for effluents from
the Irbey coal mine.
EXPECTED RESULT
Zero discharge of untreated
wastewater by 2030
Read more
in the Company’s 2022
SDG Report, p.13
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
WASTE AND TAILINGS
GRI: 3-3
GRI: 306-1
En+ increases the amount of waste and tailings
recycled and reused, implements measures
to organise their safe storage and disposal,
and develops and implements new technologies
in this area.
The main waste of the Power segment is ash
and slag waste, waste of the mining industry
(overburden) while waste of the Metals segment
(RUSAL) are red and nepheline slime, which
is formed from production of bauxites and
nephelines and also the fulfilled coal lining
of electrolysers. The Company strives to
minimise risks at all stages of the life cycle of
waste disposal facilities: design, construction
and renovation, operation and maintenance,
conservation.
The main update to the management approach
in this area in 2022 consisted in the approval
of the Waste Management Standard. There, En+
defined the general procedure for the collection,
placement, accounting, storage, and disposal
of waste across the Company. This standard
was approved at the corporate level at En+
and then adopted by internal instructions at all
the Company’s entities. During the reporting
year, the Power segment performed internal
audits to check the compliance of enterprises
with the Standard. A list of measures
was developed to ensure that the identified
inconsistencies were eliminated. In 2023
it is planned to conduct several more
internal audits to verify the implementation
of this standard and to study the results
of the implementation.
In 2022, RUSAL adopted a strategy for waste
management until 2030. RUSAL defined the
following key issues in the strategy:
- strategic priorities in the area of waste
generation and management
- waste management hierarchy
- major industrial waste and promising methods
for its treatment
- waste management facilities and priorities
for their development
- priority waste management projects
RUSAL also approved key performance indicators
(KPIs) and waste management programmes
for 2024–2029 in all its companies to implement
the provisions of the strategy.
SASB: ЕМ-ММ-150а.9
Hazardous waste management is carried
out on the basis of licences in accordance
with legislative requirements. During
the reporting period, En+ did not transport
any waste across national borders. There
were no significant incidents related
to the management of waste and hazardous
materials in the Group’s companies in 2022.
Read more in the 2021
Sustainability Report,
pp. 86-87
The Metals segment also processed 14.24 tonnes of waste
containing PCBs. In addition, plans for the complete decommissioning
of equipment and disposal of waste containing PCBs have
been developed for all 11 RUSAL entities that have existing
or decommissioned equipment and waste containing PCBs
for the period 2022-2025. For the Power segment, the year
2022 was also marked by a significant event in this area:
the decommissioning of PCB-containing equipment at all production
sites of IESK JSC was completed. It was replaced with environmentally
friendly equipment.
Significant changes in performance
Changes
Explanations of the dynamics
↓11.5%
of total
volume
waste
generated
(compared
to 2021)
In the Metals segment, waste generated (excluding
overburden) in 2022 decreased by 11.5% compared to 2021
and reached 13.8 mt. The volume of waste generated
is directly related to the dynamics of production, and also
depends on factors such as the depth of ore deposits
and the percentage of alumina in the processed ore
and bauxite.
The most significant waste by volume in the Metals segment
are red and nepheline sludges, which result from alumina
production and are classified as non-hazardous and non-
toxic. They represent 87% (90% in 2021) of the RUSAL total
waste volume, or 12.0 mt (7.7% of which was recycled
or reused).
At the same time, 6% (4.5% in 2021) of the RUSAL’s total
waste amount (excluding overburden), or 0.8 mt (96.8%
of which was recycled or reused), is hazardous waste, which
requires special attention for its storage and disposal. This
includes in particular spent refractory lining.
↑4.6%
increase
in total
volume
of waste
(compared
to 2021)
In the Power segment, waste increased by 4.6% compared to
2021 mainly due to a higher volume of tailings and
overburden in SMR main types of waste in the Power
segment are ash and slag waste (ASW) and mining waste
(stripping and tailings). Most of them are waste from
the mining industry. Overburden is mainly used for filling
underground workings and is not disposed.
Metals segment Power segment
2.6
2.4
2.8
2022
2021
2020
GRI: 306-3
Metals segment
Power segment
GRI: 306-2
GRI: 306-4
GRI: 306-5
GRI: 306-2
GRI: 306-4
GRI: 306-5
SASB: EM-MM-150a.8
Total volume of non-hazardous waste reused
and recycled, mt
Total volume of hazardous waste reused and recycled, kt
122.9
118.6
123.9
125.5
121.0
126.7
2022
2021
2020
807.6
10.8
660.4 2.0
813.6 2.1
818.4
662.4
815.7
Total volume of non-hazardous waste generated,
excluding mining waste, mt
SASB: EM-MM-150a.5
Total weight of tailings waste generated, mt
1.0
0.8
1.4
2022
2021
2020
GRI: 306-3
6.1
8.6
8.5
9.6
6.9
9.9
2022
2021
2020
12
6.0
14.1
4.0
14.4
6.6
18.0
18.1
21.0
Total volume of non-hazardous waste generated, mt
Percentage of tailings waste recycled, %
2022
2021
2020
62
83.5
72.9
137.1
131.1
137.6
199.1
214.6
210.5
7.7
2022
2021
2020
6.6
7.4
67.4
65.7
68.1
27.6
19.7
26.5
GRI: 306-3
SASB: EM-MM-150a.7
SASB: IF-EU-150a.1
Total volume of hazardous waste generated, kt
Amount of coal combustion residuals (CCR) generated, mt
2022
2021
2020
834,6
12
695,9 2,7
848,1 2,3
846.6
698.6
850.4
2022
2021
2020
1.9
1.5
1.4
Waste intensity metrics
Indicator
Total volume of waste generated
intensity
2020
0.02
2021
0.022
2022
0.016
2020
1.21
2021
1.06
2022
1.18
Metals segment (kt/kt)
Power segment (kt/bn kWh)
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
CLIMATE AND ENVIRONMENT
METALS SEGMENT
GRI: 306-1
GRI: 306-2
SASB: EM-MM-150a.4
SASB: EM-MM-150a.6
SASB: EM-MM-150a.10
RUSAL’s strategic priorities are minimising
production waste wherever possible
and maximising the involvement of waste
in the economic cycle of recycling.
RUSAL set following goals within its
Sustainability Strategy:
- By 2030, to ensure a gradual reduction of
waste-to-landfill by at least 10% per tonne
of metal and safe disposal of 100% of
such waste.
The Company continues to implement the
‘Safe operation of red mud disposal sites
and other waste disposal sites’ project and
a range of measures aimed at increasing
the proportion of recyclable waste
and finding new ways to reduce the volume
of waste generated.
Project
Expected results
Reducing red mud residual
alkali content down
to 0.5%
CONSTRUCTING A MODERN SLUDGE FIELD
MAP
In 2022, the Company announced the completion
of the construction of the first sludge site
at the Urals Aluminium Smelter. The new facility
meets the world safety and environmental
requirements.
CREATING PRODUCTS FROM RED MUD
Aughinish and RUSAL ETC are key participants
in the European Removal project, within which
we have developed a technology for making
it suitable for creating products from red mud
in various industries (construction materials,
production of Fe-Si alloys, cement additives, rare
elements, mineral fillers and heat insulations).
The project completed pilot tests at the Aughinish
and Aluminium of Greece production facilities
in 2022, confirming the reduction of Na2O content
from 4–5% to ≤ 0.5% and achieved technology
targets: moisture ≤ 25%; lime consumption
≤ 160 kg. De-alkalised mud batches were tested
by other participants of the REMOVAL project
to produce construction materials and other
products.
Read more in the 2022 SDG
Report pp.20-21
POWER SEGMENT
GRI: 306-1
GRI: 306-2
SASB: EM-MM-150a.4
SASB: EM-MM-150a.10
The Power segment continues cooperation
with leading research institutes
and manufacturing companies to introduce
the latest methods of ash and slag
waste disposal. The Company develops
and implements advanced methods of ash
and slag waste management and takes
measures aimed at improving its waste
management system.
In 2023, in line with the Directive
of the Government of the Russian Federation
No. 1557-r dated 15 June 2022 ‘On approval
of a comprehensive plan to increase
the volume of disposal of ash and slag
waste of hazard class V’, the Company plans
to join a taskforce with the Federal Agency
on Technical Regulating and Metrology
(Rosstandart) to promote their own designs.
A national standard in this area, in which
developments of En+ may be used, is a part
of prospective activities.
Ongoing projects to use ash and slag waste
Projects
AS A COMPONENT OF RECLAMATION
MIXTURES FOR COAL MINES
AND RECLAMATION OF WASTE LANDFILLS
The project is aimed at using ash and slag waste
as a component of reclamation mixtures for coal
mines reclamation of waste landfills. Currently,
the project is undergoing a state environmental
assessment. After the completion of it,
the Company will be able to apply the project
at its facilities.
AS A MATERIAL FOR ROAD CONSTRUCTION
The project provides for the use of ash and slag
waste as a material in road construction. In 2022,
the testing stage of a roadbed in the Irkutsk
Region was completed and guidelines
were developed, which will become regulation
after research work finalisation.
OTHER INITIATIVES
The Company develops and implements other
advanced methods of ash and slag waste
management:
-
increasing the volume of fly ash utilisation
through modernisation of the dry ash
unloading unit at Novo-Irkutsk CHP
- selling ash and slag waste to producers
of construction materials
- extracting iron-containing concentrate
as a pilot project at CHP-9
Expected results
- maximising disposal
of ash and slag waste
- ensuring the absence
of ash dumps
with a residual capacity
of less than three years
implemented at the Company’s offices in Irkutsk, at the Irkutsk,
Bratsk, Ust-Ilimsk and Krasnoyarsk HPPs.
Some of the Company’s offices arranged their own waste collection
and separation facilities. For the remaining offices, the Company,
in cooperation with regional operators, modernised urban sites that
were accessible to both employees and local residents.
In 2023, the Group plans to implement similar solutions
in some of the enterprises of BEK and RUSAL. During the reporting
year, the companies carried out preparatory analytical work.
Over the next year, En+ will work with its employees to educate
them about waste management. Through training and publicity
in the offices, employees will learn why it is important to separate
waste and why the Company does so.
2022
2023
En+ Group offices in Moscow
and Irkutsk, as well as
the Irkutsk, Bratsk, Ust-Ilimsk
and Krasnoyarsk HPPs:
- moved to separate collection
of household waste (glass,
metal, plastic and composite
packaging)
- terminated use of disposable
plastic tableware (Moscow
office only)
Launch of
the initiative
Expanding
the initiative
Baikal Energy Company and RUSAL:
- transition to separate waste
collection in businesses
En+ Group’s offices:
- educating employees: training
courses and publicity (posters)
explaining why it is important
to separate waste and why
the Company does it
TRANSITION
TO THE ‘GREEN OFFICE’
CONCEPT
In 2022, the Company launched the Green
Office initiative. This involves the creation
of a workspace where environmentally
efficient solutions are implemented
to reduce resource consumption
and increase recycling volumes.
At the beginning of 2022, the En+ head office
in Moscow introduced separate collection
of household waste (glass, metal, plastic
and composite packaging) and completely
stopped using disposable plastic tableware.
During the year, the system of separate
collection of household waste was also
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Appendices
CLIMATE AND ENVIRONMENT
LAND REHABILITATION AND RECLAMATION
Land reclamation is an important Company obligation,
which facilitates biodiversity conservation by restoring
vegetation cover and habitats of biological species
where necessary.
obligations in decommissioning facilities and restoring
the environment around the production sites. The Metals
segment plans to fully meet its obligations to restore
disturbed lands and lands after waste disposal by 2030.
The Metals segment performs land reclamation after
completing mining operations in accordance with RUSAL’s
operational policy “Decommissioning Assets and Restoring
the Environment: Requirements for Organising Work
and Assessing Obligations”. RUSAL applies unified
corporate approaches and requirements to the reclamation
of disturbed lands and unified rules for assessing
The enterprises of the coal business regularly carry out
land reclamation operations after the completion of coal
mining activities and ash and slag storage facilities
closing.
The life cycle of a production facility includes
the following stages:
Completion of open-pit mining and decommissioning of waste disposal sites
Development and approval of reclamation plans that consider potential riskis for particular facilities, amounts
of work needed, and the required resources
Carrying out the following activities:
Restoration of disturbed terrain
and soil after the completion
of open-pit mining
Reclamation of waste disposal
sites (ash and stag dumps
and landfills)
Reclamation of disturbed
and polluted lands
Subsequent monitoring in areas where forest ecosystems are restored:
Re-planting of seedlings instead
of those that have not taken root
Weed removal
Creation of a firebreak zone
in the corresponding territory
EM-MM-160a.2
En+ keeps track of both the integrity and qualitative
characteristics of land cover. As changes
in the chemical composition of the soil cover can lead
to degradation of the vegetation cover over vast areas,
the Company carefully monitors the sites to ensure they
do not emit acidic waste. The appearance of acidic
wastewater is not typical of the developed
nepheline and bauxite deposits as these deposits
do not contain sulphidic rocks.
GRI: 304-3
The Company uses different types of remediation depending
on the original land use, but reforestation is particularly important as
TOTAL AREA OF DISTURBED AND RESTORED LAND, 2022
Company engages in mining activities. One
of our most important land management
tasks is to boost the volume of reforestation.
Total area of land disturbed
as a result of open-pit
mining but not reclaimed, as
at 1 January 2022
Total land area
disturbed by open-pit
mining, 2022
Total area of land
reclaimed, 2022
Total area of land disturbed
as a result of open-pit
mining, but not reclaimed, as
at 31 December 2022
12,104
11,995
24,099
45
227
272
77
0
77
12,072
12,221
24,293
Changes
Metals
segment
Power
segment
En+
FORESTS PROTECTION INITIATIVES
The Company carries out diverse projects aimed at growing
and protecting forests. For instance, ‘The Green Wave’ initiative
was launched in 2017. It comprises a grant competition
for municipal and non-profit organisations and volunteers
in landscaping and improvement of local urban spaces. In 2022,
more than 2,700 bushes and trees were planted by the project
participants.
The first in Russia large-scale voluntary tree planting
and conservation initiative ‘Under the Green Wing’ has
been implemented by the Metals segment of En+ since 2019.
It is aimed at absorbing greenhouse gases and combating
climate change. It is carried out across Irkutsk and Krasnoyarsk
Regions.
In the framework of reforestation, the Company planted more
than 1.1 million pine seedlings in the Irkutsk Region from 2019
to 2020. In 2022, 1,305,320 pine seedlings were planted in Komi
Republic. The forests require to be taken care of during the five-
years period, therefore in 2022, En+ performed the forest
management measures, which will be continued in 2023
in purpose of the natural biodiversity protection. One more
important project of the Company in area of forests protection
is using of aviation to detect and extinguish fires.
In 2022, under the project environmental
activists in Buryatia with the support
of En+, government authorities, public
and educational institutions, planted
over 25,000 pine seedlings on an area
of 5 hectares affected by fires. Buryatia
became a partner region of the project
for the first time.
In reporting period, as part of a reforestation
programme, En+ planted about 10,000 pine
seedlings near the village of Ust-Baley
in the Irkutsk Region, at the site of a large-
scale forest fire. The planting area amounted
to 4.7 hectares. The total reforestation area
for 2021–2022 exceeds 22 hectares.
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Appendices
CLIMATE AND ENVIRONMENT
BIODIVERSITY
GRI: 3-3
GRI: 2-28
Preservation of biodiversity is an essential
part of Company’s activities.
GRI: 304-1
En+ do not operate in protected areas
or the high biodiversity value areas outside
protected areas. In case of indirect impact
on them, the Company conducts monitoring
to fully comprehend if there is effect
of Company’s activities.
En+ actively engages in international initiatives and contributes
to the development of international standards:
- En+ is a member of the Business and Biodiversity Conservation
Working Group under the Ministry of Natural Resources
and Environment of the Russian Federation
- En+ entities participate in the ASI Biodiversity and Ecosystem
Services Working Group jointly with the International Union
for Conservation of Nature (IUCN), Fauna & Flora International (FFI)
and the Chimbo Foundation
- En+ is also engaged in the development of the Science-Based Targets
for Nature
EM-MM-160a.1
Read more about participation in international initiatives at p.173
In carrying out its biodiversity conservation
activities, En+ is guided by the requirements
of a wide range of internal and external
regulations and documents:
- National legislation of the countries where
The Department for Environmental and Climate Risk Management
and the Project Office, which are part of the Sustainable
Development Directorate, and the Audit and Risk Committee under
the Board of Directors are responsible for managing biodiversity
conservation issues.
the Company operates
- Russian Federal Law No. 16-FZ
“On the ratification of the Convention
on Biological Diversity” dated
17 February 1995
- Other applicable regulatory legal acts
- International Finance Corporation
Performance Standard 6 “Conservation
of Biological Diversity and Sustainable
Management of Living Natural Resources”
- En+ Environmental Policy
- En+ Biodiversity Conservation Policy
En+ Biodiversity Conservation Policy,
outlining the core principles and views,
covers both the Metals and Power segments.
In 2022, the Metals segment put into effect
a biodiversity policy, and the Power segment
started developing an appropriate corporate
programme.
Sustainable Development Directorate
resolves issues related to the conservation
of biodiversity within the Company
Department
for Environmental
and Climate Risk
Management together
with the Audit and Risk
Committee under the Board
of Directors
assess the risks associated
within biological resoures
within the overall risk
management system
Project Office
develops strategic
and policy documents
in the field of biodiversity
conservation; accompanies
the development
and implementation
of specific measures
and action plans
for biodiversity conservation
Employees are guided by KPIs as part of the corporate
biodiversity conservation management system.
In 2022, the KPIs of the Power segment ensured
the implementation of research on the impact
of the operation of HPP’s on the state of aquatic
biological resources and the development
of the Biodiversity conservation programme
for the Angara HPP cascade.
The Metals segment’s KPIs correlate with the natural
change drivers described by the Intergovernmental
Science-Policy Platform on Biodiversity and Ecosystem
Services (IPBES) and include indicators for land use,
implementation of biodiversity impact assessment
measures, compensatory stocking, forest planting,
gardening, co-operation with protected areas and other
stakeholders to study and protect biodiversity.
As part of the development of corporate programmes,
the Company plans to develop indicators for biodiversity
conservation activities.
GRI: 2-25
En+ applies a precautionary approach to the conservation
of biodiversity as part of the overall risk management
system and the environmental impact assessment.
To prevent negative impacts and protect species and their
habitats, the Company strives to:
Follow a hierarchy of mitigation measures aimed
at preventing, minimising, restoring or offsetting
negative impacts on biodiversity
Asses the risks of significant impacts
of the Company’s activities on biodiversity and,
in case of detection of such risks, set goals
for the conservation of biological resources
and create appropriare action plans based
on interaction with stakeholders
Actively cooperate with research institutes
and NGOs on projects aimed at studying
the causes of threats to ecosystems
and biodiversity and reducing the anthropogenic
impact on biodiversity
Biodiversity risks are considered and managed as part
of a strategic risk management plan of the Power segment,
which includes activities to develop corporate programmes
for biodiversity preservation, improve management
of biodiversity conservation issues, conduct consultations
with stakeholders and compensate for the negative impact
on aquatic biological resources.
Read more at p.167
The Metals segment has a Regulation on Conducting
an Initial Assessment of Risks and Significance of Impacts
on Biodiversity for Operating Enterprises, which is used
as a guideline for the Company’s biodiversity conservation
activities. According to RUSAL’s Biodiversity Policy,
biodiversity conservation risks are identified in areas such
as the use of natural resources, habitat transformation
and the introduction of alien species. If a significant
risk is identified, the Company takes steps to prevent
or minimise it or to implement compensatory measures.
To promote the approaches of En+ to biodiversity
conservation and ecosystem services, the Company
interacts with a wide range of stakeholders, including
scientific and educational institutions, public authorities,
non-profit organisations, by publishing reports,
forming an environmentally responsible worldview
amongst colleagues and in the Company’s regions
of operation, holding events aimed at the exchange
of relevant knowledge.
In 2022, En+ held a seminar to discuss the first results
of the development of the Biodiversity Conservation
Programme, which was attended by representatives
of the scientific community, protected area directorates
and public organisations. Stakeholders’ suggestions
and comments were taken into account when determining
impact zones, analysing impact factors, and selecting
indicator species.
The En+ Sustainable Development Directorate
responds to questions and requests from stakeholders,
including those related to conservation of biodiversity
and ecosystems, via the email and telephone.
Carry out planning and monitoring in the field
of biodiversity conservation: determine
goals and budgets, finance activities, control
obtaining permits, conduct risk assessments
for biodiversity, publish reports
Contact information
for the Sustainable
Development Directorate
is available on the En+
website
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GRI: 413-1
MONITORING AND ASSESSING
IMPACTS ON BIODIVERSITY
Long-term studies of biodiversity in the Krasnoyarsk Stolby
National Park continued in 2022. Experts discovered ten new
species of zooplankton (rotifers and copepods), 16 species
of higher vascular plants and recorded presence of a small bird –
the booted warbler (Iduna caligata) – for the first time.
The monitoring material collected represents a unique scientific
database on specially protected natural areas.
JOINING THE ALL-IRELAND
POLLINATOR PLAN (AIPP)
In 2022, Aughinish conducted lowland meadow surveys
and insect observations, counted the region’s winter bird
population, and participated in tree planting, roosting hedgehogs,
bats and birds, and weed control. The actions were taken
under the All-Ireland Pollinator Plan jointly with the National
Biodiversity Data Centre.
RUSAL developed a plan detailing practical measures to improve
and preserve biodiversity across the protected areas located
in the immediate vicinity of the enterprise. An annual report
on its progress was published on the Irish Environmental
Protection Agency website.
GRI: 413-1
PROMOTING SNOW LEOPARD
CONSERVATION
The Metals segment carries out long-term monitoring
of the population and habitats of snow leopard – a rare
species of large felids, listed as Vulnerable in the Red List
of the International Union for Conservation of Nature (IUCN).
In 2022, six adult snow leopards were regularly recorded
– four males and two females. Two transiting specimens
were also noted.
The effectiveness of the actions taken by RUSAL
was confirmed by the fact that three snow leopard cubs
were born in the reporting period.
METALS SEGMENT
POWER SEGMENT
GRI: 304-2
In accordance with the RUSAL
Biodiversity Policy, RUSAL
performs a mandatory assessment
of the Company’s activities impact
on biodiversity.
Under one of its largest projects,
the environmental restructuring
of the largest Siberian aluminium
smelters in Krasnoyarsk, Bratsk,
Shelekhov and Novokuznetsk,
RUSAL assessed the impact of all
project stages on the flora and fauna
of affected territories. According
to the assessment, taking into account
the absence of protected species
within the boundaries of the site
of the proposed activity, the impact
is considered to be acceptable,
and due to the reduction in emissions
of significant pollutants during
the operational phase, the impact
on the flora and fauna of the adjacent
territories is also expected
to be reduced. By 2035, RUSAL
aims to ensure a holistic approach
to conserving biodiversity and
supporting the effectiveness of priority
ecosystem services by introducing
its own biodiversity and ecosystem
service quality programmes across
the company’s operations. As part
of achieving the goals of RUSAL’s
Sustainability Strategy, the Company
is implementing the ‘Biodiversity
Conservation and Enhancement of
Ecosystem Services’ project.
GRI: 304-2
In 2022, the Power segment began work
on its Biodiversity Conservation programme
for the Irkutsk, Bratsk and Ust-Ilimsk HPPs to 2030.
The programme will make it possible to implement
the provisions of the En+’s unified Biodiversity
Conservation Policy at these facilities, focusing on key
industry specific directions for biodiversity conservation
associated with the potential impacts of the operation
of the Angara cascade HPPs.
Activities under the Biodiversity Conservation
programme will be aimed at:
- identifying negative and positive potential impacts
of the Company’s facilities on biological diversity
- defining the nature, geographical coverage, extent
and duration of potential impacts
- establishing indicators for the state of biodiversity
and for the effectiveness of the programme activities
- developing and implementing a set of measures
to mitigate the identified effects of potential impacts
to ensure the stable state of aquatic and terrestrial
ecosystems in the areas affected by HPPs’ operation
Once in force, the programme will be integrated through
the implementation of separate biodiversity action plans
for the Irkutsk, Bratsk and Ust-Ilimsk HPPs. The Company
plans to monitor the effectiveness of actions using
a system of custom indicators. Approval and entry
into force of the programme are scheduled for 2023.
In 2022, as part of the initial stage of developing
the Biodiversity Conservation Programme for the Angara
cascade HPPs, the Company determined areas of direct
and indirect potential impacts on biodiversity. In doing
so, multi-factorial approach and regulatory documents
and international standards were used.
Three proposed areas of potential biodiversity impact
were identified:
- a direct potential impact area
- an indirect potential impact area
- an area of potential indirect impact on Lake Baikal
Once the programme is approved, the impact areas will
be used to develop biodiversity conservation measures.
Types of potential impact on biodiversity considered
in the programme for the Angara HPPs
Schematic map of potential impact areas of the Irkutsk,
Bratsk and Ust-Ilimsk HPPs on biodiversity
DIRECT
Ust-Ilimsk HPP
- the potential impact that directly influences
the elements of biodiversity affected by economic
activity
- may have negative, neutral or positive consequences,
resulting in a change in the state (response)
of biodiversity or the volume of ecosystem services
produced in the area under consideration
Bratsk HPP
Direct potential impact area
Indirect potential impact area
Area of potential indirect
impact on Lake Baikal
Hydropower plant
INDIRECT
- the potential impact on the environmental parametes
of the affected area or on the ecosystems adjacent
to the affected area, which, through chains
of interrelated influences of abiotic and biotic
factors, may lead to changes in biological diversity
and ecosystem services in the affected area
- has negative, neutral or positive consequences
Irkutsk HPP
In 2023, the Power segment plans to start
developing a corporate biodiversity programme
for the Krasnoyarsk HPP.
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• SUSTAINABLE DEVELOPMENT
• SUSTAINABLE DEVELOPMENT
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Financial statements
Appendices
Appendices
En+ Group Consolidated Report 2022
LONG-TERM
ENVIRONMENTAL
MONITORING
OF LAKE BAIKAL
GRI: 413-1
Some production facilities of the Power
segment are located on the Angara
River, which originates in Lake Baikal,
a UNESCO World Heritage Site,
and in the ecological zone of atmospheric
influence of the Baikal natural
territory. To understand whether there
is any impact on ecosystem of the Baikal,
En+ jointly with leading scientific
institutions (Lomonosov Moscow State
University, A. N. Severtsov Institute
of Ecology and Evolution of the Russian
Academy of Sciences, Moscow
Institute of Physics and Technology,
etc.) conducts long-term monitoring
of the state of biological species
and the environmental situation
of the lake plus its main tributaries.
Based on its findings, a conclusion
was made in 2022 on the interrelation
between water quality of the coastal
zone of Lake Baikal and the inflow
of pollutants and contamination
with metals from the Selenga River, which
originates in Mongolia and flows into it.
The Company expanded the monitoring
area to the Russian-Mongolia border
and the Selenga River tributaries to track
the paths of contaminants.
In 2023, the Company plans to extend
cooperation to research institutions
in Mongolia to study the state
of the Selenga River basin.
INSTALLING BIRD-
PROTECTING DEVICES
In 2022, IESK installed 1,500 bird-protecting devices
on power transmission towers in the environmental
areas of the Baikal natural territory.
Advantages of using bird-protecting devices:
- preventing the death of birds from contacting power
lines and deterring them from landing on power line
pylons
- minimising the risks of outages and reducing
the number of short-circuits on lines caused by birds
DEVELOPING INTERNAL
INSTRUCTIONS
FOR ENCOUNTERS
WITH WILD ANIMALS
En+ takes care of the safe interaction of employees
of enterprises and wild animals, whose habitats
intersect with production facilities of the Company.
To this end, En+ has developed an Instruction
for employees to follow when encountering wild
animals. All employees familiarised with these
instructions, which are displayed on information stands
on the premises of En+ enterprises.
ASSESSING THE IMPACT
OF HPP OPERATION
ON AQUATIC
BIORESOURCES
In 2022, a comprehensive assessment
of the impact of the operation
of the Angara cascade HPPs
on the state of aquatic biological
resources in the areas of their impact
was carried out in two stages. During
the first stage, field studies done out
as part of research work to determine
the impact of HPPs on aquatic
biological resources: hydrobiological
sampling and ichthyological studies
were carried out. During the second
stage, a compensation plan for the HPPs
was developed to minimise the impact
on aquatic biological resources.
In 2023, the following activities
are planned:
-
implementation of the compensation
plan developed under the project
at the Bratsk HPP
- design of fish-protection
facilities at the water intake
of the Avtozavodskaya CHP,
Segozerskaya HPP
- assessment of the background
condition of the reservoir
prior to the construction
of the Segozerskaya HPP
GOALS FOR 2023
AND ONWARDS
In the medium term, En+ aims to:
continue the modernisation
of aluminium production facilities
(implementing an advanced gas
purification system, prebaked
anode method, the Eco-Søderberg
technology, a new anodic mass)
continue the design and installation
of electric filters, work
on the conversion of ash collectors
at the CHP
continue the design work
for local treatment facilities
at the HPPs plants at Angara
and at the Krasnoyarsk HPP
and for enterprises of BEK
apply the practice of improving
the coal mine effluent indicators
developed at the Irbey coal mine
to other coal mines
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• SUSTAINABLE DEVELOPMENT
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Appendices
En+ Group Consolidated Report 2022
ENVIRONMENTAL STEWARDSHIP
In carrying out economic
activities within the Baikal
natural territory, a unique
object of undeniable value
on a global scale, En+ is aware
of its responsibility for the
preservation of regional natural
ecosystems, the welfare of local
communities, and the exchange
of knowledge with and among its
stakeholders on issues related
to the sustainable ecosystems
of Lake Baikal plus adjacent
territories.
L
A
K
A
B
I
Activities of the enterprises of the Power segment
depend on the ecosystem services provided by Lake
Baikal and the Angara River. En+ therefore makes every
effort to minimise the impact on biological resources
and actively engages with stakeholders to identify
and address the most pressing issues related to the
conservation of Lake Baikal’s unique ecosystem.
106
ESTABLISHMENT OF THE BAIKAL
PLASTIC-FREE ASSOCIATION
the Baikal Plastic-Free Association. Its members advocate
In 2022, En+ co-founded
the immediate development of a set of measures to stop developing contamination
of Lake Baikal with plastic and microplastic. First plans include measures to
eliminate single-use plastic products from circulation in the central environmental
area of the Baikal natural territory, provide the regions around Baikal with
infrastructure for separate waste collection, develop a recycling system for them, and
raise awareness of the importance of responsible behaviour among local people and
tourists. One of the goals is to preserve original habitats for endemic species.
In the reporting year, the association developed a roadmap, held a series of public
meetings and volunteer events and organised a large-scale advertising campaign.
The roadmap includes 14 points describing a particular environmental problem of
the lake – for each point specific solutions, implementation deadlines and members
of the association responsible for execution are proposed. En+ is responsible for the
implementation of a number of programme items.
SOCIAL EVENT PARTICIPATION
DEVELOPMENT
OF A BIODIVERSITY
CONSERVATION
PROGRAMME
En+ started developing a comprehensive
programme for the conservation of
biological diversity in the area affected
by the Angara cascade HPPs. In 2022,
assessment of biodiversity impact was
carried out.
En+ actively engages in activities aimed at joint dialogue and informed decisions that
can positively affect the Baikal natural territory.
Read more at p.103
In 2022, the Company took part in public events aimed at discussing issues related to
the preservation of Lake Baikal’ ecosystems:
- Forum ‘Baikal-2022: on the way to save the lake’, organised by the Russian
Association of Managers.
‘MicroPlasticsEnvironment-2022’
- Conference ‘Challenges 2030. Sustainable Development of the Regions’
- The Conference on Waste and the Problem of Microplastics in the Arctic
-
- Seminar ‘Lake Khuvsgul and Lake Baikal: environmental and economic problems’
- XI All-Russian scientific-practical conference with international participation ‘Rivers
of Siberia and the Far East’ on the topic ‘Conservation of river ecosystems in the
era of global change’
- Round table ‘Protection zones of water bodies of the Baikal natural territory. New
legal reality’ within the framework of the All-Russian Water Congress
COMMUNITY ENVIRONMENTAL
PROJECTS
En+ implements projects aimed at identifying, discussing and solving environmental
problems that exist in the Baikal natural territory jointly with the public.
Volunteer project ‘360’ held for the 12th time
The ‘360’ volunteer project was initiated by En+ in 2021. It is dedicated to the
protection of Lake Baikal and other water bodies and natural areas across the
Company‘s operating regions. Among key activities are the collection of litter on
the shores of Lake Baikal, construction of eco-trails, tree planting, improvement of
tourist infrastructure and assistance to nature sites.
In 2022, the project was carried out for the 12th time on the banks of Lake Baikal,
the Angara and other water bodies in popular recreation spots in Irkutsk, Bratsk,
Ust-Ilimsk, Divnogorsk, Miass, Nizhny Novgorod, and for the first time in Ulan-Ude,
Severobaikalsk and Krasny Chikoy.
Read more at p.129
ENVIRONMENTAL
MONITORING
OF LAKE BAIKAL
En+ has supported a research
expedition tasked with the complex
environmental monitoring of Lake
Baikal since 2019.
In 2022, based on the monitoring
results, conclusions were drawn on
the reasons for certain qualitative
characteristics of the coastal waters
of Lake Baikal.
Read more at p.104
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Financial statements
Appendices
PEOPLE
HEALTH AND SAFETY
KEY FACTS
0.16
Lost time injury
frequency rate
(LTIFR)1
8% reduction
in occupational illness
cases compared to 2021
(from 205 to 188)
35
external audits were carried out to
receive ISO 45001:2018 certificates
REGULATORY
DOCUMENT
- Health,
Occupational,
Industrial and Fire
Safety Policy
MATERIAL
TOPIC
- Health and safety
KEY GOALS
GOALS
STATUS
PROGRESS MADE IN 2022
To achieve zero work-related
fatalities
Not achieved
- Power segment suffered one fatality
- Metals segment suffered 4 fatalities
To reduce LTIFR
Not achieved
LTIFR remained stable- 0.16
To enhance the OHS management
system, guided by international best
practices
In progress
- Power segment carried out external
audits for compliance of the OHS
management system with the
requirements of ISO 45001:2018
Management approach
GRI: 3-3
Ensuring the occupational health and safety
of all employees and contractors is a priority
for En+. The Company is fully committed
to preserving lives and well-being of its people
and always focuses on building a safe work
environment. The Company’s management
is working hard to achieve the goal of zero
fatalities and zero injury among employees.
En+ is conscious of all the negative impacts
that its operational activities may have
on personnel. The Company recognises that
production and non-production processes
cause risks to the health and safety
of employees, which can lead to injury
or occupational diseases.
These potential impacts may occur
in the case of safety rules violation, accidents,
and emergencies. To protect employees,
who are the Company’s main value, En+
is constantly improving its occupational
health and safety (OHS) management system
and taking actions to prevent and mitigate
negative impacts on workers.
En+ pays close attention to all its operations
and endeavours to eliminate activities
with a high risk of injury or death.
The Company keeps records of all past
accidents, incidents, and diseases,
as well as near misses, and implements all
necessary corrective actions based on this
information in a timely manner. En+ collects
and processes appropriate data and tracks
OHS indicators to find new solutions
for making work environment even safer.
Furthermore, the Company works to develop
OHS competencies of its employees
and carries out evidence-based analysis
to create a more predictive safety model.
1 / Per 200,000 hours worked.
108
100%
of employees
are covered by
occupational
health and safety
management system
The Company has a comprehensive
management system that includes policies,
standards, requirements, and best practices
in health and safety. Under this system, En+
controls all processes associated with safety
hazards and expects each site within
the Company to implement and maintain
necessary OHS programmes and practices.
GRI: 3-3
The Company’s OHS management
approach draws on the following
fundamental principles:
- life and health are more important than
production results economic indicators
- any incident that can be prevented
must be prevented
- work must not start if it cannot
be safely executed
- the safety agenda should be fully
integrated into all business
and production operations from daily
routine
- an unwavering commitment to comply
with the OHS legislation, and, where
possible, be best in class should
be met
- each employee must have or has
the appropriate skills and knowledge
to work safely
- safe behaviour must be supported
and motivated
- suppliers and contractors must follow
our safety requirements
The Company’s stance on health and safety
is based on Health, Occupational, Industrial
and Fire Safety Policy, which regulates OHS
issues. The Policy applies to all employees
and contractors of En+ and formalises
the basic principles of industrial safety,
commitments of the Company’s CEO.
GRI: 403-1
GRI: 403-8
All the Company’s sites and 100%
of employees, as well as all the contractors,
are covered by occupational health
and safety management system (OHSMS).
In 2022, the OHS system was verified
and updated to comply with the requirements
of ISO 45001:2018 standards:
- En+ certified all sites of the Power segment
to ISO 45001:2018, with a consecutive
assessment of OHSMS of these facilities.
To receive those certificates, 30 external
audits were carried out in the reporting
period.
- En+ conducted re-certification
to ISO 45001:2018 at those enterprises
of the Metals segment that had been
certified in previous years. External audits
were carried out at five sites of the Metals
segment in 2022.
In the reporting period, the Company
also developed its Occupational Safety
Strategy until 2030 for the Metals segment.
It is aimed at promoting all health and safety
elements to ensure safe work condition
for personnel and reduce injuries. By 2025,
RUSAL plans to ensure safe working
conditions for company employees
and contractors’ personnel accessing the
company’s production sites and offices,
with a 50% reduction in the frequency
of work-related injuries.
GRI: 2-13
GRI: 403-4
The Board of Directors is actively involved
in health and safety issues. The HSE
Committee of the Board has been
operating since 2019. It comprises five
members and sits at least once a quarter.
Committee members are responsible
for the consideration of all strategic OHS
issues and preliminary consideration of issues
pertaining to proper functioning of OHSMS.
Read more at p.152
The Health and Safety (HS) Directorate is the
governance body that ensures an appropriate
operation of OHSMS. The Directorate
controls all facilities in the Power and Metals
segments, coordinates local health and safety
functions, and conducts internal audits.
Members of the Directorate also take part
in employee training.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
In 2022, the HS Directorate conducted 19 on-site audits in the Power
segment and 14 in the Metals segment to assess the functioning
of OHSMS, the implementation of the information system,
and the organisation of communication with personnel. In addition,
the Directorate conducted weekly visits to enterprises.
En+ uses the following mechanisms to evaluate its health and safety
management approach:
- OHS KPIs for managers
- constant monitoring of health and safety performance of production
sites
- conducting internal and external audits
In addition, En+ started digital transformation of occupational health
and safety processes. In 2022, the Occupational Safety information
system based on the 1C platform was put into operation at most
enterprises of the Power segment. In the Metals segment, 10 technical
specifications for the development of the automated information system
Safety of Production Activities were developed and approved. In 2023,
En+ will continue automation of OHS processes.
Read more about Digitalisation at p.184-187
CONTRACTOR HEALTH AND SAFETY MANAGEMENT
For En+ the safety of its contractors is no less important than the safety
of its employees. For this reason, En+ recognises the importance
of including contractors in OHSMS. The Company holds a mandatory
security briefing with each new contractor, which outlines the corporate
security requirements and the potential risks they may face. Contractors
are introduced to the required PPE and other trainings as appropriate
to their work.
Standard contractor agreement and the Agreement on the Respect
for Occupational Health, Fire and Industrial Safety by Contractor
are the main documents regulating performance of contractors
in terms of health and safety. The latter agreement covers a long list
of requirements for contractors, their duties, responsibilities, a list
of violations and relevant penalties.
Dedicated En+ managers are responsible for contractors’ OHS
management, not limited to supervising contractors. The main role of the
dedicated manager is to build an OHS system that ensures contractors’
safety. All contractors are obliged to report their OHS performance
monthly or until their withdrawal from the production site.
The Company closely analyses contractor companies with regard to their
level of occupational health and safety and continues to work with those
who meet all respective legislative requirements and hold all necessary
licences, certificates and work permits.
In 2022, some changes were made to the process of engagement
with contractors regarding their health and safety:
- introduced unified OHS requirements for tendering contractor
organisations
- systematised the process of collecting reports from contractors
- implemented a single procedure for the admission of contract
personnel to the territory of enterprises
110
HEALTH AND SAFETY PERFORMANCE
In 2022, in spite of all the seriousness En+
approaches safety management with, 5
people died as a result of safety incidents –
one employee in the Power segment and four
in the Metals segment.
The incident in the coal business of the Power
segment was due to a violation of instructions
when inspecting railway car coupling. En+
deeply regrets this loss and expresses
its support to the family of the locomotive
driver. The Company took corrective actions
right away, including conducting unscheduled
briefings on safety behaviour with employees,
installation of video recording cameras,
and amending the relevant regulatory
documents. In addition, a prohibition
on the use of mobile devices during
production processes was introduced.
One of the most serious occurrences
was at the BrAZ. A worker, who was not
authorised to independently drive a diesel
loader in electrolysis buildings, ran
over an anode paste hopper. As a result,
the hopper traverses overturned and crushed
another worker to death. Right after
the incident, En+ changed the system
for distributing keys and equipped the loaders
with individual locks across all sites
of the Metals segment.
The Company deeply regrets all the irreparable
losses suffered in the reporting year
and expresses condolences to the families
and friends of our passed colleagues.
To make enterprises safer, all incidents
are subject to investigation. The Company
finds root causes and takes them into account
in the future. En+ conducts investigations
in accordance with the national legislation
and internal standards. En+ assesses all
potential risks, including risks associated
with the human factor. The corporate LTIFR
within the En+ stood at 0.16, remained
stable from 2021. LTIFR of Power segment
contractors was 0.10.
33 audits
conducted
to assess
the functioning
of OHSMS
The LTIFR of the Power segment stood
at 0.13, showing reduction to 7% through
successful prevention of group injuiry
cases. In the Power segment, 36 injuries
were recorded among full-time employees
and two among contractors in 2022. Injuries
were primarily caused by falling from height
and electrical trauma. In line with this, En+
published regulatory documents detailing
additional measures for each area, including:
- personal participation of chief engineers
(technical directors) in granting permits
for the most comprehensive works
associated with higher risks of electrical
trauma
- keeping logs of the condition of fences
at enterprises
- dismantling of fences and openings
only in coordination with chief engineers
(technical directors); installing temporary
fences instead of dismantled during repair
works
In the Metals segment, 85 accidents of work-
related injuries were recorded among full-
time employees and 22 among contractor
employees. The most common type
of occupational injury was minor injury
leading to temporary disability. The injuries
were primarily caused by falling as a result
of slipping or stumbling. In the reporting
period the LTIFR of Metals segment was 0.18,
remained stable from 2021.
GRI: 403-9
Work-related employee injuries
1
2
3
4
400,321
unsafe conditions / actions
Identified
89
27
Minor injuries
Severe injuries
5
Fatalities
Work-related contractor’s injuries
1
2
3
12
11
Minor injuries
Severe injuries
1
Fatality
LTIFR1
2022
2021
2020
0.13
0.14
0.18
0.17
0.20
0.21
0.16
0.16
0.21
Power segment
Metals segment
0,0
1 / Per 200,000 hours worked.
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
OHS TRAINING
Basic Safety Rules
Employees
Managers
I am always sober while on duty. I do not carry alcohol, drugs or toxic
substances and don’t use them
I always fully and reliably report all information about incidents that I’m aware of
I do not organise hazardous works:
a. without a work permit
b. without the appropriate
qualifications of the staff
c. without a permit carried out
at the work site
d. without the necessary private
protective equipment (PPE)
I never let myself and my colleagues:
- perform hazardous work without
a work permit and actual
admission to work
- arbitrarily turn on / connect
equipment
- perform repairs and maintenance
of equipment without shutdowns,
and the implementation
of technical measures, preventing
erroneous or spontaneous
switching on
- arbitrarily remove / switch off
protective locks, posters, portable
grounding, fences
In the reporting period, the Unified regulations
for conducting behavioural safety audits
were introduced. The Company conducts
behavioural safety audits, which comprise
observation of employees at work
and evaluation of their safety behaviour. Such
audits incorporate the human factor while
using a risk-based approach.
In 2022, audits were primarily held
for 100% of engineering and technical
employees responsible for organising
the safe performance of work and safe
work support. Subsequently, audits
for 15% of both engineering and technical
employees and workers were organised
on a monthly basis.
I operate machinery and vehicles only
if I have the appropriate permission
I always stop work that poses a risk
to employee’s health and safety
GRI: 403-4
GRI: 413-1
Cardinal Safety Rules
Managers and employees
I always work wearing/using
appropriate PPE
-
-
-
I proceed with switching and repair
of electrical equipment only
in complete arc flash PPE
I always use safety devices when
working at heights (at a distance
less than 2 metres from
an unsecured vertical drop of 1.8
metres height or greater)
I always wear a safety helmet
securely fastened with a chin strap
in the areas where a safety helmet
is mandatory
When working with lifting equipment,
I use only proper strapping and cargo
sling schemes. I keep away from
possible drop zone of a load
I never change my work assignment
without permission, I do not expand
the work area. I am in no hurry
and do not violate the technology
of work
I do not enter designated hazardous
areas without permission
I always wear a seatbelt in a vehicle
I use only established traffic routes.
I cross the road and railway tracks
in a specially designated/equipped
pedestrian crossings
En+ encourages its employees to always
stay vigilant and report any safety hazards
they notice right away. Employees may
report directly to their supervisors or through
other communication channels, including
anonymously:
- Commission on labour disputes
- Incident warning system for executives
- Monthly OHS meetings
- OHS Commission
- Hotlines
- Problem-solving boards
For many years, En+ has invested a lot
of effort in the development and maintenance
of a strong and effective safety culture. It
is possible to achieve the demonstrated
high level of employee engagement through
initiatives that encourage workers to become
increasingly interested in their own safety
and that of their co-workers.
Key implemented OHS initiatives in Power segment in 2022:
Competence Development Programme
for OHS leaders
The Corporate University and the OHS
Directorate implemented the Competence
Development Programme for OHS leaders,
which, in addition to the development
of professional skills, includes issues
on emotion, personnel and time
management, as well as communication.
Labour Safety Leader contest
Act Safely comic strips
The Labour Safety Leader contest
for Power segment enterprises
was launched. Those with the most
outstanding results over a quarter
or a year received commendation from
the management, a monetary award
for distinguished employees, and additional
funding for enhancing work conditions
at enterprise.
Two Act Safely comic strips that
illustrate how employees must behave
when working at height and with lifting
equipment were created and published
in the Vestnik En+ corporate newspaper
in the reporting period.
THE LOOK AROUND
PROJECT IN METALS
SEGMENT
The Look Around project was launched
in the Downstream division of the Metals
segment in 2019. The initiative aims to
involve all employees of RUSAL in the
process of detecting safety hazards. They
will be required to send information about
dangerous situations using a special
programme.
In 2022, the implementation of the project
continued. In total, a quarter of the
Downstream division headcount (1,312
people) took part in this initiative in 2022.
This increased the number of identified
safety hazards by 37% compared to 2019.
37%
increase in the number of identified
safety hazards in Downstream
division
HEALTH PROTECTION
GRI: 403-7
GRI 403-3
GRI 403-6
Health protection is a priority for En+. The Company believes that
workers have the right to a high level of protection of their health.
That is why En+ provides a voluntary medical insurance policy for all
employees. Moreover, they have the opportunity to be assisted
by corporate medical centres for free. Each En+ facility has a special
medical post to carry out checks before and after shifts and provide first
aid and other medical care to employees.
All respective employees submit to annual medical examination prior
to commencing work as required by national legislation. En+ also covers
expenditures related to different medical procedures if they are required
for an employee.
Employees of the Metals segment and their families are entitled to high-
quality medical services provided by 14 branches of medical centres
are located in most regions of the Company’s operation. All Metals
segment facilities cooperate with the Izmerov Research Institute
of Occupational Health. This enables conducting comprehensive
medical examinations of the Company’s workers and detecting
occupational diseases.
GRI: 403-10
The Power segment also has an extensive network of medical centres,
which provide employees with high-quality treatment and preventive
care. Employees obtain first aid, pre-shift and post-shift checkups,
alcohol tests and preventive medical examinations. In addition, En+
provides annual vaccinations against flu and tick-borne encephalitis.
In 2022, the most common occupational illnesses were vibration
disease and hearing loss for the Power segment and vibration disease,
joint diseases, sensorineural hearing loss and intoxication with fluorine
compounds for the Metals segment.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
EMPLOYEES
GOALS FOR 2023 AND ONWARDS
In the medium term, the Company aims to:
Decrease LTIFR by 10%
Achieve zero work-related fatalities
Conduct an external audit of the safety culture
and approve the 2024–2026 Strategic Action
Plan
Conduct a recertification audit of OHSMS
across all enterprises
Develop a corporate system of vocational
training in health and safety for all categories
of personnel. The process includes revision
of existing educational programmes
and development of additional ones
Emergency preparedness
En+ complies with all national legislation requirements and ensures the
Company preparedness to emergencies of any kind. All facilities have
Actions Plans for the Localisation and Liquidation of the Consequences
of Accidents, which include information on facility inherent risks
and required measures to respond to emergencies in a proactive way.
En+ pays special attention to local communities. Some facilities
of the Company are located in areas exposed to natural risks, including
floods, earthquakes and wildfires. These facilities are required
to develop and regularly update their Emergency Response Plans that
include measures to minimise this kind of risks for local communities
and business itself.
Facilities of En+ take the following actions to prevent emergencies
and eliminate consequences of accidents:
- creation of commissions for prevention and liquidation of emergency
situations and ensuring fire safety
- permanent operation of the Bureau for Civil Defence and Emergencies
- day-to-day operation of the Duty Dispatch Service
- creation of material and financial reserves to use in case
of emergencies
- use of communication, warning and information support systems
- emergency preparedness trainings for employees
- creation of emergency rescue units and civil defence units
GRI: 403-10
Employee occupational illness cases1
2022
2021
2020
65
53
91
123
114
101
188
205
154
Metals segment
Power segment
REGULATORY
DOCUMENTS
- Code of Corporate
Ethics
- Diversity and equal
opportunities
policy
- Human Rights
Policy
MATERIAL
TOPICS
- Employees
management and
engagement
- Social and cultural
diversity and
equal opportunity
KEY FACTS
96,617
employees
as of 2022
KEY GOALS
86.3%
of employees covered
by collective bargaining
agreements in 2022
27.6%
female in Company
GOALS
STATUS
PROGRESS MADE IN 2022
To ensure the implementation of
automation projects of the main
HR units according to the approved
schedule
Completed
En+ has been systematically
automating HR business processes
for several years, and all planned
measures have been fully
implemented
To automate work with the talent
pool based on the UNIVER e-learning
portal
To ensure the development of
the mortgage programme and its
expansion to all the Company’s
enterprises
On track
Documents and processes were
developed
Completed
The Company continues to
implement this programme
To expand the list of infrastructure
projects and cooperate with worker’s
and youth councils
Completed
In 2022, the Workers’ and Youth
Councils proposed a number of
initiatives to improve the social and
living conditions of employees and
their families. All the main proposals
were reflected in the activities that
were implemented
To ensure the expansion of the
staff of production teachers being
recruited, including among the
retired
Completed
46 people were recruited as
production teachers
1 / Hereinafter in the section "Health and safety"
in the Metals segment cases of occupational
illness identified in the post-contract period are
not included.
114
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Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
Management approach
GRI: 3-3
People are the Company’s most important asset. Respect for human
rights and individual freedom is a fundamental value of En+ in achieving
its strategic and sustainability goals.
The Company’s approach to human resources management
is enshrined in a comprehensive set of corporate instruments such
as the Diversity and Equal Opportunities Policy, the Human Rights
Policy and the Corporate Code of Ethics. Policies are mandatory
for application by all management bodies of the Company, including
the Board of Directors and its committees, and by all structural divisions
of En+. The Company also expects its business partners, consultants
and other business agents to adhere to the principles of the policies
and the
Code.
Read more on the
Company's website
The efficiency of human resources management is confirmed
by the positive dynamics of labour productivity, low staff turnover
and the results of the annual employee satisfaction and engagement
surveys, which have consistently shown an increase in these indicators
in recent years.
GRI: 2-27
There were no significant incidents of non-compliance with labour laws
and regulations in the Company resulting in legal action in 2022.
In 2022, significant improvements in HR management included
the automatisation of HR assessment and training processes
on the UNIVER platform and HR data collection, including gathering
information for ESG standards, on the 1C platform.
PERSONNEL STRUCTURE
SASB: EM-MM-000.B
GRI: 401-1
In 2022, the Company’s turnover was 10.5%
(decreased by 1.6 p.p. from 12.1% in 2021)2.
The Company hired 13,706 people, with 30.8%
of new hires being women.
GRI: 2-7
SASB: EM-MM-OOO.B
Total number of employees at the end
of the year1
2022
2021
2020
59,463
37,154
57,933
35,256
56,150
35,003
96,617
93,189
91,153
Metals segment
Power segment
GRI: 2-8
The most common types of workers
who are not employees and whose work
is controlled by En+ are contractors and
subcontractors. They work under civil
contracts and perform work such as building,
technological development, repairing,
teaching, marketing.
En+ has representative offices on five continents. The Company
employed 96,617 people at the end of 2022. Compared to 2021, the total
number of employees has increased by 3.7% in 2022.
GRI: 2-7
GRI: 401-1
The majority of the Company’s employees lived in Russia (89.5%),
worked full-time (97.9%) under permanent employment contracts
(93.6%). Most of the employees in 2022 were in the 30-50 years age
group.
1 / The total number of employees at the end of the year does
not include external secondary job employees. The data
was collected using the HR data collection system.
2 / In the Power segment, employee turnover is calculated
as follows: the number of employees who resigned from
their job during the reporting period (in accordance with
section 3, part 1, article 77 of the Russian Labour Code)/
the number of employees as of 31 December, while in the
Metals segment, employee turnover is calculated using the
formula: the number of employees who left the Company
during the reporting period, irrespective of the reason and the
article of the Labour Code/the number of employees as of
31 December.
116
DIVERSITY, EQUAL OPPORTUNITIES
AND INCLUSION
GRI: 405-2
Ratio of the basic salary of men to women at Russian enterprises, 20223
GRI: 3-3
En+ encourages and supports the diversity
of its employees, creating the conditions
for effective work and providing
equal opportunities for all employees
of the Company. En+ exercises due diligence
and prevents violations of human rights
and freedoms, harassment and discrimination
on various grounds, such as age, gender,
sexual orientation, ethnicity and nationality,
disability and other legally defined
characteristics. Equal opportunities and non-
discrimination are provided throughout
recruitment, remuneration, job evaluation
and training. By 2025, Metals segment
plans to achieve the Dream Employer (No.1)
status for young people by creating a value
proposition based on the principle of equal
opportunity and rejection of bias in the
workplace.
1.13
1.26
1.26
1.10
Average salary
Senior management
1.02
1.10
Middle-level management
1.22
1.34
1.36
1.40
Specialists
Workers
Power segment
Metals segment
GRI: 202-2
Senior managers recruited from local population in Russia and other
countries4, 2022, %
99.8
100
91.9
Metals segment
100
Power segment
Russia
Other countries
When recruiting employees, the Company
gives preference to candidates from the local
community. This practice is followed at all
levels and at all enterprises.
GRI: 405-1
Gender diversity, 2022, %
Employees by age,
2022, %
The proportion of women in the workforce
increased to 27.6% in 2022 and by 3.3% to 36.3%
on the Board of Directors (compared to 2020).
The proportion of women in the workforce
is close to the natural level in the industry.
During the reporting year, the ratio of the average
basic salary of men and women at the Russian
enterprises of the Company in Power segment
was 1.13 compared to 1.26 Metals segment (0.7
in the other countries of operation). The reason
for this difference is that the participation
of women in hazardous production activities
is restricted by law in the countries of operation,
particularly in Russia and the CIS countries.
In 2022, 61.5% of employees were in the age
group 30-50, while 25.3% of the total workforce
were over 50 and 13.2% under 30.
27.6
36.3
19.9
22.4
57.2
21.1
72.4
63.7
80.1
77.6
42.8
78.9
Workforce
Board of Directors6
Senior management
Middle-level management
Specialists
Workers
Female
Male
30-50
Over 50
Up to 30
61.5
25.3
13.2
3 / The basic salary excludes any additional remuneration, such as payments for overtime or bonuses.
4 / The geographical definition of ‘local population’ includes the country of operation. Senior managers include
a president, vice-presidents, directors of enterprises, production units and other functions, as well as their
deputies.
5 / To enforce the Federal Law ‘On social protection of disabled persons in the Russian Federation’ in terms of
the required number of people with disabilities employed in quota jobs RUSAL recently decided to enter into
agreements with local branches of the All-Russian Society of the Disabled People in Company operating
regions. This allows enterprises to meet the quota through the agreements rather than by directly employing
people with disabilities on a full-time basis.)
6 / Board of Directors of En+ Group without RUSAL
Read more at Additional ESG data at pp.294-301
WOMEN’S COUNCILS
In 2022, 7725 employees with disabilities
worked in the Group. En+ also offers
the possibility of transfer and retraining
to employees who have suffered an accident
at work without a reduction in salary.
Read more at Additional ESG data p.298
GRI: 413-1
Women’s councils have been set up and operate in Metals segment and
at the En+’s Krasnoyarsk HPP. For example, the Women’s Council of
Krasnoyarsk HPP holds meetings with speakers, participates in events and
charity projects and organises cultural and sporting leisure activities for
female employees.
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En+ Group Consolidated Report 2022 Strategic report
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
HUMAN RIGHTS
FEEDBACK MECHANISMS
HUMAN RIGHTS
In 2022, En+ identified:
En+ is always open to dialogue and is ready
to answer any questions from employees,
contractors, suppliers and representatives of
local communities on human rights violations.
The Company has a round-the-clock hotline,
where everyone can contact with a proposal or
complaint regarding the observance of rights.
In 2022, En+ received no complaints on labour
rights violations.
GRI: 406-1
No incidents of discrimination
GRI: 408-1
No incidents of child labour
Signal Assurance
Service
GRI: 409-1
No incidents of forced or compulsory labour
8-800-234-56-40
GRI: 3-3
Signal@enplus.ru
En+ regularly assesses human rights risks as part of its risk
management system and carries out comprehensive human rights
audits and procedures. Human rights compliance is the responsibility
of HR department.
The employees’ and suppliers’ rights and freedoms in En+
The right to work and to fair and favourable working
conditions
The right to equality and non-discrimination
No forced, child or compulsory labour
The right to health
The right to safe environment
The right to privacy
118
118
SUPPORT THE RIGHT
TO WORK AND TO FAIR
AND FAVOURABLE
WORKING CONDITIONS
En+ aims to create a positive working
environment in which each employee
feels respected and accepted.
The Company complies with national
and international legislation and industry
standards on working hours, weekends
and paid annual leave.
SUPPORT THE RIGHT
TO EQUALITY AND
NON-DISCRIMINATION
GRI: 406-1
En+ does not tolerate any form
of discrimination or preferential treatment
in employment on the basis of gender,
nationality, religion or any other grounds.
The remuneration system applied
at the Company’s production sites ensures
the right of En+’s employees to fair
remuneration and to equal pay for equal
work, considering the specifics of the region,
where the Company operates. Equal wages
and remuneration for men and women
in positions with the same skill requirements
for work of the same value are ensured.
Read more p.123
SUPPORT THE RIGHT
TO HEALTH
En+ is dedicated to maintaining the health
and safety of its employees and to complying
with relevant safety standards, health
standards, rules and internal health and safety
requirements for employees at all production
sites and divisions of En+. The ultimate goal
of the Company’s approach is to achieve zero
injuries and minimal negative environmental
impact in the cities where En+ operates.
Read more at pp.108-114
SUPPORT THE RIGHT
TO SAFE ENVIRONMENT
En+ recognises its impact on local
communities and therefore seeks
to engage in a dialogue on human rights
with representatives of government
and public organisations in the countries
where it operates. En+ takes all necessary
steps to reduce the impact of its operations
on the environment. It also considers
the culture, customs and values
of local communities. When planning
significant changes to existing projects
and commissioning of new production
facilities, the Company undertakes
a mandatory preliminary assessment
of the impacts, including potentially negative
ones, of the planned initiatives on local
communities and the environment.
Read more at pp.84-107
NO FORCED, CHILD OR
COMPULSORY LABOUR
SUPPORT THE RIGHT
TO PRIVACY
GRI: 408-1
GRI 409-1
En+ neither uses nor supports the use
of any form of forced or compulsory labour
by its business partners, as well as the work
of employees below the age permitted under
national and international labour law.
Read more at p.177
The Company respects the private and family
lives of its employees and applicants
and therefore ensures the protection
of the personal data of all employees
and other parties concerned.
Read more at pp.189-191
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
GRI: 2-23
Human rights and the UN SDGs
Priority SDGs
Supported human rights
- The right to life, freedom and personal integrity
- The right to health
- Special protection of mothers and children
- The right to safe water and sanitation
- Equal access to water and sanitation for women
Key results
14 branches of medical centres
for employees are located in
most regions of the Company’s
operation
91.5% the share of reused
and reusable water at RUSAL
- The right to an adequate standard of living
10% increase in the salary level
of the Company’s employees
- The right to work and to fair and favourable working conditions
- The right to social security
- The right to education
- Prohibition of torture
- Prohibition of child labour
- Protection of children from all forms of violence, abuse
and exploitation
- The right to equality and non-discrimination
- Equal rights for women in employment and economic life
- Equal rights for women and girls in education
- Elimination of all forms of discrimination against women
- The right to decide on the number and spacing of children
- The elimination of violence against women and girls
- The right to adequate housing, including land and resources
- The right to participate in cultural life
- Access to transport
- Protection from natural disasters
- The right of all nations to freely dispose of their natural resources
- The right to health, including the right to a safe, clean, healthy
and sustainable environment
- The right to adequate food and safe drinking water
- The right of all peoples to self-determination
- The right of all peoples to development and international
cooperation
- The right of everyone to enjoy the results of scientific progress
- The right to privacy
27.6% of women in Company
The ratio of the average basic
salary of men and women at the
Russian enterprises
of the Company in Power
segment was 1.13
compared to 1.26 Metals
segment (0.7 in the other
countries of operation).
18 electric charging stations
were opened
The “Energy” cultural festival
was organised in Irkutsk
The design of the treatment
facilities was completed at the
Irkutsk HPP
More than 100 environmental
events, 13 scientific expeditions,
and an online course
for corporate volunteers
were developed as part
of the “Environmental Project”
grant competition
Kamensk-Uralsky Aluminium
Smelter transferred to a water
recycling system
The Company continues
the modernisation
of wastewater treatment
at CHPs
En+ engaged in the development
of the Science Based
Targets for Nature through
the partnership with the World
Business Council on Sustainable
Development in 2022
120
SOCIAL PROTECTION
KEY FIGURES OF SOCIAL PROTECTION PROGRAMMES
GRI: 401-2
En+ constantly explores the needs of its
employees and supplements the standard
compensation package with options
necessary for a comfortable standard
of living. In the reporting period, the Company
retained all social programmes for employees,
added new ones and continued to raise
salaries.
GRI: 403-6
Key social benefits
FINANCIAL AID
By 50% the meal allowance was increased for workers
in the regions where the Company operates and was granted to workers who had
not previously received this benefit
≈USD 2.3 mn (RUB 157 mn) is the amount of funds En+ allocated in 2022
to purchase recreation vouchers for employees in Power segment and their families1
No down payment under the preferential mortgage lending programme
USD 146 (about 10,000 RUB) is the amount of the monthly
supplement for each child paid to the families of employees raising disabled
children, in force since June of the reporting year1
PREFERENTIAL MORTGAGE LENDING AND HOUSING
PROGRAMME
The corporate housing programme covers employees of Power
segment, including thermal power and coal companies. A unique
condition of the En+ programme is that no down payment on the
mortgage is required and 50% of the monthly annuity payment
is compensated by the Company for the entire term of the loan
agreement.
The actual mortgage rate is around 10%. The loan can be taken out for
10, 15 or 20 years, at the participant’s discretion. During its existence,
Power segment has approved more than 230 applications, under 130
of which employees have already purchased or refinanced a dwelling.
The average age of programme participants is 34.
ACTIVE FUNDING OF LEISURE AND CHILDREN’S
PROGRAMMES
In 2022, the Company allocated additional USD 0.5 million for the
purchase of recreation vouchers (about USD 2.3 million in total)1.
The expenses include payment for employee wellness programmes
at health resorts, weekend trips and vouchers for various recreation
centres and boarding houses, as well as the organisation of
recreational activities for employees’ children. More than 5,000
employees and their family members were able to improve their
health thanks to these funds. This figure includes 1,500 children
who attended camps. En+ also agreed with partner hotels and
sanatoriums to give employees discounts of up to 40%.
SPORTS AND HEALTHY LIFESTYLE SUPPORT
Sports grounds are being opened at the Company’s enterprises,
competitions are being held and new areas of activity are being
developed. For example, tennis classes started in the reporting year
at the Krasnoyarsk HPP. The Company is purchasing modern fitness
and weight training equipment. An extra benefit for employees is a
sauna where they can relax after a workout.
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
SUPPORT FOR LARGE FAMILIES AND
PARENTS OF SCHOOL CHILDREN
SUPPLEMENTARY PENSION
PROGRAMMES
SUPPLEMENTARY HEALTH INSURANCE
In 2022, En+ continued its efforts to minimise
the risk of COVID-19 and ARI infection and to
support employees in case of illness. Regular
employee communication and hotline activities
were continued, and advice was provided by
doctors at the enterprises.
ADDITIONAL MONTHLY PAYMENT FOR
BRINGING UP DISABLED CHILDREN
DOBROSERVICE ADVISORY SUPPORT
LINE
Since 2022, the Company have been
cooperating with the Dobroservice employee
support centre. The helpline can be addressed
with various questions: psychological and
legal support, personal finance. The client
manager receives the question and arranges a
convenient consultation time or, if the question
is urgent, provides emergency communication
with an expert. The service is available around
the clock. All information and advice are
confidential.
MEAL ALLOWANCE
A cash subsidy for food was introduced for all
employees of Power and Metals segments.
121
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Strategic report
Strategic report
• SUSTAINABLE DEVELOPMENT
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
SOCIAL PARTNERSHIP
MOTIVATION AND REMUNERATION
An effective system of social partnership
is crucial to the Company’s operations
as it provides for a dialogue with employees
and an understanding of their interests.
For this purpose, trade unions, workers’
councils and an electronic proposal
submission platform have been created
in the divisions.
A constructive dialogue between employee
representatives (union committees)
and the Company’s management remains
in place, with the aim to further improve
the efficiency of the production process
and employee satisfaction.
GRI: 2-30
As a result of the joint activities
of the Company and trade unions, 86.3%
of employees were covered by collective
bargaining agreements in 2022. Some
subsidiaries have separate local regulations
on payment and social benefits.
GRI: 2-30
SASB EM-MM-310.a.1
Employees covered by collective bargaining
agreements, %
86.5
88.3
89.9
86.3
86.0
87.2
2022
2021
2020
86.2
84.6
85.5
Metals segment
Power segment
PEOPLE
WORK COUNCILS
GRI: 413-1
En+ enterprises have established collective work councils. Their goal is
to ensure effective interaction between the employer and the workforce
on the issues of stable work, production development, working and living
conditions of the employees. Each work council is governed by a separate
regulation. These councils are usually formed from employees of an
enterprise who have a significant work experience.
GRI: 413-1
YOUTH COUNCILS
Youth councils are a further form of employee association within the
Company. By the end of 2022, 38 youth councils had been established.
Compared to the previous year, the total number of employees involved in the
councils increased from 200 to 300 people.
The master class at the September Youth Forum focused on issues such as
engagement, the role of corporate culture in an uncertain environment, how
to respond to these factors and whether the Company should care about the
happiness of its employees. The purpose of the whole forum was to create
mechanisms to increase the engagement of Company’s employees, based
on the opinions of representatives of youth councils. A total of 56 people
attended the forum, including senior managers.
Main events of the youth councils in 2022
1
2
3
4
- I am a Donor event
- Support for an animal nursery
- Charity events to protect the rights of
minors
- Promotion of law-abiding healthy
lifestyles among schoolchildren
- Organisation of visits to enterprises
- Environmental campaigns to collect
batteries and recyclable items
- Planting trees with students
- A project competition aimed at
maintaining order in the workplace
and developing business processes
122
Adequate remuneration is the most important
tool for motivating employees to work
effectively. Encouraging and rewarding
employees who perform well is extremely
important in maintaining a high level
of motivation. En+ endeavours to ensure that
its employees are paid at or above the average
market rates.
Remuneration and benefits provided
M
E
T
S
Y
S
I
N
O
T
A
V
T
O
M
I
+
N
E
SALARY
BASIC
SALARY
RATE
ADDITIONAL PAYMENTS
- Bonuses accrued by the
heads of subsidaries from
a specially allocated funds
- Annual performance
bonuses
- Payments to employees
who actively participate
in the Company’s social
projects
- Payments to employees
who have received
corporate, state and
department awards
- Annual, quarterly and
monthly bonuses to
provide additional incentive
All KPIs are automatised and put on the UNIVER portal. Employees have
access to their KPIs, which come down to them from their supervisor. Each
employee reports on KPI fulfilment once every six months on the UNIVER
portal. Based on the percentage of KPIs achieved by the employee, bonuses
are paid to them.
The Company’s career competence assessment is based on the SHL
platform, a personality model assessment that describes an individual
according to 32 essential parameters (scales). These scales reflect
the most important aspects of professional work in modern organisations
and are grouped into three key areas: Managing People, Managing Tasks
and Managing One’s Own Behaviour.
GRI: 202-1
Standard entry-level wage in Russia, 2022, RUB1
15,279
17,600
Established minimum in Russia
Standard entry-level wage Power segment
22,000
Standard entry-level wage Metals segment
GRI: 202-1
Standard entry-level wage in other countries (Metals segment), 20222, USD
213 207 253 63 286 71
Estabilished minimum wage in country
564 207 345 77
554 131
Standard entry-level wage
729
207
345 77
554 172
Standard entry-level wage of women
564 207 347 77
605 131
Standard entry-level wage of men
SOCIAL BENEFITS
Detailed information is provided in the
subsection “Social protection”, p.121
Republic of Armenia
Ukraine
Jamaica
Guinea
Guyana
Nigeria
Metals segment raised the salaries
of its employees in Russia by 10%. In March
2022, the management of Power segment
decided to further increase the salary level
of the Company’s employees (by 10%),
which ensured that the average income level
is higher than the regional salary level.
Read more at Additional ESG data, pp.297-298
Efficiency and effectiveness of personnel
management are assessed monthly, quarterly
and annually. Each month initial analysis is held,
reports are prepared each month or quarter
and KPI fulfilment is assessed on an annual
basis.
GRI: 3-3
Personnel management assessment
EFFICIENCY AND EFFECTIVENESS ASSESSMENT
MONTHLY
QUARTERLY
ANNUALLY
Initial analysis
Monthly or quarterly
reports
On the basis of KPIs
1 / Standard entry-level wage refers to the wage that is paid to a lower-level employee for full-time
work (i.e., the minimum wage). This indicator excludes the salaries of trainees and students.
2 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
123
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Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
EMPLOYEE ENGAGEMENT
Employee engagement and satisfaction, %
2022
2021
2019
67.8
67.8
73.8
71.5
66.6
70.7
Engagement
Satisfaction
Annual monitoring of employee engagement and satisfaction allows
you to analyse the state of employees and the level of social tension.
Since 2019, monitoring has been carried out by En+ employees through
anonymous online surveys. Engagement is assessed through employee
surveys. Information is also collected on the level of satisfaction
and happiness of the En+ employees.
In 2022, more than 44,000 En+ employees (Power segment – more than
20,000, Metals segment – more than 24,000) took part in a satisfaction
and engagement survey, and 66,287 employees participated in a public
opinion survey. The results showed a level of engagement of 67.8% (1.2
p.p. higher than in 2019) and a level of satisfaction of 73.8% (3.1 p.p.
higher). In addition to the surveys, employees can voice their concerns
through a round-the-clock hotline, a feedback box or by contacting
the Ethics Office.
SUCCESSION POOL AND TRAINING
As one of the largest employers in the countries where it operates,
En+ takes care of its employees offering them many opportunities
for comprehensive self-development. In 2022, for example,
the Company contributed around RUB 203.9 million (USD 2.9 million)1
to training and development of its employees, excluding travel
expenses, and RUB 204.2 million (more than USD 2.9 million) to training
of the external succession pool.
In 2022, the Company revised its policy on the training and development
of the internal succession pool and regulations on working
with the succession pool. En+ launched a self-nomination programme
for the succession pool: any employee who wants to be promoted can
apply for consideration. The participation of potential pool members
in the Company’s strategic projects is of particular importance.
GRI: 404-2
The Corporate University offers more than 100 professional retraining
and development programmes to En+ employees. Professional
development programmes are also implemented at the request
of the Company’s segments. In 2022, employees completed 22,322
educational person-courses2.
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
2 / Number of courses completed by the staff in the reporting period.
124
Schoolchildren and students
En+ provides various educational facilities for young people in its
regions of operation as they are future talents and the Company
is interested in hiring them to maintain a high level of personnel
qualification. Educational opportunities at En+ include its Energy
Laboratory, School, Classes and cluster, corporate scholarship, IT
Academy, corporate centres, participation in the Engineering Holidays
and in the ‘Professionals of the Future’ case movement.
Read more at pp.126-135
Employees and newcomers
The UNIVER training portal
The career development portal allows you to get to know with digital
training tools and to organise distance training. The external portal
https://career.enplusrusal.ru/ has been created for those who
are interested in power and metals industries. Internal portal https://
univer.enplusrusal.com/ is designed to be used by current employees.
GOALS FOR 2023 AND ONWARDS
In the medium term, the Company aims to:
conduct employee appraisals
ensure a high level of qualification
among current personnel, considering
the specifics of the hazardous production
industry, and strengthen the requirements
for mandatory knowledge and skills
implement activities to engage high-potential
employees in the Future Enterprise Leaders
programme
develop the mentoring system in the Company
increase the level of collecting data on internal
training through the automation of the UNIVER
portal
EN+’S SUPPORT FOR
PROMISING PROFESSIONALS
The UNIVER training portal offers
MY CAREER 2.0
The project bringing together the
most promising talent from En+
enterprises across the country to
pitch their ideas on a wide range of
topics, including urban development,
environment, health and safety, and
digitalisation
PREFERENTIAL EDUCATION
A co-funded university study
programme for young En+ employees
who are strongly motivated to
continue their studies at university for
new career opportunities
Employees receive higher education
under the preferential programme
IRKUTSK STATE UNIVERSITY
A cooperation agreement
MOSCOW STATE UNIVERSITY
A training programme
UNIVER
UNIVER TRAINING PORTAL
A career development portal from
Power and Metals segment, which is
designed, among other clients, for the
Company’s employees and features
various educational tools and job
openings
70 training courses, video lectures and recordings of webinars
on different topics
increase the number of scholarship holders
who have obtained or plan to obtain a job
in the Company
Preferential education
All employees of En+ under the age of 35 have the opportunity to study
at universities in the regions where the Company’s production activities
are conducted. The project participant only has to pay for the first term,
and the Company pays for all the subsequent ones.
14 students received
accelerated distance learning
at INRTU and Bratsk University
9 people started distance
learning on the basis of partner
universities with an energy profile
My Career 2.0
The aim of the programme is to identify material project topics
according to young employees and to give them the opportunity to work
in project teams with a wide geography.
187 employees
participated in the conference
in such areas as ecology, health
and safety, digitalisation
5 webinars were conducted
within the online training marathon
180 participants
pre-defended their
implemented projects
22 finalists were appointed
to higher positions
14 of 28 finalists from the previous My Career 2.0 session
were included in the succession pool, as other participants were already enrolled
125
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
PEOPLE
COMMUNITY
ENGAGEMENT
KEY FACTS
RUB 3.6 bn
(USD 53 mn)
total social investments
More than
RUB 41 mn
invested in the ‘Multilabs’ project
Over
Over
151,000 people became
the ‘360’ campaign eco-volunteers over the life
of the programme
10,000
people attended
the ‘Energy’ cultural
festival
KEY GOALS
GOALS
STATUS
PROGRESS MADE IN 2022
To allocate 100% of social
investment of Metals segment
based on the Sustainable Urban
Development Index Methodology
with measurable indicators of
improved living standards as
compared to other regions
Completed
In 2022, RUSAL developed the
Sustainable Cities Responsibility
Index, an analytical tool to assess
the appeal of cities and prioritise the
projects
Management approach
GRI: 3-3
En+ is dedicated to driving change
for the future of local communities
and aspires to make a significant positive
contribution to the well-being and social life
of all the regions where it operates.
GRI: 2-29
GRI 3-3
En+ has a Stakeholder Engagement Policy
which sets out procedures and tools
for working with local communities.
GRI: 203-2
En+ supports candidates from local
communities and tries to recruit employees
from among local residents, paying particular
attention to respecting the rights of local
communities, and only if there are no
people with the necessary knowledge
and skills in the local labour market, does
the Company hire candidates from other
regions. This practice is applied at all levels
of the Company’s operations.
REGULATORY
DOCUMENT
- Stakeholder
engagement policy
MATERIAL
TOPICS
- Local
communities
engagement
- Social and cultural
diversity and
equal opportunity
The Stakeholder Engagement Policy
is available on the Company’s website
126
GRI: 2-29
GRI 413-1
SASB: EM-MM-210a.3
By investing in social projects, the Company
aims to meet the needs of local
communities and to create sustainable
value for its business. En+ always takes
into account the views of local communities
on social issues such as the development
of urban infrastructure, programmes
and initiatives in the areas of health, education
and sports, which helps the Company make
decisions on investments and actions.
Under its Sustainability Strategy by 2025
RUSAL plans to make 100% social
investments according to the Sustainable
Cities Index methodology and on the basis
GRI: 2-13
The parties responsible for the implementation
of En+ social projects are:
of measurable indicators in order to ensure
a meaningful quality of life (environment)
improvement on the 3 most critical aspects
of social and environmental well-being
of the top 10 areas of responsibility that
require improvement in such aspects.
Company’s social projects aim to improve
the living conditions and the well-being
of its employees and the residents of the regions
in which it operates. This is reflected in eight
SDGs supported by En+.
En+ always
takes into
account the
views of local
communities on
social issues
Deputy Chief Executive Officer for
Public Affairs
- defining the Company’s strategic approach to
working with local communities
- analysing the results of social programmes
Director of the Department of
Communication and Social Projects
implemented
- developing plans for future periods
CSR Project Manager
Committees on Social Investments in
the Metals and Power segments
- identifying social investment and financing
priorities
- holding monthly meetings to develop tactical
decisions on social investment projects
- approving funding requests received
from the social projects committees
at the enterprise level
- developing strategies for the implementation
of social projects in a specific region
of presence
Committees on Social Projects
at the enterprise
- processing requests from local communities for
charitable assistance
- making recommendations to social policy
committees
127
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
DEVELOPMENT OF INFRASTRUCTURE AND URBAN
ENVIRONMENT
GRI: 203-1
En+ has unique experience in the implementation of social projects
and regularly invests in the creation and renewal of regional infrastructure.
To determine the real needs of each region and to address a wide range
of infrastructure issues, En+ conducts surveys of the local population
in the regions where it operates.
To assess the attractiveness of cities and prioritise projects, in 2022,
RUSAL developed an Index of Sustainable Development for the areas where
the Company operates. The aim is to assess the attractiveness of the areas
and to create a database to evaluate the effects of social projects.
Project
Goal
METALS SEGMENT
Investments1
Key results
Social
cooperation
To improve public areas, playgrounds, repair
of educational and cultural institutions,
construction of social facilities
RUB 2.7 bn
(USD 39.4 mn)
Concluded 26 agreements on socio-
economic cooperation in 12 cities
Taezhny
village, Russia
To build social infrastructure facilities
in the village of Taezhny in the Krasnoyarsk
Region – a kindergarten, a school and a polyclinic
RUB 7 bn
(USD 102.1 mn)
Republic
of Guinea
To build a new health centre
To repair and restore the municipal sewage
treatment plant in the city of Friya
To improve public spaces in the city,
reconstruct sports stadiums, and open four new
artesian wells with drinking water at the Boke
region
To rebuild cultural and sports centres and schools
and improve the safety of children in the village
To identify, train and develop leaders of urban
change who can improve the quality of life
in the regions through implementation
of territorial development projects
Jamaica
School
of Urban
Change
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
128
Built 13 comfortable residential buildings
for 790 apartments with landscaped
courtyards, engineering and infrastructure
facilities, two kindergartens for 500 places,
a school with a swimming pool, lifts
for people with limited mobility, an assembly
hall for 300 seats with a full set of musical
equipment, and a polyclinic
Health centre was built and equipped
at the expense of the Kindia Bauxite
Company
Project is on track
Project was completed
Cultural and sports centres were rebuilt.
Reconstruction of the school bus stop
was initiated
RUSAL held 32 educational events with 1,238
participants and 35 experts
12 events and five online distance learning
courses were offered to 352 participants
Project
Goal
POWER SEGMENT
Investments1
Key results
Electric
vehicles
in Siberia
Modernised
power grid
Participation
in public-
private
partnership
Urban
infrastructure
improvements
To develop network of charging stations
and of ‘green’ technologies
To improve the power supply situation
in the Shelekhovsky district and significant
improvement in the quality of electricity supply
To build effective interaction with the government
on financing socially important initiatives
To improve the Park of Hydrobuilders in Irkutsk
Eight electric filling stations were opened
in the Irkutsk Region in 2020 and 2021,
and ten more in 2022.
En+ purchased 19 Russian-made buses,
some of which are electric vehicles
RUB 1.1 bn
(USD 16 mn)
Power grids in the Shelekhovsky district
were upgraded
RUB 269 mn
until 2025
(USD 3.9 mn)
The funds were used for social projects
in the cities of the Krasnoyarsk (Divnogorsk),
Irkutsk (Irkutsk, Angarsk, Bratsk, Ust-Ilimsk,
Usolye-Sibirskoye, Zheleznogorsk-Ilimsky,
Cheremkhovo) and Chelyabinsk (Miass)
Regions
RUB 50 mn
(USD 0.7 mn)
Lighting and small architectural forms –
benches, chairs, lounges, litter bins, bike
parks were installed
SUPPORTING PUBLIC ENVIRONMENTAL PROJECTS
GRI: 203-2
GRI: 413-1
In regions of responsibility, En+ and RUSAL consistently approach
the resolution of social and environmental issues by monitoring
the environmental status of natural objects and performing systematic
work to support and develop environmental initiatives. The Company’s
volunteers clean and sort waste, build and restore eco-trails, plant trees
and support nature reserves.
Goal
Investment1
Key results
Project
‘360’ project
To preserve Lake Baikal and protect
areas of the lake from negative
environmental impacts
Environmental project
grant competition
To preserve aquatic ecosystems
and biodiversity and maintain
the ecological balance of natural
areas in the regions under En+’s
responsibility
RUB 10 mn
(USD 0.146 mn)
In 2022, the geography of the project
was expanded – for the first time, volunteers
from Ulan-Ude, Severobaikalsk and Krasny
Chikoy took part in the programme. In addition,
the events were traditionally held in Irkutsk, Ust-
Ilimsk, Bratsk, Divnogorsk, Miass and Nizhny
Novgorod
- 1,248 face-to-face volunteers
- 1,190 online eco-marathon participants
- more than 4,300 bags of waste (34,664 kg)
In 2022, more than 100 environmental events,
13 scientific expeditions, and an online course
for corporate volunteers were developed as part
of the competition. More than 1,000 volunteers
took part in the events
129
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
Project
Goal
Investment1
Key results
SUPPORTING EDUCATION
GRI: 203-2
En+ pays great attention to improving the accessibility and quality
of education. Supporting talented young people in obtaining
the necessary skills for professional training and development
is an integral part of En+’s social policy.
En+ provides high-quality professional training for both specialists
and young people within programmes such as the IT Academy
programme, the Power Engineering Lab 2022, the UNIVER
training portal for industry employees, and also has a corporate
university, which is one of the largest educational centres
of additional professional education in Eastern Siberia. RUSAL
organises Olympiads for schoolchildren, pays special scholarships
to gifted students, and provides targeted support to educational
institutions. RUSAL also arranges practical training in its enterprises
and in the Moscow office for young specialists. En+ also participates
in open career guidance events for students at its partner
universities, such as job fairs and career forums.
Project
Goal
Investment1
Key results
‘Energy School‘
‘Energy in Every
Drop’
‘Energy
classes’
Energy session
on the basis of
the educational
centre ‘Persei’
‘Polytechnic’
The ‘Engineering
Vacation’
Energy
Laboratory
To popularise the industry
and core professions
among high school students
in the Irkutsk Region
To provide students
with basic engineering
skills, concepts of design
and its main features,
information culture,
teaching and research skills,
intelligence development
and group interaction skills
To attract and prepare well-
educated, motivated school
graduates for admission
to higher education
institutions in the energy
sector
To find and develop talented
young people and provide
them with career guidance
in the energy industry
RUB 2.9 mn
To involve young talent
in the search for promising
technological ideas
and implement them
in the enterprises
of the Power segment
METALS SEGMENT
Scholarships
for Guinean
students
To provide university
scholarships to students from
Guinea
Science festival
To popularise science among
schoolchildren and encourage
interest in invention
and scientific creativity
Ireland
and Sweden
To support education
POWER SEGMENT
Multilabs
in Krasnoyarsk,
Irkutsk
and Divnogorsk
To ensure the growth
of the quality of education
in the regions, help students
shape the trajectory of their
individual development,
and ensure the popularisation
of engineering
and IT-directions
RUB 41 mn
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
130
50 representatives of Guinean youth will be able to receive
free (including all costs related to flights, accommodation
and training) higher education in a wide range of medical
specialties at the Krasnoyarsk State Medical University
The festival took place in five Russian cities, bringing together
32,000 children and teenagers. The festival programme
included an interactive scientific exhibition and workshops,
a lecture hall with performances by Russian scientists from
Moscow State University, Skolkovo and the Darwin Museum.
In 2023, the Company plans to organise another large-scale
science festival in the cities where its plants are located
Aughinish provided material support to libraries and schools
and regularly arranges school trips
KUBAL organised an internship for high school students
and supported local schools by purchasing educational aids
on environmental issues
Three Multilab skills development centres with modern
computer, audio and video equipment, as well as equipment
for development in the sphere of robotics, 3D modelling
(engineering design), electronics, the Internet of Things,
and video production in Krasnoyarsk, Irkutsk and Divnogorsk
were opened
Additional capabilities of the centres: additional educational
programmes, conferences and competitions, a popular
science festival, additional courses for the retired, additional
courses for schoolchildren and parents
‘Future Educator’
Irkutsk Energy
College
Corporate
training and
research centre
(on the basis of
three universities)
To train teachers with a deep
understanding of the specifics
of the En+ Power business
for practice-oriented training
of students whose skills
and qualifications will meet
the needs of enterprises.
To offer targeted training
of students in college for
secondary vocational education
and a working specialty and
subsequent guaranteed
employment in En+
To offer targeted additional
training for students on the
basis of three universities:
INRTU, BrGU, IRGAU for
higher education in energy
areas with subsequent
guaranteed employment in
En+
RUB 0.411 mn
A total of 1,135 schoolchildren from 43 schools of Ust-
Ilimsk and Angarsk were involved in the project in test
mode. The first dozen of schoolchildren registered
on the career.enplusrusal.ru platform and started mastering
the programme.
- 130 schools from 30 regions
- Educational camp on Lake Baikal for teachers of robotics
and captains of robotics teams held
- A series of educational webinars were held for participants
in robotics competitions
RUB 2.211 mn
Eleventh-graders in the Irkutsk Region were prepared for their
final exams free of charge. At the end of the training under
the Energy Classes programme, 25 graduates received
a certificate that provides additional points for admission
to energy-related universities
25 high school students studied natural sciences
intensively, presented their own projects and visited En+’s
enterprises. In the future, these young people will be able
to join the Energy Classes programme for further university
admission
Competition for schoolchildren and students of specialised
professional institutions held in a wide range of subjects,
and in 2022 – for the first time – in the field of ‘Modern
Energy’, on the basis of INRTU
Annual career guidance programme based at INRTU
for regional schoolchildren who are interested in the field
of energy
The Energy Laboratory is case study grant programme
for solving cases.
In 2022, 339 students from 12 educational institutions from
nine cities in Russia joined the programme. A total of 783
people have participated in the programme over five years.
The Energy Laboratory 2022 was one of the winners
of the federal project ‘University Technology Entrepreneurship
Platform’. As a result, the Energy Lab will receive a grant
of more than RUB 7 mn to further develop student initiatives
and create innovative products
Four postgraduate students from INRTU were selected
through a competition and successfully completed
the educational track and receive a scholarship
of RUB 55,000 and after graduation are guaranteed
employment as teachers with pay conditions not lower than
the average in the energy industry. A total of 105 graduates
in specialised professions started working at the Company’s
enterprises
RUB 20.9 mn
From 2013 to 2022, 180 people were trained and then
employed by En+ under targeted contracts
RUB 46.6 mn
From 2008 to 2022, 662 people were trained and then
employed by En+ under targeted contracts
131
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
Project
Goal
Investment1
Key results
JOINT PROJECTS OF TWO SEGMENTS
IT Academy
RUB 41.1 mn
To strengthen the human
resources potential of Russian
regions required to digitalise
En+ large-scale production
enterprises in the Irkutsk
and Krasnoyarsk Regions
Scholarships
for talented
students
To support students in four
fields: energy, metallurgy,
medicine and pedagogy
RUB 9.4 mn
‘Professionalitet’
programme
To create a training
and production centre
for the energy sector
RUB 92.7 mn
(USD 1.3 mn)
En+ and INRTU completed the training of the first group
of students. After successfully defending their projects
and receiving a higher education diploma, eight first-
tier graduates started working at En+ Digital. In 2022,
the IT Academy was already opened at two universities
in Irkutsk – in INRTU, ISU, and also opened in Bratsk
on the basis of BrSU and in Krasnoyarsk on the basis
of SibFU
The programme covers all regions where the Company
operates, 179 students were selected as winners and got
corporate scholarships in the range of RUB 2,500 (USD 36)
to RUB 25,000 (USD 364) per month. In 2022, 50 educational
institutions from 18 cities of Russia participated in the
programme
In 2023 En+ laboratories will be opened in industrial areas,
production sites and training areas
En+ Digital acts as a supporting employer for an IT cluster
in the Krasnodar Territory. Upon successful completion
of training, graduates of both clusters will be offered
employment in their specialty
EuroSibEnergo JSC acts as a supportive employer
for the energy cluster in the Irkutsk Region
HEALTHY LIFESTYLE
Promoting a healthy lifestyle and popularising skiing among
the Company’s employees, their families and residents of the regions
is an important for En+. The Company actively supports both
professional and amateur sports, implements programmes to develop
sports infrastructure and provides financial support to professional
sports teams.
Project
Sweden
Jamaica
Ireland
Goal
Investment
Key results
To support the local football
club
To support the development
of sports at the local
and national levels
To support the local football
club
KUBAL supported the local football club ‘Sundsvall’ in its social
work with vulnerable children and the disabled and provided
financial support to the women’s football club ‘SDFF’
and the local hockey club ‘Timrå IK’
Company hosted football competitions and other sporting
events at its sports complexes and sponsored youth table tennis
competitions
Aughinish sponsored local athletics clubs and football club
“Aughinish”. Aughinish also has sports facilities, including tennis
courts, basketball and indoor football pitches and a small gym
for use by employees and members of the local community
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
132
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!
E
N
O
Y
R
E
V
E
S
I
K
S
En+ actively supports skiing in Russia. The large-
scale project ‘Get on your skis everyone’ is aimed
at modernising and building ski infrastructure,
training ski coaches, supporting youth teams and
promoting a healthy lifestyle and skiing.
The project has been successfully implemented in
partnership with the Russian Ski Racing Federation
for a long time and today covers 16 cities in the
Irkutsk, Kemerovo and Krasnoyarsk Regions, the
Komi and Khakassia Republics.
SKI BASES AND
TRAILS OPENED
In January 2022, a completely reconstructed ski resort of
the Divnogorsk Technical School of Forestry Technologies
was opened as part of the ‘Get on your skis everyone’
programme. En+’s investment in the project amounted to
more than RUB 35 million.
In addition, as part of the ‘Get on your skis everyone’
project, a new ski base of international standard
was built in Tulun and Nizhneudinsk, the ski-biathlon
complex in Angarsk was reconstructed, and the phased
reconstruction of the Bratsk ski stadium is underway.
The official partner
of the Russian
national ski racing
team
‘GET ON YOUR
SKIS EVERYONE’
SPORTS DAY
cities
21
8,000
participants
-
In March 2022 En+ organised sports events in Irkutsk,
Angarsk, Bratsk, Shelekhov, Cheremkhov, Tulun,
Nizhneudinsk, Abakan, Sorsk, and Miass as part of
the ‘Get on your skis everyone’ project together with
the Russian Ski Racing Federation.
- The sports day included ski races, master classes,
competitions, interactivity and animation for children
were organised. The winners of the competitions
received prizes and souvenirs.
EN+ AND THE
MATCH TV
CHANNEL LAUNCH
A TV PROGRAMME
In January 2022, with the support of
En+, the first episode of the new TV
project ‘Get on your skis everyone
with Elena Vyalbe’ was broadcast
on the Match TV channel. The aim
of the project was to popularise
and promote skiing. Through this
programme, viewers could learn
about the latest news from the
world of skiing, as well as about the
development of skiing in Russia.
The programme was hosted by
Russian skier Elena Vyalbe, multiple
Olympic champion, President of the
Russian Ski Racing Federation since
2010 and the Head of the Russian Ski
Sports Association since 2020.
CROSS-COUNTRY
SKIING TO
BE INCLUDED
IN SCHOOL
CURRICULUM
En+ signed a cooperation agreement
with the administration of the Angarsk
district, to include cross-country
skiing in the school curriculum as a
compulsory part of physical education.
The project involves 21 schools of
the Angarsk district, more than 3,000
schoolchildren. The Company invested
more than RUB 7 million in the
purchase of appropriate equipment
and materials.
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Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
PEOPLE
СULTURAL DEVELOPMENT
CHARITY
En+ and RUSAL actively promote the development of culture
and the arts in the regions where they operate and support
cultural and artistic projects. In this regard, they cooperate
with the country’s leading theatre award, the Golden Mask, organise
tours of the capital’s theatres as part of their own festivals, support
the Baikal Dance Festival, the Jazz on Baikal Festival and other
cultural events and institutions throughout the country.
The Company finances and supports charitable projects, which
are becoming an important part of the Company’s policy,
and systematically provides charitable assistance to those who need
it most – adults and children with disabilities, children from needy
families, orphans. The Company pays special attention to children
without parental care or with serious illnesses.
Project
Goal
Investment
Key results
Project
‘Energy’ festival
Goal
Investment
Key results
To organise cultural festival
in Irkutsk
The biggest cultural festival since the beginning
of COVID-19 was organised and brought together more
than 20 well-known Russian cultural figures: leading
writers, screenwriters, actors and creators. More than
10,000 guests visited the festival
Republic of Guinea
To provide charitable assistance
and support local infrastructure
projects in the Fria prefecture
VOLUNTEERING
En+ is working to create a culture of voluntary active participation
among its employees in solving social problems of local communities
and implementing various volunteer campaigns and projects.
Project
Goal
Investment
Key results
METALS SEGMENT
‘Helping is Easy’
programme
To develop corporate
and urban volunteering
and support vulnerable groups
through the social initiatives
of city change leaders
POWER SEGMENT
‘World with a plus sign
To promote eco volunteering
JOINT PROJECT OF TWO SEGMENTS
New Year Charity
Marathon
To strengthen the Company’s
systematic cooperation
with social institutions
Green Wave’ campaign: more than 1,000 volunteers
from 13 cities took part in the marathon, 1,316 trees
and shrubs were planted
‘River Day’ eco-marathon: 1,617 volunteers collected
31 tonnes of rubbish from the banks of reservoirs in 13
cities; 10 tonnes were sent for recycling
In the Pribaikalski National Park, an entrance group
on the route ‘Big Baikal Trail – 1: Listvyanka – Bolshoye
Goloustnoye’ was equipped. In addition, volunteers
improved 12 km of trails in the Baikal Nature Reserve
and the Zapovednoe Podlemorye National Park.
Another project is the construction of the first 2-km
long urban eco-trail in Irkutsk
In the reporting year, teams of corporate volunteers
from 16 cities of Metals segment and from five cities
of Power segment took part in volunteer activities
Financial assistance was provided to:
- school supplies to 15 women’s agricultural
cooperatives in the Kindia region
- 12 mosques and 23 territorial religious
communities
- 45 local communities at the end of the Muslim
fasting period
- women on the occasion of International
Women’s Day on 8 March
In 2022, KUBAL donated to the Children’s
Oncology Fund and to Doctors Without Borders
(MSF), as well as medical and humanitarian aid
to children from vulnerable families
In 2022, fundraising events were organised,
as a result more than 500 families received food
parcels for the Christmas and New Year holidays
Sweden
To provide financial support
Ireland
To support of local charities
GOALS FOR 2023 AND ONWARDS
In the near future, En+ plans to:
expand current social projects and interaction
with stakeholders, including active interaction
with the Youth and Working councils
and cooperation with NGOs and national parks
create new tools to attract the public (master
classes, challenges, games, etc.)
open several sports infrastructure facilities,
including a football pitch and a pump track
for biking, scooter riding and skateboarding
develop a cultural support area for social
investment
increase the number of scholarship holders
who have obtained or plan to obtain a job
in the Company
create an external succession pool and attract
young talent
expand the volunteer movement
134
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
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.
KEY FACTS
12 directors
including 8 independent
non-executive directors1
6 Board committees
KEY GOALS
All Board committees are
chaired by independent
non-executive directors
LSE suspended the admission
to trading of the instruments
for most Russian companies,
including En+
En+ has received a permit from
the Government Commission on
Control of Foreign Investments
in the Russian Federation to
continue the circulation of the
Company’s GDRs outside the
Russian Federation until
7 November 2024 inclusive
GOALS
STATUS
PROGRESS MADE IN 2022
REGULATORY
DOCUMENTS
- Regulations on the
Board of Directors
- Code of Corporate
Ethics
- Diversity policy
of the Board of
Directors
MATERIAL
TOPIC
- Corporate
governance
To conduct self-assessment and independent
evaluation of the activities of the Board
of Directors, its members and committees
in order to evaluate the activities of the Board
of Directors.
To organise training to improve
the qualifications of the Board of Directors,
which were cancelled or postponed
due to the COVID-19 pandemic.
GRI: 3-3
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.
1 / As at the date of this
Report.
2 / As defined under Federal
Law No. 290-FZ
On International
Companies
and International Funds
dated 3 August 2018.
3 / Trade of the GDRs
of the Company
on the Main Market
of the London Stock
Exchange was suspended
on 3 March 2022.
As an international company2, the Company
aims to comply with the recommendations
of the Russian Corporate Governance Code
insofar as is appropriate and practicable
within the Group’s context. In corporate
governance practices, the Company is also
guided by the Listing Rules of the Moscow
Exchange.
136
On track
Self-assessment has been carried
out, an external assessment is
planned for 2023.
On track
The trainings were planned, but
postponed due to the current
geopolitical situation.
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
Exchange3, 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
No disputes
and litigation
regarding
compliance
with corporate
governance
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 Group’s
stakeholders for the strategic management
of the Company. The day-to-day running
of the Company falls within the competence
of the CEO4. 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 compliance, including clear
and robust compliance with requirements
for the Company to be and remain clear
from OFAC Sanctions
- Ongoing growth of the Company’s value
for the benefit of all stakeholders
In 2022, the Company did not register:
- GRI: 2-27 disputes and litigation regarding
compliance with corporate governance
standards and best practices
- GRI: 2-27 cases of improper behaviour
of the Board members or the CEO
- GRI: 2-15 conflicts of interest affecting
the Board members or the CEO
4 / The Charter uses the term “General Director” which is used
interchangeably with the term “CEO” in public disclosures
made by the Company.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
CORPORATE GOVERNANCE
STRUCTURE
GENERAL SHAREHOLDERS MEETING
GRI: 2-9
The Company’s corporate governance structure
includes the following key elements:
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.
General
shareholders
meeting
Board of
Directors
CEO
TIMELINE OF CORPORATE
GOVERNANCE CHANGES 2022
7 March
Joan MacNaughton resigned from the Board.
25 March
Lord Barker resigned from his role
as Executive Chairman of the Board
and as a director, Christopher Burnham
was elected as Chairman of the Board
on the same date.
31 March
Carl Hughes has resigned from the Board.
18 May
Lyudmila Galenskaya and Steven
Quamme were elected to the Board.
25 May
J.W. Rayder was elected to the Board.
5 July
Steven Quamme resigned from the Board.
3 April 2023
James Schwab was elected to the Board.
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 the Company’s
shares
- the acquisition of the Company’s outstanding shares and
- an 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 quorum for the 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, from 2021 to 2023 the Russian joint-stock
companies were permitted1 to hold GSMs with the above-mentioned
agenda via absentee voting.
1 / In accordance with Federal Law No. 17-FZ dated 24 February 2021.
77.79%
votes participated
in the annual GSM
on 23 June 2022
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.
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.
ANNUAL GSM
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 ON MEETINGS HELD
In 2022, the annual GSM of the Company
was held on 23 June 2022 in the form
of absentee voting. Shareholders holding
77.79% votes participated in the annual GSM.
The annual GSM considered and passed
the following resolutions:
1. “To approve the Company’s Annual Report
for 2021”
2. “To approve the Company’s annual
accounting (financial) statements
for the 2021 reporting year”
3. “Not to distribute the net profit received
by the Company for 2021 and not to pay
dividends on shares for 2021”
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. Christopher Burnham
2. Timur Fidailevich Valiev
3. Zhanna Sergeevna Fokina
4. Lyudmila Petrovna Galenskaya
5. Vadim Viktorovich Geraskin
6. Thurgood Marshall Jr.
7. Elena Valerievna Nesvetaeva
8. Steven Quamme
9. J.W. Rayder
10. Andrey Vladimirovich Sharonov
11. Andrey Vladimirovich Yanovsky
report
5. “To approve TSATR Audit Services
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”
- The approval of annual accounting
(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.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
BOARD OF DIRECTORS
The Board adheres to the consistent approach that it aims to create a long-term value for the Company
by supporting the balance between short and long-term objectives.
4
Non-executive
directors
8
Independent
non-executive
directors
GRI: 2-11
On 7 March 2022, Joan MacNaughton
resigned from the Board. On 25 March 2022,
Lord Barker resigned from his role
as Executive Chairman of the Board
and as a director; Christopher Burnham was
elected as Chairman of the Board on the same
date. On 31 March 2022 Carl Hughes resigned
from the Board.
On 18 May 2022, the Board elected Lyudmila
Galenskaya and Steven Quamme to the Board.
On 25 May 2022, the Board elected
J.W. Rayder to the Board.
All directors as of the date of the annual GSM
in 2022 were re-elected to the Board.
On 5 July 2022, Steven Quamme resigned
from the Board with effect from close
of business.
On 3 April 2023, James Schwab was elected
to the Board.
As at 31 December 2022, there were 11
directors on the Board, including seven
independent non-executive directors, including
the Chairman of the Board, and four non-
executive directors. As of the date of this
Report, there are 12 directors on the Board,
including eight independent non-executive
directors, including the Chairman of the Board,
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 seven 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.
Lord Barker’s appointment came
with additional powers and responsibilities,
designed to enhance the control
of the Board over the corporate governance
systems 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.
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.
GRI: 2-10
The Nominations Committee recommends
candidates for election to the Board
based on such factors as independence,
cultural and personal diversity, age,
impeccable reputation, skills, qualifications,
as well as the experience of a person,
his/her knowledge of business, industry
areas of the Company and willingness
to devote sufficient time to the duties
of a member of the Board, with account
of the existing composition, succession
planning and the needs of the Board
and its Committees and, in the light of such
criteria, prepares a position description.
BOARD COMPOSITION AND ATTENDANCE
Board attendance and number of meetings in 2022
EXECUTIVE CHAIRMAN OF THE BOARD
Appointed on
Resigned on
Attendance2
Lord Barker
17.10.2017
25.03.2022
3/3
CHAIRMAN OF THE BOARD (SINCE 25.03.2022)
Christopher Burnham
NON-EXECUTIVE DIRECTORS
Olga Filina
Vadim Geraskin
Elena Nesvetaeva
Timur Valiev
INDEPENDENT NON-EXECUTIVE DIRECTORS
Zhanna Fokina
Lyudmila Galenskaya
Carl Hughes
Joan MacNaughton
Thurgood Marshall Jr.
Steven Quamme
J.W. Rayder
Andrey Sharonov
Andrey Yanovsky
Total number of meetings
27.01.2019
15.12.2021
08.02.2019
08.02.2019
26.05.2021
26.05.2021
18.05.2022
–
–
–
–
–
–
–
27.01.2019
31.03.2022
27.01.2019
07.03.2022
26.05.2021
–
18.05.2022
05.07.2022
25.05.2022
27.01.2019
25.09.2020
–
–
–
13/13
13/13
13/13
13/13
13/13
13/13
7/7
4/4
0/0
13/13
1/3
5/6
13/13
13/13
13
During 2022,
the Board held
13 meetings
and all of them
were held
in the form
of absentee
voting.
1 / Lord Barker’s plan regarding the removal of OFAC Sanctions from the Company was announced on 27 April 2018 and subsequently adopted by the Board on 18 May
2 / The number of meetings attended/maximum number of meetings the directors could have attended.
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/.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
Board’s focus during the year
GRI: 2-16
Area of focus
Matters considered and decisions adopted
Strategy and risk
- The Board preliminarily approved the Annual
Succession
and leadership
Report for 2021.
- The Board approved the Sustainability Report
for 2021.
- The Board approved the Company’s Business
Plan for 2023.
- The Board considered updates on health and
safety matters and updates on COVID-19.
- The Board appointed Christopher Burnham as
the Chairman of the Board.
- The Board elected new members of the Board:
Steven Quamme, Lyudmila Galenskaya and
J.W. Rayder.
- The Board updated the composition
and appointed chairpersons of all Board
committees after the Annual General Meeting
of Shareholders. The Board updated the
composition and appointed chairpersons
of the Corporate Governance Committee,
Nominations Committee, Audit and Risk
Committee and Remuneration Committee on
17 August.
- The Board approved general levels of the
members of the Company’s Board of Directors’
compensation.
- The Board appointed the Director of the Internal
Audit Directorate of the Company.
Corporate Governance
- The Board approved general levels of the D&O
(Directors and Officers) insurance.
- The Board approved the results of assessment
of achievement of key performance indicators
(KPIs) by the General Director for 2021.
- The Board approved key performance
indicators (KPIs) of the General Director for
2023.
- The Board took into consideration the results of
the Board’s self-evaluation.
- The Board approved revised versions of
the Regulations on the Health, Safety and
Environment Committee and the Audit and Risk
Committee.
- The Board approved the consolidated interim
condensed financial information for the six
months ended 30 June 2022.
- The Board preliminarily approved the
Company’s annual accounting (financial)
statements for the 2021 reporting year.
- The Board approved the consolidated financial
statements for the year ended 31 December
2021 prepared in accordance with IFRS.
Financial performance
Prior to the COVID-19 pandemic, many important issues in the field
of sustainable development were considered by the Board in person.
Since the beginning of the pandemic, such issues have been discussed
via videoconference, where each director could give comments.
In 2022, a strategic session of the Board, inter alia on sustainable
development, was planned for October, and was postponed on the basis
of the geopolitical situation.
Nature and number of critical sustainability
issues escalated to the Board of Directors, %
12
10
34
30
11
16
2022
2021
2020
47 7
40
10
10
58
5
11
Economic and financial issues
Social and environmental issues
Corporate governance
Approval of transactions
Other
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.
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
- The establishment and termination
of committees, commissions, councils
and other structural units of the Board,
approval of their personal composition
and regulations governing their operations
142
GRI: 2-18
As of the date
of this Report,
the Company
is developing
a procedure
for evaluating
the activities
of members
of the Board,
the work of the
Board and its
committees.
- 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 register holder
of the Company
- 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 appointment of the sole executive body
(the CEO) of the Company
The Board has taken steps to ensure
that 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.
EVALUATION OF THE WORK
OF THE BOARD
In 2022, the Board carried out self-
evaluation of the Board guided by best
corporate governance practices, including
the Corporate Governance Code of Russia
and recommendations of the Bank of Russia
on organisation and conduct of self-evaluation
of effectiveness of the board of directors
in public joint stock companies. The Board
considered the report on self-evaluation
on 25 May 2022.
The members of the Board commended
the performance of the Board in general,
including the following positive features:
- Commitment to high standards of corporate
governance
- Significant attention to review
of the financial performance
of the Company
- High quality of communication
with the management
Based on the results of self-evaluation,
the Board has identified certain areas
for further improvement, including awareness
of advanced technologies and due attention
to interaction with local communities.
The Company plans to carry out an external
assessment of the Board in 2023, results
of which will be considered by the Board
in 2024 and provided in the Annual Report
for 2023.
TRAINING AND PROFESSIONAL
DEVELOPMENT OF THE BOARD
MEMBERS
Newly elected directors complete induction
training 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
- Presence, as invitees, at meetings of all
Board committees
- Mandatory training, including
by external advisors, on matters relating
to insider trading, regulatory disclosure
and compliance with sanctions
GRI: 2-17
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 2022, due to geopolitical
situation all planned training sessions were
postponed until 2023.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
BIOGRAPHIES OF THE DIRECTORS CURRENTLY SERVING ON THE BOARD
A C
H G N
Hon Christopher Burnham
Chairman of the Board, Independent Non-Executive Director
Zhanna Fokina
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 of Cambridge Global Capital,
which he 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.
N G
James Schwab
Independent Non-Executive Director
Appointed: 3 April 2023
James has 30 years of general management and Private Equity
experience across a variety of industries, including logistics,
paper and forest products, telecommunications, government etc.
James held board positions of CrimStone portfolio companies,
Western Marketing, Cimcon Finishing, Waples Manufacturing, and
Greenscape Landscaping.
James holds a bachelor degree (with distinction) in Mathematics
from the United States Naval Academy and MBA from Harvard
Business School.
C G
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.
Full biographies can be found
on the Company’s website
144
Appointed: 26 May 2021
Zhanna Fokina has extensive experience working in environmental
control and supervisory authorities.
Currently she heads the Environment Unit at RUSAL Krasnoyarsk.
Ms. Fokina 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.
G H N
Lyudmila Galenskaya
Independent Non-Executive Director
Appointed: 18 May 2022
At the beginning of her career, Lyudmila got a job at the Angarsk
Polymer Plant. There were 150 people working in her subordination.
After she moved from Angarsk to Irkutsk, she found a new job
in Irkutskenergo. Today Lyudmila is engaged in ecological issues
and environmental protection. She heads the Environmental Safety
department. Supports all Company’s activities in the field of ecology
and environmental protection, works with government authorities.
Interacts with the entire company and all branches. She is engaged
in informing the public about environmental work, participates
in environmental actions, discussions. Works on environmental
issues with mass media. Actively exchanges experience with all
environmental safety services within EN+. She is open to new ideas,
participates in the development of new projects and in bringing
them to implementation.
H
Vadim Geraskin
Non-Executive Director
Appointed: 8 February 2019
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.
C R H
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.
R
Elena Nesvetaeva
Non-Executive Director
Appointed: 8 February 2019
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 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.
G A N
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.
Gender1
C R
Timur Valiev
Non-Executive Director
Appointed: 26 May 2021
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+.
Prior to his career at En+, he served as Director
for International Projects and M&A at Basic Element
Limited.
Prior to joining Basic Element Limited, Mr. Valiev
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.
Male
Female
Age1
35-45
46-55
56-65
65+
A C R
Independence1
7
4
3
2
3
3
J.W. Rayder
Independent Non-Executive Director
Appointed: 25 May 2022
J.W. Rayder has been involved in or led significant
corporate restructuring projects, financings, mergers
and acquisitions, and had successfully negotiated
numerous power supply and natural gas contracts
on behalf of his clients.
J.W. Rayder also advises clients on a myriad
of legislative, regulatory and transactional issues
related to energy markets and federal taxation.
R A H
Andrey Yanovsky
Independent Non-Executive Director
Appointed: 25 September 2020
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 and received an MBA degree in Strategic
Management from Kingston University.
Chairman
Independent
Directors
Non-executive
Directors
1
6
4
KEY
Committee chair
Audit and Risk
Committee
Compliance
Committee
Corporate Governance
Committee
Health, Safety
and Environment
Committee
Nominations
Committee
Remuneration
Committee
A
C
G
H
N
R
1 / As at 31 December 2022.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
BIOGRAPHIES OF DIRECTORS WHO SERVED ON THE BOARD IN 2022 AND HAVE RESIGNED
AS AT THE DATE OF THIS REPORT
GRI: 2-9
ESG competencies of the Board
Steven Quamme
Independent
Non-Executive Director
Appointed: 18 May 2022
Resigned: 5 July 2022
Steven Quamme has
extensive investing
and operations expertise,
and helps oversee Cartica’s
investments, portfolio
construction, and operations.
Prior to forming Cartica,
he was a co-founder
and COO of a USD 1.0
billion activist fund
as well as Senior Managing
Director of an affiliated
professional services firm
focused on corporate
governance, restructurings
and turnarounds.
Steven has extensive
experience in overseeing
investments in Russian equities
(Yandex, Ozon, TCS, X5).
Joan MacNaughton CB
Hon FEI
Independent
Non-Executive Director
Appointed: 27 January 2019
Resigned: 7 March 2022
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.
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+.
Lord Barker has
served on the boards
of the Environmental
Defence Fund Europe
and the Climate Group
and also chaired the London
Sustainable Development
Commission for Mayor Boris
Johnson in 2014–2016.
He is also currently 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.
Carl D. Hughes
Independent
Non-Executive Director
Appointed: 27 January 2019
Resigned: 31 March 2022
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 Arthur 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.
Power
industry
Strategic
management
Occupational
health
and industrial
safety
Environmental
management
Legal
and corporate
governance
Ethics
and compliance
with established
requirements
Risk
management
and audit
•
•
•
Christopher
Burnham
Olga Filina
Vadim
Geraskin
Elena
Nesvetaeva
Timur Valiev
Zhanna
Fokina
Lyudmila
Galenskaya
Thurgood
Marshall Jr.
Andrey
Sharonov
Andrey
Yanovsky
J.W. Rayder
James
Schwab
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
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.
Currently, the post of the CEO is held by Vladimir Kiriukhin.
Vladimir Kiriukhin
Chief Executive Officer (CEO)
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+, 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 graduated from the All-Union Institute
of Interindustrial Information with a PhD
in engineering.
Vladimir does not hold any shares in the Company
and has not entered into any transactions
with the Company shares during 2022.
146
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
In 2022, no loans were issued by the Company
(or any Group company) to members
of the Board or the CEO.
COMMITTEES
OF THE BOARD
OVERVIEW
GRI: 2-9
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 (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”)
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 composition of the Company’s existing
Board committees was elected on 23 June
2022 and further amended on 18 August
2022 and 3 April 2023. The details regarding
each of the Committees are set out below.
All members of the Board attended
at least 75% of the meetings of the Board
and meetings of the relevant committees.
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:
- participating 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
- liaisoning between the Company and its shareholders,
and preventing corporate conflicts
- improving the corporate governance system and practices
of the Company
Sergey Makarchuk
Appointed as Secretary of the Board on 10 April 2019.
Corporate Secretary of En+ on 14 November 2019.
After working at various law firms, Sergey worked for RUSAL Group
from 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.
From 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 Makarchuk 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 2022, 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 2022 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).
148
Committees attendance and number of meetings in 20221
A&RC
CC
CGC
HSE Committee
NC
RemCom
EXECUTIVE CHAIRMAN OF THE BOARD
Lord Barker
(until 25 March 2022)
CHAIRMAN OF THE BOARD
1/1
Christopher Burnham
6/6
3/3
NON-EXECUTIVE DIRECTORS
Olga Filina
Vadim Geraskin
Elena Nesvetaeva
Timur Valiev
3/3
1/1
3/3
INDEPENDENT NON-EXECUTIVE DIRECTORS
Zhanna Fokina
Lyudmila Galenskaya
Carl Hughes
(until 31 March 2022)
Joan MacNaughton
(until 07 March 2022)
Thurgood Marshall Jr.
Steven Quamme
(until 5 July 2022)
J.W. Rayder
Andrey Sharonov
Andrey Yanovsky
Total number of meetings
1/1
1/1
2/2
2/2
2/2
3/3
6/6
6/6
6
1/1
3
1
1/2
3/3
3/3
3/3
1/1
3/3
3
6/6
6/6
4/4
6/6
5/6
6
1/1
1/1
1/1
1
SHARE DEALING CODE
SHAREHOLDINGS OF DIRECTORS
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).
As at the date of this Report Mr. Timur Valiev
holds 64 shares of the Company. Aside
from this, throughout 2022, Mr. Carl Hughes
(resigned on 31 March 2022) held 5,000
GDRs in the Company. Other directors directly
or indirectly held no shares in the Company
and none of the directors concluded
any transactions with the Company shares.
Neither the CEO
nor members
of the management
team directly
or indirectly
hold any shares
in the Company
1 / The number of meetings
attended/maximum
number of meetings
the directors could have
attended.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
RESPONSIBILITY STATEMENT
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.
- 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
- 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
AUDIT AND RISK COMMITTEE
GRI: 2-5
Composition
Pursuant to the revised Regulations
on the Audit and Risk Committee, approved
by the Board on 23 June 2022, 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:
- J.W. Rayder, as Chairman
- 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
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 2022, the A&RC held six meetings. The A&RC meetings were held
to consider financial statements, internal audit reports and plan
for 2023, control and risk management reports, external audit reports.
Auditor’s remuneration for audit and non-audit services
For the year ended 31 December 2022, the total fees for audit and non-
audit services provided by the Group’s external auditor, B1, are set out
below1:
Power
Metals
En+
USD
mn
0.7
0.1
0.8
%
87.5
12.5
USD
mn
4.2
0.7
4.9
%
91
9
USD
mn
4.9
0.8
5.7
%
86
14
Audit services, incl.
Non-audit services
Total fees paid
to the audit firm
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
USD5.7mn
Total fees paid
to the audit firm
CORPORATE GOVERNANCE
COMMITTEE
Composition
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
- Lyudmila Galenskaya
- James Schwab
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
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
- Reviewing the corporate governance system
- Assessing the independence of the Board
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 2022, the CGC held one meeting to consider
D&O liability insurance policy of the Company.
NOMINATIONS COMMITTEE
Composition
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:
- James Schwab, as Chairman
- Zhanna Fokina
- Lyudmila Galenskaya
- Andrey Sharonov
The NC’s primary role is to develop
recommendations to the Board on Board
performance evaluation and planning internal
appointments.
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 2022, the NC held one meeting to consider
the substantive explanation relating to
recognition of Andrey Sharonov as an
independent director.
COMPLIANCE COMMITTEE
GRI: 2-15
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:
- Thurgood Marshall Jr., as Chairman
- Christopher Burnham
- Olga Filina
- J.W. Rayder
- Timur Valiev
150
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
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 2022, the CC held three meetings and considered compliance
with the Terms of Removal in the current geopolitical situation
and regular compliance reports of the Company.
HEALTH, SAFETY AND ENVIRONMENT COMMITTEE
Composition
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 Chairman
- Lyudmila Galenskaya
- 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 2022, the HSE Committee held six
meetings and considered regular HSE
reports, environmental and climate strategy
development update, environmental risk
management status, HSE KPIs results
for 2022 and KPIs for 2023, biodiversity
strategy update and En+’s HSE road map
for 2023.
REMUNERATION COMMITTEE
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:
- Andrey Yanovsky, as Chairman
- Thurgood Marshall Jr.
- Elena Nesvetaeva
- J.W. Rayder
- Timur Valiev
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
- Supervising the disclosure
of remuneration policies and procedures,
and of the ownership of the Company
81%
issues
escalated
to the Board
of directors
are related
to sustainable
development
shares by Board members and the person
acting as the CEO in the annual report
and on the Company’s website
- 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
In 2022, the RemCom held three meetings
and mainly considered KPIs of the CEO.
REMUNERATION
DISCLOSURE REPORT
GRI: 2-19
GRI: 2-20
OBJECTIVES OF THE REMUNERATION
POLICY
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).
GRI: 2-7
Stakeholders do not participate in determining
remuneration. The remuneration system
of the Company is defined by its internal
regulations. The Remuneration Committee
comprising the majority of independent
directors oversees the remuneration
policy of the Board and the CEO
with account of the stakeholders’ interests.
The Remuneration Committee may involve
external independent advisors when
considering certain remuneration issues within
the authority of the Remuneration Committee.
REMUNERATION OF EXECUTIVE
MANAGEMENT1
In 2022, the remuneration of the key
management personnel, including
the CEO, amounted to USD 11.6 million.
This remuneration includes base salary
in the amount of USD 6.2 million and bonuses
in the amount of USD 5.4 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 Chairman, are entitled to receive
remuneration of EUR 215,000 (c. USD 228,000)2
gross per annum, paid monthly.
All members of the Board, are entitled
to receive additional remuneration for serving
on a committee or other structural unit
of the Board3:
- EUR 26,000 (c. USD 28,000)2 gross per
annum for chairing a committee or other
structural unit of the Board
- EUR 18,000 (c. USD 19,000)2 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 2022 amounted
to USD 6.1 million, excluding social insurance4.
152
1 / Accrual basis.
2 / Calculated based on a EUR/USD exchange rate of 1.06 as at 31 December 2022.
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 / Mandatory payments (pension provision, mandatory health insurance, etc.) as required by the legislation of the Russian Federation.
153
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
STRUCTURE OF REMUNERATION:
Element of remuneration
Approach
Salary is set to ensure 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
Indices and dependencies
Not applicable
Key changes
during the year
No changes
made during
the year
INFORMATION
FOR SHAREHOLDERS
AND INVESTORS
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
- The Company ensures a competitive total
compensation portfolio for its employees,
providing them with meal expenses, certain
other reimbursements and medical insurance
Not applicable
- We do not fund any pension 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
- The objective in setting the fees 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
Not applicable
Examples:
- Financial performance
Adjusted EBITDA; Free
Cash Flow
- HSE & sustainability –
Lost 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
Not applicable
No changes
made during
the year
No changes
made during
the year
No changes
made during
the year
No changes
made during
the year
Paid for achievements that are important
for the Company, but which are outside the main
KPIs
Task specific
No changes
made during
the year
- Top managers of En+ subsidiaries
are considered as risk-taking employees
- Application of the Group’s executive
remuneration policy
- Aligned with the Group’s
executive remuneration
structure
No changes
made during
the year
The Company
received
a permit
to continue
the circulation
of its GDRs
outside
the Russian
Federation until
7 November
2024 inclusive.
On 14 July 2022, Russian Federal Law
No. 319-FZ “On Amendments to Certain
Legislative Acts of the Russian Federation”
entered into force. The Law provided for two
mechanisms of conversion of the Russian
companies’ GDRs into shares: automatic
conversion upon application of the issuer
of shares (the Automatic Conversion)
and forced conversion upon request
of GDR holders (the Forced Conversion).
On 18 August 2022, En+ submitted
to its Custodian AO Citibank a notification
triggering the procedure for the automatic
conversion. The automatic conversion
applied only to those GDR the rights to which
were recorded in Russian depositaries.
With respect to the GDRs, the rights
to which are recorded in depositaries
outside of the Russian Federation, the Law
provided for the forced conversion
at the request of the GDR holders submitted
to the Custodian.
GRI: 2-1
The Company’s management is not aware
of any holdings in excess of five per cent
of the Company’s share capital save for those
disclosed by the Company immediately below.
ORDINARY SHARES
AND GLOBAL
DEPOSITARY RECEIPTS
As at 31 December 2022, the share capital
of En+ was divided into 638,848,896 ordinary
shares with the par value of USD 0.00007 each.
En+ ordinary shares in the form of Global
Depositary Receipts (GDRs), are listed
on the London Stock Exchange (ticker: ENPL),
where one GDR represents one share. Since
18 February 2020, the Company’s ordinary
shares have also been traded in the Level
One Quotation List of the Moscow Exchange
(ticker: ENPG).
On 3 and 4 March 2022, the London Stock
Exchange suspended admission to trading
of instruments for most Russian companies,
including En+.
On 16 April 2022, Russian Federal Law
No. 114- FZ “On Amendments to the Federal
Law “On Joint Stock Companies” and Certain
Laws of the Russian Federation”, requiring
Russian companies to initiate the termination
of the depositary agreements relating to their
GDRs, entered into force. In May 2022,
En+ applied to the Russian Government
for a permit to continue the circulation
of its GDRs outside the Russian Federation
and on 19 May 2022, the Company received
such a permit until 7 November 2024 inclusive.
154
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
EN+ VOTING AND SHAREHOLDER STRUCTURE
AS AT 31 DECEMBER 2022
Independent trustee2
Independent trustee2
Volnoe delo
Former family members
Glencore
2.53%
3.22%
3.42%
10.55%
6.64% 2.53%
Shareholding
Voting rig
hts
DEPOSITARY BANK
REGISTRAR
The Company’s depositary bank is Citibank N.A.,
registered address: 388 Greenwich Street New York,
New York 10013, United States of America.
Contact details of Citibank N.A. are:
Citibank, N.A.
Tel.: +1 (212) 723 5435
Email: CitiADR@Citi.com
The Company’s registrar is Joint Stock Company
“Interregional Registration Center” (the “IRC”).
Contact details of IRC are:
JSC “IRC”
Tel.: +7 (495) 234 4470
Email: info@mrz.ru
www.mrz.ru
Other shareholders
Mr. Deripaska4
https://citiadr.factsetdigitalsolutions.com/www/drfront_page.idms
44.95%
London Stock Exchange
EN+’S INTERNATIONAL SECURITIES IDENTIFICATION NUMBERS
10.55%
35.00%
Public float
13.95%
13.95%
14.33%
9.95%
7.04%
21.37%
Independent trustee2
Independent trustee2
En+ Group3
En+ Group’s Chairman3
Ticker
ISIN5
Common Code6
CUSIP7
Moscow Exchange
Ticker
ISIN
Instrument
GDRs
Ordinary shares
Regulation S GDR
ENPL
US29355E2081
170465199
29355E208
Rule 144A GDR
ENPL
US29355E1091
171560667
29355E109
Ordinary shares
ENPG
RU000A100K72
Trading platform
London Stock Exchange
Moscow Exchange
Bloomberg code
ENPL LI
ENPG RM
Note: percentages may not add up to 100% due to rounding.
1 / As of 31 December 2022.
2 / Independent trustees, who exercise voting rights attaching to certain shares of the Company, as required by OFAC.
3 / Shares acquired from VTB by En+’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 the Chairman of the Board at the Board’s direction.
4 / 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%.
5 / ISIN (International Securities Identification Number) – international identification number of the share.
6 / Common Code – a nine-digit identification code issued jointly by CEDEL and Euroclear.
7 / CUSIP (Committee on Uniform Security Identification Procedures) – identification number is given to the issue
of shares for the purposes of facilitating clearing.
156
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
EN+ SHARE PERFORMANCE AND TRADING VOLUMES
DIVIDEND PAYMENTS
DIVERSITY
Moscow Exchange
(cid:54)(cid:57)(cid:38)(cid:4)(cid:84)(cid:73)(cid:86)(cid:4)(cid:87)(cid:76)(cid:69)(cid:86)(cid:73)(cid:1)
1,200
1,000
Temporary suspension of trading
on MOEX (28 Feb-24 Mar)
800
600
400
200
0
Jan22
Feb22
Mar22
Apr22
May22
Jun22
Jul22
Aug22
Sep22
Oct22
Nov22
Dec22
Trading volume, ths shares (RHS)
Share price, RUB per share (LHS)
ths shares
2,500
2,000
1,500
1,000
500
0
Source: Moscow Exchange.
En+’s ordinary share price on the Moscow Exchange
decreased from RUB 913.0 as at 3 January 2022
to RUB 374.5 per ordinary share as at 30 December 2022.
En+’s market capitalisation decreased from RUB 583 billion
at the beginning of the year to RUB 239 billion
on 30 December 2022. The average daily trading volume
during the year was 230,664 ordinary shares.
Trading on the Moscow Exchange was suspended between
28 February 2022 and 24 March 2022.
SHARE REPURCHASES
In the reporting period, the Company did not, either itself
or through a person acting in his/her 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 his/her own name but on the Company’s behalf,
hold any shares in treasury.
DIVIDEND POLICY
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 RUSAL2
shareholder)
- seventy five per cent (75%) of the Free Cash Flow3
in the En+ Power segment4, but in any event at least
USD 250 million per year
1 / Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, as retained in the domestic law of the United Kingdom
by virtue of the European Union (Withdrawal) Act 2018.
2 / 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.
3 / “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.
4 / “En+ Power Segment” means the Segment defined in the Group’s IFRS consolidated statements.
158
During 2022, the GSM of the Company did
not approve any dividend distributions.
The Company anticipates that dividend
payments will be resumed as soon as market
condition allow.
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.
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 Regulations1 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)
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
To download
the Regulations
on Dividend Policy
from our website
To download
the Diversity Policy
from our website
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
INTERNAL CONTROL
AND RISK MANAGEMENT
REGULATORY
DOCUMENTS
- Antibribery
and Corruption
Policy
- Code of Corporate
Ethics
- Conflict of Interest
Policy
- Sanctions
Compliance Policy
MATERIAL
TOPIC
- Corporate
governance
KEY FACTS
Risk management have been incorporated
into the business objectives sitting process
at the Group’s level as well as at the level
of the operational units and entities.
KEY GOALS
GOALS
STATUS
PROGRESS MADE IN 2022
To implement of an automated
risk management system for En+
companies.
On track
A new IT resource has been
developed and put into operation
to automate the processes of
generating, storing, processing and
consolidating risk maps of En+ Group
companies.
To ensure effective management of
the risks identified in the Risk Matrix
for 2022 year, as well as update the
risks in accordance with the Risk
Management Regulations.
Completed
A risk matrix for 2022 has been
developed with detailed risk
management measures.
To develop measures to increase
the efficiency of commercial
activities.
Completed
To update internal documents
regulating key business processes.
Completed
Better use of risk management tools
in achieving the production targets
of operating companies.
Completed
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.
Internal documents regulating
key business processes
(purchases, electronic document
management, project activities,
etc.) have been updated.
The actual achievements in
risk management are linked to
key management performance
indicators.
The Board
of Directors
is responsible
for maintaining
and reviewing
the effectiveness
of the Company’s
systems
of 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
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.
GRI: 2-13
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.
INTERNAL CONTROL
SYSTEM (ICS)
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 detect
illegal actions 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 control
of 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)
160
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En+ Group Consolidated Report 2022 4. Development and implementation of projects to improve ICS
RISK MANAGEMENT FRAMEWORK
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
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
– 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.
IMPROVEMENT OF THE CORPORATE SYSTEM
OF INTERNAL CONTROL
The IAD achieved substantial results in 2022 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.
– The targets for the sale of the Group’s illiquid assets have been
exceeded by 100%.
– Updated regulatory documents for the procurement of goods
(works, services), for work with illiquid and non-core assets of the
Company.
2. Development and adoption of a framework of regulations for the ICS
– The automation of the regulated process of business trips at the all
Company’s facilities continues.
– Development of the Group’s system
– The process of Development of the Group’s unified regulations
portal continues.
– The Regulations for Management of Operational Development
Projects of the Company have been updated.
– The Regulations for Operation of the Electronic Document
Management System of the Company have been introduced.
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 trips,
project activity, 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).
162
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.
GRI: 3-3
Risk management is carried out on the basis
of the precautionary principle in relation
to each aspect of the Company’s activities.
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.
The vertical principle is used to manage
the risks of the Company, including
sustainability risks, 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.
GRI 2-12
Thus, all employees are involved in the risk
management system. In risk management,
En+ strives to take into account the needs
and concerns of interested parties when
assessing the economic, environmental
and social impact of the Company.
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.
GRI: 2-12
GRI: 2-13
The risk monitoring results are submitted
to management, the Chief Executive Officer
(monthly), the A&RC and the Board (quarterly).
Responsibility for effective risk management
rests with the Chief Executive Officer.
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.
Key risk management developments
of the Company in 2022:
1. 2022 Risk Map development
and monitoring on quarterly basis
over the year
The En+’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.
Risk status
monitoring
is undertaken
on a quarterly
basis
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
2. Use of risk management tools in achieving the production targets
EN+ GROUP’S KEY BUSINESS RISKS
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. Automation of the processes of generation, storage, processing
and consolidation of risk maps of En+ enterprises
A new IT resource has been created and is being put into operation
to automate the processes of generating, storage, processing
and consolidation of risk maps of En+ facilities.
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.
Identification of all risks that may affect the implementation of
the company’s business plan
Inclusion of identified risks in the risk matrix
Assessment of identified risks according to three parameters:
- probability
- financial assessment
- potential damage
Selection of risk management method and development
of measures to mitigate risks
Risk monitoring and quarterly updating of the risk matrix
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.
The Group is working to ensure that
its rapid response measures are appropriate
and corresponding to the level of risk.
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 2023
and onwards.
En+’s key risks
Impact of the risk on the Company’s activities
1
4
6
9
11
5
10
8
3
2
7
12
Low
Medium
High
Increased impact
No change
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 2022
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.
The Board of Directors of RUSAL approved
the updated Climate Strategy until 2032 with a view
to 2050.
2
3
Laws
and regulations
Market: supply,
demand,
and commodity
price volatility
4
Geopolitical
5
Force-majeure:
natural
disasters,
large-scale
accidents,
epidemics, etc.
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.
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).Risk
of recession in USA/EU (and global)
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 and/or increase in capital
expenditures
- capital flows and ability of the Group
to secure foreign currency credit
facilities
-
- sales structure and sales volumes
delays in consumers payments
tightening of export control for certain
types of goods, works and services,
including hi-tech ones
- cyber-attacks on IT infrastructure
-
limited access to IT software
and hardware
Risks of a negative impact on the Metals
segment’s operations in various countries
(Guinea, Australia, Sweden, Germany,
other countries) including risks of the raw
material security and risks to the supply
chain.
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
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.
Expanding the portfolio of customers, developing
the product line to diversify sales, increasing sales
to the alternative markets.
Continued implementation of the Pathway to net
zero strategy and promotion of a highly competitive
low-carbon metal and power.
Monitoring of the geopolitical situation
and relevant risks. As part of the anti-crisis
management, the Company develops and performs
a package of measures to mitigate such risks
(elaboration of various scenarios for development
of the situation, search for alternative suppliers,
buyers, carriers, possible analogues of imported
equipment, alternative sources of funding, etc.).
Providing legal protection of the Company’s
interests.
N/C
Scenario planning and development of early
response measures.
Implementing a set of organisational and practical
measures to ensure asset safety.
RISK IMPACT ON THE COMPANY
CHANGES IN 2022
High
Medium
Low
Higher impact
N/C No impact
Lower impact
164
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
#
Risk
Description
BUSINESS AND OPERATIONAL RISKS
Change
in 2022
Mitigation measures
GOVERNANCE
ETHICS AND COMPLIANCE
6
Maintenance
7
Legal
Commercial
and project
8
9
These risks relate to equipment:
failures of equipment that may result
in damage to property, reduced output
or discontinued operations.
Including, for reasons of non-fulfilment
of the repair plan (due to failure or increase
in the delivery time of imported equipment
and materials).
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.
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.).
Financial impact of market volatility
regarding foreign exchange and interest
rates.
Tax risks.
CLIMATE-RELATED RISKS
12
Transitional
risks
N/A
Physical risks
N/A
Financial or reputational impact
due to policy, legal, technology, and market
changes.
Negative impact on operational process
due to climate change, including water
supply and temperature variations.
N/C
N/C
166
Read more about climate-related risks at Climate leadership at p.81
Timely maintenance and repairs/ overhauls
of equipment; modernisation of production facilities.
Systematic ongoing work to find alternative
suppliers of equipment and services in connection
with the imposed sanctions and trade restrictions
against exports to the Russian Federation,
individual industries and enterprises of the Russian
Federation.
N/C
Legal defence against lawsuits.
Negotiating with the claimants.
Negotiating with suppliers of logistical services, raw
materials, components, equipment.
Ensuring timely supply and performance
under investment contracts in accordance
with the Group’s internal regulations.
Conclusion of long-term formula based contracts.
Spot purchases based on economic efficiency.
Expansion of the pool of potential suppliers.
Continuous monitoring of alternative markets.
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.
Currency risk hedging strategy (partially).
Continuous monitoring and adjustment of cash
flow.
Loan portfolio and foreign currency deposits
diversification.
Constant monitoring of policy, legal, technology,
and market changes and proactive management
of these issues.
Business and scenario planning; climate research
and analysis.
Accounting for climate risks and regional specifics
in R&D and investment projects.
KEY FACTS
398 employees’messages
received on the Signal hotline in 2022
REGULATORY
DOCUMENTS
GRI: 3-3
KEY GOALS
- Corporate Code of
Ethics
GOALS
STATUS
PROGRESS MADE IN 2022
- Anti-Bribery and
Corruption Policy
- Human Rights Policy
- Diversity and Equal
Opportunity Policy
To continue to inform employees
about the hotline and ethical values
through email newsletters, articles
in the corporate newspaper, internal
and public websites, etc.
Completed
MATERIAL
TOPIC
- Business ethics
To update existing and develop
new distant learning courses on
corporate ethics, anti-corruption and
sanctions compliance.
Completed
Information about the hotline is
posted on 16 subsidiaries’ public
websites.
Information relating to Company’s
ethical values and hotline is
communicated regularly through
newsletters, corporate TV channel,
newspaper, screensavers.
Three distance learning courses in
place:
- Corporate ethical standards
- Anti-corruption and conflict of
interest
- Sanctions risks and compliance
To implement quarterly screening of
employees for possible conflicts of
interest, as an additional measure to
annual overall survey.
Completed
Quarterly screening has conducted
on a regular basis since 2022.
GRI: 2-23
En+ continues to develop 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. En+
adheres to the principle of zero tolerance
for any forms of harassment or discrimination
at the workplace. We expect all the Company’s
representatives to adhere to our values
and ethical standards in their activities.
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.
GRI: 2-23
Maintaining goodwill is an essential part
of sustainable development, so we strive
to partner with companies that committed
to high level of transparency and have
a good business reputation. As part of our
commitment to ethical business practices.
En+ has the Supplier Standards that set out
expectations for partners of the Group’s
in terms of responsible business, quality
assurance and sustainability.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
CORPORATE
COMPLIANCE SYSTEM
GRI: 2-13
GRI: 2-24
En+ 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.
ANTI-CORRUPTION COMPLIANCE
AND CORPORATE ETHICS
SASB: EM-MM-510a.1
En+ takes every opportunity to promote
best practice in fighting corruption,
and consistently complies with high
standards of responsible and ethical
behaviour. We strictly comply with legislative
requirements of the countries where
we operate, including the Federal Anti-
Corruption Law of the Russian Federation,
the UK Bribery Act 2010, and the US Foreign
Corrupt Practices Law (FCPA).
GRI: 205-1
Corruption-related risks are assessed
and managed by the Company as part
of its overall risk management system. En+
seeks to eliminate any compliance risks
not only within the Company but also when
interacting with its counterparties.
GRI: 2-24
The Group has adopted an Anti-Bribery
and Corruption Policy and a Conflict
of Interest Policy at the Group level
as well as at the level of its subsidiaries
and affiliates. Internal regulations stipulating
the tasks, functions, rights and responsibilities
of the Group subsidiaries’ Ethics Officers
were adopted.
168
The Company has the Know Your Customer procedures in place –
data for each counterparty is assessed for compliance risks,
with subsequent assignment of a risk tag. After the assessment En+
implements the measures to mitigate the identified risks as well.
En+ consistently improves existing corruption prevention measures
and implements new ones. Particular attention is paid to conflicts
of interest, which can be a cause of corruption offences. En+ has
had the electronic system for annual collection of conflict-of-interest
declarations in place. This solution helps the Ethics Officer to identify
any potential conflicts of interest in the Group subsidiaries and generate
reports based on the declarations received. As an additional measure,
we conduct a quarterly screening process of all newly hired employees
for possible conflicts of interest and address results accordingly.
GRI: 2-24
In 2022, we continued to inform employees through all available
channels about ethical standards and the Company’s approaches
to anti-corruption and conflict of interest management. The Company
developed procedures for identifying and investigating violations
of business ethics, followed by the development of corrective measures.
The Company educates its employees on the internal documents
in the field of ethics.
In addition to familiarisation with the Policies and the Corporate Code
of Ethics, the En+ provides training to its employees on various aspects
of business ethics, including labour law regulations.
GRI: 205-3
– There were no confirmed cases
of corruption in the Company during
the reporting period.
GRI: 415-1
– The Company does not finance
political parties, their candidates
or representatives in Russia or abroad,
and also refrains from direct or indirect
influence on political figures.
GRI: 206-1
– There were no lawsuits filed
or considered against the Company
in connection with the obstruction
of competition and violation
of antimonopoly laws.
– There were no cases of violation
of the Code of Corporate Ethics
by members of the Board of Directors.
GRI: 205-3
– There were no terminations
of contracts with business partners
as a result of corruption violations.
HOTLINE “SIGNAL”
GRI: 2-25
GRI: 2-26
En+ operates a 24/7 hotline, “Signal”,
for employees and other stakeholders
to interact on issues related to ethical
violations, corruption and other illegal actions.
All the stakeholders may contact the hotline
confidentially and anonymously. The Company
has its own Regulation governing the hotline
operation in place that sets out procedures
for recording, processing and storing the data
on the incoming applications. 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.
A decrease in messages on the Signal
hotline is due to the constant communication
of its objectives and promoting the hotline
as a compliment tool to overall issue
awareness strategy, as well as an increase
in number of the communication channels
with employees. In 2022, we decreased non-
relevant messages recorded due to changes
in the assessment methods.
INSIDER INFORMATION COMPLIANCE
SANCTIONS COMPLIANCE
Messages on the Signal hotline, Nb
Since the financial instruments of En+ 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+. The Group approved the list of insider information, maintains
the list of insiders, sets up timely disclosure processes, and implements
appropriate internal control.
En+ is focused on mitigating the risk of the
imposition of international economic
sanctions. A relevant compliance programme
has been devised and is being continuously
developed by the Group. The Board
of Directors has approved the Sanctions
Compliance Policy aimed at ensuring that En+
and its officers, directors and employees
comply with the applicable legislation
for mitigating such risk.
2022
2021
2020
303 0 92 3
420
192
127 52
372 54
169 51
398
791
646
Metals, relevant messages
Metals, irrelevant messages
Power, relevant messages
Power, irrelevant messages
To download the Code
of Corporate Ethics
from our website
To download the Anti-
Bribery and Corruption
Policy from our website
Categories of relevant
messages to the Signal
hotline, 2022, %
labour relations
relationship with
counterparties
occupational
health and safety
asset protection
other
38
31
11
10
10
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En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
STAKEHOLDER
ENGAGEMENT
GRI: 2-29
En+ builds interaction with all its stakeholders
in a responsible, respectful and transparent
way. Using various engagement methods,
the Company responds to stakeholder
interests and expectations, identifies
and mitigates Company’s actual and potential
negative impacts and receives feedback
to maintain long-term constructive
relationships with the stakeholders.
En+ stakeholders are identified based
on the following criteria:
- significance of the Company to the
stakeholders
- their significance to the Company
- frequency of their interaction
with the Company
- impact of the activities and processes
of the Company on stakeholders
- impact of stakeholders on the Company’s
activities and processes
En+ pursues three main goals
in communication with stakeholders as set
in the Stakeholder Engagement Policy.
The Company seeks to use every opportunity
for mutually beneficial partnership, to respect
the views of local communities and business
partners for business success, and to jointly
prevent or control conflicts by maintaining
dialogue with stakeholders. The Stakeholder
Engagement Policy, adopted by the Board
of Directors in 2020, also specifies
the Company’s approach and obligations
regarding stakeholder engagement,
procedure for interaction with stakeholders,
and mechanisms for management
and oversight.
The Stakeholder
Engagement Policy
is available on the
Company’s website
GRI: 2-13
GRI: 2-25
GRI: 2-26
GRI: 3-3
Stakeholder engagement
Stakeholder group
Interests and expectations
of stakeholders
Engagement methods
Responsible unit
and frequency of interaction1
ASSOCIATIONS AND INITIATIVES
En+ believes
that interaction
with associations
and initiatives can
help to stimulate
the development
and improvement
of the economic sector
in which it operates
- Enhancing transparency
of technological processes
in aluminium production
- Transitioning to production
of low-carbon aluminium
- Raising demand for low-
carbon aluminium
- Developing and deploying
standards to reduce
adverse impacts
on the environment
and to ensure responsible
and open business
practices
Read more about Collaboration and Partnerships at p.173
- Participation
in meetings
- Discussions
concerning plans
and joint resolutions
of the Company
via various
communication
channels
- Preparation
of Annual Reports
Energy associations
Directorate of International
Cooperation
Aluminium associations
and initiatives
- Sustainable Development
Department
Value created
for stakeholders
in 2022
Co-founder
and member
of the National
ESG Alliance
Support
for launching
of Baikal Plastic-
Free association
Stakeholder group
Interests and expectations
of stakeholders
Engagement methods
Responsible unit
and frequency of interaction
CUSTOMERS AND SUPPLIERS
En+ customers
and suppliers are vital
to value creation. Being
a reliable partner is one
of the Company’s top
priorities
- Openness
and transparency
of reporting, strategy,
environment, and social
responsibility
- Receiving information
regarding the Company’s
product mix, prices,
and market
- Support on contracts
and prompt decision-
making regarding new
contracts
- Regular meetings
- Participation
of the Company
in relevant forums
and conferences
- Audit of financial,
tax and reputational
status of suppliers,
mandatory technical
audit
- Providing
information upon
request
Customers
- Sales and Marketing
-
Department
Interaction reports
submitted to top
management
Suppliers
- Commercial Department
- Reporting to top
management
Read more about Supply chain management and Quality management at p.176 and p.182
EN+ EMPLOYEES
The Company’s success
depends on building
an inclusive and diverse
environment where
its employees can thrive
- Safe working conditions
and fair remuneration
- Compliance
-
with employment law
Improving equality
and diversity
-
Intranet portal
for the employees
- Staff satisfaction
surveys
- Corporate Hotline
(the Signal hotline)
- Supporting labour rights
- Contact
- Human Resources
Department
- Corporate
Communications
Department
- Reports to the Board
of Directors
with Workers
Committees
and Ethics
Officers across
the Company’s
operations
- Providing access
and required
information
to the supervisory
authorities,
in accordance
with the Barker
Plan2
- Email
communication,
official letters
- Participation
in workshops,
round tables
and ministerial,
interinstitutional,
and regional
meetings
Read more about Employees at p.115
GOVERNMENTAL AUTHORITIES
- Positive operational,
environmental and social
performance
- Legislative and regulatory
compliance
Cooperation
with regional
and federal
governments
and positive
relationships
play a critical role
in the Company’s
licence to operate.
En+ enters into socio-
economic partnerships
with local governments
and cooperates
with local authorities
to implement social
projects
Read more about Community engagement at p.126
- Government Relations
Department; heads
of Regional Operations
Value created
for stakeholders
in 2022
с. USD 9,649 mn
total amount of
purchases from
suppliers3
c.39% share
of local
suppliers in
total amount of
purchases
1.2 mt of low-
carbon ALLOW
aluminium sold
in 2022
86.3%
of employees
covered
by collective
bargaining
agreements
73.8% level
of employee’s
satisfaction
12% increase
in government
payments
(compared to
2021)
RUB 10 mn
investments in
environmental
project grant
competition
On a regular basis
Scheduled calendar meetings
Upon request
1 / Frequency
170
2 / The Barker Plan (also known as the Chairman’s plan), a roadmap to lift the OFAC sanctions imposed on the Company’s corporate governance mechanism
was implemented by the Board in 2018. The plan was successful, with sanctions lifted on 27 January 2019.
3 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
171
En+ Group Consolidated Report 2022 in relevant forums
and conferences
- Providing
information upon
request
- Required
disclosures
via the Company’s
reports
- Annual community
surveys
- Hosting own
relevant events
- Grant competitions
to implement
the initiatives
of local NGOs
- Annual public
discussion
of Sustainability
report
- Participation
in meetings
and joint
discussions
- Participation
in relevant
conferences
and forums
- Providing
information upon
request
- Submission
of regular reports
on the Company’s
activities
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
Stakeholder group
Interests and expectations
of stakeholders
Engagement methods
Responsible unit
and frequency of interaction
Value created
for stakeholders
in 2022
Stakeholder group
Interests and expectations
of stakeholders
Engagement methods
Responsible unit
and frequency of interaction
NON-GOVERNMENTAL ORGANISATIONS (NGOS) AND LOCAL COMMUNITIES
SHAREHOLDERS INVESTORS AND FINANCIAL ANALYSTS
- Positive sustainable
- Participation
En+ works
collaboratively
with researchers,
educational institutions,
and non-governmental
organisations
to develop
effective strategies
for sustainable
development. To be able
to operate in the long
term, the Company
must be respectful
towards the views
of local communities
-
-
development
Increasing the number
and enhancing
the transparency
of environmental projects
(provision of detailed
information, including
quantitative information
on all stages of projects)
Increasing the number
of jobs available to local
communities
USD 53 mn
social
investment1
1,000 new
positions
announced
in April 2022
to support
regional
economies
NGOs
- Corporate
Communications
Department, Sustainable
Development Department
Interaction reports
submitted to the Board
-
Local communities
- Corporate
Communications
Department, Committee
of Social Investments
of the Company
Interaction reports
to the Board of Directors
-
-
- Strategy and Capital
Markets Department
Interaction reports
submitted to the Board
of Directors
The Company
strives to strengthen
its competitive position,
to deliver robust
returns and long-
term sustainable
value for the investors
and to have strong
partnerships
within financial
markets. In turn,
investors provide
the capital to expand
and develop En+
performance
- Strong and sustainable
financial performance
- Dynamics of the share
price performance
- Short-term and long-term
development strategy
of the Company
- Compliance
with requirements
on information disclosure
and corporate governance
- Regular electronic
communications
- Publication
of mandatory
periodic reports
- Official press
releases on various
events
- Mandatory
information
submissions
by the Company
as an issuer
of securities
Read more about Information for shareholders and investors at p.155
Value created
for stakeholders
in 2022
18.8% adjusted
EBITDA margin
Read more about Community engagement at p.126
METAL AND STOCK EXCHANGES
Interaction with metal
and stock exchanges
is vital to developing
En+ business
and the global market
- Raising demand for low-
carbon aluminium
- Financial statements
and information regarding
the Company’s corporate
governance in accordance
with the requirements
of stock exchanges
- Openness
and transparency
of reporting, strategy,
and ESG information
-
- Strategy and Capital
Markets Department
Interaction reports
submitted to the Board
of Directors
Read more at Information for shareholders and investors at p.155
RATING AGENCIES (INCLUDING ESG RAS)
Considering
global trends
and the growing interest
of the investment
community
and business partners
in ESG ratings, En+
intends to improve
its ESG ratings
and expand the number
of ESG ratings that
cover En+
-
Increasing
the transparency
of disclosures
on environmental, social
and governance indicators
- Development of corporate
policies and procedures
- Providing
information upon
request
- Required
disclosures
via the Company’s
reports
- Official press
releases
on the Company’s
website
Read more about Sustainability management at p.62
-
- Strategy and Capital
Markets Department
Interaction reports
submitted to the Board
of Directors
On a regular basis
Scheduled calendar meetings
Upon request
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
172
Obtained a
permit from
the Russian
Government
to continue
the circulation
of En+’s
GDRs outside
the Russian
Federation until 7
November 2024
inclusive
Maintained
disclosure in
order to comply
with the listing
requirements
and to remain
transparent for
stakeholders
One of the leader
of the ESG
transparency
ranking
of Russian
companies
by Expert RA
High level at ESG
index of Russian
business
by National credit
ratings
COLLABORATIONS AND PARTNERSHIPS
GRI: 2-28
ADVOCACY
En+ actively works with and alongside national
and international stakeholders to advance sustainable
development efforts. The Company actively participates
in dialogues, knowledge sharing, advocacy efforts,
and maintains bilateral contacts to address ESG issues.
The Company recognises that efforts of individual
actors are not enough for global change. Only by joining
efforts with industry peers and like-minded parties
around the world will En+ be able to shift its markets to
a sustainable and responsible future.
United Nations
Global Compact
(UNGC)
Association “Local
Network of the UN
Global Compact
in Russia”
National ESG
Alliance
Climate Partnership
of Russia
The UNGC is a universal corporate sustainability initiative. Based on a call for business leaders to enter a Global
Compact on shared values and principles it empowers businesses to operate in a sustainable manner. En+
annually reports its sustainability progress to the UN Global Compact through the UNGC Communication
on Progress. Our teams benefit from the educational seminars and courses provided by the UNGC academy.
The UNGC’s guidance on the international sustainability agenda in 2022 has helped shape the sustainability
priorities of the Group over the past year.
In 2022, the Association underwent structural changes and became much more active in advancing the UNGC
sustainability agenda across Russian business. En+ was actively involved in the Association’s endeavours
to increase communication between business and UN organisations, such as UNEP and FAO.
With the En+ CSO on the Board of the Association, significant efforts to maintain contact with the UNGC head
office culminated in a signed memorandum, acknowledging the Association’s recognition as the official Local
Network of the UNGC in Russia.
In early 2022, En+ became one of the 28 original founders of the ESG Alliance, a consolidated effort to advance
the ESG agenda on a national scale. Supported by leading Russian and international companies, the Alliance
represents 1.5 million people and revenue exceeding RUB 10 trillion.
En+ is actively involved in shaping the partnership’s agenda and heads its Climate Working Group.
The Climate Partnership of Russia is a national association of more than 30 companies from all sectors
of the economy that have consolidated their efforts to mitigate climate change and develop measures
to transition to a decarbonised economy. In 2022, the Partnership became a key platform for corporate Climate
discussions in Russia. In September 2022, En+ presented its first Net Zero Progress Report to a panel of experts
on the Partnership’s platform.
Carbon Pricing
Leadership
Coalition (CPLC)
En+ and RUSAL are the only two Russian members of CPLC, a voluntary partnership under the auspices
of the World Bank to advance global carbon pricing. En+ and RUSAL regularly contribute language to CPLC annual
reports. In the latest
by 2050. The CPLC report contains information about Company’s Pathway to Net Zero Report and about the fact
that embedding an internal carbon price helps RUSAL cut aluminium production emissions by 8%.
CPLC Carbon Pricing Leadership Report 2021/22 En+ reaffirms its commitment to net zero
173
En+ Group Consolidated Report 2022
International
Policy Coalition
for Sustainable
Growth (under
the auspices
of US Chamber
of Commerce)
Business 20 (B20)
Business
and Advisory
Committee
to the Organisation
for Economic
Cooperation
and Development
(BIAC at OECD)
The U.S. – Russia
Business Council
(USRBC)
BRICS Business
Council
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
In 2021, En+ became a Knowledge Partner at the International Policy Coalition for Sustainable Growth launched
by the US Chamber of Commerce. In 2022, the International Policy Coalition for Sustainable Growth incorporated
En+ recommendations on introduction of CO2 emissions standards for hard-to-abate industries as a part
of discussions on COP27 agenda.
En+ and RUSAL are among companies preparing policy recommendations on climate change, carbon pricing,
sustainable development and the green energy transition through B20 for the leaders of the Group of Twenty
(G20), an international forum for 19 leading world economies and the European Union. In 2022, En+ was the only
Russian company to participate in two taskforces on climate and sustainable development related issues: the
B20 Energy, Sustainability & Climate Taskforce and the B20 Trade and Investment Taskforce.
The B20 Trade and Investment Taskforce incorporated the Company’s suggestions on harmonisation
of environmental labelling and information schemes (ELIS) and its possible usage on exchanges into the final
document.
For B20 Energy, Sustainability & Climate Taskforce, the Company was among the authors suggesting measures
that would help reduce carbon emissions from hard-to-abate sectors, such as improving the use of existing
stocks of materials through enhanced reuse and recycling; and promoting electrification of hard-to-abate sectors
using renewable and low-carbon electricity sources where possible. These recommendations were included
in the policy paper presented by the Taskforce.
En+ and RUSAL are members of the Business and Industry Advisory Committee to the OECD (BIAC)
and contribute to the OECD’s work on climate change, circular economy, trade liberalisation, resource efficiency
and sustainable materials management. The Orientation of the 2023–2024 Programme of Work and Budget
of the OECD Trade Committee includes a number of En+ recommendations that reflect need for environmental
goods liberalisation and facilitation, and necessary prerequisites for it (e.g., separate customs codes or suitability
labelling, etc.).
En+ and RUSAL are members of the U.S. – Russia Business Council. USRBC shared on its website the “Green
Aluminium Vision”, En+ ambition to lead the aluminium industry into the green economy via nine key initiatives
and the news about En+ setting sector beating targets for GHG emissions reductions.
En+ chairs the Russian part of the Energy and Green Economy Working Group at BRICS Business Council. In the
2022 Business Council’s Annual Report, the Company co-authored recommendations on low-carbon and green
transportation considering national specifics and establishment of a BRICS business dialogue mechanism
to reduce emissions within the framework of nationally determined contributions, which resulted in the foundation
of the BRICS Energy Cooperation Forum. The Company’s Director for International Cooperation and Chair
of Energy and Green Economy Working Group Russia Chapter Evgeny Fokin made
the opening session.
Ahead of the event the Working Group also presented “Contributing Energy to BRICS Sustainable Development
in the Post-Pandemic Era” Initiative. The document included the Company’s suggestion regarding facilitating
the achievement of Intended Nationally Determined Contributions among BRICS countries through
the establishment of a green energy certificate mechanism among BRICS countries.
welcoming remarks during
Association “Baikal
Plastic Free”
In the spring of 2022, major stakeholders operating in the regions around Lake Baikal came together to shape
an association focused on combatting plastic and micro-plastic pollution of the Lake. En+ is actively involved
in changing local attitudes towards plastic pollution.
In 2022, members of the Association aided in the development of a draft law, aimed to prohibit use and sale
of certain single use plastic products on the Baikal territory.
TRANSPARENCY AND CERTIFICATION
En+ supports the notion that emission transparency is the first stage towards increased climate commitments.
The Company discloses its own emissions and promotes industry-wide transparency and disclosure.
Aluminium
Stewardship
Initiative (ASI)
International
Aluminium Institute
(IAI)
Carbon Disclosure
Project (CDP)
ASI is a global, multi-stakeholder, non-profit standards and certification organisation. It unites producers,
users and stakeholders in the aluminium value chain through a commitment to maximise the contribution
of aluminium to a sustainable society.
RUSAL representatives are actively involved in ASI’s work to develop a robust certification system
and to implement responsible standards on a large scale.
The IAI is a platform bringing together the global primary aluminium industry. IAI promotes responsible
production, sustainable use and recycling of aluminium through process analysis, industry modelling, statistics
collection and participation and leadership in initiatives to ensure a safe and sustainable aluminium cycle
in the economy. RUSAL has been a member of the IAI since 2002. Company’s representatives are closely involved
in industry-specific committees, including the Energy and Environment Committee and Health Committee,
and in various project and working groups.
CDP is a non-profit international organisation that provides a comprehensive, globally trusted environmental
impact disclosure. CDP is the gold standard for environmental reporting, allowing participants to better navigate
building a sustainable economy.
RUSAL has been disclosing its GHG emissions to CDP since 2015. In 2021, EuroSibEnergo, subsidiary
of the Power segment, submitted its first CDP. In 2022, En+ submitted its first Group-wide CDP report.
ENERGY TRANSITION
The future green economy will be shaped by the energy transition and will rely increasingly on renewable energy sources.
Through energy-focused partnerships, the Group aims to improve its own capabilities, share best practices and raise
awareness of the opportunities associated with renewable energy scale-up.
Hydropower of Russia
Association
The Hydropower of Russia Association is the only hydropower industry community in Russia that aims
to improve the efficiency and reliability of hydropower generation through coordination, best practice sharing,
and advocating for the industry.
En+ took part in the development of a national sustainable hydropower assessment methodology. In 2022,
the methodology was finalised following the completion of on-site testing and subsequent reviews.
The Association now works to advance wide scale implementation.
CLIMATE
Operating among the hard-to-abate sectors, En+ is aware of the impact that such industries are having on the climate.
Therefore, the Group believes it is essential to reduce its GHG emissions to ensure it contributes to global efforts to mitigate
climate change and align with the 1.5 °C scenario. The partnerships below support the climate ambitions of En+.
Canada Eurasia
Chamber
of Commerce (CECC)
En+ is a member of the Canada Eurasia Chamber of Commerce (CECC). En+ regularly submits information
to the CECC Newsletter to share its achievements in sustainable development and climate change
with the international business community.
Science Based
Targets initiative
(SBTi)
Conferences
of the Parties
(COP) to the United
Nations Framework
Convention
on Climate Change
(UNFCCC)
UN Energy
SBTi is a joint initiative of CDP, UNGC, World Resources Institute to support companies in setting
emission reduction targets in line with the recommendations described in the Assessment Reports
of the Intergovernmental Panel on Climate Change (IPCC).
In December 2022, En+ received SBTi feedback regarding its submitted roadmap. En+ is now in the process
of reviewing its roadmap in accordance with SBTi recommendations.
En+ and RUSAL regularly attend UN Climate Change Conferences.
At COP27 in Sharm el Sheik En+ and RUSAL representatives took part in a session organised by the Russian
Local Network of the UNGC.
In 2021, UN Energy, the principal mechanism within the UN system for inter-UN collaboration on sustainable
recognised the En+ New Energy modernisation programme and En+ International Renewable Energy
energy,
Certificates (I-RECs) Project as part of the UN Energy Compact to drive the progress on the achievement
towards SDG7 (Affordable and clean energy). In 2022, En+ updated the UN Energy Secretariat
on the programmes, thus maintaining its membership in the UN Energy initiative. It is expected that updates
will be sent to the Secretariat annually.
Energy Compacts established by UN Energy are voluntary commitments of action, with specific targets
and timelines to accelerate action for clean, affordable energy for all and to contribute to successful SDG7
implementation. En+ became the first Russian company to be registered within the UN Energy Compact
system.
Race to Zero
Founded by the Climate Champions, Race to Zero mobilises a coalition of leading net zero initiatives. In 2020,
En+ became a member of the umbrella initiative as a signatory of the Business Ambition 1.5 °C.
KEY ACTIVITIES AND PROGRESS
Supporting Nature
Through a partnership with the World Business Council on Sustainable Development, in the spring of 2022, En+
engaged in the development of the Science Based Targets for Nature.
Prioritising the Energy
Transition
Together with our partners at the Global Sustainable Electricity Partnership (GSEP), En+ helped set up
the annual GSEP Electrification report 2022. GSEP membership fees allowed to award 17 grants to students
studying within the electrification field.
Restating the Net Zero
commitment
In September 2022, a year after releasing its Net Zero Pathway, En+ released the first report of its journey
to carbon neutrality. On the platform of the Climate Partnership of Russia, En+ and RUSAL representatives
presented the progress, this was followed by a discussion with global climate experts regarding future steps
to be taken.
Supporting
the national
sustainability
landscape
Through our partnership with the national ESG Alliance, throughout 2022, En+ participated in providing
feedback and suggestions to numerous organisations working to develop national ESG rankings and ratings.
These mechanisms will help push national industries towards greater transparency and sustainable business
practices.
174
175
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
SUPPLY CHAIN MANAGEMENT
REGULATORY
DOCUMENT
Supplier Standards
MATERIAL
TOPIC
- Sustainable
Supply Chain
KEY FACTS
39.1%
of purchases made
from local suppliers
KEY GOALS
100%
of suppliers having no significant actual and
potential negative social impacts
40
supplier’s audits conducted
in 2022
GOALS
STATUS
PROGRESS MADE IN 2022
To automate the supplier rating
assessment and supplier claims
process
To extend the APQP process in
order to enhance the qualification
process to other divisions of the
Company
On track
On track
Management approach
GRI: 3-3
En+ cares for the quality of the goods
and services Company provides to customers
and consumers. Therefore, a sustainable
and transparent supply chain is a necessary
condition for well-coordinated activities.
En+ conducts its supply chain management
activities in accordance with Russian
and international regulatory requirements
and internal policies and rules provided for each
of the segments. In 2022, the Company
updated its Procurement Regulations to meet
the requirements of current Russian legislation
on the procurement of goods and services.
In 2022, functional requirements for the
supplier’s personal account on the website
were developed.
In 2022, the preparatory stage of
extending the qualification process to
the Downstream Division (wheel and
foil production), the Directorate for New
Projects (silicon and flux businesses) was
completed – all purchased raw materials
and materials are differentiated by groups
of influence on the technological process
and the quality of finished products.
GRI: 2-13
The procurement process of the Power
segment is mainly centralised within
EuroSibEnergo Trading House LLC (the “Trading
House”), a single supplier of material
and technical resources and required works
and services for all Power segment’s companies.
RUSAL has seven procurement centres
responsible for procurement within the Divisions
and plants of the Metals segment.
As the quality and timeliness of deliveries
depend, among other things, on the work
of contractors and suppliers, the Company
selects contract partners according among
others to ESG criteria’s. The Company’s approach
to procurement is outlined in
Supplier Standards,
which include requirements for responsible
business practices, quality assurance
and sustainable development to be met
by the suppliers of goods, works and services
to the Company.
Key supply chain management efforts include:
Engaging top management in the supply
chain management
Adhering to supply chain performance
indicators
Read more in the 2021
Sustainability Report,
at p.51
Making the procurement process more
transparent and convenient
Opting for local suppliers wherever
possible
Creating a safe working environment
for employees and contractors
Monitoring compliance
with environmental and social
responsibility requirements
Engaging with stakeholders on issues
of interest to them and regularly
reviewing feedback
In 2022, RUSAL adopted the Responsible
Procurement Policy. The purpose of the Policy
is to build an effective high-quality supply
chain management system for all types
of the Company’s production activities.
The policy sets out the basic requirements
for suppliers of raw materials and goods,
and specifies RUSAL’s criteria for selecting
suppliers in terms of quality control,
environmental protection and compliance
with social, economic and cultural rights.
GRI: 2-24
GRI: 407-1
408-1
409-1
Under the risk management system,
the Company assesses risks associated
with the supply chain, such as interruption
in the supply of goods and raw materials,
monopoly pricing in the transport market,
failures to meet deadlines and project cost
overruns. Should a supplier violate established
rules and behave in an unethical manner,
the Company reserves the right to terminate
any business relationship with the supplier.
En+ excludes transactions and suppliers that:
- undermine the right to freedom
of association and collective bargaining
- have a high risk of child or forced labour
Read more about Human rights at p.118
176
177
En+ Group Consolidated Report 2022 Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
Requirements for suppliers and contractors
GRI: 308-2
GRI: 414-2
All business partners are required to adhere to sustainability principles.
To ensure this, the Company organises its procurement process, which
involves interaction with suppliers as follows:
POTENTIAL
SUPPLIERS
NEW SUPPLIERS
CURRENT
SUPPLIERS
- Supplier audit
- Professional
exhibitions of
goods and services
- Supplier audit
- Qualification
assessment
- Assessment of
compliance with
regulatory ESG
requirements and
standards
- Supplier audit
- Verification of
compliance
with applicable
requirements for
suppliers
Interaction with suppliers of the
Metals segment
Interaction with suppliers of the
Power segment
- Suppler Business Practice
Questionnaire
- Assessment of compliance
with internal and extremal
requirements
- Support measures in case of
non-compliance
- Thorough analysis of
documentation, transactions and
publicly available materials of
potential RUSAL’s partners
- Regular audits
- Activities related to labour
protection and industrial safety
- Compliance with the Federal Law
“On the procurement of goods,
works and services
- Compliance with internal
documents
- Evaluation of the business ethics
of suppliers
- Technical audits
- Analysis of performance indicators
- Health and safety requirements
The Company’s additional requirements (such as required
certification) for suppliers are set out in the 2021 Sustainability
Report at p.53
GRI: 308-2
GRI: 308-1
GRI: 414-1
En+ regularly conducts internal
and independent external audits of all
suppliers (current and potential) to verify
that their activities do not have a negative
impact on people and the environment,
and to eliminate business with suppliers
whose activities have a negative social
and environmental impact.
In 2022, 40 audits of new business partners
were organised. 100% of new suppliers
were screened using social criteria. In
addition, the Company added its health
and safety measures to mandatory
requirements for contractors. Failure
to comply with the requirements in the field
of health and safety is punishable by a fine,
as indicated in supplementary agreements
to contracts.
In 2022, 25% of new suppliers to the Metals
segment were screened using environmental
criteria. In addition, En+ carried out an audit
of Russian suppliers of electrostatic
precipitators in the reporting year under
the Clean Air project, which aims to replacing
precipitators and ash collectors by 2027.
En+ validates supplier compliance
with established requirements and provide
certification. The Company carries out
the certification procedures on a regular
basis in accordance with the requirements
of IATF 16949 “Quality Management System
for Automotive Industries Organisations”
using the Enhanced Product Quality Planning
(Production Parts Approval Process)
approach.
REPORTING VIOLATIONS IN COMPLIANCE WITH THE SUPPLIER STANDARDS
The Company operates the Signal, a single line of trust, which suppliers and
other interested parties may use to (and, if necessary, anonymously) report
violations confidentially, as well as to receive advice on how to properly apply
the standards. To make a report, one should use:
-
trust line (toll-free): 8-800-234-5640
- email: signal@enplus.ru.
178
Local supplier support
GRI: 2-6
GRI: 204-1
When working with local suppliers,
the Company strictly complies
with the requirements of applicable laws
regarding the amount of goods and services
to be purchased from them and quarterly
reports on the interaction with local
suppliers and small businesses. For small
businesses, the Power segment provides
benefits, which comprise a grace period
for deferred payments (no more than 15 days)
and an opportunity for simplified participation
in competitions and auctions.
GRI: 203-2
En+ seeks to assist in the development
of the regions of presence, supports local
suppliers, products and services by giving
priority to Russian and CIS suppliers
and developing relationships based on long-
term contracts with local suppliers.
Russian companies have been key suppliers
of equipment for the Power segment
for a long time; and some of the shipments
are made from China and Kazakhstan.
In 2022, Import Substitution Working Group
was created within the Trading House,
whose functions include ensuring a stable
supply chain for goods manufactured
abroad or searching for domestic
analogues to replace them without
affecting the Company’s production
process. As a result, a temporary instruction
was issued for the implementation
of procurement activities under the conditions
of sanctions, and some products purchased
by the Company were replaced with worthy
analogues: automated process control
system, VD shut-off valves, hydrazine hydrat,
pumps, special equipment, fuel feed reducers.
1 / Calculated based on average for 2022 USD/RUB exchange
rate of 68.55.
The local suppliers are considered
to be regional enterprises located near main
production facilities:
METALS SEGMENT
- Local suppliers are companies registered
in the Russian Federation
POWER SEGMENT
- Local suppliers are companies registered
in the regions where the segment is
present (Irkutsk Region, Krasnoyarsk
Territory, Nizhny Novgorod Region,
Republic of Tyva, Republic of Khakassia)
GRI: 204-1
The total amount of purchases made from
local suppliers1, 2022, USD mn
Power segment
Metals segment
1,061.85
1,846.78
2,713.50
7,802.28
3,775.35
9,649.06
En+
Total purchases
Purchases made from local suppliers
Increase in Group's total purchases (around
7%) compared to 2021 was mainly due to
changes in calculation's methodology of
Power segment, which happened due to the
inclusion in the amount of purchases of works
and services. En+ slightly increased share of
purchases from local suppliers from 34% in
2021 to 39.1% in 2022.
Based on
the results
of 40 audits
conducted in
2022, 100% of
suppliers had
no significant
actual and
potential
negative
social or
environmental
impacts.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
RUSAL PROMOTES
ALLOW LOW-CARBON
ALUMINIUM THROUGH
THE SUPPLY CHAIN
In 2022, RUSAL continued to promote ALLOW
brand. The ALLOW is the brand of low-carbon
aluminium, which helps customers to increase
their global contribution to climate goals as it
is produced using carbon-free energy sources,
mainly hydropower. Products created using
ALLOW will enable the Company’s customers
to significantly reduce their carbon footprint
throughout the entire production chain.
RESEARCH ON
THE QUALITY OF
MANAGEMENT OF
ESG ASPECTS AT
RAW MATERIAL
SUPPLIERS OF RUSAL
In 2022, RUSAL conducted a study aimed at
assessing existing suppliers in terms of ESG
practices based on a questionnaire. A survey
was conducted for supplier companies, as a
result of which their strengths, weaknesses,
main risks and recommendations in the field of
ESG were highlighted.
The recommendations are aimed at eliminating
shortcomings in order to achieve higher
performance in the field of managing ESG
practices in companies. RUSAL actively
interacts with suppliers and evaluates the
quality and effectiveness of their management
of ESG aspects.
METAL SEGMENT
GRI: 3-3
A sustainable supply chain is a guarantee of business stability
and benefits all stakeholders in the Metals segment, as RUSAL works
with a large number of suppliers of goods and services to ensure
the consistently high quality of its own products.
To carry out its activities, RUSAL purchases goods from suppliers1:
1
2
3
4
5
Energy supply services
Alumina
Primary aluminium
Fuel
Repair and other production maintenance services
In 2022, the location of production facilities, the geography of suppliers,
the organisation and structure of the supply chain did not change
significantly, however, the geography of suppliers was reoriented
towards the purchase of goods in Russia and China, and part
of the supply chains was changed taking into account possible options
for organising logistics.
Under RUSAL’s Sustainability Strategy RUSAL to establish a sustainable,
ethical supply chain of raw materials, finished products and services
based on a proprietary ESG accreditation, evaluation and compliance
audit system covering at least 80% of suppliers by 2025 and 100% of
suppliers by 2035.
1 / Primary aluminium are purchased from joint ventures.
DESIGN COMPETENCE
CENTRE
The merger of designers from two
organisations – Irkutskenergoproekt and the
EuroSibEnergo Engineering Centre – made
it possible to create a design competence
centre at EuroSibEnergo-engineering to satisfy
needs of all the Company’s enterprises.
The aim of the centre is to bring together
specialists to provide a professional, rapid
and comprehensive solution to project-related
problems that adversely affect the timing of
investment projects.
AUTOMATISATION
OF SUPPLIER
RELATIONSHIPS
To build long-term relationships with
suppliers, the Power segment offers modern,
convenient solutions: in 2022, the Power
segment developed functional requirements for
suppliers’ personal account on the website. In
addition, En+ introduced an automated control
and limit monitoring system, which allows
customers to monitor online, and in real time,
the price at which goods are purchased to carry
out their projects. In early 2023, the Power
segment plans to launch new functionality
in the supplier’s personal account: a tool for
communication with suppliers on supply chain
issues.
POWER SEGMENT
GRI: 2-6
Not only efficiency but also the security of energy supplies at regional
level depend on the quality of supplies in the Power segment.
For the stable functioning of the Power segment,
the Company purchases a variety of goods and services.
Top products by volume purchased by En+ to support
its own activities are as follows:
1
2
3
4
5
Petroleum products, fuel and lubricants
(fuel oil, gasoline, diesel, etc.)
Cable products
Personal protective equiment and overalls
Rolled metal and pipes
Computer equipment and spare parts for it.
In addition, the Company regularly uses repair services
for its main and auxiliary equipment.
As part of a programme to improve the quality of personal
protective equipment and overalls provided to employees
for enhancing health and safety performance, the Power segment
organised a special exhibition in 2022 for suppliers of these goods
to share experience and best practices in this area.
GOALS FOR 2023 AND ONWARDS
In 2023, En+ intends to:
implement a barcode system in the Company’s warehouses to ensure
prompt solutions to logistical issues related to the storage and transport
of goods
create a single-window service for business partners: appoint a single
manager responsible for communication regarding the procurement
of goods and services
simplify a process for purchasing automotive parts to respond quickly
to breakdowns of corporate vehicles
implement a simplified continuous system for purchasing low-value
goods required for the continuity of internal processes
development and pilot the operation of a module for assessing
counterparties in terms of quality, as well as expanding the use
of assessment for planning supplier audits and control schemes
in the Metals segment
180
181
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En+ Group Consolidated Report 2022 GOALS
STATUS
PROGRESS MADE IN 2022
Quality standards followed by Metals segment1
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
RESPONSIBLE BUSINESS
PRACTICES
As a responsible business, En+ is always looking to boost operational performance. The Company remains committed
to providing high quality at all stages, improving production efficiency, implementing best-available technologies and
introducing innovative technologies throughout the production chain.
QUALITY MANAGEMENT SYSTEM
KEY FACTS
91%
of customers assessing their suppliers
gave RUSAL the highest rating
KEY GOALS
REGULATORY
DOCUMENT
Quality Policy
MATERIAL TOPIC
- Economic
performance
To develop online services for
customers
In progress
Activities are carried out
in accordance with the schedule.
To maintain registry of RUSAL
ratings, including information on
interaction with key customers and
the status of the implementation of
relevant measures
Completed
91% of customers assessing their
suppliers gave RUSAL the highest
rating
Management approach
Ensuring high quality of services and products at all stages
of the life cycle has always been a fundamental priority
for En+. The Company applies the best international
practices and standards in quality management:
the Company’s compliance with standards is reviewed
on a regular basis. Focusing on the needs of the customers
and building trustworthy and transparent relations, En+ uses
various communication tools.
En+ believes that professional training and development
is the key to successful employee involvement in the quality
management process, as it makes employees feel valued
by the Company and, therefore, more enthusiastic about
producing better quality goods and services. That is why
employee involvement in quality management is centred
on professional training and development opportunities.
Quality academy
The Quality academy offers five educational programmes
and 27 internal courses for employees.
En+ has founded an educational institution to conduct:
- quality management training of employees
- staff development to ensure Quality management system
(QMS) efficiency
- systematic improvement of the approach to QMS training
of employees
Read more in the 2021 Sustainability
Report at p.41
En+ Group Consolidated Report 2022
EN+ LAUNCHES
A MOBILE
ELECTRICAL LAB
In 2022, En+ purchased a modern
mobile electrical laboratory, which
makes it possible to:
- diagnose the condition
of the insulation of power cable lines
- determine the locations of cable
damages using modern and effective
methods
APPLICATION
FOR CUSTOMERS
To support the infrastructure
of electric filling stations, En+ created
a mobile application – the Electrifly
app. The application was developed
in Russia, and it provides an ability
to make payments using bank cards.
IMPLEMENTATION
OF A MODULE FOR
CARRYING OUT
INVESTIGATIONS
INTO THE QUALITY OF
PRODUCTS SUPPLIED
RUSAL’s Aluminium Division is
implementing a comprehensive
programme to improve the quality of
finished products by introducing the
culture of SPC in the companies.
In 2022, an 8D investigation module
was introduced to automate the
process of resolving complaints
received from buyers. Based on the
results of the investigation report, the
Company takes corrective action to
improve the quality of goods produced
and services provided.
METALS SEGMENT
The main goal of RUSAL’s production strategy is to fabricate products
of which their properties and characteristics must meet the needs
and expectations of consumers in accordance with the corporate
Quality Policy under the guidance of the Quality Management
Directorate. RUSAL’s Aluminium Division has a Comprehensive
Programme for Improving the Quality of Finished Products, aimed
at improving the properties of wire rod by introducing a culture of SPC
(statistical process control) at enterprises.
To meet advanced quality standards for products, the Metals segment
annually conducts certification of new enterprises. In 2022, RUSAL
certified six enterprises.
ISO 9001
(main standard
for QMS)
IATF 16949
(standard for
the automobile
industry)
FSSC 22000
(safety standard
for food
products)
DNV Ship,
ABS Ship
(shipbuilding
standards)
- 11 key RUSAL
- 6 aluminium
plants
plants
- a wheel plant
- Foil rolling
company
- RUSAL Bratsk
POWER SEGMENT
Each year, En+ improves the internal QMS based on the following goals
and principles set out in
the Quality Policy:
Achieve maximum efficiency in the operation
and modernisation of the Company’s assets
Modernise production facilities, improve operational
efficiency of assets
Ensure high quality of services by improving process efficiency
Ensure reliable supply of heat and electricity to consumers
using best practices consistent with the sustainability principles
In 2022, the Power segment focused its quality management efforts on
the extensive testing and upgrade the of existing equipment to improve
the quality of its power supply, as well as on the purchase, installation
and commissioning of modern equipment for timely detection of faults
in the cable lines.
182
1 / In 2022, the certificates were withdrawn as the companies that provided tahem temporarily
ceased operations in the Russian Federation.
183
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
DIGITALISATION AND
INFORMATION SECURITY
En+ takes a responsible approach to implementing digital transformation solutions in all areas and maintaining
information security of all business processes.
KEY FACTS
A major six-year programme has been
launched to improve the reliability of
equipment and automation of automated
process control systems for all facilities.
More than a hundred RPA (robot process
automation) robots have been created for all
business units of Metals segment.
DIGITALISATION
MATERIAL
TOPIC
- Economic
performance
Management approach
GRI: 2-13
GRI: 3-3
DIGITAL TRANSFORMATION STRATEGY
AUTOMATION
DIGITALISATION
- Automation of routine processes for all
- Implementing a product-based approach to the
services of the Company
development of digital solutions
- Development of analytical tools and automatic
- Developing a system for digital skills training and
reporting
development for all the employees of the Company
- Creation of a unified corporate data warehouse
- Adoption of MES systems to automate
- Implementing digital solutions by business area:
– Decision-making systems, including AI-based
operations
- Unification and centralisation of processes,
expertise and competences, automation tools
(artificial intelligence based) digital advisors and
assistants for decision-making in production and
company management processes
- Protection of IT data and supporting
– Use of immersive technologies (AR/VR headsets)
infrastructure from accidental or intentional
interference
for production, construction and repair management
– Digitised management of loose basic raw materials
- Automation and digitalisation projects
(coke, alumina, nepheline, limestone)
A
R
E
A
S
T
O
O
L
S
B
E
N
E
F
I
T
S
A predictive analytics system for power
facilities (CHP, HPP) has been developed and
a digital model of HPP has been created.
contributing to ESG agenda
– Establishment of a unified 3D ground and UAV
scanning service to improve operational efficiency
– Measurement and warning systems based on AI
capabilities
- Increasing productivity and reducing equipment
downtime
- Reducing injuries using digital solutions, reducing
risks of lack of qualified staff
- Reducing costs
- Increasing process transparency, ensuring
traceability, automating reporting system and
improving its quality
Digitalisation and sustainability
Sustainable management approach
Digital innovations
INNOVATIVE AND SUSTAINABLE BUSINESS MODEL
As a part of its digitalisation transformation,
En+ updated its Digital Transformation
Strategy. The focus of the strategy
is the digitalisation of logistics,
the development of a digital culture
and creation of the centre of excellence
in artificial intelligence. The strategy covers
two key areas: automation and digitalisation
of production processes and corporate
functions such as finance, logistics, sales,
repairs and maintenance, HR management,
energy management, accounting automation,
IT services and information security.
The year 2022 was a milestone in digitalisation of En+ business
processes. In 2022, changes were made to the En+’s organisational
structure and the Directorate for Digital Transformation was created.
It directly reports to the CEO of the Company. The risks associated
with digitalisation are within the competence of the Risk Committee.
The Directorate manages digital transformation process, continues
implementing ongoing projects and implements new ones. The keynote
of the Directorate’s activities is the implementation of digital
transformation solutions in all areas, including ESG. It focuses
on the following tasks:
- implementation of the Digital Transformation Strategy
- acceleration and efficiency improvement of digitalisation projects
- creation of a digital management platform based on big data
and artificial intelligence
So, En+ moved to the next stage of digitalisation development, from
collecting the needs of enterprises in digitalisation and fulfilling
these requests to the formation of a common digitalisation strategy,
studying best practices and implementing the best available solutions
at all enterprises.
184
Social
Health and safety
- Decrease in work-related injuries
Governance
Corporate governance
- Increase in the transparency of information
Staff development
- Development of educational
Economic efficiency
- Increase in productivity
Environment
Energy management
- Increase in energy
efficiency
Climate leadership
- Decrease in GHG
emissions
Environmental stewardship
- Improvement of
platforms
Local communities
- Increase in the range of services
- Development of new
environmental monitoring
infrastructure
Risk management
- Increase in risk management efficiency
Stakeholder engagement
- Improvement of supply chains
- Increase in customer and investor satisfaction
The Сompany has identified four priority areas of activity
in the field of digitalisation:
- digital logistics: real-time supply chain optimsations to
reduce costs
- business system 2.0: strengthening the system
by applying the best practices of the transition from lean
manufacturing to “Digital Kaizen”
- digital project office: unified methodology and digital
tools for effective project management
- artificial intelligence: creation of an artificial intelligence
and big data laboratory focused on business value
The specific projects of the Company within these
directions of digitalisation and their description
are presented below.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
The Сompany has identified four priority areas of activity in the field of digitalisation:
PROJECTS
of the Company within these directions of digitalisation
DIGITAL
LOGISTICS:
BUSINESS
SYSTEM 2.0:
DIGITAL
PROJECT OFFICE:
ARTIFICIAL
INTELLIGENCE:
from real-time
management, optimisation
and control to industrial
internet, artificial
intelligence and big data
strengthening the system
by applying the best
practices of the transition
from lean manufacturing
to Digital Kaizen
transformation of alertness
to the latest technologies
into a driving force through
investment in training
creation of an artificial
intelligence and big
data laboratory focused
on business value
6-year programme to improve
the reliability of equipment
and automation of automated
process control systems
Equipping, re-equipment
and replacement of equipment
at all facilities
Energy accounting
Equipping all energy flows
with measuring devices
and remote control
of electric facilities
End-to-end MES
functionality
Creating unified
platform for production
and process data
handling
Basic functionality of MES
Foundry and Electrolysis
production
Building a unified production
accounting of electrolysis
and casting
Remote Expert System
The emergence
of opportunities to launch
equipment without
the arrival of representatives
of suppliers, which reduces
downtime and speeds up
the launch
Creation of a Single
logistics process
management centre
Collection
and aggregation of needs,
supply plans, optimisation
algorithms in one place
Optimisation of routes
and reduction of the duration
of the cycle “from order
to delivery”
Just-in-time delivery, dynamic
planning and tracking
of routes and stocks
Laboratory Information
Management System (LIMS)
Creating of unified automation
of production laboratories
Production NSI
management system
Creating of a single
centralised system
for all enterprises
of the aluminium division
Digital Factory
Creating a digital production
concept and design of fully
integrated automation
for a new anode plant
Situation Analysis Centres
Establishing integrated centres
(processes, automation,
experts) to support production
and senior management
decision-making
Repair management
system
Implementation
of an integrated automation
system for planning
and automating repair work
Digital advisor based on neural
network technologies
The advisor predicts the current
state of the sinner in the sintering
furnace and allows an increase
in the yield of normal production,
resulting in an increase in alumina
output
Software robots
for production sites
Robots reduce labour
costs for the preparation
of documentation
and thereby affect
the productivity
of the section
3D scanning
Measurement of the amount
of alumina in silos
of aluminium plants,
estimation of the amount
of raw coke in closed
and open warehouses
by lidar drones
Development of predictive
analytics systems for energy
facilities (CHP, HPP)
Implementation of a risk-predictive
approach to planning maintenance
and repair, as well as a system
for monitoring the reliability
of generating equipment
Creation of a digital model
of HPP and a database
of technical documentation
Digitisation of archival
drawings of equipment,
buildings and structures
Interactive dashboard
Creating Dashboards
for Company KPIs
Permanent thermal imaging
monitoring system
Development of a system
for open switchgears
Laboratory of Artificial Intelligence
and Big Data
The laboratory will collect data arrays
from equipment and transactional
systems and develop models, which
will then be implemented at enterprises
186
Digital logistics
Integrated business
planning
Company-wide scenario
analysis and modelling,
creation of a unified data
model
Introduction of digital twins
Creating a supply chain model based on operational
data and AI methods for forecasting. The digital twin
predict the behaviour of the supply chain and provides
proactive management recommendations
Automatisation,
digital solutions,
artificial intelligence
for production
processes
to improve efficiency
and reliability
of production
proccesses
Digital solutions
to reduce
environmental
impact
Health
and safety
digital
solutions
Business
system 2.0
Digital
education
System for determining and fixing spillage when casting
in cylinders based on machine vision technology
The system should signal the operators about the situation
with the casting on the casting table and warn in case
of an emergency
On-line monitoring of personnel compliance with safety regulations
Provision in the network complex of monitoring of compliance with safety
regulations by personnel when they are at work and carrying out work
Industry 4.0 Laboratory
Laboratory for testing
and adaptation
of “Digital” industrial
solutions for the needs
of the company
Lean Manufacturing 2.0
Application of the
advanced Digital
Technologies
for continuous monitoring
and elimination of losses
Digital Kaizen
Continuous
improvement
of the business
system
Cloud X Digital
Platform
Building a platform
for all the Company’s
Digital solutions
and IT systems
Development platform Digital Aluminium
Training of all RUSAL employees
in basic capabilities and technologies
for implementing digital solutions
Regular online training of all employees,
passing exams and obtaining
certificates
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
AGREEMENT
BETWEEN EN+ AND
NATIONAL RESEARCH
UNIVERSITY MPEI
Under the terms of the agreement, the parties
will jointly develop competitive innovative
technologies to provide application and
system services, as well as information
security tools. En+ and the university are
working together on programmes and projects
in the field of information technologies and
artificial intelligence methods to ensure more
rational use of the resources of the planet,
protection of unique ecosystems in the regions
where En+ operates, and digital transformation
of the enterprises of the Russian energy
sector.
The programme also covers issues related
to development of the digital economy and
implementation of smart power systems
technologies. Following the signature of
the agreement, En+ conducted training
seminars for its employees in the field of
digitalisation, held a series of joint meetings
and presentations of new digital equipment
for energy companies, and started projects for
the implementation of intelligent digital relay
and automation systems in the En+ network
complex.
En+ also strives to conduct regular training in the field of digital
technologies not only for its employees but also for younger people.
The Company holds various competitions and festivals on robotics
and information technologies for schoolchildren, opens competence
development centres – Multilabs in the regions of its operation.
For student audiences, the Company has various programmes
for training specialised specialists (IT Academy, Energy Laboratory, etc.)
and encouraging the best students, as well as partnership programmes
with leading universities in the country.
Read more at p.131
GOALS FOR 2023 AND ONWARDS
In the medium term, the Company aims to:
implement end-to-end automation projects according to the plans
develop and implement a comprehensive project “Digital transformation
of the Power segment”
launch the Digital Project Office, Artificial Intelligence and Big Data
Laboratories, Industry 4.0 Laboratory, and ‘Digital Logistics’
by 2025, RUSAL plans to create a single digital ESG data loop
for the company, with the subsequent integration of 100% of ESG
indicators into a single information platform that enables big data-driven
ESG decision-making
INFORMATION SECURITY
KEY FACTS
135 information security vulnerabilities
were fixed in 2022
REGULATORY
DOCUMENT
KEY GOALS
Information
Security Policy
GOALS
MATERIAL
TOPIC
- Business ethics
STATUS
Completed
To create an Information Security Incident Response Team to monitor
and respond to threats
To develop and approve a Disaster Recovery Plan
Completed
Management approach
To secure confidentiality, integrity,
and availability of information
we implemented an information security
management system, which covers
the process of risk management, among
other things. The core regulatory document
on information security of the Company
is the Information Security Policy, which
reflects the following priorities:
- ensuring the continuity of technological
and business processes
- The Standard for the Protection
of Confidential Information
- The Standard for the Procedure for Planning
and Implementing Information Security
Countermeasures
- The Information Security Risk Management
Standard
- The Standard for Ensuring Information
Security of Technical Resources
- The Standard for Ensuring Information
Security in the Organisation of an External
Perimeter
- protecting information in accordance
- The Standard for Ensuring Information
with legislation
Security of Remote Access
- detecting vulnerabilities at early stages,
- The Standard for Ensuring Information
including technical protection of personal
data and objects of critical information
infrastructure
Except the Information Security Policy, there
are internal information security documents,
which regulates company’s information
security management system:
- The Information Security Management
System Standard
- The Information Resources Access
Management Standard
- The Information Security Audit Standard
- The Password Management Standard
- The Standard for Ensuring the Information
Security of Payment Systems
Security of Mobile Assets
- The Standard for the Procedures for the Use
of Removable Media
- The Standard for Ensuring Business
Continuity
Furthermore, in 2021 En+ developed and put
in force its own package of information
security standards, that meets the ISO/
IEC 27001 standard. Each year, regulatory
documents in this sphere are updated
to reflect new threats and risks.
Besides, in 2019 the Board of directors
adopted a strategy for enhancing information
security.
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
En+ Group Consolidated Report 2022
POWER SEGMENT
INFORMATION
SECURITY AT ELECTRIC
CHARGING STATIONS
In March 2022, the entire network of En+’s
electric vehicle charging stations switched
to the Electrifly mobile app, which plays a big
role connecting users to charging sessions.
The app was developed in Russia and retained
the ability of bank card payments – a function
which became critical to Russian users.
Another crucial factor is the security of
customer personal data. The transition to
the local app helped ensure a high level of
protection against external threats.
GOVERNANCE
To ensure a timely response and monitoring
of information security threats, the Information
Security Incident Response Team was created
in 2022. Its members – both experts from
the Company’s internal divisions and external
specialists from information security firms
– are now involved in analysing information
security, as well as auditing IT infrastructure
at enterprises and information systems.
The activities result in regular development
of recommendations for enhancing
information security.
Information security management processes
are reviewed annually by external auditors.
Internal information security units conduct
information security audits in relation
to the IT infrastructure of individual enterprises
and information systems. Based on the results
of the activities carried out, recommendations
are being prepared to increase the level
of security of the IT infrastructure. For example,
during the reporting period, 135 vulnerabilities
were identified on the external perimeter,
and all of them were eliminated.
Involvement of employees
En+ takes a responsible approach
to maintaining information security among
its employees. Electronic Computing Facilities
Rules contain relevant requirements in this
regard, and they are updated annually.
To ensure compliance with the Rules,
the Company holds regular internal trainings
for a wide circle of participants using
the Corporate University internet portal. Criteria
of compliance with the Electronic Computing
Facilities Rules are part of employee work
efficiency assessment. If information security
breaches occur, employees can report them
to authorised departments. Moreover, En+
raises awareness on information security
issues through regular educational newsletters
and drill phishing emails.
SASB: IF-EU-550a.1
In the reporting year, 110 significant cases of non-compliance
with the information security codes were identified in the Company.
Such information security violations, in particular, included:
- not blocking accounts in a timely manner
- using non-approved software
- inconsistent granting of extended access rights to users
- connecting personal devices
- disclosing credentials as a result of clicking on a phishing link
- transferring account password (use of someone else’s account)
- using corporate resources for personal purposes
- sending service information to personal external emails
- exchanging confidential information using non-encrypted tools
- ignoring requirements of information security personnel aimed
at eliminating violations
- violating information security requirements when setting up access
to resources, including those published externally
For each violation, we conducted a careful check. In line
with the Planning and Implementation of Information Security
Counter-Measures Procedure enterprise standard, causes of incidents
were identified, technical and disciplinary actions taken to prevent
similar situations in the future. As part of our Business Continuity Plan,
which includes the Disaster Recovery Plan, procedures for responding
to information security incidents as well as procedures and frequency
of testing were defined.
METALS SEGMENT
The following information security measures were implemented
at enterprises in the Metals segment in 2022:
- Interaction with the National Computer Incident Coordination Centre
was organised
- Information security incident response exercises were carried out
at critical infrastructure facilities
To ensure business continuity and resilience in the face of cyber-
attacks, business continuity measures were developed and enshrined in:
- The Recovery Policy for the Internal Web-application Farm
- The Disaster Recovery Plan for the Mail System
- The Disaster Recovery Plan for the SharePoint Server-based Farm
- The Active Directory Forest Recovery Plan
- The Recovery Plan for Active Directory Objects Deleted
due to a Logical Error
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• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
En+ Group Consolidated Report 2022
GOVERNANCE
POWER SEGMENT
METALS SEGMENT
INNOVATION MANAGEMENT
GRI: 3-3
En+ continuously strives to improve its performance by implementing new technologies and continuing constant
improvement projects. R&D management enables develop more effective technologies, and the business system entails
the involvement of employees in the development of small improvement projects.
R&D MANAGEMENT
KEY FACTS
RUB 216.1 mn (USD 3.1 mn) were allocated for R&D projects1
REGULATORY
DOCUMENTS
KEY GOALS
GOALS
STATUS
PROGRESS MADE IN 2022
R&D Policy
Patent Policy
MATERIAL
TOPICS
- Economic
performance
- Air quality
- Climate change
- Energy
management
To develop projects for the
production, transport and sale of
green hydrogen
Completed
To continue the implementation of
projects to develop perovskite solar
cells
Completed
The production of hydrogen by
electrolysis, the installation of
filling stations, the development of
hydrogen buses, the engineering of
a tank container for liquid hydrogen
were considered
Scalable approaches for the
production of hybrid perovskite films
were developed, and a wide range of
organic compounds used as hybrid
perovskite modifiers were analysed
To consider participation with
partners in the development
of promising energy storage
technologies
GRI: 3-3
Completed
En+ became an industrial partner
in the project to develop cathode
materials for lithium-ion batteries
The Company’s R&D efforts are directed
towards the introduction of new technologies
and the development of green energy projects.
GRI: 2-13
Innovative projects in Metals segment
are managed by the New Projects Directorate.
Key decisions on innovative activities in Power
segment are taken by the R&D Council
and the Innovation Committee. In 2022, En+
allocated RUB 216.1 million1 (USD 3.1 million)
to R&D projects: RUB 54.7 million (around
USD 0.8 million) in Metals segment,
RUB 161.4 million (around USD 2.4 million)
in Power segment, including RUB 54.7 million
(around USD 800,000) for environmental
studies organised by the Sustainable
Development Directorate.
NEW ALUMINIUM ALLOY
FOR SPACE
Specialists at the Institute of Light Materials
and Technologies (ILM&T) have developed
a new aluminium alloy, a special feature
of which is increased heat-resistance.
The thermal expansion rate of the new
alloy is more than 1.5 times lower than that
of conventional aluminium alloys and is almost
equal to that of steel and nickel alloys.
The new alloy is highly relevant
to the development of satellite elements
and electronics that operate in extreme
conditions with large temperature differences.
ILM&T scientists adapted the material for 3D
printing by increasing the plasticity of the alloy.
This allowed the finished 3D digital model
to have an almost completely identical shape,
thereby reducing costs and production time.
PLANS FOR 2023
To expand the range of partnerships and
attract new academic partners to R&D
projects of topical interest of the Company
To continue to work on new directions for the
Company (CO2 capture and storage (CCS),
energy storage, hydrogen power and others),
such as creating industrial production of
cathode materials for batteries
BUILDING A SMALL MODULAR
REACTOR
En+ with partners are preparing to begin construction of a small
modular nuclear reactor. This will be followed by further testing
and certification of materials, then the start of industrial production.
It is potentially the world’s first commercial fourth generation medium-
power reactor using a heavy-metal coolant and capable of occupying
10–15% of the emerging global market for small and medium-power
nuclear reactors.
INDUSTRIAL INSPECTION ROBOT
En+ supported one of the projects developed by INRTU students
as part of the Energy Laboratory accelerator. The industrial inspection
robot developed by the students can easily move along the surface
of the pipe and can be equipped with a video camera with lighting
and aids of non-destructive testing. It has already been successfully
tested at the Bratsk HPP.
STUDYING THE POSSIBLE
INFLUENCE OF THE POLYNYA
ON THE AIR QUALITY
IN KRASNOYARSK
Since 2019, the Institute of Computational Modelling (Siberian Branch
of the Russian Academy of Sciences), with the support of En+, has
been studying the possible influence of the polynya on the Yenisei
River on the air quality in Krasnoyarsk (about RUB 7.3 million, or
USD 106,000, were allocated in 2022)1. In particular, scientists
are studying the regularities of clouds formation over the city
and the Yenisei River. In 2022, the meteorological temperature profiler
MTP-5 was installed on the Posadniy Island in Krasnoyarsk.
HYBRID PEROVSKITES FOR SOLAR
PANELS
The creation of solar panels from a new material will increase
the efficiency of solar energy generation and reduce the cost of panel
production. The funding for the project was UB 11.25 million (around
USD 164,000)1 in 2022.
192
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
193
En+ Group Consolidated Report 2022 GOVERNANCE
BUSINESS
SYSTEM
REGULATORY
DOCUMENT
Regulation on
the management
of operational
development
projects of
EuroSibEnergo
MATERIAL
TOPICS
- Economic
performance
- Employees
management and
engagement
Strategic report
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
KEY FACTS
KEY GOALS
RUB 3,476.3 mn
(USD 50.6 mn) of the total economic
effect of business system projects
and proposals implementation1
A total of
16,574
Kaizen proposals
were submitted during 2022
GOALS
To hold the Improvements of the Year 2022
competition
To conduct audits of the implemented
business system at the En+ enterprises in
accordance with the annual schedule
STATUS
Completed
Completed
Management approach
GRI: 3-3
Innovation is impossible without a well-
developed business system in which every
employee shares the values of continuous
improvement and has the opportunity
to contribute to it. En+ collects ideas from
employees on how to improve operational
efficiency within the Company, develops
employee initiatives and finally implements
their proposals in the production process.
The total economic effect of implementing
all business system projects in En+ in 2022
was RUB 2,833.3 million (USD 41.3 million)
in Metals segment and around
RUB 643 million (USD 9.3 million) in Power
segment1. The motivation of employees
of Power segment to participate
in the development of the enterprises
was increased by introducing rewards
for projects without economic effect.
In 2022, the Company developed a website
and a mobile application to organise online
management of the submission, introduction
and follow-up of Kaizen proposals. These
new features will help to significantly simplify
the relevant processes, create an integrated
knowledge base for all improvements
and make it accessible to everyone.
Employee proposals received, Nb
Employee proposals implemented, Nb
2022
2021
2020
12,596 3,978
12,396 3,579
11,816 3,754
16,574
15,975
15,570
2022
2021
2020
11,430 3,677
11,607 3,108
11,155 3,754
15,107
14,715
14,909
Metals segment
Power segment
Metals segment
Power segment
En+ aims to the maximum level of employees’ knowledge of and engagement in the business system. For this purpose,
the Company conducts thematic trainings on this topic for the employees.
Business system training
1
2
3
4
Trainings for managers and lead
engineers
Learning the principles and
instruments of the business system
Business system at the Corporate
University
BS-250 programme
Transformation programme
Training programme for new staff
Succession pool training
for students and lower-level
employees
- The Group conducted separate training sessions for managers and lead
engineers
- 395 employees and line managers completed special business system
trainings
- 7,022 employees of the Metals segment received in-house training
- 2,337 participants were trained remotely
- 424 multi-topic practical training sessions on production process
organisation and improvement were held
- 70 employees received external training
- In 2022, a business system training class was created on basis of the
Corporate University in Irkutsk as planned
- 47 practice sessions of the Transformation programme were arranged
- In 2022, 144 applicants were accepted to participate in the programme
- A total of 224 employees continued the Transformation programme
training
- Instead of the distance learning system, a mandatory business system
training programme was developed and approved for new workers,
specialists and clerks in Power segment. 529 employees were trained
under the programme in Power segment.
- The course is created and devoted to the theory of inventive problem
solving, its structure, basic tools and concepts, and management
of the mechanism for finding new ideas
- The lecturer is the head of a direction of Metals segment’s Department
for the Development of Tools for the Theory of Inventive Problem Solving
- The course of Metals segment consists of 11 lessons with a total
duration of 39 minutes and a control test
En+ held an annual Project of the Year contest in Metals and Power segments at factory and company’s levels. A total of
36 projects of Power segment competed in the final of the Project of the Year contest. In the project teams, there were 129
employees of the Power segment.
Project of the Year winning projects
Project to reduce
the time to issue a
job order
The introduction of visualisation
maps of hazardous and risky
zones in the workshop
A set of measures for improving working
conditions and ecology that allowed the number
of blockages in the town’s sewerage network to
be reduced from 212 to 73
Increasing the
productivity of
bauxite grinding mills
Prevention of steam
boiler foaming
Robotisation of the registration and
unblocking of invoices for the purchase
of inventory
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
194
195
En+ Group Consolidated Report 2022 Strategic report
SUSTAINABLE DEVELOPMENT
• SUSTAINABLE DEVELOPMENT
Financial statements
Appendices
GOVERNANCE
METALS SEGMENT
POWER SEGMENT
Business system projects
Business system projects
COST-SAVING TRANSPORT
BUSINESS SYSTEM ENHANCEMENT
PRODUCTION OPTIMISATION
GOALS FOR 2023 AND ONWARDS
The method of loading alumina was improved.
Projects by the management
Technical re-equipment
The economic effect of the project amounted to
58.8 million roubles
- 150 personal projects were launched by managers in 2022
- 29 of these projects have already been implemented
- The technical re-equipment of Hydraulic Unit
No. 7 at the Irkutsk HPP took only 350 days
instead of 368 days through involvement of
Business System Development Department
In the medium term, the Company aims to implement the following
measures:
Introduce a mobile application for submitting Kaizen proposals
Organise and run Kaizen of the Year 2023 and Project of the Year 2023
contests
114 projects
aimed at the development of the business
system at the company level and 197 in-house
projects (loss reduction, equipment optimisation)
were implemented
10 Kaizen workshops
have been operating for several years
1,303 participants
competed in the Kaizen of the Year contest
RUB 775.5 mn
(USD 11.3 mn) of the economic effect
of the implemented Kaizen projects
and proposals1
EMPLOYEE SATISFACTION IMPROVEMENT
Improving working conditions
- During the reporting period, with the participation of
representatives of the work council and the work team, En+
improved working conditions of employees
Organising the workplace
- En+ employees work in compliance with the principles of the
5S system: sorting, tidiness, cleanliness, standardisation and
improvement. This system operates based on the Regulations
on the Procedure for the Rational Organisation of Workplace in
accordance with the 5S methodology. En+ continues to implement
5S methodology at the enterprises
Reference workshops
- Power segment has reference workshops with standardised
information points that operate in line with the developed
approaches to storage, accounting, and issuance of inventory
items
Operational Development Programme
- 113 Operational Development Programme
projects were implemented
Continue the business system training programme for new employees
and provide 100% of trained workers
Introduce a mandatory business system training programme
at the production site for various levels of engineering
and technical staff
Reducing the time to issue a job order
- Project allowed to reduce the maximum
waiting time and admission to the order
for the performance of work by repair
personnel from 150 to 15 minutes. This
project is important since it aims to address
issues that are common for all enterprises
and therefore has a huge potential for
replication
1 / Calculated based on average for 2022 USD/RUB exchange rate of 68.55.
196
196
197
En+ Group Consolidated Report 2022 Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
FINANCIAL STATEMENTS
CONSOLIDATED
FINANCIAL
STATEMENTS
EN+ GROUP IPJSC
Consolidated Financial Statements
for the year ended 31 December 2022
Contents
Statement of Management’s Responsibilities
Independent Auditor’s Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
198
199
200
205
207
208
210
211
2
EN+ GROUP IPJSC
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 2022
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 200-204, 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 2022 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 22 March 2023 and
were signed on its behalf by:
General Director of EN+ GROUP IPJSC
Vladimir Kiriukhin
199
3
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022 Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
1111
NEW CHALLENCiES
NEW SOLUTIONS
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. In addition to the
matters described in the Material uncertainty related to going concern section we have
determined the matter described below to be the key audit matter to be communicated in our
report. 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 this matter. For the matter below, our description of how our audit addressed this
matter is provided in that context.
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 property, plant and equipment
balance in the consolidated financial statements,
high subjectivity of judgments and estimates
underlying the impairment analysis used by
management.
Current global market conditions, including
fluctuations in LME aluminum prices, market
premiums and alumina purchase prices together with
their long-term forecasts, fluctuations of coal sale
prices and additional volumes of electricity
transmission set in further periods, increase of
logistics costs 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 analized 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 aluminum sales
prices, forecasted electricity tariffs and
transmission volumes, forecasted coal sales
prices and volumes, 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.
With assistance of our internal valuation experts we
analyzed 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.
200
5
201
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022 Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
202
203
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022 Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2022
EN+ GROUP IPJSC
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2022
Year ended 31 December
2022
USD million
2021
USD million
Revenues
Cost of sales
Gross profit
Distribution expenses
Revenues
General and administrative expenses
Cost of sales
Impairment of non-current assets
Gross profit
Other operating expenses, net
Distribution expenses
Results from operating activities
General and administrative expenses
Share of profits of associates and joint ventures
Impairment of non-current assets
Gain from partial disposal of investment in associate
Other operating expenses, net
Finance income
Results from operating activities
Finance costs
Share of profits of associates and joint ventures
Profit before tax
Gain from partial disposal of investment in associate
Income tax expense
Finance income
Finance costs
Profit for the year
Profit before tax
Attributable to:
Income tax expense
Shareholders of the Parent Company
Non-controlling interests
Profit for the year
Profit for the year
Attributable to:
Shareholders of the Parent Company
Earnings per share
Non-controlling interests
Basic and diluted earnings per share (USD)
Profit for the year
Earnings per share
Basic and diluted earnings per share (USD)
Note
5
Note
5
11
6
13
11
13
6
8
8
13
13
10
8
8
10
16(g)
16(g)
9
9
16,549
Year ended 31 December
(12,056)
4,493
14,126
(9,174)
4,952
2021
USD million
2022
USD million
(793)
16,549
(1,071)
(12,056)
(370)
4,493
(253)
(793)
2,006
(1,071)
1,553
(370)
−
(253)
184
2,006
(1,290)
1,553
2,453
−
(607)
184
(1,290)
1,846
2,453
(607)
1,083
763
1,846
1,846
1,083
763
2.156
1,846
2.156
(708)
14,126
(861)
(9,174)
(267)
4,952
(218)
(708)
2,898
(861)
1,802
(267)
492
(218)
87
2,898
(1,141)
1,802
4,138
492
(604)
87
(1,141)
3,534
4,138
(604)
2,142
1,392
3,534
3,534
2,142
1,392
4.264
3,534
4.264
204
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 211 to 275.
9
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 211 to 275.
205
9
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022 Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2022 (continued)
EN+ GROUP IPJSC
Year ended 31 December
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2022 (continued)
2022
USD million
2021
USD million
Profit for the year
Other comprehensive income/(loss)
Items that will never be reclassified subsequently to
profit or loss
Profit for the year
Actuarial gain/(loss) on post-retirement benefit plans
Revaluation of non-current assets
Other comprehensive income/(loss)
Тахation
Items that will never be reclassified subsequently to
profit or loss
profit or loss
Actuarial gain/(loss) on post-retirement benefit plans
Items that are or may be reclassified subsequently to
Revaluation of non-current assets
Тахation
Reclassification of accumulated foreign currency translation
loss to statement of profit or loss due to partial disposal of
investment in associate
Items that are or may be reclassified subsequently to
Foreign currency translation differences on foreign
profit or loss
subsidiaries
Reclassification of accumulated foreign currency translation
Foreign currency translation differences for equity-accounted
loss to statement of profit or loss due to partial disposal of
investees
investment in associate
Change in fair value of cash flow hedge
Foreign currency translation differences on foreign
subsidiaries
Foreign currency translation differences for equity-accounted
Other comprehensive income for the year, net of tax
investees
Total comprehensive income for the year
Change in fair value of cash flow hedge
Attributable to:
Other comprehensive income for the year, net of tax
Shareholders of the Parent Company
Non-controlling interests
Total comprehensive income for the year
Total comprehensive income for the year
Attributable to:
Shareholders of the Parent Company
Non-controlling interests
Total comprehensive income for the year
Note
Note
18(b)
11(e)
10(c)
18(b)
11(e)
10(c)
13
13
13
19
13
19
16(g)
16(g)
1,846
Year ended 31 December
3,534
2022
USD million
2021
USD million
1,846
11
650
(132)
529
11
650
(132)
529
−
(47)
369
−
(131)
(47)
191
720
369
2,566
(131)
191
720
1,669
897
2,566
2,566
1,669
897
2,566
3,534
(4)
–
–
(4)
(4)
–
–
(4)
613
25
21
613
(28)
25
631
627
21
4,161
(28)
631
627
2,488
1,673
4,161
4,161
2,488
1,673
4,161
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 211 to 275.
206
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 211 to 275.
10
10
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
Prepayments and VAT recoverable
Income tax receivable
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
Retained earnings / (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
Advances received
Other taxes payable
Derivative financial liabilities
Total current liabilities
Total equity and liabilities
Note
11
12
13
10(b)
15(h)
19
15(g)
14
15(b)
15(c)
10(e)
19
15(f)
16
16(g)
17
10(b)
18
19
17
18
15(d)
15(e)
19
EN+ GROUP IPJSC
Consolidated Statement of Financial Position
as at 31 December 2022
31 December
2022
USD million
2021
USD million
11,607
2,417
5,194
98
459
90
311
20,176
4,383
1,477
820
217
50
78
3,477
10,502
30,678
−
1,516
(1,579)
9,193
3,480
82
(5,422)
210
7,480
5,252
12,732
9,702
1,222
380
−
175
11,479
3,898
146
1,687
309
427
−
6,467
30,678
10,117
2,199
4,028
150
316
22
258
17,090
3,731
1,969
668
18
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
1,328
1,163
315
145
5,849
26,057
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 211 to 275.
207
11
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022 Strategic report
Sustainable development
Operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Impairment of non-current assets
Operating activities
Net foreign exchange loss
Profit for the year
Loss on disposal of property, plant and equipment
Share of profits of associates and joint ventures
Adjustments for:
Gain on partial disposal of investment in associate
Depreciation and amortisation
Interest expense
Impairment of non-current assets
Interest income
Net foreign exchange loss
Dividend income
Loss on disposal of property, plant and equipment
Income tax expense
Share of profits of associates and joint ventures
Write-down of inventories to net realisable value
Gain on partial disposal of investment in associate
Impairment of trade and other receivables
Interest expense
Provision for legal claims
Interest income
Change in fair value of derivative financial instruments
Dividend income
Revaluation of financial assets
Income tax expense
Write-down of inventories to net realisable value
Operating profit before changes in working capital
Impairment of trade and other receivables
Increase in inventories
Provision for legal claims
Increase in trade and other receivables and advances paid
Change in fair value of derivative financial instruments
(Decrease)/increase in trade and other payables and
Revaluation of financial assets
Operating profit before changes in working capital
Cash flows from operations before income tax
Increase in inventories
Income taxes paid
Increase in trade and other receivables and advances paid
Cash flows from operating activities
(Decrease)/increase in trade and other payables and
advances received
advances received
Cash flows from operations before income tax
Income taxes paid
Cash flows from operating activities
Note
Note
8
6
13
13
8
8
8
8
6
10
13
13
6
8
8
8
8
8
10
6
8
8
10(e)
10(e)
• FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
Appendices
Year ended 31 December
2022
USD million
EN+ GROUP IPJSC
2021
Consolidated Statement of Cash Flows
USD million
for the year ended 31 December 2022
1,846
3,534
Year ended 31 December
2022
USD million
720
370
111
1,846
23
(1,553)
−
720
988
370
(115)
111
(38)
23
607
(1,553)
172
−
169
988
10
(115)
191
(38)
(31)
607
172
3,470
169
(1,098)
10
(418)
191
(31)
(783)
3,470
1,171
(1,098)
(599)
(418)
572
2021
USD million
822
267
33
3,534
5
(1,802)
(492)
822
709
267
(65)
33
(22)
5
604
(1,802)
24
(492)
65
709
10
(65)
352
(22)
47
604
24
4,091
65
(1,373)
10
(455)
352
47
434
4,091
2,697
(1,373)
(529)
(455)
2,168
(783)
1,171
(599)
572
434
2,697
(529)
2,168
Note
Note
15(h)
15(h)
13
13
16(a)
16(a)
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
Investing activities
fair value through profit and loss
Proceeds from disposal of property, plant and equipment
Cash received from other investments
Acquisition of property, plant and equipment
Interest received
Acquisition of intangible assets
Dividends from associates and joint ventures
Cash paid for investment in equity securities measured at
Dividends from financial assets
fair value through profit and loss
Proceeds from partial disposal of associate
Cash received from other investments
Contribution to associates and joint ventures
Interest received
Cash outflow from disposal of subsidiary
Dividends from associates and joint ventures
Prepayment for and acquisition of subsidiaries
Dividends from financial assets
Change in restricted cash
Proceeds from partial disposal of associate
Cash flows from investing activities
Contribution to associates and joint ventures
Cash outflow from disposal of subsidiary
Financing activities
Prepayment for and acquisition of subsidiaries
Proceeds from borrowings
Change in restricted cash
Repayment of borrowings
Acquisition of non-controlling interest
Cash flows from investing activities
Interest paid
Financing activities
Restructuring fees
Proceeds from borrowings
Settlement of derivative financial instruments
Repayment of borrowings
Dividends to non-controlling shareholders
Acquisition of non-controlling interest
Cash flows from / (used in) financing activities
Interest paid
Restructuring fees
Net increase/(decrease) in cash and cash equivalents
Settlement of derivative financial instruments
Cash and cash equivalents at beginning of the year,
Dividends to non-controlling shareholders
Cash flows from / (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at end of the year,
excluding restricted cash
EN+ GROUP IPJSC
Consolidated Statement of Cash Flows
for the year ended 31 December 2022 (continued)
Year ended 31 December
EN+ GROUP IPJSC
Consolidated Statement of Cash Flows
2021
for the year ended 31 December 2022 (continued)
USD million
2022
USD million
Year ended 31 December
8
(1,674)
(37)
2022
USD million
20
(1,485)
(28)
2021
USD million
(113)
8
111
(1,674)
104
(37)
1,639
34
(113)
−
111
(8)
104
(16)
1,639
−
34
(1)
−
47
(8)
(16)
−
9,129
(1)
(7,007)
(14)
47
(987)
(21)
9,129
(229)
(7,007)
(129)
(14)
742
(987)
(21)
1,361
(229)
(129)
2,328
742
(215)
1,361
3,474
(291)
20
39
(1,485)
63
(28)
620
34
(291)
1,421
39
(9)
63
−
620
(99)
34
−
1,421
285
(9)
−
(99)
2,881
−
(4,474)
(44)
285
(703)
(36)
2,881
(315)
(4,474)
−
(44)
(2,691)
(703)
(36)
(238)
(315)
−
2,549
(2,691)
17
(238)
2,328
excluding restricted cash
excluding restricted cash
Cash and cash equivalents at beginning of the year,
Restricted cash amounted to USD 3 million and USD 2 million at 31 December 2022 and 31 December 2021,
Effect of exchange rate changes on cash and cash equivalents
respectively.
Cash and cash equivalents at end of the year,
2,328
(215)
2,549
17
15(f)
excluding restricted cash
15(f)
3,474
2,328
Restricted cash amounted to USD 3 million and USD 2 million at 31 December 2022 and 31 December 2021,
respectively.
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 211 to 275.
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 211 to 275.
12
13
208
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 211 to 275.
12
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 211 to 275.
209
13
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022 Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
Attributable to shareholders of the Parent Company
EN+ GROUP IPJSC
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
USD million
Share
premium
Treasury
share
reserve
Additional
paid-in
capital
Reva-
luation
reserve
Other
reserves
Balance at 1 January 2021
1,516
(1,579)
9,193
2,902
Comprehensive income
Profit for the year
Other comprehensive (loss)/income
Total comprehensive (loss)/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
Balance 31 December 2021
Balance at 1 January 2022
Comprehensive income
Profit for the year
Other comprehensive income/(loss)
Revaluation of hydro assets (note 11(e))
Taxation (note 10(c))
Other comprehensive (loss)/income
Total comprehensive income/(loss)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,516
1,516
(1,579)
(1,579)
9,193
9,193
–
–
–
43
43
2,945
2,945
−
−
EN+ GROUP IPJSC
Consolidated Statement of Changes in Equity
−
for the year ended 31 December 2022
−
−
−
650
(132)
−
−
−
−
−
−
−
518
−
−
−
−
Foreign
currency
translation
reserve
Retained
earnings/
(accumu-
lated
losses)
Non-
controlling
interests
Total
equity
Total
(5,923)
(3,122)
3,156
2,909
6,065
–
362
362
–
–
–
(5,561)
(5,561)
−
139
2,142
–
2,142
73
15
15
(892)
(892)
1,083
−
2,142
346
2,488
73
58
58
5,775
5,775
1,083
586
1,392
281
1,673
56
(102)
(102)
4,536
4,536
763
134
3,534
627
4,161
129
(44)
(44)
10,311
10,311
1,846
720
169
–
(16)
(16)
–
–
–
153
153
−
(71)
−
650
−
(132)
Attributable to shareholders of the Parent Company
(71)
202
650
(132)
68
−
−
139
−
−
134
−
−
−
−
−
−
518
(71)
139
1,083
1,669
897
−
subsidiaries (note 16(a))
Transactions with owners
Change in effective interest in
Retained
Treasury
Foreign
earnings/
share
17
currency
(accumu-
Dividends to non-controlling shareholders
reserve
USD million
Total
lated
translation
(note 16(e))
−
17
Total transactions with owners
equity
losses)
reserve
(1,579)
Balance at 1 January 2021
3,480
Balance 31 December 2022
6,065
(5,923)
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 211 to 275.
Comprehensive income
–
Profit for the year
14
Other comprehensive (loss)/income
362
Total comprehensive (loss)/income
Share
−
Non-
premium
controlling
−
−
interests
1,516
Reva-
luation
19
reserve
−
19
2,902
210
Additional
paid-in
capital
−
−
Total
1,516
3,156
Other
36
reserves
–
(16)
(3,122)
2,909
9,193
(131)
(181)
169
(5,422)
(1,579)
–
–
–
–
5,252
7,480
9,193
−
36
(50)
−
−
−
−
−
−
82
−
−
−
2,142
–
2,142
346
2,566
Foreign
currency
translation
(14)
reserve
(131)
(145)
(5,923)
12,732
–
362
362
for the year
Share of equity transactions of an
2,142
associate (note 13)
Transactions with owners
Change in effective interest in
subsidiaries (note 16(a))
Total transactions with owners
73
15
15
(892)
Balance 31 December 2021
(5,561)
Balance at 1 January 2022
(5,561)
Comprehensive income
Profit for the year
(892)
2,488
73
58
58
5,775
5,775
1,083
1,083
Other comprehensive income/(loss)
−
139
586
Revaluation of hydro assets (note 11(e))
Taxation (note 10(c))
650
Other comprehensive (loss)/income
(132)
Total comprehensive income/(loss)
68
−
−
139
−
−
−
for the year
139
1,083
1,669
Transactions with owners
Change in effective interest in
subsidiaries (note 16(a))
Dividends to non-controlling shareholders
19
−
36
(note 16(e))
Total transactions with owners
−
19
−
36
–
–
–
−
−
−
–
–
1,392
281
–
1,673
–
–
3,534
627
–
4,161
–
56
–
–
(102)
(102)
1,516
4,536
1,516
4,536
−
763
−
134
−
−
−
−
−
134
−
897
–
129
–
–
(44)
(44)
(1,579)
10,311
(1,579)
10,311
−
1,846
−
720
−
−
650
−
(132)
202
−
2,566
−
(50)
−
−
(131)
(181)
−
(14)
−
−
(131)
(145)
–
–
–
–
9,193
9,193
−
−
−
−
−
−
−
−
−
–
43
43
2,945
2,945
−
518
650
(132)
−
518
17
−
17
(16)
362
–
–
–
153
153
−
(71)
−
−
(71)
(71)
−
−
−
–
–
–
(5,561)
(5,561)
−
139
−
−
139
139
−
−
−
1.
Background
(a) Organisation
EN+ GROUP IPJSC (the “Parent Company” or EN+) 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
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). The Parent
Company’s registered office is Oktyabrskaya st. 8, office 34, Kaliningrad, Kaliningrad Region, 236006,
Russian Federation.
EN+ GROUP IPJSC
On 8 November 2017, the Parent Company successfully completed an initial public offering of global
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
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.
Retained
earnings/
(accumu-
lated
losses)
Total
(3,122)
3,156
Non-
controlling
interests
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”).
Total
equity
As at 31 December 2022 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.
2,909
6,065
2,142
–
2,142
73
15
15
(892)
(892)
1,083
−
−
−
−
1,083
19
−
19
2,142
346
2,488
73
58
58
5,775
5,775
3,534
627
The other significant holders as at 31 December 2022 were as follows:
1,392
281
Parent Company’s subsidiary
1,673
4,161
Glencore Group Funding Limited
Other shareholders
Independent trustees
129
56
Shareholding
21.37%
10.55%
23.13%
–
Voting rights
7.04%
10.55%
13.96%
33.45%
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
(102)
indirect prevailing ownership interest in the Parent Company exceeding 50%, who could exercise voting
(102)
rights in respect of more than 35% of the Parent Company’s issued share capital or has an opportunity to
4,536
exercise control over the Parent Company.
(44)
(44)
10,311
4,536
Related party transactions are detailed in note 23.
10,311
1,083
(b) Operations
763
1,846
586
650
(132)
68
1,669
36
−
36
720
The Group is a leading vertically integrated aluminium and power producer, which combines the assets and
134
results of its Metals and Power segments.
650
(132)
202
−
The Metals segment operates in the aluminium industry primarily in the Russian Federation, Ukraine,
−
134
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
897
aluminium and aluminium alloys into semi-fabricated and finished products.
2,566
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
(50)
the Group. The Group’s principal power plants are located in East Siberia and Volga Region, the Russian
(131)
Federation.
(181)
(131)
(145)
(14)
Balance 31 December 2022
(5,422)
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 211 to 275.
(5,422)
(1,579)
12,732
12,732
5,252
7,480
5,252
3,480
7,480
1,516
9,193
210
210
82
Attributable to shareholders of the Parent Company
for the year
USD million
Treasury
Additional
Share
premium
share
reserve
paid-in
capital
Reva-
luation
reserve
Other
reserves
Balance at 1 January 2021
1,516
(1,579)
9,193
2,902
Comprehensive income
Profit for the year
Other comprehensive (loss)/income
Total comprehensive (loss)/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
Balance 31 December 2021
Balance at 1 January 2022
Comprehensive income
Profit for the year
Other comprehensive income/(loss)
Revaluation of hydro assets (note 11(e))
Taxation (note 10(c))
Other comprehensive (loss)/income
Total comprehensive income/(loss)
for the year
Transactions with owners
Change in effective interest in
subsidiaries (note 16(a))
Dividends to non-controlling shareholders
(note 16(e))
Total transactions with owners
–
–
–
–
–
–
−
−
−
−
−
−
−
−
−
–
–
–
–
–
–
−
−
−
−
−
−
−
−
−
–
–
–
–
–
–
−
−
−
−
−
−
−
−
−
–
–
–
43
43
2,945
2,945
−
518
650
(132)
−
518
17
−
17
1,516
1,516
(1,579)
(1,579)
9,193
9,193
Balance 31 December 2022
1,516
(1,579)
9,193
3,480
169
–
(16)
(16)
–
–
–
153
153
−
(71)
−
−
(71)
(71)
−
−
−
82
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 211 to 275.
210
14
14
15
211
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022 Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(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.
The imposition of economic sanctions on Russian individuals and legal entities by the European Union, the
United States of America, Japan, Canada, Australia and others, as well as counter sanctions imposed by the
Russian government, has resulted in increased economic uncertainty including more volatile equity,
commodity and currency markets. The longer term effects of implemented sanctions, as well as the threat of
additional future sanctions, are difficult to determine.
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) Going concern
These consolidated financial statements have been prepared assuming that the Group will continue as a going
concern. Accordingly, these statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts, the amounts and classification of liabilities or any other adjustments
that might result from the Group being unable to continue as a going concern.
Ban of Australian government for the export of alumina and bauxite to Russia introduced in March, 2022
and temporary suspension of production at Mykolaiv Alumina Refinery Company Ltd due to developments
in Ukraine starting from 1 March 2022 influenced the availability of alumina and bauxite or increase the
purchase prices for the Group. Difficulties with logistics caused the Group to rebuild the supply and sales
chains and lead to additional logistics costs. If the situation in Ukraine and overall geopolitical tension
persists or continues to develop significantly, including the loss of significant parts of foreign markets, which
cannot be reallocated to new markets, it may affect the Group’s business, financial condition, prospects and
results of operations.
16
212
Potentially the Group may have difficulties with equipment deliveries that may postpone realization of some
investment projects and modernization programs for existing production facilities.
The facts described above, as well as the volatility of commodity markets, stock, currency markets and
interest rates, create material uncertainty in the Group’s ability to meet its financial obligations on time and
continue as a going concern entity. Management constantly evaluates the current situation and prepares
forecasts taking into account different scenarios of the events and conditions development. The Group’s
management expects that prices on the world commodity markets will grow and improve the results of
operating activities. The Group is also revising its supply and sales chains, ensuring an optimal equity and
debt ratio, searching for resolutions of logistic difficulties, as well as the ways to survive its obligations in
order to adapt the current economic changes to maintain the continuance of the Group’s operations (note 24).
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 applied for the first-time certain standards and amendments, which are effective for annual periods
beginning on or after 1 January 2022 (unless otherwise stated).
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37;
Reference to the Conceptual Framework – Amendments to IFRS 3;
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16;
IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time
adopter;
IFRS 9 Financial Instruments – Fees in the ‘10 per cent’ test for derecognition of financial liabilities.
These amendments had no impact on the consolidated financial statements of the Group.
(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;
Amendments to IAS 1: Classification of Liabilities as Current or Non-current;
Amendments to IAS 1: Non-current Liabilities with Covenants;
Definition of Accounting Estimates − Amendments to IAS 8;
Disclosure of Accounting Policies − Amendments to IAS 1 and IFRS Practice Statement 2;
Deferred Tax related to Assets and Liabilities arising from a Single Transaction − Amendments to
IAS 12;
Amendments to IFRS 16: Lease Liability in a Sale and Leaseback.
The Group is currently assessing the impact the amendments will have on current practice, when they become
effective.
17
213
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(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 2021, except for those disclosed in 2(a).
(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 substantive potential voting rights 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.
18
214
Non-controlling interests are presented in the consolidated statement of financial position within equity,
separately from equity attributable to the equity shareholders of the Parent Company. 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 Parent Company.
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 is 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.
19
215
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
(ii) Foreign operations
(b) Segment results, assets and liabilities
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 non-current 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 measures used for reporting segment results are 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 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.
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 as part of other comprehensive income 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 personnel and Board of Directors to make decisions about resources to be
allocated to the segment and assess its performance and for which discrete 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.
216
20
21
217
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
Year ended 31 December 2022
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 on disposal of property, plant and equipment
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
13,755
11,384
557
581
233
62
938
219
13,974
(11,946)
2,028
(503)
(13)
(196)
1,316
1,555
(349)
(356)
2,166
(373)
1,793
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Metals
Power
Adjustments
Total
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Metals
Power
Adjustments
Total
2,794
−
−
340
1,611
463
380
1,091
3,885
(2,631)
1,254
(221)
(10)
(174)
849
(2)
(524)
296
619
(235)
384
(523)
−
−
−
−
−
−
−
(1,310)
(1,310)
1,147
(163)
4
−
−
(159)
−
−
(173)
(332)
1
(331)
−
16,549
11,381
557
921
1,843
525
1,322
−
16,549
(13,430)
3,119
(720)
(23)
(370)
2,006
1,553
(873)
(233)
2,453
(607)
1,846
(1,765)
22
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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
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
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)
24
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Additions to non-current segment assets during the year (note 11(b))
(1,242)
Additions to non-current segment assets during the year (note 11(b))
(1,342)
USD million
Metals
Power
Adjustments
Total
Consolidated statement of financial position
Segment assets, excluding cash and cash equivalents and interests in associates
and joint ventures
Investment in metals segment
Cash and cash equivalents
Interests in associates and joint ventures
Total segment assets
Segment liabilities, excluding loans, borrowings and bonds payable
Loans, borrowings and bonds payable
Total segment liabilities
Total segment equity
Total segment equity and liabilities
Consolidated statement of cash flows
Cash flows (used in) / 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 received from other investments
Dividends from associates and joint ventures
Dividends from Metals segment
Interest received
Other investing activities
Cash flows from / (used in) financing activities
Interest paid
Restructuring fees
Settlements of derivative financial instruments
Dividends to Power segment
Dividends to non-controlling shareholders
Other financing activities
Net change in cash and cash equivalents
16,261
−
3,196
5,174
24,631
2,867
9,457
12,324
12,307
24,631
(412)
472
(1,239)
(113)
97
1,639
−
70
18
1,415
(428)
(17)
(229)
(173)
(129)
2,391
1,475
6,690
4,595
281
20
11,586
1,680
4,143
5,823
5,763
11,586
986
(254)
(474)
−
14
−
173
34
(1)
(846)
(559)
(4)
−
−
−
(283)
(114)
(944)
(4,595)
−
−
(5,539)
(201)
−
(201)
(5,338)
(5,539)
(2)
(171)
2
−
−
−
(173)
−
−
173
−
−
−
173
−
−
−
22,007
−
3,477
5,194
30,678
4,346
13,600
17,946
12,732
30,678
572
47
(1,711)
(113)
111
1,639
−
104
17
742
(987)
(21)
(229)
−
(129)
2,108
1,361
23
218
USD million
Metals
Power
Adjustments
Total
Consolidated statement of financial position
Segment assets, excluding cash and cash equivalents and interests in associates
and joint ventures
Investment in Metals segment
Cash and cash equivalents
Interests in associates and joint ventures
Total segment assets
Segment liabilities, excluding loans and borrowings and bonds payable
Loans, borrowings and bonds payable
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)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
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)
25
219
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
(i) Geographic information
5.
Revenues
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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. 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.
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
2022
USD million
2021
USD million
Russia
South Korea
China
Turkey
Japan
Netherlands
USA
Germany
Poland
Mexico
Greece
Italy
Norway
Sweden
France
Ireland
Other countries
Specified non-current assets
Russia
Guinea
Ireland
Sweden
Ukraine
Unallocated
6,267
1,184
1,122
1,011
963
884
647
441
385
354
339
303
248
238
223
221
1,719
5,437
314
772
1,108
744
443
744
356
330
280
367
266
267
209
247
148
2,094
16,549
14,126
31 December
2022
USD million
2021
USD million
16,006
237
94
53
2
3,784
20,176
13,294
232
82
68
6
3,408
17,090
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, legal title to the asset and physical possession of the
asset is transferred. 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
2022
USD million
2021
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 – 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
11,384
11,164
211
6
3
557
251
306
921
921
1,844
1,803
2
39
525
513
3
9
1,318
1,055
21
4
238
16,549
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
14,126
All revenue of the Group relates to revenue from contracts with customers.
220
26
27
221
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
6. Other operating expenses, net
Impairment of trade and other receivables
Charity
Loss on disposal of property, plant and equipment
Other operating expenses, net
7.
Personnel costs
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Year ended 31 December
2021
USD million
2022
USD million
(169)
(53)
(23)
(8)
(253)
(65)
(55)
(5)
(93)
(218)
Personnel costs comprise salaries, annual bonuses, annual leave, cost of non-monetary benefits and social
contributions. 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.
Contributions to defined contribution retirement plans
Contributions to defined benefit retirement plans
Total retirement costs
Wages and salaries
Year ended 31 December
2022
USD million
2021
USD million
(348)
(3)
(351)
(1,547)
(1,898)
(273)
(3)
(276)
(1,170)
(1,446)
8.
Finance income and costs
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.
28
Foreign currency gains and losses are reported on a net basis. Foreign exchange loss on loans and borrowing
for the year ended 31 December 2022 amounted to USD 164 million (2021: loss of USD 3 million).
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Finance income
Interest income
Dividend income
Revaluation of financial assets and liabilities
Finance costs
Interest expense
Change in fair value of derivative financial instruments (note 19)
Net foreign exchange loss
Revaluation of financial assets and liabilities
Year ended 31 December
2022
USD million
2021
USD million
115
38
31
184
(988)
(191)
(111)
−
(1,290)
65
22
–
87
(709)
(352)
(33)
(47)
(1,141)
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 2022 and 31 December 2021.
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
2022
2021
502,337,774
502,337,774
1,083
2.156
2,142
4.264
There were no outstanding dilutive instruments during the years ended 31 December 2022 and 31 December
2021.
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 liability 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
liability 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 Company to change its judgement regarding the adequacy of existing tax liability. 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.
222
29
223
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(b) Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following items:
USD million
2022
2021
2022
2021
2022
2021
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
Tax loss carry-forward
Others
Tax assets/(liabilities)
Set off of tax
Net deferred tax assets/(liabilities)
118
50
83
26
143
120
540
(442)
98
97
71
61
23
90
136
478
(328)
150
(1,423)
(29)
(55)
−
−
(157)
(1,664)
442
(1,222)
(1,250)
(13)
(32)
–
–
(97)
(1,392)
328
(1,064)
(1,305)
21
28
26
143
(37)
(1,124)
−
(1,124)
(1,153)
58
29
23
90
39
(914)
–
(914)
31
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 asset is not recognised for the following
temporary differences: 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 reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilized. 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
2022
USD million
2021
USD million
(553)
(54)
(607)
(569)
(35)
(604)
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 is 18%; Guinea is 0%; China is 25%; Kazakhstan is 20%; Australia is 30%; Jamaica is 25%; Ireland
is 12.5%, Sweden is 20.6% and Italy is 27.9%. 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 9.06% and 11.8% 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 2021 were the same as for the year ended 31 December 2022 except for tax rates
for subsidiaries domiciled in Switzerland which amounted to 9.55% and 11.85% subsequently, subsidiary
domiciled in Italy which amounted to 26.9% and subsidiaries domiciled in Guinea which amounted from 0%
to 30%.
Reconciliation of effective tax rate
Year ended 31 December
2022
2021
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 /
(impairment)
Effect of different income tax rates
Income tax
2,453
(491)
54
288
(269)
(18)
(171)
(607)
(100)
20
(2)
(12)
11
1
7
25
4,138
(828)
(57)
451
(99)
42
(113)
(604)
(100)
20
1
(10)
2
(1)
3
15
30
224
225
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(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
Tax loss carry-forwards
Others
1 January
2022
Recognised in
profit or loss
Recognised
in other
comprehensive
income
Currency
translation
31 December
2022
(1,153)
58
29
23
90
39
(914)
14
(37)
(1)
3
48
(81)
(54)
(132)
−
(34)
−
(1,305)
21
−
−
−
−
−
−
5
5
28
26
143
(37)
(132)
(24)
(1,124)
USD million
Property, plant and equipment
Inventories
Trade and other receivables
Trade and other payables and
advances received
Tax loss carry-forwards
Others
1 January
2021
Recognised in
profit or loss
Currency
translation
31 December
2021
(1,215)
50
16
29
187
38
(895)
50
7
13
(6)
(100)
1
(35)
12
1
–
–
3
–
16
(1,153)
58
29
23
90
39
(914)
Recognised tax losses expire in the following years:
Year of expiry
Without expiry
(d) Unrecognised deferred taxes
31 December
2022
USD million
31 December
2021
USD million
143
143
90
90
At 31 December 2022 and 2021 the Group has not recognized deferred tax in respect to temporary differences
associated with investments in subsidiaries as the Group is able to control the timing of reversal of those
investments and does not intend to reverse them in the foreseeable future.
At 31 December 2022 and 2021 the Group has not recognized deferred tax in respect to temporary differences
associated with investments in associates and joint ventures as both distribution of dividends and profit on
sales are non-taxable.
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Tax loss carry-forwards
226
31 December
2022
USD million
31 December
2021
USD million
1,040
748
1,788
1,009
510
1,519
32
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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
From 6 to 10 years
31 December
2022
USD million
31 December
2021
USD million
745
3
748
510
−
510
(e) Current taxation in the consolidated statement of financial position represents
31 December
2022
USD million
31 December
2021
USD million
44
553
(599)
(16)
(18)
199
(217)
(18)
7
569
(529)
(3)
44
62
(18)
44
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(d))
Income tax receivable
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.
33
227
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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.
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.
(iv) Stripping costs
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.
However, to the extent the benefit is improved access to ore, the Group recognises these costs as a non-
current asset, if only: (a) it is probable that the future economic benefit (improved access to the ore body)
associated with the stripping activity will flow to the entity; (b) the entity can identify the component of the
ore body for which access has been improved; and (c) the costs relating to the stripping activity associated
with that component can be measured reliably.
(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 proved and probable reserves;
1 to 30 years.
228
34
35
229
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(b) Disclosure
USD million
Cost
1 January 2021
Additions
Acquired through business
combinations
Disposals
Transfers
Translation difference
At 31 December 2021
Additions
Acquired through business
combinations
Disposals
Transfers
Revaluation of hydro assets as at
31 December 2022
Translation difference
At 31 December 2022
Land and
buildings
Machinery and
equipment
Electrolysers
Hydro
assets
Mining
assets
Construction
in progress
Other
Total
4,790
250
8
(60)
189
(26)
5,151
32
5
(32)
202
−
83
5,441
7,792
25
6
(95)
520
(21)
8,227
61
19
(109)
400
−
90
8,688
2,868
143
–
–
35
(14)
3,032
−
−
(16)
295
−
(13)
3,298
3,443
–
–
–
37
(20)
3,460
−
−
−
45
464
197
4,166
616
62
–
(5)
9
(10)
672
22
−
(132)
9
−
11
582
2,693
1,236
–
(26)
(697)
–
3,206
1,650
−
(26)
(978)
−
38
3,890
433
1
1
(6)
(93)
3
339
−
9
(10)
27
−
12
377
22,635
1,717
15
(192)
–
(88)
24,087
1,765
33
(325)
−
464
418
26,442
USD million
Depreciation and impairment losses
1 January 2021
Depreciation charge
(Impairment losses) / reversal of
impairment
Disposals
Transfers
Translation difference
At 31 December 2021
Depreciation charge
(Impairment losses) / reversal of
impairment
Disposals
Revaluation of hydro assets as at
31 December 2022
Translation difference
At 31 December 2022
Net book value
At 1 January 2021
At 31 December 2021
At 31 December 2022
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 2022
(2,674)
(161)
(163)
8
1
24
(2,965)
(157)
(42)
16
−
(34)
(3,182)
2,116
2,186
2,259
(5,800)
(371)
(438)
80
(31)
24
(6,536)
(297)
(150)
86
−
(47)
(6,944)
1,992
1,691
1,744
(2,536)
(164)
15
–
–
13
(2,672)
(169)
4
12
−
11
(2,814)
332
360
484
–
(94)
–
–
–
1
(93)
(90)
−
−
186
(3)
−
3,443
3,367
4,166
(528)
(35)
(68)
1
–
11
(619)
(8)
87
10
−
(8)
(538)
88
53
44
(1,246)
–
432
4
–
5
(805)
−
(240)
−
−
(16)
(1,061)
1,447
2,401
2,829
(274)
(14)
(26)
4
30
–
(280)
(10)
(6)
8
−
(8)
(296)
159
59
81
(13,058)
(839)
(248)
36
97
–
78
(13,970)
(731)
(347)
132
186
(105)
(14,835)
9,577
10,117
11,607
37
Depreciation expense of USD 670 million (2021: USD 778 million) has been charged to cost of goods sold,
USD 7 million (2021: USD 8 million) to distribution expenses and USD 23 million (2021: USD 25 million)
to administrative expenses.
Interest capitalised for the years ended 31 December 2022 and 31 December 2021 was USD 39 million and
USD 9 million, respectively.
Included in construction in progress at 31 December 2022 and 31 December 2021 are advances to suppliers
of property, plant and equipment of USD 164 million and USD 174 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 that significant increase of aluminium prices as a result of LME appreciation
indicated that for a number of Group’s cash-generating units previously recognised impairment loss may
require reversal. At the same time due to significant increase of oil and gas prices, fluctuations of coal sale
prices and additional volumes of electricity transmission set in further periods and overall market instability
impairment loss may be recognised for a number of cash-generating units. For alumina cash generating units,
major influence was from unfavourable dynamics in prices of energy resources being a significant part of
cash cost.
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.
Metals
At 31 December 2022 and 31 December 2021 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 2022, management has concluded that an
impairment loss relating to property, plant and equipment of Sayanal and PGLZ in the amount of
USD 85 million should be recognised in these consolidated financial statements.
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 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.
Assumptions used to determine the recoverable amount of the cash generating units are the same as disclosed
in note 12(d). 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
RUSAL Sayanal
PGLZ
Year ended 31 December
2022
2021
16.0%
14.3%
14.3%
11.2%
20.0%
13.0%
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.
230
38
231
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
The results of impairment testing of Taishet aluminium smelter are particularly sensitive to the following key
assumptions:
Five percent reduction in the projected aluminium price level will result in a decrease in the
recoverable amount of Taishet aluminium smelter and will lead to an additional impairment in the total
amount of USD 323 million;
One percent increase in the discount rate applied will result in a decrease in the recoverable amount of
Taishet aluminium smelter and will lead to an additional impairment in the total amount of
USD 161 million.
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 99 million at 31 December 2022
(2021: USD 190 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 2022 and 2021 management identified several indicators that property, plant and equipment
of the Coal CHPs (in 2022 Coal and CHPs CGUs were combined) and Irkutsk GridCo CGUs may be
impaired.
Based on results of impairment testing as at 31 December 2022, management concluded that impairment
losses of USD 23 million and USD 29 million regarding Irkutsk GridCo and Coal CHPs CGUs, respectively,
should be recognized. 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.
The following key assumptions were used to determine the recoverable amount of the Irkutsk GridCo CGU:
Sales volumes of electricity transmission in 2023/2022
Expected growth of sales volumes till 2032/2031
Tariffs for electricity transmission in 2023/2022
Tariffs growth till 2032/2031
Pre-tax discount rate
Year ended 31 December
2022
54 mln MWh
11%
USD 7-10
(RUB 502-726)
55%
15%-15.6%
2021
51 mln MWh
10%
USD 6-9
(RUB 445-665)
42%
15%
The anticipated price/tariffs growth included in the cash flow projections for the years from 2023 to 2032
have been based on the publicly available forecasts of Ministry of Economic Development of the
Russian Federation.
The recoverable amounts estimated at 31 December 2022 and 31 December 2021 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.
The following key assumptions were used to determine the recoverable amount of the Coal CHPs CGU:
Electricity sales volumes in 2023/2022
Electricity sales volumes growth till 2032/2031
Electricity sales prices in 2023/2022
Electricity sales prices growth till 2032/2031
Sales volumes of heat in 2022-2031/2023-2032
Heat tariffs in 2023/2022
Tariffs growth till 2032/2031
Sales volumes of coal in 2023/2022
Expected growth of sales volumes of coal till 2032/2031
Weighted average price for coal in 2023/2022
Weighted average price growth after 2023/2022
Pre-tax discount rate
232
Year ended 31 December
2022
2021
34 mln MWh
0%
USD 10-31
(RUB 684-2,204)
48%-52%
20 mln Gcal
USD 20 (RUB 1,375)
63%
15,846 ths tonnes
(3)%
USD 17 (RUB 1,177)
1%-9%
15.7%
29 mln MWh
5%
USD 7-27
(RUB 544-2,011)
37%-42%
20 mln Gcal
USD 16 (RUB 1,211)
42%
13,889 ths tonnes
12%
USD 13 (RUB 930)
2%-4%
15.6%
39
The recoverable amount of Coal CHP CGU is particularly sensitive to changes in forecast electricity and coal
sales prices, forecast of sales volumes 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 122 million (2021: USD 41 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 pledged under the loan agreements was USD 53 million
at 31 December 2022 (31 December 2021: USD 1,048 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 2022 the independent appraiser estimated the fair value of hydro assets at USD 4,166 million
with an equity effect of USD 650 million and revaluation loss of USD nil million recognised in profit or loss.
As at 31 December 2021 a valuation by external independent appraiser was not performed because there
were no indicators showed that the fair value of hydro assets was not equal their carrying amount at that date.
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 as at 31 December 2022 economic obsolescence of
Onda HPP was recognised and included into results of valuation analysis. As at 31 December 2021 there was
no economic obsolescence.
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 2022 according to the cost model amounted to USD 409 million
(31 December 2021: USD 358 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 or modification 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.
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.
40
233
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 in 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 45 million during the year ended 31 December 2022 (31 December 2021: USD 43 million). The
carrying amounts of right-of-use assets are presented below.
USD million
Balance at 1 January 2022
Balance at 31 December 2022
Land and
buildings
Property, plant and equipment
Machinery and
equipment
Total
36
42
6
23
42
65
Total depreciation charges related to the right-of-use assets for the year ended 31 December 2022 amount to
USD 17 million (31 December 2021: USD 15 million).
USD 2 million of right-of-use assets has been impaired during the year ended 31 December 2022
(31 December 2021: USD 15 million). The Group’s total cash outflow for leases was in the amount of
USD 25 million for the year ended 31 December 2022 (31 December 2021: USD 26 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 218 million as at 31 December 2022 (31 December 2021: USD 199 million).
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.
234
41
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 2022 amounted to USD 49 million (31 December 2021:
USD 45 million).
Total interest costs on leases recognised for the year ended 31 December 2022 amount to USD 7 million
(31 December 2021: USD 7 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 and low-value leases in the
amount of USD 28 million is included in cost of sales or administrative expenses depending on type of
underlying asset for the year ended 31 December 2022 (31 December 2021: 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 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. If concentration test is met the acquired set of activities and assets is not a business.
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.
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.
42
235
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
(ii) Research and development
(b) Disclosure
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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.
(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:
Software
Other intangible assets
5 years;
2-8 years.
USD million
Cost
Balance at 1 January 2021
Additions
Disposals
Foreign currency translation
Balance at 31 December 2021
Additions
Disposals
Foreign currency translation
Balance at 31 December 2022
Amortisation and impairment losses
Balance at 1 January 2021
Amortisation charge
Impairment
Foreign currency translation
Balance at 31 December 2021
Amortisation charge
Disposals
Foreign currency translation
Balance at 31 December 2022
Net book value
At 1 January 2021
At 31 December 2021
At 31 December 2022
(c) Amortisation charge
Goodwill
Other intangible
assets
Total
2,485
14
–
(8)
2,491
135
−
44
2,670
(450)
–
–
–
(450)
−
−
−
(450)
2,035
2,041
2,220
605
40
(3)
3
645
51
(56)
13
653
(459)
(11)
(14)
(3)
(487)
(20)
54
(3)
(456)
146
158
197
3,090
54
(3)
(5)
3,136
186
(56)
57
3,323
(909)
(11)
(14)
(3)
(937)
(20)
54
(3)
(906)
2,181
2,199
2,417
The amortisation method, useful lives and residual values are reviewed at each financial year end and
adjusted if appropriate.
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 following CGUs listed below. 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
Other
Allocated
goodwill
2022
2,434
235
1
2,670
Accumulated
impairment
loss
2022
(449)
−
(1)
(450)
Allocated
goodwill
2021
2,269
221
1
2,491
Accumulated
impairment
loss
2021
(449)
–
(1)
(450)
236
43
44
237
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Metals
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 2022, management analysed changes in the economic environment and developments in the
aluminium industry and the Group’s operations since 31 December 2021 and performed an impairment test
for goodwill at 31 December 2022 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 5.4 million metric tonnes of alumina and of 16.5 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
2023
2024
2025
2026
2027
2,422
2,512
2,588
2,606
2,571
324
331
341
349
360
70.5
7.0%
4.3%
71.9
7.0%
2.2%
73.3
6.0%
1.9%
75.4
5.0%
2.0%
76.9
4.0%
2.0%
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 17.5%;
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 historic 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 13% 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 8% 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 2022.
238
45
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.
Power
Goodwill primarily resulted from the acquisition of Angara 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 2022 and 2021 was determined by reference to its value in use
derived by discounting of the future cash flows generated from continuing use of production facilities.
239
46
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
The following key assumptions were used to determine the recoverable amount of the Angara HPPs cash-
generating unit at 31 December 2022:
The sales volumes were projected based on the approved budgets for 2023. In particular, the sales
volumes of electricity in 2023 were planned at the level of 55 million MWh with a decline by 10% till
2032;
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 0.7-12.4 (RUB 49-875) per
MWh depending on market segment in 2023 and increased by 48-62% respectively till 2032. Operating
costs were projected based on the historical performance and the anticipated increase during the
projected period was in line with inflation;
The pre-tax discount rate was estimated in nominal terms based on the weighted average cost of capital
amounted to 15.7%;
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 2021:
The sales volumes were projected based on the approved budgets for 2022. 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 pre-tax discount rate was estimated in nominal terms based on the weighted average cost of capital
amounted to 15.6%;
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 2022 or 2021.
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 within profit or loss, whereas the Group’s share of the post-acquisition post-tax items
of the investees’ other comprehensive income is recognised in the 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.
47
240
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.
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 and impairment
Group’s share of equity transactions
Acquisition and contribution to investments
Partial disposal of investment in associate
Dividends
Foreign currency translation
Balance at the end of the year
Goodwill included in interests in associates
31 December
2022
USD million
2021
USD million
4,028
1,553
−
8
−
(764)
369
5,194
2,404
3,832
1,802
129
9
(313)
(1,452)
21
4,028
2,300
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,
RUB 1 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%
26.39%
11.38%
20%
28.44%
50%
Principal
activity
Nickel and other
metals production
Production of alumina
under a tolling agreement
Power /
Aluminium production
241
48
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
The summary of the consolidated financial statements of associates and joint ventures for the year ended
31 December 2022 is presented below:
PJSC MMC
Norilsk Nickel
Queensland Alumina
Limited
BEMO project
Other associates and
joint ventures
Group
share
USD
million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
6,614
2,218
(2,517)
(2,029)
100%
USD
million
17,392
8,403
(9,539)
(7,689)
Net assets
4,286
8,567
Group
share
USD
million
182
27
(92)
(117)
−
100%
USD
million
1,053
163
(495)
(653)
68
Group
share
USD
million
1,367
201
(808)
(33)
100%
USD
million
2,559
391
(1,616)
(66)
727
1,268
Group
share
USD
million
244
121
(110)
(74)
181
100%
USD
million
593
265
(220)
(133)
505
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
4,454
16,876
110
550
678
1,356
285
821
Revenue
Profit/(loss) and
impairment from
continuing operations
Other comprehensive
income/(loss)
Total comprehensive
1,440
5,854
336
920
−
−
−
(20)
(25)
(45)
102
29
131
210
56
266
11
4
15
51
11
62
income/(loss)
1,776
6,774
(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 profit or loss and other comprehensive 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 2022 and 31 December 2021 amounted USD 4,286 million and USD 3,274 million,
respectively. The Group’s share of profit of Norilsk Nickel was USD 1,440 million, the foreign currency
translation gain was USD 336 million for the year ended 31 December 2022.
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 other effects of associate recognized in the equity in
the amount USD 129 million.
The fair value of the investment amounted USD 8,775 million and USD 12,395 million as at
31 December 2022 and 31 December 2021, 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.
The summary of the consolidated financial statements of associates and joint ventures for the year ended
31 December 2021 is presented below:
(b) Queensland Alumina Limited
PJSC MMC
Norilsk Nickel
Queensland
Alumina Limited
BEMO project
Group
share
USD
million
100%
USD
million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
5,590
2,605
(2,788)
(2,133)
13,565
9,870
(10,564)
(8,083)
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
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
234
85
(91)
(69)
159
562
198
(182)
(143)
435
Other associates
and joint ventures
Group
share
USD
million
100%
USD
million
Revenue
Profit/(loss) and
impairment from
continuing operations
Other comprehensive
income/(loss)
Total comprehensive
income/(loss)
242
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
49
The carrying value of the Group’s investment in Queensland Alumina Limited as at both 31 December 2022
and 31 December 2021 amounted to USD nil million. At 31 December 2022 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 value of the Group’s investment in BEMO project as at 31 December 2022 and 31 December
2021 amounted USD 727 million and USD 595 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 2022 management has not identified any impairment indicators relating to the Group’s
investment in BoGES as well as 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 2022, accumulated losses of USD 73 million (2021: USD 51 million) at BoAZ have not
been recognised because the Group’s investment has already been fully written down to USD nil million.
50
243
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Additional financial information of the Group’s effective interest in BEMO project for the year ended
31 December 2022 and 31 December 2021 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
2022
USD million
31 December
2021
USD million
78
(1)
(633)
(66)
3
(6)
(25)
32
(25)
(770)
(53)
1
(13)
(14)
Inventories are measured at the lower of cost and 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
31 December
2022
USD million
2021
USD million
1,634
887
1,862
4,383
1,499
769
1,463
3,731
Inventories at 31 December 2022 and 31 December 2021 are stated at net realisable value.
Inventories with a carrying value of USD nil million and USD 781 million were pledged as collateral for
secured bank loans at 31 December 2022 and 31 December 2021, respectively (note 17).
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.
51
244
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(g)). The Group’s financial liabilities fall within category of financial
liabilities measured at amortised cost
(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.
52
245
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 2022 and 31 December 2022.
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
2022
1 January
2022
1%
10%
50%
48%
38%
1%
18%
45%
52%
63%
Credit-
impaired
No
No
No
No
Yes
The following table provides information about determined ECLs rates for trade receivables both as at
1 January 2022 and 31 December 2022.
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
2022
1 January
2022
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.
As 31 December 2022 the Group presented non-derivative financial and non-financial assets and liabilities
separately. Balances for 31 December 2021 were represented respectively for comparative purposes.
(b) Trade and other receivables
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
Other receivables from third parties
Dividends receivable from related parties
Related parties – associates and joint ventures
Impairment of receivables
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
31 December
2022
USD million
2021
USD million
1,295
50
45
−
5
235
−
−
1,580
(103)
1,477
949
126
105
2
19
171
827
827
2,073
(104)
1,969
(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
2022
USD million
2021
USD million
842
122
42
1
31
196
1,038
833
16
–
1
11
28
861
31 December
2022
USD million
2021
USD million
197
12
6
4
8
1
31
228
160
11
6
4
7
3
31
191
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.
Further details of the Group’s credit policy are set out in note 20(e).
246
53
54
247
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
(c) Prepayments and VAT recoverable
VAT recoverable
Advances paid to third parties
Advances paid to related parties, including
Related parties – associates and joint ventures
Other taxes receivable
Other current assets
Impairment of prepayments and VAT recoverable
(d) Trade and other payables
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
Other payables and accrued liabilities
Income tax payable
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
31 December
2022
USD million
2021
USD million
552
311
88
88
18
7
976
(156)
820
419
137
109
109
19
9
693
(25)
668
31 December
2022
USD million
2021
USD million
1,047
115
6
109
326
199
1,687
896
103
6
97
267
62
1,328
All of the trade and other payables are expected to be settled within one year or are repayable on demand.
(e) Advances received
Advances received from third parties
Advances received from related parties, including
Related parties – associates and joint ventures
31 December
2022
USD million
2021
USD million
296
13
13
309
1,163
−
−
1,163
Advances received represent contract liabilities to perform obligations under contracts with customers.
Advances received are short-term and revenue in respect of the contract liabilities recognized as at the
reporting date is fully recognized during next twelve months.
As at 31 December 2022 and 31 December 2021 included in cash and cash equivalents was restricted cash
of USD 3 million and USD 2 million, respectively.
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(g) Other non-current assets
Long-term deposits
Prepayment for subsidiary acquisition
Other non-current assets
31 December
2022
USD million
31 December
2021
USD million
125
−
186
311
139
73
46
258
(h)
Investments in equity securities measured at fair value through profit and loss
the year 2022 Metals segment continued
During
to acquire equity securities of RusHydro,
10,893,422,000 shares were bought for a total consideration of USD 113 million. As at 31 December 2022
the Group owns circa 9.75% of RusHydro shares. Investment is treated as equity securities measured at fair
value through profit and loss.
Fair value is estimated in accordance with Level 1 of the fair value hierarchy. The market value was
determined by multiplying the quoted bid price per share on the Moscow Exchange on reporting date by the
number of shares held by the Group.
16. Equity
(a)
Share capital, additional paid-in capital and transactions with shareholders
As at 31 December 2022 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 2022 and 31 December 2021 all issued ordinary shares were fully paid.
Change in effective interest in subsidiaries
Following consolidation of more than 95% of Irkutskenergo shares, in January 2022 the Group submitted a
buyout notice. As at 31 December 2022 the effective and nominal interest in Irkutskenergo held by the Group
is 100.00%. Total consideration paid to non-controlling shareholders during the reporting period amounted
to USD 14 million.
In 2021, through certain transactions, the Group increased its effective interest in Irkutskenergo from 93.2%
to 98.03% for USD 44 million.
(f) Cash and cash equivalents
(b) Treasury share reserve
Bank balances, USD
Bank balances, RUB
Bank balances, EUR
Bank balances, other currencies
Cash in transit
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
248
31 December
2022
USD million
2021
USD million
120
1,544
81
134
17
1,548
30
3,474
3
3,477
549
402
85
75
1,213
4
2,328
2
2,330
55
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 2022 and 31 December 2021 the Group held 136,511,122 of its own shares.
56
249
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(c) Currency translation reserve
The currency translation reserve comprises all foreign exchange differences arising from the translation of
the consolidated financial statements of foreign subsidiaries, associates and joint ventures. 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 accumulated 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 2022 and 31 December 2021 the Parent Company did not declare and
pay dividends.
In 2022 Metals segment declared dividends. In November 2022 dividends of USD 131 million were paid to
Group’s non-controlling shareholders.
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 2022, the fair value of
hydro assets was estimated at USD 4,166 million (note 11(e)). As a result of this fair value valuation, the
Group recognised an additional revaluation reserve in the amount of USD 518 million net of tax.
(g) Non-controlling interests
The following table summarises the information relating to each of the Group’s subsidiaries that has material
non-controlling interest:
31 December 2022
USD million
NCI percentage
Assets
Liabilities
Net assets
Carrying amount of NCI
Revenue
Profit/(loss)
Other comprehensive income
Total comprehensive (loss)/income
Profit/(loss) attributable to NCI
Other comprehensive income attributable to NCI
Cash flows (used in) / from operating activities
Cash flows from / (used in) investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash
equivalents
UC RUSAL
OJSC Irkutsk
Electric Grid
Company
Total
43.1%
24,147
(12,324)
11,823
5,098
13,974
1,793
294
2,087
777
127
(412)
472
1,415
1,475
46.2%
544
(205)
339
154
407
(39)
−
(39)
(14)
7
39
(48)
6
(3)
5,252
763
134
57
250
31 December 2021
USD million
NCI percentage
Assets
Liabilities
Net assets
Carrying amount of NCI
Revenue
Profit/(loss)
Other comprehensive income
Total comprehensive income/(loss)
Profit/(loss) attributable to NCI
Other comprehensive income attributable to
NCI
Cash flows from operating activities
Cash flows from / (used in) investing activities
Cash flows (used in) / from financing activities
Net (decrease)/increase in cash and cash
equivalents
UC RUSAL
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)
Irkutsk-
energo
1.97%
5,772
(3,462)
2,310
46
1,790
17
172
189
4
12
398
(409)
79
68
OJSC Irkutsk
Electric Grid
Company
Total
46.6%
534
(175)
359
161
345
(9)
–
(9)
(3)
–
36
(60)
26
2
4,536
1,392
281
17. Loans and borrowings
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
2022
USD million
2021
USD million
5,333
858
3,511
9,702
6,291
567
1,316
8,174
31 December
2022
USD million
2021
USD million
928
9
937
284
1,251
78
1,348
2,961
3,898
675
5
680
–
871
68
1,118
2,057
2,737
58
251
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
(a) Loans and borrowings
The bank loans are secured as at 31 December 2022 and 31 December 2021 by the following:
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 3.0%
Unsecured bank loans
Variable
RUB – CBR + 1.15-2.00%
EUR – 6M Euribor + 0.45-0.67%
Fixed
CNY – fixed at 3.75%
RUB – fixed at 3.0%
Bonds
Current liabilities
Current portion of secured bank loans
Variable
USD – 3M Libor + 1.7%
USD – 3M Libor + 2.1%
RUB – CBR + 1.5-2.00%
RUB – CBR + 3.15%
Fixed
RUB – fixed at 3.0%
Current portion of unsecured bank loans
Variable
EUR – 6M Euribor + 0.45-0.67%
Fixed
RUB – other
Secured bank loans
Fixed
RUB – fixed at 11.0%
Unsecured bank loans
Variable
RUB – CBR + 1.1-2.5%
Fixed
USD – fixed at 2.15-2.25%
CNY – fixed at 4.2%
RUB – fixed at 5.75-10.5%
Accrued interest
Bonds
252
31 December
2022
USD million
2021
USD million
25
359
2,100
2,690
137
22
5,333
37
34
777
10
858
3,511
9,702
100
359
465
3
1
928
6
3
9
284
284
876
−
375
−
1,251
78
1,348
2,961
3,898
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
59
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 Agreement (PXF) 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 4,883 million at 31 December 2022
(31 December 2021: USD 4,266 million).
As at 31 December 2022 and 31 December 2021 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
The nominal value of Power loans and borrowings was USD 3,881 million at 31 December 2022
(31 December 2021: USD 4,182 million).
As at 31 December 2022 and 31 December 2021 the secured bank loans are secured by certain pledges of
shares of a number of Parent Company’s subsidiaries, including LLC ESE–Hydrogeneration – 100%
(2021: 100%), JSС Krasnoyarsk Hydro-Power Plant – 100% (2021: 100%), PJSC Irkutskenergo – 77.42%
(2021: 73.18%) and JSC EuroSibEnergo – 50% + 1 share (2021: 50% + 1 share). Additionally as at
31 December 2022 and 31 December 2021 21.37% shares of the Parent Company were pledged.
(b) Bonds
As at 31 December 2022, the Group had outstanding (traded in the market) bonds denominated in RUB,
Chinese yuan and eurobonds denominated in USD:
Type
Series
Bond
Bond
Bond
Bond
Eurobond
Eurobond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
BО-01
BО-001P-01
BО-001P-02
BО-002P-01
−
−
BО-05
BО-06
BО-001P-01
BО-001P-02
BО-001P-03
001PC-01
001PC-02
001PC-03
001PC-04
001PC-01
The number of
bonds traded
in the market
Nominal
value,
USD million
Nominal
interest rate
Put-option
date
Maturity
date
30,263
3,490,970
15,000,000
10,000,000
458,785
484,712
2,000,000
2,000,000
6,000,000
1,000,000
3,000,000
2,379,660
2,352,869
2,367,763
1,778,060
2,075,377
0.01%
−
9.50%
49
8.60%
213
6.50%
142
5.3%
459
4.85%
485
3.90%
281
3.90%
281
3.75%
844
141
3.95%
422 LPR1Y + 0.2%
3.75%
335
3.75%
331
3.75%
333
3.75%
251
4.45%
292
−
25.10.2023
25.01.2023
09.06.2023
−
−
05.08.2024
05.08.2024
−
−
−
−
−
−
−
−
07.04.2026
16.04.2029
28.06.2029
28.05.2030
03.05.2023
01.02.2023
28.07.2027
28.07.2027
24.04.2025
23.12.2025
24.12.2025
07.03.2025
07.03.2025
07.03.2025
07.03.2025
22.12.2025
60
253
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
On 3 August 2022 Metals segment placed its exchange-traded non-convertible interest-bearing yuan bonds
series BО-05, BО-06 in the total amount of CNY 4 billion with a coupon rate fixed at 3.9% p.a. on the
Moscow Exchange. Maturity of the bonds is five years, with the put-option in 2 years.
On 27 October 2022 Metals segment placed its exchange-traded non-convertible interest-bearing yuan bonds
series BО-001P-01 in the amount of CNY 6 billion with a coupon rate fixed at 3.75% p.a. on the Moscow
Exchange. Maturity of the bonds is 2.5 years.
On 27 December 2022 Metals segment placed its exchange-traded non-convertible interest-bearing yuan
bonds series BО-001P-02 in the amount of CNY 1 billion with a coupon rate fixed at 3.95% p.a. on the
Moscow Exchange. Maturity of the bonds is 3 years.
On 28 December 2022 Metals segment placed its exchange-traded non-convertible interest-bearing yuan
bonds series BО-001P-03 in the amount of CNY 3 billion with the floating rate linked to LPR 1Y + 0.2% on
the Moscow Exchange. The interest rate for the first coupon period was set at 3.85% p.a. Maturity of the
bonds is 3 years.
In November 2022 Metals segment placed its commercial non-convertible interest-bearing yuan bonds series
001PC-01, 001PC-02, 001PC-03, 001PC-04 in the total amount CNY 8,878,352,000 with a coupon rate fixed
at 3.75% p.a. Maturity of the bonds is March 2025.
In December 2022 Power segment placed its commercial non-convertible interest-bearing yuan bonds series
001PC-01 in the total amount CNY 2,075,377,000 with a coupon rate fixed at 4.45% p.a. Maturity of the
bonds is December 2025.
On 8 September 2022 the exchange-traded non-convertible interest-bearing RUB denominated bonds of
RUSAL Bratsk series BO-001P-03 were fully repaid.
On 10 November 2022 the exchange-traded non-convertible interest-bearing RUB denominated bonds of
RUSAL Bratsk series BO-001P-04 were fully repaid.
As at 31 December 2022, the amount of accrued interest on these bonds was USD 48 million (31 December
2021: USD 44 million).
The total foreign exchange gain on bonds for the year ended 31 December 2022 accounted in other
comprehensive loss as part of the cash flow hedge result amounted to USD 96 million (USD 4 million income
for the year ended 31 December 2021).
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.
61
254
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.
(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.
62
255
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(b) Disclosure
USD million
Balance at 1 January 2021
Non-current
Current
Provisions made during the year
Provisions reversed during the year
Actuarial losses
Provisions used during the year
Effect of the passage of time
Change in estimates
Translation difference
Balance at 31 December 2021
Non-current
Current
Provisions made during the year
Provisions reversed during the year
Actuarial gain
Provisions used during the year
Effect of the passage of time
Change in estimates
Translation difference
Balance at 31 December 2022
Non-current
Current
Pension
liabilities
Site
restoration
Provisions for
legal claims
Total
99
91
8
10
–
4
(7)
–
–
–
106
98
8
15
−
(11)
(8)
−
−
(1)
101
93
8
101
476
427
49
5
–
–
–
7
(38)
68
518
387
131
−
−
−
−
(1)
(112)
(6)
399
287
112
399
32
–
32
14
(4)
–
(20)
–
–
–
22
−
22
14
(4)
−
(6)
−
−
−
26
−
26
26
607
518
89
29
(4)
4
(27)
7
(38)
68
646
485
161
29
(4)
(11)
(14)
(1)
(112)
(7)
526
380
146
526
(c) Pension liabilities
As at 31 December 2022, the pension liability is represented by UC RUSAL of USD 60 million
(31 December 2021: USD 66 million) and Power of USD 41 million (31 December 2021: USD 40 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.
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 2022 and 2021 was
51,783 and 50,518, respectively. The number of pensioners in all jurisdictions as at 31 December 2022 and
2021 was 39,302 and 42,086, respectively.
The Metals segment expects to pay under the defined benefit retirement plans an amount of USD 5 million
during the 12 month period beginning on 1 January 2023.
Actuarial valuation of pension liabilities
The actuarial valuation of the Group and the portion of the Group funds specifically designated for the
Group’s employees were completed by a qualified actuary, Konstantin Kozlov, as at 31 December 2022,
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 2022
% per annum
31 December 2021
% per annum
9.5
8.6
5.0
4.7
USSR population table for
1985, Ukrainian population
table for 2000
70% Munich Re for Russia;
40% of death probability for
Ukraine
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
As at 31 December 2022 and 31 December 2021 the Group’s obligations were fully uncovered as the Group
has only wholly unfunded plans.
256
63
257
64
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
POWER
The principal assumptions used in determining pension obligations for the pension plans are shown below:
19. Derivative financial assets and liabilities
Accounting policies
Discount rate
Future salary increases
Pension and inflation rate increases
(d) Site restoration and environmental provisions
31 December
2022
31 December
2021
10.1%
6.2%
4.7%
8.5%
5.7%
4.2%
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 carrying 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 Coal CHPs CGU assets after
adjusting for inflation
Risk free discount rate for UC RUSAL after
adjusting for inflation
31 December 2022
31 December 2021
2023: USD 111 million
2024-2028: USD 46 million
2029-2038: USD 156 million
after 2038: USD 456 million
26.8
2022: USD 130 million
2023-2027: USD 30 million
2028-2037: USD 145 million
after 2037: USD 410 million
26.5
6.71%
3.60%
4.2%
1.19%
The risk free rate for the year 2021-2022 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 2022, 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 26 million
(31 December 2021: USD 22 million).
At each reporting date management has assessed the provisions for litigation and claims and concluded that
the provisions and disclosures are adequate.
258
65
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
31 December 2022
USD million
31 December 2021
USD million
Derivative
assets
Derivative
liabilities
Derivative
assets
Derivative
liabilities
Petroleum coke supply contracts
and other raw materials
Forward contracts for aluminium
and other instruments
Cross currency swap
Total
Non-current
Current
−
168
−
168
90
78
−
−
−
−
−
−
24
118
–
142
22
120
15
26
165
206
61
145
66
259
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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, as well as for instruments for which fair value is disclosed, 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.
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 movement in the balance of Level 3 fair value measurements of derivatives is as follows:
31 December
2022
USD million
2021
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
(64)
(191)
(131)
554
168
(135)
(352)
(28)
451
(64)
During the year 2022 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 2022 the Group recognised
a total net loss of USD 191 million in relation to the above contracts (31 December 2021: loss of
USD 352 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
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.
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 2022 and 31 December 2021 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.
260
67
261
68
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
As at 31 December 2022
Carrying amount
Fair value
Derivatives
Note USD million
Loans and
receivables
USD million
Other
financial
assets/
(liabilities)
USD million
Total
Level 1
Level 2
Level 3
Total
USD million
USD million
USD million
USD million
USD million
Financial assets measured at
fair value
Forward contracts for aluminium
and other instruments
Investments in equity securities
measured at fair value through
profit and loss
Financial assets not measured
at fair value*
Trade and other receivables
Short-term investments
Cash and cash equivalents
Financial liabilities not
measured at fair value*
Loans and borrowings
Unsecured bond issue
Trade and other payables
19
15
15
15
17
17
15
168
−
168
−
−
−
−
−
−
−
−
−
−
–
1,906
50
3,477
5,433
−
−
−
−
−
459
459
−
−
−
−
(8,741)
(4,859)
(1,687)
168
459
627
1,906
50
3,477
5,433
(8,741)
(4,859)
(1,687)
(15,287)
(15,287)
−
459
459
−
−
−
−
−
(1,935)
−
(1,935)
−
−
−
1,906
50
3,477
5,433
(8,824)
(2,907)
(1,687)
(13,418)
168
−
168
−
−
−
−
−
−
−
−
168
459
627
1,906
50
3,477
5,433
(8,824)
(4,842)
(1,687)
(15,353)
* The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values.
69
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
As at 31 December 2021
Carrying amount
Fair value
Derivatives
Note USD million
Loans and
receivables
USD million
Other
financial
assets/
(liabilities)
USD million
Total
Level 1
Level 2
Level 3
Total
USD million
USD million
USD million
USD million
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
15
Financial assets not measured
at fair value*
Trade and other receivables
Short-term investments
Cash and cash equivalents
15(b)
15
Financial liabilities measured
at fair value
Cross currency swaps
Petroleum coke supply contracts
and other raw materials
Forward contracts for aluminium
and other instruments
Financial liabilities not
measured at fair value*
Loans and borrowings
Unsecured bond issue
Trade and other payables
19
19
19
17
17
15
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)
–
–
–
–
* The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values.
24
118
316
458
2,410
131
2,330
4,871
(165)
(15)
(26)
(206)
(8,614)
(2,465)
(1,643)
(12,722)
70
262
(b) Financial risk management objectives and policies
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 2022 and 31 December 2021, 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.
(ii)
Interest rate risk
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 2022
31 December 2021
Effective
interest rate
%
USD
million
Fixed rate loans and borrowings
Loans and borrowings (note 17(a))
0.01%-11.0%
Variable rate loans and
borrowings
Loans and borrowings (note 17(a))
2.86%-10.0%
5,904
5,904
7,618
7,618
13,522
Effective
interest rate
%
0.01%-10.5%
0.45%-10.5%
USD
million
2,824
2,824
8,019
8,019
10,843
71
263
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 annualized 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 2022
Basis percentage points
Basis percentage points
As at 31 December 2021
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
(76)
76
(80)
80
(61)
61
(64)
64
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, EUR and yuan. 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.
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
2022
2021
2022
2021
2022
2021
2022
2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Non-current assets
Trade and other receivables
Cash and cash equivalents
Loans and borrowings
Provisions
Derivative financial liabilities
Income tax
Non-current liabilities
Bonds
Trade and other payables
Net exposure arising from
recognised assets and liabilities
−
−
−
−
−
−
−
−
−
(1)
(1)
–
2
–
–
–
–
–
–
–
(1)
1
86
914
1,378
(684)
(66)
−
(157)
(46)
(406)
(514)
505
38
821
428
(549)
(84)
(16)
(24)
(1)
(1)
(1,080)
(468)
21
219
148
−
−
−
−
(3)
−
(111)
274
–
184
81
(19)
(21)
–
–
(6)
–
(104)
115
−
60
684
(1,152)
(17)
−
−
(2)
(3,219)
(119)
(3,765)
264
–
69
50
–
(18)
–
(1)
–
–
(135)
(35)
72
73
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(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 2022
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%
76
27
(188)
76
27
(188)
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)
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 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:
31 December 2022
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
Total
USD
million
Carrying
amount
USD
million
Trade and other payables to
third parties
Trade and other payables to
related parties
Bonds
Loans and borrowings, including
interest payable
Within
1 year or
on demand
USD
million
1,998
115
1,156
2,928
6,197
1
−
698
1,465
2,164
−
−
3,014
5,942
8,956
Financial guarantees issued:
Maximum amount guaranteed
40
79
−
−
−
−
271
271
−
1,999
115
4,868
10,606
17,588
119
1,999
115
4,859
8,741
15,714
−
74
265
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
44
69
–
–
113
–
Net amount
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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
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 2022 and 31 December 2021 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 2022 and 31 December 2021, the Group has no concentration of credit risk within any single
largest customer but 27.0% and 12.6% 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.
75
266
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(g) Master netting or similar agreements
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.
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
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 2022
USD million
Trade receivables
USD million
Trade payables
95
95
(47)
48
(112)
(112)
47
(65)
Year ended 31 December 2021
USD million
Trade receivables
USD million
Trade payables
114
114
(36)
78
(90)
(90)
36
(54)
The Group had outstanding capital commitments which had been contracted for at 31 December 2022 and
31 December 2021 in the amount of USD 787 million and USD 655 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 2023-2034 under supply agreements are estimated from USD 3,450 million to USD 5,169 million at
31 December 2022 (31 December 2021: USD 2,517 million to USD 4,534) depending on the actual purchase
volumes and applicable prices.
Commitments with related parties for purchases of primary aluminium, alloys and other purchases in
2023-2030 under supply agreements are estimated from USD 4,824 million to USD 7,283 million at
31 December 2022 (31 December 2021: USD 5,733 million to USD 7,540 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 2023-2034 are estimated
from USD 852 million to USD 1,275 million at 31 December 2022 (31 December 2021: from
USD 1,187 million to USD 1,596 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 2022 and 31 December 2021.
Commitments with related parties for sales of primary aluminium and alloys in 2023 are estimated from
USD 149 million to USD 182 million at 31 December 2022 (31 December 2021: from USD 337 million to
USD 412 million). Commitments with third parties for sales of primary aluminium and alloys in 2023-2027
are estimated to range from USD 5,505 million to USD 8,386 million at 31 December 2022 (31 December
2021: from USD 8,842 million to USD 12,148 million).
76
267
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(d) Social commitments
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.
22. Contingencies
(a) 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 and federal authorities. 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.
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 (though less than
50% likely) may become payable if these tax positions were not sustained at 31 December 2022 is
USD 61 million (31 December 2021: USD 26 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.
(c) 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 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 2022, the amount of
claims, where management assesses outflow as possible approximates USD 33 million (31 December 2021:
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 2022 and 31 December 2021 USD 239 million and
USD 226 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, receivables from and payables to related parties
are disclosed in note 15.
268
77
78
269
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
Purchases of raw materials and services from related parties for the period were as follows:
Property, plant and equipment – recoverable amount
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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
2022
USD million
2021
USD million
(988)
(30)
(958)
(104)
(48)
−
(56)
(30)
−
(30)
(1,122)
(738)
(24)
(714)
(76)
(33)
(1)
(42)
(111)
–
(111)
(925)
(c) Related parties balances
At 31 December 2022, there are no balances of related parties included in non-current assets (31 December
2021: USD 2 million). At 31 December 2022, included in non-current liabilities are balances of related
parties – associates and joint ventures of USD 16 million (31 December 2021: USD 14 million).
(d) Remuneration to key management
For the year ended 31 December 2022 remuneration to key management personnel comprised short-term
benefits and amounted to USD 18 million from which Board members received USD 6 million (year ended
31 December 2021: USD 26 million from which Board members received USD 10 million).
24. Events subsequent to the reporting date
In February 2023, UC RUSAL entered into a new credit facility with a Russian bank in the total amount up
to USD 4.4 billion and maturity on 24 December 2027. On 3 February 2023 the funds in the amount of
15.8 billion Chinese yuan were partially drawdown with an interest rate 4.75% and were used to refinance
the principal outstanding under the existing debt with a Russian bank
On 8 February 2023 pursuant to the Extraordinary resolution of the noteholders UC RUSAL redeemed the
Eurobond with a coupon 4.85% to noteholders who hold Eurobond through NSD and other Russian
custodians being the NSD direct participants in the amount of USD 418 million. The redemption to
noteholders who hold Eurobond through foreign clearing and settlement systems will be made in accordance
with terms of the Extraordinary resolution of the noteholders.
In February 2023 the High Anticorruption Court of Ukraine decided to transfer the ownership over Mykolaiv
Alumina Refinery Company Ltd from the Group in favour of Ukrainian Government. As of the date of
authorization of these consolidated financial statements for issue, management of the Group is planning to
submit an appeal against the Court’s decision. Due to the developments of geopolitical situation so far, the
carrying values of assets of Mykolaiv Alumina Refinery Company Ltd were written off as at 31 December
2022.
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.
270
79
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.
Goodwill – recoverable amount
In accordance with the Group’s accounting policy, goodwill is allocated to the Group’s operating segments
before aggregation 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.
80
271
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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.
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 related to 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.
272
81
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.
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.
273
82
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
• FINANCIAL STATEMENTS
Appendices
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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.
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.
274
83
26. Significant subsidiaries
The significant entities of the Group, included in these consolidated financial statements, are as follows:
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
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
Casting and mechanical plant “SKAD” Ltd.
LLC PGLZ
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
Place
of incorporation
and operation
Russian Federation
Guinea
Guinea
Russian Federation
Ukraine
Russian Federation
Italy
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Armenia
Principal
activities
Holding company
Bauxite mining
Alumina
Alumina
Alumina
Alumina
Alumina
Smelting
Smelting
Smelting
Smelting
Processing
Foil
Foil
Russian Federation
Russian Federation
Repairs and maintenance
Holding company
Netherlands
Management company
Russian Federation
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
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
Russian Federation
Russian Federation
Russian Federation
Switzerland
Russian Federation
Russian Federation
Management company
Smelting
Anodes
Trading
Other aluminum production
Alumina
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Russian Federation
Holding company
Management company
Power generation
Power trading
Power generation
Power transmission and
distribution
Power generation
Power generation
Engineering services
Coal production
Coal production
Ownership and
equity interest
31 December
2022
2021
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%
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%
75.0%
99.9%
100.0%
100.0%
100.0%
100.0%
100.0%
53.8%
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%
99.9%
100.0%
100.0%
100.0%
100.0%
98.0%
53.4%
100.0%
99.0%
100.0%
98.0%
98.0%
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.
84
275
FINANCIAL STATEMENTSEn+ Group Consolidated Report 2022
Strategic report
Sustainable development
Financial statements
• APPENDICES
APPENDICES
ADDITIONAL ESG DATA
FINANCIAL REVIEW
GRI 201-1
Direct economic value generated and distributed1, USD mn
Metals segment
Power segment
En+
Direct economic value
generated
2020
9,575
2021
2022
13,844
15,608
2020
2,720
2021
3,155
2022
3,919
2020
2021
2022
11,388
15,993
18,217
Revenue
8,566
11,994
13,974
2,697
3,138
3,885
10,356
14,126
16,549
Share of profits
of associates and joint
ventures
976
1,807
1,555
Interest income on loans
33
43
79
(5)
28
(5)
22
(2)
971
1,802
1,553
36
61
65
115
Economic value distributed
(8,198)
(10,496)
(13,626)
(2,185)
(2,444)
(3,480)
(9,508)
(12,080)
(15,645)
Operating costs
(7,431)
(9,502)
(12,251)
(1,534)
(1,705)
(2,467)
(8,087)
(10,340)
(13,427)
including employee wages
Retirement costs
Charity donations
Payments to providers
of capital
(624)
(160)
(63)
(459)
(723)
(196)
(45)
(364)
including dividends paid
-
-
(459)
(364)
(937)
(248)
(34)
(727)
(302)
(425)
(399)
(447)
(70)
(8)
(80)
(10)
(326)
(338)
(610)
(103)
(19)
(560)
(1,023)
(1,170)
(1,547)
(230)
(71)
(788)
(276)
(55)
(351)
(53)
(709)
(1,117)
-
-
-
-
-
(326)
(338)
(560)
(788)
(709)
(129)
(988)
(85)
(389)
(366)
(247)
(311)
(331)
(332)
(700)
(697)
(43)
1,377
(339)
3,348
(310)
1,982
(180)
535
(230)
711
(243)
439
(223)
1,880
(569)
3,913
(553)
2,572
including financial
expenses
Payments
to the government
including income tax
Economic value retained:
‘direct economic value
generated’ less ‘economic
value distributed’
GRI 201-4
Financial assistance received from government, mn
Metals segment
Power segment
En+
RUB
0
603
603
2020
USD
0
8
8
RUB
0
378
378
2021
USD
0
5
5
RUB
0
1,023
1,023
2022
USD
0
15
15
1 / All differences in the data of Metals and Power segments for 2020 and 2021 from the data presented in the reports of previous years are related to the recalculation
of data using the updated and improved methodology.
276
Overview of stakeholder groups involved in the survey, %
(multiple choice)
STAKEHOLDER ENGAGEMENT
GRI 2-25
GRI 3-1
En+ conducted the business activities analysis
to define its actual and potential impacts. This
information was used to make a list of key
impacts for stakeholder assessment.
Details on stakeholder groups which
participated in the materiality assessment
survey and concerns they raised are presented
below. Respondents evaluated En+ impact on
sustainable development aspects.
Assessment of the most significant impacts of En+
4,02
3,45
3,77
3,79
3,94
3,74
3,61
3,68
3,78
4,15
3,54
4,40
3,33
3,21
3,67
2,92
3,25
3,90
3,43
3,62
3,34
3,91
3,40
3,31
3,57
3,12
4,20
3,45
3,07
3,56
3,82
3,89
3,32
3,25
3,36
3,10
3,53
3,33
3,63
3,03
3,23
3,25
3,57
2,98
3,44
3,52
3,06
4,00
3,83
3,71
3,14
2,91
3,01
3,15
2,92
3,26
3,10
3,16
3,26
3,58
3,27
4,17
3,31
3,31
3,39
3,29
3,60
3,16
3,15
3,06
2,72
3,00
2,96
2,96
2,58
2,61
2,80
3,08
2,94
2,92
2,77
3,21
3,40
3,13
3,06
2,94
2,80
3,48
3,07
2,88
2,91
3,50
3,20
3,21
3,18
2,88
2,94
3,62
3,00
3,27
3,03
3,38
Employees and trade unions
Shareholders, investors,
banks and rating agencies
Customers and suppliers
Local communities
Non-profit organisations
National and regional authorities
59
18
9
7
5
2
Business ethics
Innovation management
Corporate governance
Sustainable supply chain
Economic performance
Local community engagement
Health and safety
Social and cultural diversity and equal opportunity
Employees management and engagement
Human rights
Safe waste management
Biodiversity
Climate change
Water and wastewater management
Air quality
Environmental compliance and the best available technologies (BAT)
Energy management
Employees and trade unions
Shareholders, investors, banks, and rating agencies
Local communities
Customers and suppliers
Non-profit organisations
National and regional authorities
GRI 2-25
List of concerns raised by stakeholders
Stakeholders concerns
Information on the impact on valuable natural objects (PAs,
World Natural Heritage Sites)
More detailed disclosure on work-related injuries
More detailed disclosure on participation in working groups,
expert councils or other similar initiatives in the field
of sustainable development
More detailed disclosure on financial performance indicators
(cost and its change by year, cash flow by year, return
on investment program, company plans to pay off debt, etc.)
More detailed disclosure on operational performance
More detailed disclosure on the Company’s long-term
development plans and projects
A forecast of electricity consumption and tariffs in the Russian
Federation, as well as the aluminium market’s demand and supply
En+ response
Read more about Baikal at p.106
Read more about health and safety performance at p.111
and at Additional ESG data pp.293-294
Read more about Collaborations and partnerships at p.173
Read more about Financial review at p.36
Read more about Business review at p.24
Read more about Investment programme and modernisation at p.58
and Strategy at p.22
Read more about Industry positioning at p.16
277
En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
VALUE CREATION MODEL
GRI 3-3
203-2
KEY PRODUCTION PROCESS
FOR THE GROUP
BAUXITE
MINING
ALUMINA
REFINING
ENERGY AND HEAT PRODUCTION
ALUMINIUM
PRODUCTION
Energy and heat
production (CHP)
Energy production
(HPP)
• Bauxite reserves
• Bauxite
• Land surface
• Water
• Land surface
• Caustic Soda
• Water
• Calcine
• Water
• Fuel
• Coal
• Water
• Land surface
• Bauxite
• Alumina
• Energy and heat
• Rehabilitated land
• Air emissions
• Air emissions
• Energy
• Noise
• Waste
• GHG emissions
• Rehabilitated land
• Waste
• Biodiversity impact
• Contribution to climate
change
• Effect on the
landscape
• Biodiversity impact
• Effect on the
landscape
• Biodiversity impact
• Biodiversity impact
MEASURES TO MITIGATE NEGATIVE EFFECT
Climate change strategy
Engagement with local communities
Collaboration with scientific community
Modernisation of equipment
Environmental monitoring
Transparency in sustainability indicators
through the disclosure of annual reporting
T
U
P
N
I
Y
E
K
T
U
P
T
U
O
Y
E
K
T
C
E
F
F
E
Y
E
K
278
• Alumina
• Energy
• Aluminium scrap
• Water
• Fuel
• Aluminium and its products
• Air emissions
• GHG emissions
• Waste, wastewater
• Contribution to climate
change
• Biodiversity impact
• Totential reduction of water
reserves and water pollution
N
O
M
M
O
C
Y
E
K
T
U
P
N
I
N
O
M
M
O
C
Y
E
K
T
U
P
T
U
O
N
O
M
M
O
C
Y
E
K
T
C
E
F
F
E
• Labour
• Production and distribution infrastructure
• Financial resources
• Governance system
• Royalties
• Financial results
• Skilled employees
• Taxes
• Social investments
• Payments to suppliers
• Affordable energy
• Salaries and social
benefits for employees
and heat for
consumers
• Value for shareholders
• National and local
economic development
• Employment stability
• Regional development
• Professional
development
of employees
• Product development
• Innovation
development
279
En+ Group Consolidated Report 2022
Strategic report
Sustainable development
Financial statements
• APPENDICES
CLIMATE LEADERSHIP
GRI 302-4
Reduction of energy consumption in Power segment, GJ
Reduction of energy consumption
GRI EU2
Power segment’s net energy supply1, GJ
Electricity supply
Heat energy supply
GRI EU2
Power segment’s net energy supply by energy source
2021
2022
8,365,779.225
3,126,243.31
2020
287,627,662
113,015,778
2021
316,499,624
119,772,801
2022
292,766,726
116,429,914
2020
Non-renewable
Coal
Natural gas
Petroleum products
Nuclear power
Renewable
Biomass
Solar
Wind
Geothermal
Hydropower
Electricity, GWh
Heat energy, ths Gcal
2020
9,066
1,586
2021
8,814
1,688
2022
11,000
1,503
2020
22,433
4,570
2021
23,468
5,146
2022
23,137
4,679
0
0
1
5
0
0
0
0
0
6
0
0
0
0
0
6
0
0
69,239
77,408
68,816
0
0
9
0
0
0
0
0
0
12
0
0
0
0
0
0
11
0
0
0
0
GRI 302-1 b, EU Taxonomy, SASB EM-MM 130 a.1, SASB IF-EU-000.E
Energy consumption, GJ
Energy consumption from non-renewable sources by fuel types
458,907,287.9
485,084,312.2
494,575,180.7
2020
2021
2022
- Natural gas
- Heavy oil
- Coal
- Petrol
- Kerosene
- Propane and butane
- Diesel fuel
- Coke
Energy consumption from renewable sources by fuel types
- Charcoal
- Waste wood
- Bark waste
Consumption of energy purchased or obtained by any means
other than self-generation from non-renewable and renewable
fuel
153,673,640
175,355,705.1
157,776,860.5
25,123,142.63
27,535,025.2
24,459,491.22
274,083,117
275,023,875.2
188,578.96
6,054.44
184,628.13
260,035.33
6,313
456,379.31
305,076,445
191,770.73
5,935.86
482,090.43
5,404,428.04
5,947,975.48
5,877,301.36
243,698.76
647,935.97
246,442.30
258,612.80
142,880.87
499,003.51
797,721.73
456,001.76
175,909.59
165,810.38
705,285.67
1,414,746.05
954,283.71
339,822.41
120,639.93
249,993,066.77
251,426,433.73
253,153,097.96
- Electricity consumption
- Heating consumption
245,723,404.73
246,716,542.82
248,164,412.96
4,269,662.04
4,709,890.91
4,988,684.99
Energy losses during transportation
23,518,397.49
25,412,554.99
27,436,758.37
- Electricity losses
- Heating losses
Energy sales
- Electricity sales
- Heating sales
10,674,529.20
12,383,899.20
14,501,417.11
12,843,868.29
13,028,655.79
12,935,341.26
400,823,352.47
436,485,808.20
409,384,919.73
287,627,662.33
316,499,623.70
292,766,725.81
113,195,690.14
119,986,184.50
116,618,193.91
Total energy consumption within organisation
332,243,335.69
326,235,214.40
367,194,863.39
SASB IF-EU-240a.1
Average retail electricity tariff for (1) the residential, (2) commercial and (3) industrial enterprises2, RUB/kWh
Residential
Commercial
Industrial
SASB IF-EU-240a.2
2020
0.91
2.83
2.74
2021
0.93
2.99
2.85
2022
0.98
3.14
2.98
The average cost of (1) 500 kWh and (2) 1000 kWh of electricity for household consumers per month2, RUB
500 kWh
1000 kWh
2020
539.40
1,074.94
2021
564.08
1,125.43
2022
596.15
1,189.69
1 / Hereinafter all differences in the data for 2020 in the Climate Leadership section from the data presented in the reports of previous years are related to the recalculation
of data using the updated methodology.
2 / USD/RUB average exchange rate of RUB 72.14 per USD for 2020, RUB 73.65 per USD for 2021, RUB 68.55 per USD for 2022.
280
281
En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
SASB IF-EU-240a.3
The number of power outages by household consumers for non-payment, the proportion of repeated connections within
30 days1
GRI 201-2
Table 1 Physical risks
The number of power outages by household consumers
for non-payment
The proportion of repeated connections within 30 days, %
2020
20,635
0.4
2021
81,823
0.5
SASB IF-EU-420a.2
The share of delivered electricity serviced by smart grid technology2, %
2020
47
2021
49
SASB IF-EU-550a.2
The Average System Interruption Duration Index (SAIDI), the Average System Interruption Frequency Index (SAIFI)
and the Interruption Duration Index (CAIDI)3
SAIDI
SAIFI
CAIDI
2020
61.58
0.48
129.77
2021
87.27
0.66
133.26
2022
90,774
0.7
2022
52
2022
66.57
0.48
137.30
Physical risk
Risk factor
Scenario
Region of exposure
Impact in time horizon
Short
term
2022
Medium-
term
2022–2025
Long-
term
2025–
2050
Probability4
Infrastructure
disruption
(underflooding
of quarries)
abnormal
precipitation
Infrastructure
disruption
Supply disruptions
abnormal
precipitation
strong wind
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
Komi Republic
Republic of Guinea
Komi Republic
Republic of Guinea
Republic of Guinea
Komi Republic
Krasnoyarsk region
Republic of Guinea
Nizhny Novgorod region
Irkutsk region
Republic of Guinea
Nizhny Novgorod region
Irkutsk region
Krasnoyarsk region
Armenia
Jamaica
Krasnoyarsk region
Republic of Guinea
Krasnoyarsk region
Republic of Guinea
Krasnoyarsk region
Republic of Guinea
Irkutsk region
Irkutsk region
Irkutsk region
Irkutsk region
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
○
○
○
○
○
○
○
○
○
○
○
○
○
○
○
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○
○
○
○
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○
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○
○
○
○
○
○
○
○
○
○
○
○
○
○
○
●
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 / The data is only for Volgaenergo Group of Companies.
2 / According to the U.S. Energy Independence Act of 2007, smart grid technologies of Power segment include smart technologies for metering technologies which provide
timely information and control options to customers.
3 / All differences in SAIDI and CAIDI of the Metals and Power segments for 2020 and 2021 from the data presented in the reports of previous years are related
to the recalculation of data using the updated methodology.
4 / Based on a qualitative risk assessment scale: low (less than 20%), medium (20-60%), high (60-100%) probability
SSP126 - •
SSP245 - •
SSP585 - •
282
283
En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
Transition risks
Risk category
Risk
Risk factor
Scenario
Metals
segment
Power
segment
Short-term
2022
Medium-term
2022–2025
Long-term 2025–2050
Assets under exposure
Impact in time horizon
Probability within the scenario
analysis1
Policy
and Legal
Expenses related to the purchase of offsets
Setting the national carbon
price and creating a regional
inventory of GHG emissions
Additional tax burden due to the CBAM introduction
Introduction of CBAM
Costs of arranging measures to adapt to and to minimise
the impact of the global climate change
Approval of the national action
plan for adaptation to climate
change
Reduction in demand for non-green electricity
due to the introduction of CBAM
Introduction of CBAM
Technology
Capital expenditure on the transition to energy-efficient
and energy-saving solutions in production processes
High carbon intensity
of manufacturing processes
Decrease in demand for the Company’s products
in the European markets
Reorientation of aluminium
exports to Asian markets
Reduction or absence of additional government investments
to reduce GHG emissions
Investment restriction for hydro
generation facilities
Failure to achieve the declared impeller performance
of hydraulic units within the New Energy programme
Implementation of the New
Energy programme
Increasing the carbon intensity of production by using
Elegaz-insulated circuit breakers
Replacement of switching
equipment
Reputation
Reduced investment appeal of the Company
Sludge overflow that entails costs on eliminating
the consequences of the accident and paying a fine
Negative perception
of the Company by investors,
independent shareholders,
local communities
Level overflow on sludge fields
Market
Reduced product margins and competitiveness due to high
carbon footprint
Lower demand for high-carbon
generation
Lower demand for coal products
Transition to low-carbon
economic development
SSP126 - •
SSP245 - •
SSP585 - •
○ – insignificant impact, ● – significant impact (based on a qualitative risk assessment)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Applicable to En+
+
+
+
Applicable to En+
+
+
+
+
+
+
+
+
+
+
+
+
Applicable to En+
+
+
+
Applicable to En+
+
+
+
○
●
●
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○
○
○
○
●
●
●
●
●
●
●
●
●
●
●
●
Medium
Low
High
High
High
Medium
High
High
●
●
●
●
Medium
Low
●
●
●
●
●
●
●
●
●
●
●
●
●
Medium
Low
●
●
●
●
Medium
Low
●
●
●
High
High
Medium
Low
High
High
Medium
Low
Medium
Medium
Low
Low
Low
Low
Low
Low
Low
High
High
Medium
Medium
High
High
Medium
Low
284
285
1 / Based on a qualitative risk assessment scale: low (less than 20%), medium (20–60%), high (60–100%) probability
En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
ENVIRONMENTAL STEWARDSHIP
Total environmental protection costs1, mn
Metals segment
Power segment
2021
En+
Metals
segment
Power
segment
USD
0,2
1,8
RUB
14,7
132,6
USD
RUB
USD
RUB
USD
RUB
USD
RUB
USD
0,0
1,7
0,0
123,1
0,2
3,5
14,7
255,7
0,2
3,2
10,4
216,4
0,0
1,5
0,0
104,6
0,2
4,7
2022
En+
RUB
10,4
321,0
50,6
3 726,6
0,7
51,0
51,3
3 777,6
89,4
6 131,2
1,4
94,8
90,8
6 226,0
3,9
287,2
3,6
263,1
7,5
550,3
3,9
265,3
6,3
431,6
10,2
696,9
1,3
10,5
69,9
95,7
773,3
5 126,0
0,6
7,7
3,1
43,0
567,3
226,5
1,9
18,2
73,0
138,7
1 340,6
1,0
5,0
68,4
0,9
63,4
1,9
131,8
339,6
10,7
732,9
15,7
1 072,5
5 352,5 114,0
7 813,9
5,5
337,6 119,5
8 151,5
PCB management
Other expenditures
for environmental
protection
Waste
management
Environmental
equipment
maintenance
Land rehabilitation
Water protection
Atmospheric air
protection
Total
138,2 10 156,1
17,3
1 274,0 155,5 11 430,1 216,7 14 845,2
26,3
1 764,8 243,0
16 610,0
Total payments for negative impact2, mn
2021
Metals
segment
Power
segment
En+ Metals segment
Power
segment
2022
En+
USD
RUB
11.87
874.2
USD
0.9
RUB
USD
66.3
12.77
RUB
913.4
USD
12.5
RUB
854.5
USD
1.5
RUB
98.3
USD
14.0
RUB
952.8
Payments
for negative impact
GRI 2-27
AIR QUALITY
GRI 305-7 SASB EM-MM-120a.1
Metals segment’s emissions3,4, kt
Pollutant
Carbon Monoxide (CO)
PM (excl. Fsolid, tarry substances, B(a)P)
Sulphur dioxide (SO2)
Sum of nitric oxides as nitrogen dioxide (NO2)
Total fluoride (gaseous and solid fluoride)
Other emissions5
Volatile organic compounds (VOCs)
Benzopyrene
Mercury (Hg)
Lead (Pb)
Total air emissions of Metals segment
GRI 305-7
SASB IF-EU-120a.1
Power segment’s emissions, kt
Pollutant
Nitric oxides (NOx)
Sulphur oxides (SOx)
Persistent organic pollutants (POP)
Volatile organic compounds (VOC)
Particulate matter (PM) (excl. Fsolid, B(a)P, Pb, Hg)
Other standard categories of air emissions identified
in relevant regulations6
Total air emissions of Power segment
2020
238.7
36.3
40.1
20.1
6.4
9.3
1.5
0.0041
0.00
0.00
352.4
2020
47.1
189.8
0.0
0.4
56.3
8.9
302.6
Non-compliance with environmental laws and regulations
SASB IF-EU-120a.1
Power segment’s share of air emissions in or near areas of dense population, %
Metals
segment
Power
segment
0
0
0
0
0
0
2020
En+
0
0
0
Power
segment
Metals
segment
0
0
0
0
0
0
2021
En+
0
0
0
Metals
segment
Power
segment
0
0
0
0
0
0
2022
En+
0
0
0
Pollutant
Nitric oxides (NOx)
Sulphur oxides (SOx)
Particulate matter (PM)
Lead (Pb)
Mercury (Hg)7
Total
2020
93.4
97.8
86.8
0.0
0.0
93.6
Total number of significant
violations of the environmental
legislation
Total number of instances
of the imposition of non-financial
sanctions
Total number of cases brought
through dispute resolution
in connection with violation
of the environmental legislation
2021
245.3
35.9
45.2
22.7
6.0
10.0
1.2
0.0038
0.00
0.00
366.3
2021
45.7
160.5
0.0
0.4
58.3
9.3
274.4
2021
93.2
97.8
87.8
0.0
0.0
93.6
2022
245.4
36.1
44.3
19.9
5.5
10.5
0.9
0.0036
0.00
0.00
362.6
2022
52.1
172.3
0.0
0.3
67.3
7.5
299.6
2022
95.3
98.4
91.8
0.0
0.0
95.4
1 / Total payments and expenditures may differ from the sums of the components due to rounding. Calculated based on USD/RUB average exchange rate of RUB 73.65 per
USD for 2021, 68.55- for 2022.
2 / Calculated based on USD/RUB average exchange rate of RUB 73.65 per USD for 2021, 68.55- for 2022.
286
3 / All differences in the data on emissions of the Metals and Power segments for 2020 from the data presented in the reports of previous years are related
to the recalculation of data using the updated methodology.
4 / The data for the Friguia Bauxite and Alumina Complex, that maybe material for consolidated indicators, is excluded, due to the lack of metering systems and relevant
requirements in national legislation.
5 / This category includes all pollutants specified by Russian legislation, with the exception of CO and of those pollutants already presented in this table.
6 / This category includes all pollutants specified by Russian legislation (including CO), with the exception of those pollutants already presented in this table.
7 / Mercury emissions are not typical for the main production units of the Company.
287
En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
WATER RESOURCES
GRI 303-3, SASB IF-EU-140a.1, SASB EM-MM-140a.1
Water withdrawal1,2, mn m3
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
176.8
704.9
881.7
178.4
727.0
905.4
172.7
820.2
992.9
Total water
withdrawal,
including:
Surface water
110.1
505.2
615.3
121.2
20.7
17.7
22.8
5.4
35.2
55.9
164.5
182.3
0.0
0.0
22.8
5.4
4.0
14.3
23.0
15.9
546.1
39.9
141.0
0.0
0.0
667.3
43.9
155.3
23.0
15.9
109.1
12.6
12.5
22.8
15.7
615.2
40.5
164.5
0.0
0.0
724.3
53.1
177.0
22.8
15.7
154.0
697.9
852.0
155.4
720.2
875.6
149.9
813.2
963.1
Ground water
Public networks
Seawater
Other
Fresh water
withdrawal,
including
GRI 303-5, SASB IF-EU-140a.1, SASB EM-MM-140a.1
Water consumption3, mn m3
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
103.8
473.2
577.0
107.5
478.4
585.9
99.0
565.4
664.4
0.3
1.9
2.2
1.0
1.9
2.9
1.5
2.0
3.5
N/A
0.3
0.0
0.4
0.0
N/A
0.4
1.0
0.0
0.4
0.0
N/A
0.5
1.5
0.0
0.3
0.0
0.5
Total water
consumption
Total water
consumption
from all areas
with water
stress
Change
in water
storage
Percentage
of water
consumption
from all areas
with water
stress, %
Surface water
110.1
505.2
615.3
121.2
20.7
17.7
5.4
0.6
0.4
0.0
0.1
0.0
0.0
0.6
0.4
0.0
0.1
0.0
0.0
0.3
28.2
48.9
164.5
182.3
0.0
4.5
0.8
0.0
3.6
0.0
0.0
4.5
0.8
0.0
3.6
0.0
0.0
0.6
5.4
5.1
1.2
0.0
3.7
0.0
0.0
5.1
1.2
0.0
3.7
0.0
0.0
0.6
4.0
14.3
15.9
1.1
1.0
0.0
0.1
0.0
0.0
1.1
1.0
0.0
0.1
0.0
0.0
0.6
Ground water
Public networks
Other
Total water
withdrawal
from all areas
with water stress,
including
Surface water
Ground water
Public networks
Seawater
Other
Fresh water
withdrawal
from all areas
with water stress,
including
Surface water
Ground water
Public networks
Seawater
Other
Percentage
of water
withdrawal
from all areas
with water
stress, %
546.1
33.1
141.0
0.0
4.4
667.3
37.1
155.3
15.9
5.5
109.1
12.6
12.5
15.7
1.6
615.2
33.6
164.5
0.0
4.6
724.3
46.2
177.0
15.7
6.2
GRI 303-4
Water discharge4,5, mn m3
0.7
0.0
3.6
0.0
0.0
4.4
0.7
0.0
3.6
0.0
0.0
0.6
1.7
0.0
3.7
0.0
0.0
5.5
1.7
0.0
3.7
0.0
0.0
0.6
1.5
0.0
0.1
0.0
0.0
1.6
1.5
0.0
0.1
0.0
0.0
0.9
0.8
0.0
3.8
0.0
0.0
4.6
0.8
0.0
3.8
0.0
0.0
0.6
2.3
0.0
3.9
0.0
0.0
6.2
2.3
0.0
3.9
0.0
0.0
0.6
Total water
discharge
Surface water
Ground water
Public
networks
Seawater
Fresh water
discharge
Total water
discharge
to all areas
with water
stress6
Fresh water
discharge
to all areas
with water
stress
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
61.6
425.8
487.4
48.6
446.3
494.9
47.3
509.7
34.3
0.0
4.5
22.8
38.8
0.02
466.3
500.6
0.0
10.7
0.0
425.8
0.0
15.3
22.8
464.6
0.7
0.72
25.9
0.0
11.3
22.7
25.9
1.15
498.9
0.0
10.5
0.0
446.3
524.8
0.0
21.8
22.7
488.1
0.8
1.95
23.0
0.0
13.4
22.8
23.0
0.03
560.0
0.0
11.0
0.0
509.7
0.8
0.83
2022
En+
557
583
0.0
24.4
22.8
532.7
0.02
0.7
0.72
1.15
0.8
1.95
0.03
0.8
0.83
1 / Water withdrawal includes quarry, mine, drainage, storm, and other waters, which are not used in the production process.
2 / Total indicators may differ from the sums of the components due to rounding.
288
3 / Represents water for production needs.
4 / Water discharge excludes quarry, mine, drainage, storm, and other waters, which are not used in the production process. Data of Metals segment for 2021 were
recalculated and included only water for production needs.
5 / Total indicators may differ from the sums of the components due to rounding.
6 / The increase in the indicator in 2021 for the Metals Segment is explained by accounting the volume of water discharge into public networks by RUSAL Armenal.
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Sustainable development
Financial statements
• APPENDICES
WASTE AND TAILINGS
GRI 306-3
Non-hazardous waste generated, mt
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
15.9
8.5
24.4
14.9
6.1
21.0
13.8
8.6
22.4
Volume of non-hazardous
waste generated (excl.
overburden)
GRI 306-3, SASB EM-MM-150a.7
Hazardous waste generated, kt
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
848.1
2.3
850.4
695.8
2.7
698.6
834.6
12
846.6
Volume
of hazardous waste
generated
GRI 306-4, GRI 306-5, SASB EM-MM-150a.8
Total volume of hazardous waste managed by disposal method, kt
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
813.6
5.8
17.3
15.7
2.1
0.0
0.0
0.2
815.7
660.4
5.8
17.3
15.9
7.3
15.9
13.0
2.0
0.0
0.0
0.6
662.4
807.6
10.8
818.4
7.3
15.9
13.6
4.3
8.5
11.4
0.0
0,0
0.9
4.3
8.5
12.3
Reused
and recycled
Off-site disposal
On-site disposal
On-site
accumulation
SASB EM-MM-150a.4
Total volume of non-mineral waste generated1, mt
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
2.2
1.5
3.7
1.5
1.6
3.1
1.8
2.1
3.9
Volume of non-
mineral waste
generated
GRI 306-4, GRI 306-5
Total volume of non-hazardous waste managed by disposal method, including overburden2,3, mt
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
2.8
123.9
126.7
2.4
118.6
121.0
2.6
122.9
125.5
0.1
37.4
32.4
0.1
0.7
14.1
0.2
38.1
46.5
0.08
49.1
32.0
0.05
0.8
12.7
0.1
49.9
44.7
0.0
22.7
36.4
0.1
0.7
14.6
0.1
23.4
51.0
Reused
and recycled
Off-site disposal
On-site disposal
On-site
accumulation
SASB IF-EU-150a.1, SASB EM-MM-150a.5
Waste generation and management
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
Tailings waste4, kt
14,416.9
6,603.4
21,020.3
14,101.1
3,983.6
18,084.6
11,988.4
5,997.6
17,986.0
7.4
68.1
26.5
6.7
65.7
19.7
7.7
67.4
27.6
16,127.3
4.3
16,131.6
15,617.5
4.0
15,621.5
12,267.2
2.7
12,269.9
13.8
0.0
13.8
2.2
0.0
2.2
9.4
0.0
9.4
N/A
1,412.9
1,412.9
Н/Д
1,502.6
1,412.9
Н/Д
1,946.1
1,946
N/A
80.0
80.0
Н/Д
68.0
80.0
Н/Д
78
78
Share of tailings
waste recycled5, %
Total weight
of mineral
processing waste
recycled, kt
Share of mineral
processing waste
recycled, %
Amount of coal
combustion
residuals (CCR), kt
Share of coal
combustion
residuals
recycled, %
G4 MM2, SASB EM-MM-150a.6
Overburden, rock, tailings, ash and sludge accumulation and generation, mt
Metals
segment
Power
segment
57.0
0.0
0.0
14.4
118.1
11.0
6.9
0.2
2020
En+
175.1
11.0
6.9
14.6
Metals
segment
Power
segment
68.6
0.0
0.0
14.1
114.8
10.3
4.3
0.2
2021
En+
183.4
10.3
4.3
14.3
Metals
segment
Power
segment
49.0
0.0
0.0
12.0
117.2
11.3
6.3
0.2
2022
En+
166.2
11.3
6.3
12.2
Generated
Overburden
Rocks
Tailings
Sludge
1 / Tailings waste is not generated in the production processes of Metals segment enterprises, therefore, non-mineral waste excludes tailings waste in the form of data
on red and nepheline sludge from alumina enterprises generated in the reporting period.
290
2 / Hereinafter in the section “Additional ESG information” the data for the for the Bauxite Company of Guyana, the Bauxite Company of Kindia (Guinea), the Dian-Dian
(Guinea), that maybe material for consolidated indicators of overburden and rock waste, is excluded, due to the lack of metering systems and relevant requirements
in national legislation.
3 / The indicator includes overburden waste, which disposal methods could be recycling associated with backfilling, as well as reprocessing to new materials.
4 / Tailings waste is not generated in the production processes of Metals segment enterprises, therefore, tailings waste is presented in the form of data on red
and nepheline sludge from alumina enterprises generated in the reporting period.
5 / Used as a constructive and anti-filtration element of hydraulic structures in the Power segment.
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Sustainable development
Financial statements
• APPENDICES
Accumulated
Overburden
469.0
Rocks
Tailings
Sludge
0.0
0.0
482.9
2020
753.6
959.1
113.4
483.5
284.6
959.1
113.4
0.6
488.0
0.0
0.0
494.2
284.6
969.3
114.5
0.6
2021
772.6
969.3
114.5
494.8
516.1
0.0
0.0
437.5
284.6
980.5
116.3
0.6
2022
800.7
980.5
116.3
438.1
SASB IF-EU-150a.2
Total number of tailings storage facilities, broken down by hazard potential classification and structural integrity
assessment in Power segment
Total number of coal combustion residual (CCR)
tailings storage facilities, including
High potential hazard
Significant potential hazard
Low potential hazard
2020
16
1
5
10
2021
16
1
13
2
LAND REHABILITATION AND RECLAMATION
G4 MM1
Area of disturbed as a result of open pit mining and reclaimed lands, hectares
2020
2021
Metals
segment
Power
segment
Metals
segment
Power
segment
En+
En+
Metals
segment
Power
segment
2022
16
2
12
2
2022
En+
6,742
11,606.3
18, 348.1
10,295
11,761.7
22, 054.9 12,104.25
11,995
22,428
1,563
155
1,718
245
214
48
1
49
107
60
459
167
45
77
227
272
0
77
8,257
11,760
20,017
10,433
11,915,7
22,347
12,072.3
12,221 24,293.25
The total area of land
disturbed as a result of open
pit mining, but not yet
reclaimed land as of January
1 of the reporting year
Total area of disturbed land
as a result of open pit mining
Total area of reclaimed land
for which a permit for use
has been obtained
The total area of land
disturbed as a result
of open pit mining, but
not yet reclaimed land
as of December 31
of the reporting year
The denominator data used for intensity metrics calculation
Power segment
Metals segment
HEALTH AND SAFETY1,2
GRI 403-5, SASB IF-EU-320a.1, SASB EM-MM-320a.1
Health and Safety indicators
Power segment
Metals segment
En+
2020
2021
2022
2020
2021
2022
2020
2021
2022
2
49
0.20
53
1
35
0.14
91
1
36
0.13
65
2
93
0.213
101
8
85
0.17
114
4
4
9
5
85
142
120
121
0.18
123
0.21
154
0.16
205
0.16
188
40,388
56,551
49,955
337,889
270,023
350,366
378,277
326,574
400,321
48,507
51,845
53,574
87,531
90,909
95,639
136,038
149,029
149,213
-
3,546
4,147
-
-
-
-
-
-
Number of fatalities
caused by work-related
injuries (employees)
Number of work-
related injuries
LTIFR (employees)
Cases of occupational
diseases4
Number of unsafe
conditions/actions
identified
Total man-hours
worked (employees),
thousands
Total man-hours
worked (contractors),
thousands
Health and Safety indicators of the Power segment
MAIN FACTORS OF WORK-RELATED INJURIES, %
- Falling objects from a height
- Falling people from a height
- Chemical exposure
- High temperature, handling melts
- Moving and rotating equipment parts
- Slipping, stumbling and falling
- Other
The average hours of trainings per employee
The average hours of trainings per contractor
Near miss frequency rate, employees (NMFR)
Near miss frequency rate, contractors (NMFR)
Total recordable injury rate, employees (TRIR)
2020
2021
2022
15%
2%
0%
0%
5%
27%
51%
31
40
0.144
-
0.293
7%
29%
0%
3%
3%
10%
48%
33
40
0.166
0.28
0.225
17%
8%
3%
0%
17%
28%
27%
38
37
0.258
0.05
0.332
Amount of electricity generation and heat generation, bn kWh
Volume of aluminium produced, kt
2020
113,5116
2021
123,574
2022
116,3756
2020
3,755
2021
3,764
2022
3,835
1 / Hereinafter in the section “Health and safety” the injuries data represent cases registered by the Company.
2 / Hereinafter in the section for work-related injuries and occupational diseases “Health and Safety” KRAMZ and SMR are included in data of the Metals segment.
3 / In 2020, the actual injury frequency rate was 0.18, excluding data for Pikalyovo Alumina Refinery (town of Pikalyovo). From the acquisition of Pikalyovo Alumina Refinery
in September 2020 until the end of 2020, 4 accidents occurred at Pikalyovo Alumina Refinery, including 2 accidents with severe injuries. In 2021, Pikalyovo Alumina
Refinery was included in the general statistics of UC RUSAL.
4 / The statistics do not include cases of newly diagnosed occupational diseases in the post-exposure period.
292
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Sustainable development
Financial statements
• APPENDICES
Health and Safety expenditures of the Power segment1, mn
2020
USD
0.6
4.2
0.2
3.2
4.1
RUB
43.3
301.8
17.1
232.7
298.2
2021
USD
0.51
5.9
1.0
2.9
4.4
2022
USD
2.7
32.8
8.1
RUB
39.8
478.2
118
253.9
17.4
427.6
29.3
RUB
37.8
434.2
76.1
216.1
321.4
893.2
12.4
1085.8
14.7
1317.6
90.3
Employee training
and maintenance
of training systems
Improvement of fire safety
Improvement of technical
level and efficiency
of production
Improving working
conditions and sanitation
measures
Improving the quality
and effectiveness
of personal protective
equipment
Total Health and Safety
expenditures
EMPLOYEES
GRI 2-6
2-7
Employees
Headcount
at Russian
and international
facilities, including
- Russia
- Other countries
Share of full-time
employees, %,
including
- Female
- Male
Share of employees
with permanent
type employment
contract, %,
including
- Female
- Male
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
56,150
35,003
91,153
57,933
35,256
93,189
59,463
37,154
96,617
46,019
10,131
98.8
34,988
15
99.3
81,007
10,146
99.1
47,873
10,060
98.9
35,247
9
99.1
83,120
10,069
99.0
49,313
10,150
97.1
37,146
8
99.1
86,459
10,158
97.9
98.8
98.8
91.5
98.5
99.6
96.1
98.7
99.2
93.8
98.7
99.0
92.3
98.6
99.3
96.1
98.7
99.2
94.2
97.5
97.0
92.4
98.5
99.4
95.5
97.9
97.8
93.6
90.5
91.9
94.6
96.8
92.6
94.4
89.4
93.2
94.6
96.8
92.0
95.0
90.0
93.2
93.7
96.2
91.6
94.3
1 / Calculated based on USD/RUB average exchange rate of RUB 73.65 per USD for 2021, 68.55- for 2022.
294
GRI 405-1
Workforce gender diversity, %
Metals segment
Power segment
En+
2020
2021
2022
2020
2021
2022
2020
2021
2022
WORKFORCE GENDER DIVERSITY
Female,
including
- Up to 30
- 30-50
- Over 50
Male,
including
- Up to 30
- 30-50
- Over 50
24.7
10.7
62.3
27.0
75.3
16.3
62.2
21.5
24.9
25.1
30.8
10.5
62.5
26.9
75.1
15.9
63.0
21.1
10.1
62.4
27.6
74.9
14.6
63.1
22.4
11.7
61.5
26.8
69.2
13.4
57.0
29.7
SENIOR MANAGERS GENDER DIVERSITY
Female,
including
- Up to 30
- 30-50
- Over 50
Male,
including
- Up to 30
- 30-50
- Over 50
16.6
0.0
73.8
26.2
83.4
0.6
61.0
38.4
17.4
18.0
18.1
0.0
71.9
28.1
82.6
0.2
57.7
42.1
0.0
74.2
25.8
82.0
0.2
58.7
41.2
0.0
75.0
25.0
81.9
1.1
66.1
32.8
MIDDLE-LEVEL MANAGERS GENDER DIVERSITY
Female,
including
- Up to 30
- 30-50
- Over 50
Male,
including
- Up to 30
- 30-50
- Over 50
20.1
1.9
66.6
31.6
79.9
3.1
66.7
30.2
21.2
21.7
22.6
1.6
66.2
32.2
78.8
3.2
68.9
27.9
2.1
65.3
32.7
78.3
2.7
67.6
29.7
2.7
63.7
33.6
77.4
3.8
66.5
29.7
SPECIALISTS GENDER DIVERSITY
Female,
including
- Up to 30
- 30-50
- Over 50
Male,
including
- Up to 30
- 30-50
- Over 50
56.6
13.7
66.5
19.8
43.4
12.6
62.1
25.3
54.5
55.6
58.5
14.1
67.0
18.9
45.5
12.9
66.3
20.8
14.3
66.8
18.9
44.4
11.4
65.7
23.0
13.2
66.6
20.2
41.5
12.3
64.5
23.2
31.1
11.2
62.4
26.4
68.9
13.6
57.3
29.1
22.6
1.2
79.0
19.8
77.4
0.7
69.8
29.5
22.4
3.1
67.6
29.3
77.6
3.4
67.0
29.5
58.8
12.4
67.6
20.1
41.2
13.2
62.9
23.9
31.6
10.9
62.9
26.2
68.4
13.8
57.3
28.8
24.4
2.8
65.3
31.9
75.6
0.4
64.6
35.0
23.2
3.4
68.0
28.6
76.8
3.9
67.3
28.8
58.8
12.0
68.6
19.5
41.2
12.8
63.6
23.6
27.8
28.0
11.2
61.9
26.9
72.3
14.9
59.6
25.6
10.9
62.5
26.7
72.0
14.8
60.2
25.1
17.4
20.0
0.0
74.4
25.6
82.7
0.9
63.6
35.6
0.6
75.5
24.0
80.0
0.5
63.8
35.8
21.4
21.8
2.3
65.2
32.6
78.7
3.5
66.6
30.0
2.4
66.9
30.8
78.2
3.3
68.0
28.7
57.6
56.7
13.5
66.6
20.0
42.5
12.5
63.3
24.3
13.3
67.3
19.5
43.4
13.1
64.6
22.4
27.6
10.4
62.6
27.0
72.4
14.3
61.0
24.7
19.9
1.0
70.9
28.1
80.1
0.3
60.3
39.4
22.4
2.7
66.7
30.6
77.6
3.3
67.5
29.2
57.2
13.0
67.7
19.2
42.8
12.1
64.6
23.3
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En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
Metals segment
Power segment
En+
2020
2021
2022
2020
2021
2022
2020
2021
2022
GRI 2-30, SASB EM-MM-310a.1
Employees covered by collective agreements, %
20.2
20.1
22.6
9.9
59.9
30.2
79.8
17.7
62.1
20.2
9.0
59.7
31.3
79.9
16.3
62.4
21.3
12.1
56.3
31.6
77.4
15.5
53.7
30.8
22.6
11.8
56.2
32.0
77.4
15.8
54.1
30.1
22.9
11.4
56.3
32.4
77.1
16.2
54.0
29.8
21.5
21.4
11.2
58.1
30.7
78.6
16.8
57.8
25.5
10.9
58.1
31.1
78.6
16.8
58.1
25.2
21.1
9.9
58.5
31.7
78.9
16.3
59.7
24.1
EMPLOYEES
COVERED
BY COLLECTIVE
AGREEMENTS,
INCLUDING
- Russia
- Other countries
GRI 202-1
Metals
segment
Power
segment
2020
En+
87.2
Metals
segment
Power
segment
2021
En+
86.0
Metals
segment
Power
segment
2022
En+
86.3
86.9
79.3
89.9
-
85.7
79.5
88.3
-
87.9
78.4
86.5
-
WORKERS GENDER DIVERSITY
Female,
including
- Up to 30
- 30-50
- Over 50
Male,
including
- Up to 30
- 30–50
- Over 50
20.3
10.3
59.9
29.7
79.7
18.1
61.8
20.1
GRI 401-1
New hires, number
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment
Power
segment
2022
En+
7,723
4,871
12,594
8,154
6,893
15,047
6,480
7,226
13,706
6,805
918
4,870
11,675
1
919
7,327
827
6,892
14,219
1
828
5,747
733
7,226
12,973
0
733
Total,
including
- Russia
- Other
countries
GRI 401-1
New hires by gender, %
Female
Male
GRI 401-1
New hires by age, %
18–30
30–50
Over 50
2020
29.1
70.9
2020
33.9
55.1
10.9
2021
30.5
69.5
2021
33.7
55.3
11.0
2022
30.8
69.2
2022
33.7
55.0
11.3
Standard entry level wage rate for employees and established minimum wage in key operating countries in Metals
segment1
Standard entry level wage rate
Established minimum wage in the region
2020
2021
2022
2020
2021
2022
Region
Russia
Republic
of Armenia
Ukraine
Jamaica
Guinea
Guyana
Nigeria
RUB
13,000
31,287
13,365
23,875
5,052
40,937
10,391
USD
180
435
185
331
70
568
150
RUB
18,100
32,360
17,563
23,043
5,054
40,949
10,540
USD
246
439
238
313
69
556
143
RUB
22,000
37,851
14,203
23,624
5,284
37,958
8,955
USD
321
564
207
345
77
554
131
RUB
12,130
13,719
13,365
16,228
3,318
USD
168
190
185
225
46
RUB
12,792
13,824
17,563
14,815
3,319
USD
177
188
238
201
45
RUB
15,279
14,570
14,203
17,338
4,338
15,146
210
15,565
211
19,640
6,067
84
5,533
75
4,852
USD
223
213
207
253
63
286
71
GRI 202-1
Standard entry level wage rate for employees and established minimum wage in Russia and CIS in Power segment1
Standard entry level wage rate2
Established minimum wage in the region3
2020
2021
2022
2020
2021
2022
Region
Russia
Republic
of Armenia
RUB
12,205
17,155
USD
188
264
RUB
15,316
17,029
USD
208
231
RUB
17,600
17,975
USD
257
262
RUB
12,130
13,697
USD
168
211
RUB
12,792
13,697
USD
174
186
RUB
15,279
14,352
USD
223
209
1 / Calculated based on USD/RUB average exchange rate of 72.14 for 2020, 73.65 for 2021, 68.55 for 2022.
2 / Average values.
3 / Average values; includes regional coefficient and Northern Index.
296
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En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
GRI 405-2
Ratio of basic salary and remuneration men to women
Average salary
Metals
segment
1.94
BREAKDOWN BY EMPLOYEE CATEGORY
1.97
1.19
1.33
1.34
Senior managers
Middle-level managers
Specialists
Workers
GRI 405-2
Average salary in Power segment1
Average salary
BREAKDOWN BY GENDER
Female
Male
Diversity of employees
2020
Power
segment
Metals
segment
2021
Power
segment
Metals segment
1.17
1.31
1.09
1.19
1.36
1.33
1.7
1.15
1.48
1.41
2020
USD
RUB
RUB
54,223
835
65,737
48,243
56,206
743
866
58,334
69,079
1.18
1.46
1.09
1.22
1.4
2021
USD
893
792
938
1.16
1.19
1.06
1.19
1.53
RUB
72,866
66,959
75,595
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
2021
En+
Metals
segment2
Power
segment
2022
Power
segment
1.13
1.26
1.02
1.22
1.34
2022
USD
1,063
977
1,103
2022
En+
n/a
331
331
n/a
333
333
359
413
772
n/a
0.9
0.9
n/a
0.9
0.9
0.6
1.1
0.8
Number
of employees
with disabilities
Share
of employees
with disabilities
in the total
number
of employees, %
GRI 401-3
Parental leave
Total number of employees
that were entitled
to parental leave
- Female
- Male
Total number of employees
that took parental leave
- Female
- Male
Total number of employees
that returned to work
in the reporting period after
parental leave ended
- Female
- Male
Total number of employees
that returned to work after
parental leave ended that
were still employed 12
months after their return
to work
- Female
- Male
Retention rate
of employees that took
parental leave, %
GRI 401-1
Employee turnover3, %
2020
2021
2022
Metals
segment
Power
segment
En+
Metals
segment
Power
segment
En+
Metals
segment
Power
segment
En+
7,408
1,470
8,878
7,186
1,221
8,407
5,924
1,750
7,674
1,615
5,793
388
363
25
266
249
17
242
675
795
546
527
19
240
229
11
181
2,290
6,588
934
890
44
506
478
28
423
1,536
5,650
312
291
21
280
267
13
215
630
591
568
535
33
218
208
10
126
2,166
6,241
880
826
54
498
475
23
341
1,275
4,649
333
320
13
317
300
17
227
810
940
579
547
32
287
272
15
149
2,085
5,589
912
867
45
604
572
32
376
233
9
85.8
168
13
401
22
76.7
81.3
203
12
80.8
119
7
52.5
322
19
66.7
221
6
81.1
142
7
68.3
363
13
75.5
Metals
segment
Power
segment
2020
En+
Metals
segment
Power
segment
10.9
10.5
19.9
9.0
10.2
11.1
17.0
9.0
12.7
11.6
11.3
10.6
12.1
19.4
10.4
12.7
11.3
18.3
9.9
10.8
11.3
19.7
9.7
11.5
11.2
17.7
9.5
11.8
10.3
20.7
8.6
10.3
10.7
18.9
8.2
12.0
13.6
15.5
27.9
13.5
14.8
12.8
20.7
11.5
11.7
2021
En+
12.1
12.9
24.3
11.1
12.6
11.8
19.8
9.9
11.9
Metals
segment
Power
segment
9.5
9.8
21.5
7.9
9.9
9.4
17.7
6.8
11.3
12.2
14.0
26.5
12.0
13.6
11.4
18.7
10.1
10.6
2022
En+
10.5
11.6
23.8
9.7
11.5
10.1
18.0
7.9
11.0
Employee
turnover
Women
- Up to 30
- 30–50
- Over 50
Men
- Up to 30
- 30–50
- Over 50
1 / Calculated based on USD/RUB average exchange rate of 72.14 for 2020, 73.65 for 2021, 68.55 for 2022.
2 / To enforce the Federal Law ‘On social protection of disabled persons in the Russian Federation’ in terms of the required number of people with disabilities employed
in quota jobs Metals segment recently decided to enter into agreements with local branches of the All-Russian Society of the Disabled People in Metals segment’s
operating regions. This allows enterprises to meet the quota through the agreements rather than by directly employing people with disabilities on a full-time basis.
298
3 / In Power segment, employee turnover is calculated as follows: the number of employees who resigned from their job during the reporting period (in accordance
with section 3, part 1, article 77 of the Russian Labour Code)/the number of employees as of 31 December, while in Metals segment, employee turnover is calculated
using the formula: the number of employees who left the Company during the reporting period, irrespective of the reason and the article of the Labour Code/the number
of employees as of 31 December.
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Sustainable development
Financial statements
• APPENDICES
GRI 401-1
Employee turnover by region, %
Metals
segment
Power
segment
10.8
11.8
11.6
6.7
2020
En+
11.2
9.3
Metals
segment
Power
segment
11.0
8.7
13.6
77.8
2021
En+
12.3
43.3
Metals
segment
Power
segment
9.7
8.7
12.2
12.5
Russia
Other countries
GRI 202-2
Share of senior managers recruited from the local population in Russia and other countries1, %
Russia
Other countries
Metals
segment
Power
segment
99.8
61.6
100
100
2020
En+
99.9
80.8
Metals
segment
Power
segment
99.8
60.8
100
100
2021
En+
99.9
80.4
Metals
segment
Power
segment
99.8
91.9
100
100
Employees who have completed training in Metals segment, %
Employees who have completed training
BREAKDOWN BY GENDER
- Female
- Male
BREAKDOWN BY EMPLOYEE CATEGORY
- Senior managers
- Middle-level managers
- Specialists
- Workers
GRI 404-1
2020
12.3
23.1
10.9
36.7
36.8
64.7
2.8
2021
18.1
27.2
15.1
54.6
60.8
65.5
5.2
2022
En+
11.0
10.8
2022
En+
99.9
82.3
2022
39.6
29.0
43.2
10.4
62.6
45.9
36.6
Average number of training hours per trained employee, hours2
Average training hours per
employee per year
BREAKDOWN BY GENDER
- Female
- Male
Metals segment
2.1
3.7
1.6
2020
Power
segment
n/a
n/a
n/a
2021
2022
Metals segment
Power
segment
Metals
segment
Power
segment
2.3
3.9
1.7
n/a
19.3
30.8
n/a
n/a
15.7
20.5
15.7
37.8
2020
Power
segment
n/a
n/a
n/a
n/a
2021
2022
Metals segment
Power
segment
Metals
segment
Power
segment
7.3
11.3
0.2
n/a
n/a
n/a
n/a
5.7
23.2
22.6
18.6
71.3
55.6
22.3
28.6
BREAKDOWN BY EMPLOYEE CATEGORY
Metals segment
- Senior manager
- Middle-level manager
- Specialist
- Worker
6.4
11.9
0.1
CORPORATE GOVERNANCE
GRI 2-9, 405-1
Diversity of Board of directors, %
GENDER
- Female
- Male
AGE
- 35-45
- 46-55
- 56-65
- 65+
INDEPENDENCE
-
Independent
- Not independent
TENURE
- 1–3 years
- 4–9 years
- 10+ years
2020
33
67
8
42
42
8
58
42
92
8
0
2021
33
67
25
33.3
33.3
8.3
58
42
92
8
0
20223
36
64
27.3
18.1
27.3
27.3
64
36
64
36
0
1 / The geographical definition of ‘local population’ includes a country. Senior managers include the president, vice-presidents, directors of enterprises and production units
and other functions, as well as their deputies.
2 / Power segment’s data disclosed only for 2022.
3 / As at 31 December 2022.
300
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En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
GRI 2-9, 405-1
Composition and diversity of Committees as at 31.12.2022, %
Audit and Risk
Committee
Compliance
Committee
Corporate
Governance
Committee
Health, Safety,
and Environment
Committee
Nominations
Committee
Remuneration
Committee
EXECUTIVENESS
- Executive
- Non-executive
INDEPENDENCE
-
Independent
- Non-independent
TENURE
- 1–3 years
- 4–9 years
- 10+ years
GENDER
- Male
- Female
0
100
100
0
50
50
0
100
0
0
100
75
25
75
25
0
75
25
0
100
75
25
75
25
0
25
75
0
100
80
20
80
20
0
60
40
0
100
100
0
50
50
0
50
50
SUPPLY CHAIN
GRI 204-1
Total volume of purchases from local suppliers1, USD mn
2020
Metals
segment
Power segment
Metals segment
20212
Power
segment
Total volume
of purchases
Share
of purchases
from local
suppliers
7,357.0
9,019.5
9,649.1
Metals segment
Power segment
36%
33%
74%
34%
32%
76%
39%
35%
57%
0
100
60
40
80
20
0
80
20
2022
GRI CONTENT INDEX
Topic
GRI 1 FOUNDATION
GRI 2 GENERAL DISCLOSURES
GRI
Indicator
Response and reference
En+ Group has reported the information cited in this GRI content index
for the period from 1 January to 31 December with reference to the GRI
Standards.
1. THE ORGANISATION AND ITS REPORTING PRACTICES
Organisational details
GRI 2-1
About the report, p.3
Our presence and scale, p.14
Business review, p.24
Financial statements, p.211
Information for shareholders and investors, p.155
Entities included in the organisation’s
sustainability reporting
Reporting period, frequency and contact
point
Restatements of information
External assurance
GRI 2-2
About the report, p.3
GRI 2-3
About the report, p.3
GRI 2-4
GRI 2-5
About the report, p.2
Corporate governance, p.150
Additional ESG Data, p.317
2. ACTIVITIES AND WORKERS
Activities, value chain and other business
relationships
GRI 2-6
Employees
Workers who are not employees
GRI 2-7
GRI 2-8
Business review, p.26-31, 34-35
Supply chain management, p.181
Additional ESG Data, p.278-279
Employees, p.116
Additional ESG Data, p.294
Employees, p.116
The number of non- employees, dynamics and calculation methods
were not collected.
3. GOVERNANCE
Governance structure and composition
GRI 2-9
Corporate governance, p.138
Nomination and selection of the highest
governance body
GRI 2-10
Corporate governance, p.141
Role of the highest governance body
in overseeing the management of impacts
Delegation of responsibility for managing
impacts
GRI 2-12
GRI 2-13
Sustainability management, p.62
Internal control and risk management, p.163
Climate leadership and energy efficiency, p.75
Environmental stewardship, p.87
Community engagement, p.127
Internal control and risk management, pp.161,163
Stakeholder engagement, p.170
Supply chain management, p.176
Responsible business practises, pp.184, 192
Role of the highest governance body
in sustainability reporting
GRI 2-14
About report, p.2
Sustainability management, pp.62, 68
Conflicts of interest
GRI 2-15
Corporate governance, pp.137, 151
Communication of critical concerns
GRI 2-16
Corporate governance, p.142
Collective knowledge of the highest
governance body
GRI 2-17
Corporate governance, p.143
Evaluation of the performance of the highest
governance body
GRI 2-18
As of the date of this Report, the Company is developing a procedure
for evaluating the activities of members of the Board, the work
of the Board and its committees.
Remuneration policies
GRI 2-19
Corporate governance, p.153
Process to determine remuneration
GRI 2-20
Corporate governance, p.153
Shareholders or stakeholders did not vote for renumeration policies
or proposals in reporting period.
6,880.7
476.3
8,574.1
445.4
7,802.3
1,846.78
Chair of the highest governance body
GRI 2-11
Corporate governance, p.140
1 / Calculated based on USD/RUB average exchange rate of RUB 72.14 per USD for 2020, RUB 73.65 per USD for 2021, RUB 68.55 per USD for 2022. Figures of Power
segment for 2021 and 2020 were recalculated due to corrections.
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En+ Group Consolidated Report 2022 Strategic report
Sustainable development
Financial statements
• APPENDICES
Topic
Annual total compensation ratio
GRI
Indicator
GRI 2-21
Response and reference
Data cannot be disclosed as the annual total compensation ratio
is confidential
Topic
Proportion of senior management hired
from the local community
GRI
Indicator
GRI 202-2
4. STRATEGY, POLICIES AND PRACTICES
Statement on sustainable development
strategy
GRI 2-22
Chairman’s and Chief Executive Officer’s statement, p.18
Policy commitments
GRI 2-23
Sustainability management, pp.62, 64
Employees, p.120
Ethics and compliance, p.167
Embedding policy commitments
GRI 2-24
Ethics and compliance, p.168
Processes to remediate negative impacts
GRI 2-25
Sustainability management, p.67
Environmental stewardship, p.101
Ethics and compliance, p.169
Stakeholder engagement, p.170
Additional ESG Data, p.277
Mechanisms for seeking advice and raising
concerns
GRI 2-26
Ethics and compliance, p.169
Stakeholder engagement, p.170
Compliance with laws and regulations
GRI 2-27
Membership associations
GRI 2-28
Employees, p.116
Corporate governance, p.137
Environmental stewardship, p.100
Collaborations and partnerships, p.173
5. STAKEHOLDER ENGAGEMENT
Approach to stakeholder engagement
GRI 2-29
Community engagement, p.126
Stakeholder engagement, p.170
Collective bargaining agreements
GRI 2-30
Employees, p.122
GRI 3 Disclosures on material topics
Process to determine material topics
GRI 3-1
List of material topics
Management of material topics
GRI 3-2
GRI 3-3
Materiality assessment, p.68
Additional ESG Data, pp.277-279
Materiality assessment, p.68
Strategy, p.22
Materiality assessment, p.68
Climate leadership and energy efficiency, pp.75, 76, 82, 83
Environmental stewardship, pp.85, 88, 89, 90, 91, 94, 100
Health and safety, pp.108, 109, 116
Employees, pp.117, 118, 123
Community engagement, p.126
Corporate Governance, p.136
Internal control and risk management, p.163
Ethics and compliance, p.167
Stakeholder engagement, p.170
Supply chain management, pp.176, 180
Responsible business, pp.184, 192, 194
Additional ESG Data, pp.278-279
GRI 200 ECONOMIC
GRI 201 ECONOMIC PERFORMANCE
Direct economic value generated
and distributed
Financial implications and other risks
and opportunities due to climate change
Defined benefit plan obligations and
other retirement plans
Financial assistance received from
government
GRI 202 MARKET PRESENCE
GRI 201-1
Additional ESG Data, p.276
GRI 201-2
Additional ESG Data, p.283-285
GRI 201-3
Financial statements, p.222
GRI 201-4
Additional ESG Data, p.276
Ratios of standard entry level wage
by gender compared to local minimum wage
GRI 202-1
Employees, p.123
Additional ESG Data, p.297
In Metals segment, the size of the standard entry-level salary is disclosed
without a breakdown by gender due to the specifics of data collection.
Response and reference
Employees, p.117
Additional ESG Data, p.300
Significant locations of operation of En+ are the regions in which
production facilities and key personnel of the enterprise are located.
GRI 203 INDIRECT ECONOMIC IMPACTS
Infrastructure investments and services
supported
GRI 203-1
Community engagement, p.128
Significant indirect economic impacts
GRI 203-2
Community engagement, pp.126, 130
Supply chain management, p.179
Additional ESG Data, pp.278-279
GRI 204 PROCUREMENT PRACTICES
Proportion of spending on local suppliers
GRI 204-1
Supply chain management, p.179
GRI 205 ANTI-CORRUPTION
Operations assessed for risks related
to corruption
GRI 205-1
Ethics and compliance, p.168
Communication and training about anti-
corruption policies and procedures
GRI 205-2
The information about total number and percentage of employees that
the organisation’s anti-corruption policies and procedures have been
communicated and total number and percentage of employees that have
receive training is excluded due to the existing reporting processes.
Confirmed incidents of corruption
and actions taken
GRI 206 ANTI-COMPETITIVE BEHAVIOR
Legal actions for anti-competitive
behavior, anti-trust, and monopoly practices
GRI 205-3
Ethics and compliance, p.169
GRI 206-1
Ethics and compliance, p.169
GRI 207 TAX
Approach to tax
GRI 207-1
En+ is a responsible and reliable taxpayer. The basis for the preparation
of accounting policies for tax purposes in the subsidiaries and affiliates
are the general accounting principles, which En+ reviews annually. En+
also has a policy that describes our approach to taxation.
The majority of our tax expense is related to income taxes. Methodology
to calculate income tax expense at p. 223 Consolidated Financial
Statements for the year ended 31 December 2021
En+ parent company is a tax resident of the Russian Federation. It is also
registered as a resident in the SAR (Special Administrative Region)
of Russia, which, subject to certain conditions, provides a number of tax
benefits.
The tax rate for the parent company and the Company’s subsidiaries
registered in Russia is 20%. In addition, subsidiaries are registered
in other 10 countries, where the tax rate varies from 0 to 30%. Tax rates
in other countries are at p. 21 Consolidated Interim Condensed Financial
Information for the six months ended 30 June 2022
We regularly publish tax information using various types of reporting:
Condensed consolidated interim financial information is published several
times during the year (once every three or six months) and provides
interim information on tax expenses and tax liabilities for the specified
period.
Consolidated financial statements are published once a year and contain
financial information for the year ended 31 December.
The Consolidated Report is published annually and provides a review
of the financial results, including financial ratios and contingent liabilities.
The country-by-country report provides information for each tax
jurisdiction for all legal entities included in a company’s audited
consolidated financial statements that are tax residents.
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Financial statements
• APPENDICES
Topic
Tax governance, control, and risk
management
GRI
Indicator
GRI 207-2
Stakeholder engagement and management
of concerns
related to tax
GRI 207-3
Response and reference
Systematic and rational tax risk management is key to the Company’s
investment attractiveness and financial stability. Thus, we take
a responsible approach to tax risk management which includes
identification and monitoring of tax risks.
Audit and risk committee is responsible for reviewing material aspects
of the Company’s and its subsidiaries’ accounting policies to ensure
that they are appropriate and consistently applied.More responsibilities
of Audit and Risk Committee at p.150 Corporate Governance
The departments responsible for tax issues within the Company
develop measures to eliminate or minimise the risks and work to avoid
them in compliance with tax legislation. Tax compliance is embedded
in the KPIs of the key departments responsible for tax management
at the Company. The Accounting Department is in charge of tax policy
compliance of the Company. The Tax Policy Department is authorised
for reviewing and approving the Company’s projects and transactions.
The Company carries out regular internal and external audits of financial
statements
We closely monitor the risks associated with the possibility of varying
interpretations and frequent changes in applicable tax, currency
and customs legislation. For example, as tax authorities take
an increasingly assertive stance in interpreting and enforcing tax laws,
the Company may need to challenge their interpretations of legal
provisions that differ from previous interpretations, which may involve
dealing with local, state, and federal authorities.
In planning our tax-related expenses, we estimate the maximum
cumulative additional amounts that could be paid if tax positions were not
sustained, as there is a possibility (although it is less than 50%) that
additional taxes could be payable as a result of the outcome of tax audits
or resolution of disputes with tax authorities.
Country-by-country reporting
GRI 207-4
Data is partially presented in the financial review.
Financial review, p.57
GRI 300 ENVIRONMENTAL
GRI 302 ENERGY
Energy consumption within the organisation
GRI 302-1
Energy management, p.83
Additional ESG Data, p.281
Reduction of energy consumption
GRI 302-4
Climate leadership and energy efficiency, p.83
Additional ESG data, p.280
d. Sources of conversion factors for calculating:
- IPCC (2006) Guidelines for National Greenhouse Gas
Inventories, Volume 2 Energy, Chapter 1 (Introduction),
pp.1.19-1.20, tab. 1.2
- Energy converter, available at http://convert-to.com/
conversion/energy/convert-kwh-to-gj.html
GRI 303 WATER AND EFFLUENTS
Interactions with water as a shared resource
GRI 303-1
Environmental Stewardship, p.91
Management of water discharge-related
impacts
GRI 303-2
Environmental Stewardship, p.91
The water withdrawal and wastewater discharges are carried out
by the Company’s enterprises in accordance with project design
solutions and established legal requirements. Interaction with water
bodies is regulated taking into account their properties and the chemical
compositions of discharges impacting on bodies of water.
Water withdrawal
Water discharge
GRI 303-3
GRI 303-4
Environmental Stewardship, p.91
Additional ESG Data, p.288
Environmental Stewardship, p.92
Additional ESG Data, p.288
Topic
Water consumption
GRI 304 BIODIVERSITY
Operational sites owned, leased, managed
in, or adjacent to, protected areas and areas
of high biodiversity value outside protected
areas
Significant impacts of activities, products,
and services on biodiversity
GRI
Indicator
GRI 303-5
Response and reference
Environmental Stewardship, p.92
Additional ESG Data, p.289
GRI 304-1
Environmental Stewardship, p.100
GRI 304-2
Environmental Stewardship, p.102, 103
Habitats protected or restored
GRI 304-3
Environmental Stewardship, p.99
GRI 305 EMISSIONS
Direct (Scope 1) GHG emissions
GRI 305-1
Climate leadership and energy efficiency, p.82
Energy indirect (Scope 2) GHG emissions
GRI 305-2
Climate leadership and energy efficiency, p.82
Other indirect (Scope 3) GHG emissions
GRI 305-3
Climate leadership and energy efficiency, p.82
GHG emissions intensity
GRI 305-4
Climate leadership and energy efficiency, p.82
Reduction of GHG emissions
GRI 305-5
Climate leadership and energy efficiency, p.77
Emissions of ozone-depleting substances
(ODS)
GRI 305-6
There are no emissions of ODS
Nitrogen oxides (NOX), sulfur oxides (SOX),
and other significant air emissions
GRI 305-7
Environmental Stewardship, p.88
Additional ESG Data, p.287
GRI 306 WASTE (2020)
Waste generation and significant waste-
related impacts
Management of significant waste-related
impacts
Waste generated
GRI 306-1
Environmental Stewardship, p.94
GRI 306-2
Environmental Stewardship, p.96
GRI 306-3
Environmental Stewardship, p.95
Additional ESG Data, p.290
Waste diverted from disposal
GRI 306-4
Environmental Stewardship, p.95
Additional ESG Data, p.290-291
Environmental Stewardship, p.95
Additional ESG Data, p.290-291
GRI 308 SUPPLIER ENVIRONMENTAL ASSESSMENT
New suppliers that were screened using
environmental criteria
Negative environmental impacts
in the supply chain and actions taken
GRI 400 SOCIAL
GRI 401 EMPLOYMENT
GRI 308-1
Supply chain management, p.178
GRI 308-2
Supply chain management, p.178
New employee hires and employee turnover
GRI 401-1
Employees, p.116
Additional ESG Data, p.296,299,300
Benefits provided to full-time employees that
are not provided to temporary or part-time
employees
GRI 401-2
Employees, p.121
Parental leave
GRI 401-3
Additional ESG Data, p.299
GRI 402 LABOR/MANAGEMENT RELATIONS
Minimum notice periods regarding
operational changes
GRI 402-1
For Group’s companies located in the Russian Federation: “in accordance
with the current Labor Code of the Russian Federation, federal laws
and other regulatory legal acts containing labor law norms, agreements
and employment contracts according to part 2 of Art. 74 of the Labor
Code of the Russian Federation, the minimum period is 2 months”.
Energy intensity
GRI 302-3
Climate leadership and energy efficiency, p.83
Waste directed to disposal
GRI 306-5
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Sustainable development
Financial statements
• APPENDICES
Topic
GRI
Indicator
Response and reference
GRI 403 OCCUPATIONAL HEALTH AND SAFETY
Occupational health and safety
management systems
GRI 403-1
Health and safety, p.109
Hazard identification, risk assessment,
and incident investigation
GRI 403-2
The internal investigation process has also been established
by the Company. The process seeks to determine root causes of incidents
through in-depth analyses of the risks, using the whole range of advanced
methods. The process is regulated by the Regulation for the Reporting,
Investigation and Analysis of Occupational Safety Incidents that
was amended in 2022. This process covers all fatal cases and injuries
with loss of working capacity as a requirement of domestic legislation
as well as cases of near miss that could potentially lead to the injury
or fatality.
Occupational health services
GRI 403-3
Health and safety, p.113
Worker participation, consultation,
and communication on occupational health
and safety
Worker training on occupational health
and safety
GRI 403-4
Health and safety, p.109
GRI 403-5
Additional ESG Data, p.293
Promotion of worker health
GRI 403-6
Health and safety, p.113
Employees, p.121
Prevention and mitigation of occupational
health and safety impacts directly linked
by business relationships
Workers covered by an occupational health
and safety management system
GRI 403-7
Health and safety, p.113
GRI 403-8
Health and safety, p.109
Work-related injuries
Work-related ill health
GRI 403-9
Health and safety, p.111
GRI 403-10
Health and safety, p.113
GRI 404 TRAINING AND EDUCATION
Average hours of training per year per
employee
GRI 404-1
Additional ESG Data, pp.300-301
Programmes for upgrading employee skills
and transition assistance programmes
GRI 404-2
Employees, p.124
GRI 405 DIVERSITY AND EQUAL OPPORTUNITY
Diversity of governance bodies
and employees
GRI 405-1
Employees, p.117
Additional ESG Data, p.295,301-302
Ratio of basic salary and remuneration
of women to men
GRI 406 NON-DISCRIMINATION
Incidents of discrimination and corrective
actions taken
GRI 405-2
Employees, p.117
GRI 406-1
Employees, p.118
GRI 407 FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
Operations and suppliers in which the right
to freedom of association and collective
bargaining may be at risk
GRI 408: CHILD LABOUR
GRI 407-1
Supply chain management, p.177
Operations and suppliers at significant risk
for incidents of child labour
GRI 408-1
Employees, p.118
Supply chain management, p.177
GRI 409: FORCED OR COMPULSORY LABOUR
Operations and suppliers at significant risk
for incidents of forced or compulsory labour
GRI 409-1
Employees, p.119
Supply chain management, p.177
GRI 411 RIGHTS OF INDIGENOUS PEOPLES
Incidents of violations involving rights
of indigenous peoples
GRI 411-1
In 202, we did not have any conflicts related to lands or objects that
present historical or cultural value for indigenous communities.
Topic
GRI 413 LOCAL COMMUNITIES
Operations with local community
engagement, impact assessments,
and development programmes
GRI 414 SUPPLIER SOCIAL ASSESSMENT
New suppliers that were screened using
social criteria
Negative social impacts in the supply chain
and actions taken
GRI 415 PUBLIC POLICY
Political contributions
GRI
Indicator
GRI 413-1
Response and reference
Environmental Stewardship, pp.102, 104
Health and safety, p.112
Employees, p.117, 122
Community engagement, p.127
GRI 414-1
Supply chain management, p.178
GRI 414-2
Supply chain management, p.178
GRI 415-1
Ethics and compliance, p.169
GRI 417 MARKETING AND LABELING
Requirements for product and service
information and labeling
GRI 417-1
Incidents of non-compliance concerning
product and service information and labeling
GRI 417-2
Finished goods manufactured at the Company’s enterprises
are automatically labelled in accordance with government requirements.
The label contains information about the trademark or name
of the manufacturer, the grade of aluminium or alloy, the heat number
and other information.
In 2022, the Company complied with the relevant laws and regulations
that have a significant impact on the RUSAL in relation to product labelling,
and no significant claims were received in connection with product
labelling.
GRI EU
Installed capacity by primary energy source
and regulatory regime
Net energy output by energy source
and regulatory regime
GRI MM
Amount of land (owned or leased) used
for production activities, disturbed,
or reclaimed
Total amounts of overburden, rock, tailings,
and sludge and associated risks
EU1
EU2
Business Review, p.35
All energy-generating assets are subject to the legal and regulatory
framework adopted in the Russian Federation.
Additional ESG Data, p.280
All energy-generating assets are subject to the legal and regulatory
framework adopted in the Russian Federation.
MM1
Additional ESG Data, p.291
MM2
Additional ESG Data, p.291
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Sustainable development
Financial statements
• APPENDICES
SASB CONTENT INDEX
METALS SEGMENT
Topic
Code
Accounting metric
Response and reference
Greenhouse Gas
Emissions
EM-MM-110a.1
Gross global Scope 1 emissions,
percentage covered under
emissions-limiting regulations
EM-MM-110a.2
Air Quality
EM-MM-120a.1
Energy
Management
Water
Management
EM-MM-130a.1
EM-MM-140a.1
EM-MM-140a.2
EM-MM-150a.4
Waste &
Hazardous
Materials
Management
Discussion of long-term and short-
term strategy or plan to manage
Scope 1 emissions, emissions
reduction targets, and an analysis
of performance against those targets
Air emissions of the following
pollutants: (1) CO, (2) NOx (excluding
N2O), (3) SOx, (4) particulate matter
(PM10), (5) mercury (Hg), (6)
lead (Pb), and (7) volatile organic
compounds (VOCs)
(1) Total energy consumed, (2)
percentage grid electricity, (3)
percentage renewable
(1) Total fresh water withdrawn,
(2) total fresh water consumed,
percentage of each in regions
with High or Extremely High Baseline
Water Stress
Number of incidents of non-
compliance associated with water
quality permits, standards,
and regulations
Total weight of non-mineral waste
generated
EM-MM-150a.5
Total weight of tailings produced
Climate Leadership and energy efficiency, p.82
According to regulations, European assets
of The Company in Ireland and Sweden are subjects
to European requirements.
Climate Leadership and energy efficiency, p.82
Environmental Stewardship, p.88
Additional ESG Data, p.287
The Company keeps records in accordance
with the requirements of the national legislation
of the regions where the Company operates and does
not collect the data on lead and mercury emissions,
in addition, these substances are not characteristic
of the main production units of the Company.
Climate Leadership and energy efficiency, p.83
The share of renewable fuels is insignificant.
Environmental Stewardship, pp.91, 92
Additional ESG Data, p.288-289
Environmental Stewardship, p.91
Additional ESG Data, p.290
Environmental Stewardship, p.95
Additional ESG Data, p.291
EM-MM-150a.6
Total weight of waste rock generated
Additional ESG Data, p.291
EM-MM-150a.7
EM-MM-150a.8
EM-MM-150a.9
EM-MM-150a.10
Total weight of hazardous waste
generated
Total weight of hazardous waste
recycled
Number of significant incidents
associated with hazardous materials
and waste management
Description of waste and hazardous
materials management policies
and procedures for active
and inactive operations
Additional ESG Data, p.290
Additional ESG Data, p.290
There are no critical risks associated with waste
management and hazardous materials. In 2022, no
significant incidents were identified for either Power
or Metals segment.
Environmental stewardship, p.96
Topic
Code
Accounting metric
Response and reference
Biodiversity
Impacts
EM-MM-160a.1
EM-MM-160a.2
EM-MM-160a.3
Description of environmental
management policies and practices
for active sites
Percentage of mine sites
where acid rock drainage is: (1)
predicted to occur, (2) actively
mitigated, and (3) under treatment
or remediation
Percentage of (1) proved and (2)
probable reserves in or near sites
with protected conservation status
or endangered species habitat
Security, Human
Rights & Rights
of Indigenous
Peoples
EM-MM-210a.1
Percentage of (1) proved and (2)
probable reserves in or near areas
of conflict
EM-MM-210a.2
EM-MM-210a.3
Percentage of (1) proved and (2)
probable reserves in or near
indigenous land
Discussion of engagement
processes and due diligence
practices with respect to human
rights, indigenous rights,
and operation in areas of conflict
Community
Relations
EM-MM-210b.1
Discussion of process to manage
risks and opportunities associated
with community rights and interests
EM-MM-210b.2
Number and duration of non-
technical delays
Environmental Stewardship, p.100
Environmental Stewardship, p.98
Metals and Power’s segments production facilities
do not have acid effluents. The appearance of acidic
waters is not typical for nepheline and bauxite
developed fields, since these fields do not contain
sulphide-containing rocks.
In its biodiversity activities, Metals and Power
segments are governed by the requirements
of the legislation of the countries of the Company’s
presence, the provisions of the Company’s
Environmental Policy, the Regulations on the initial
assessment of risks and materiality of impacts
on biodiversity for existing enterprises and other
regulations and documents.
Metals and Power segment implement
a comprehensive approach based on an assessment
of the risks of potential impacts on biodiversity
in the Company’s regions of presence, which
makes it possible to identify focus areas, minimize
and mitigate such impacts as a result of its own
production activity, and manage biodiversity
conservation issues in a rational manner. “
Additionally: There are no restrictions related to SPNAs
and habitat zones of endangered species (not
established) for the mineral deposits being developed
by the Company’s enterprises.
To help our clients meet the Dodd-Frank act
obligations, we affirm that, in accordance
with the Declaration of DRC Conflict Minerals
Free manufacturer, none of the Conflict Minerals
from the Democratic Republic of the Congo
or neighbouring countries (Angola, Republic of Congo,
Burgundy, Central African Republic, Rwanda, South
Sudan, Tanzania, Uganda or Zambia) is not used
in the production and products of En+. Also, En+
does not in any way contribute to armed conflicts
or violations of human rights in the Conflict Areas
and in the High-Risk Areas.
The Сompany does not operate in areas of in or near
indigenous land.
Community engagement, p.127
In the reporting year, there were no cases of human
rights violations, including violations of the rights
of indigenous and minority peoples.
The environmental conditions affected by the work
of enterprises and the economic situation in the region
are of huge concern to local communities.
The Company pays considerable attention to such
issues as the amount of tax payments to budgets,
the availability of jobs and decent salaries, social
guarantees, opportunities for children to receive
a decent education and the prospects for their
employment in the future. The Company strives
to create favourable living conditions for local
communities, to ensure a good social climate
and increase the Company’s trust and loyalty
to the population.
As for the Metals and Power segments, there were no
recorded facts of non-technical delays in the reporting
year.
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Sustainable development
Financial statements
• APPENDICES
Topic
Code
Accounting metric
Response and reference
Labour Relations
EM-MM-310a.1
Percentage of active workforce
covered under collective bargaining
agreements, broken down by U.S.
and foreign employees
Additional ESG Data, p.297
Disclosure includes data for all employees.
EM-MM-310a.2
Number and duration of strikes
and lockouts
Workforce
Health & Safety
EM-MM-320a.1
Business Ethics
& Transparency
EM-MM-510a.1
Tailings Storage
Facilities
Management
EM-MM-540a.1
EM-MM-540a.2
(1) MSHA all-incidence rate,
disclosed in accordance
with national law (2) fatality rate, (3)
near miss frequency rate (NMFR)
and (4) average hours of health,
safety, and emergency response
training for (a) full-time employees
and (b) contract employees
Description of the management
system for prevention of corruption
and bribery throughout the value
chain
Tailings storage facility inventory
table: (1) facility name, (2) location,
(3) ownership status, (4) operational
status, (5) construction method,
(6) maximum permitted storage
capacity, (7) current amount
of tailings stored, (8) consequence
classification, (9) date of most recent
independent technical review, (10)
material findings, (11) mitigation
measures, (12) site-specific EPRP
Summary of tailings management
systems and governance structure
used to monitor and maintain
the stability of tailings storage
facilities
EM-MM-540a.3
Approach to development
of Emergency Preparedness
and Response Plans (EPRPs)
for tailings storage facilities
As for the Metals and Power segments, operations
and suppliers in which workers’ rights to exercise
freedom of association or collective bargaining may
be violated were not identified in the reporting
year. Also, there were no recorded facts of strikes
and mass layoffs.
Additional ESG Data, p.293
Data is disclosed under the requirements
of the legislation of the Russian Federation.
Ethics and compliance, p.168
Tailings waste is not generated in the production
processes of the Metals segment enterprises,
therefore, the Metals segment has no tailings storage
facilities.
Within the Power segment this information cannot
be disclosed in the current reporting period
due to the peculiarities of data collection.
Tailings waste is not generated in the production
processes of the Metals segment enterprises,
therefore, the Metals segment has no tailings storage
facilities.
As for the Power segment, the tailings management
system used to monitor and maintain the state
of tailings storage facilities is developed. It includes
internal production and environmental control,
as well as control by supervisory state bodies
and independent organisations.
The Company has a multi-level structure to ensure
transparency and a high level of control over all tailings
management processes. Tailings management
is conducted within the framework of environmental
protection management.
Tailings waste is not generated in the production
processes of the Metals segment enterprises,
therefore, the Metals segment has no tailings storage
facilities.
As for the Power segment, Emergency Preparedness
and Response Plans are developed at all tailings
storage facilities. EPRPs, in particular, provide
for measures to eliminate accidents, operational
actions of personnel in case of preemergency
and emergency situations, and a list of persons
responsible for the implementation of measures.
EPRPs also contain probable scenarios of emergency
situations at the tailings storage facilities.
Activity Metrics
EM-MM-000.A
Production of (1) metal ores and (2)
finished metal products
Business review, p.26
EM-MM-000.B
Total number of employees,
percentage contractors
Employees, p.116
The Company collects data only on the number of full-
time employees and share of permanent contracts.
POWER SEGMENT
Topic
Code
Accounting metric
Response and reference
IF-EU-110a.1
Greenhouse Gas
Emissions &
Energy Resource
Planning
1) Gross global Scope 1 emissions,
percentage covered under (2)
emissions-limiting regulations,
and (3) emissions-reporting
regulations
IF-EU-110a.2
IF-EU-110a.3
IF-EU-110a.4
Air Quality
IF-EU-120a.1
Water
Management
IF-EU-140a.1
IF-EU-140a.2
IF-EU-140a.3
IF-EU-150a.1
IF-EU-150a.2
Energy
affordability
IF-EU-240a.1
Greenhouse gas (GHG) emissions
associated with power deliveries
Discussion of long-term and short-
term strategy or plan to manage
Scope 1 emissions, emissions
reduction targets, and an analysis
of performance against those targets
(1) Number of customers served
in markets subject to renewable
portfolio standards (RPS) and (2)
percentage fulfilment of RPS target
by market.
Air emissions of the following
pollutants: (1) NOx (excluding N2O),
(2) SOx, (3) particulate matter
(PM10), (4) lead (Pb), and (5)
mercury (Hg); percentage of each
in or near areas of dense population
(1) Total water withdrawn, (2) total
water consumed, percentage of each
in regions with High or Extremely
High Baseline Water Stress
Number of incidents of non-
compliance associated with water
quantity and/or quality permits,
standards, and regulations
Description of water management
risks and discussion of strategies
and practices to mitigate those risks
Amount of coal combustion
residuals (CCR) generated,
percentage recycled
Total number of coal combustion
residual (CCR) impoundments,
broken down by hazard potential
classification and structural integrity
assessment
Average retail electric rate for (1)
residential, (2) commercial, and (3)
industrial customers
Climate Leadership and energy efficiency, p.82
According to regulations, Decree of the President
of the Russian Federation No. 666 of 04.11.2020
“On Reducing GHG Emissions” (the national
contribution of the Russian Federation as part
of the implementation of the Paris Agreement);
Climate Leadership and energy efficiency, p.82
Climate Leadership and energy efficiency, pp.76, 82
There are no requirements in Russia for the minimal
share of renewable energy in the portfolio of generating
companies.
Environmental Stewardship, p.88
Additional ESG Data, p.287
This category includes all pollutants specified
by Russian legislation.
Environmental Stewardship, pp.91, 92
Additional ESG Data, p.288-289
Environmental Stewardship, p.91
Environmental Stewardship, p.91
Environmental Stewardship, p.95
Additional ESG Data, p.291
Additional ESG Data, p.292
Additional ESG Data, p.281
The maximum electric rate for the residential
customers is set in accordance with the directive
of the Federal Antimonopoly Service of Russia.
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Financial statements
• APPENDICES
Topic
Code
Accounting metric
Response and reference
Energy
Affordability
IF-EU-240a.2
Typical monthly electric bill
for residential customers for (1) 500
kWh and (2) 1,000 kWh of electricity
delivered per month
Additional ESG Data, p.281
The maximum electric rate for the residential
customers is set in accordance with the directive
of the Federal Antimonopoly Service of Russia.
IF-EU-240a.3
Number of residential customer
electric disconnections
for nonpayment, percentage
reconnected within 30 days
Additional ESG Data, p.282
The regulatory framework for disconnecting electricity
is provided by Russian Federation Government
Resolutions No. 354 and No. 442, which state that
the contractor (organisation providing housing
and utilities services), if there are legal grounds,
terminates or suspends the provision of unpaid
services.
IF-EU-240a.4
Discussion of impact of external
factors on customer affordability
of electricity, including the economic
conditions of the service territory
Energy affordability is mainly determined by reginal
factors and maximum federal rates that stipulated
and controlled by the Federal Antimonopoly Service
of Russia.
Workforce
Health&Safety
IF-EU-320a.1
End-Use
Efficiency &
Demand
IF-EU-420a.1
IF-EU-420a.2
IF-EU-420a.3
IF-EU-540a.1
IF-EU-540a.2
IF-EU-550a.1
IF-EU-550a.2
Activity metrics
IF-EU-000.A
IF-EU-000.B
IF-EU-000.C
IF-EU-000.D
Additional ESG Data, p.293
Not applicable
1) Total recordable incident rate
(TRIR), (2) fatality rate, and (3) near
miss frequency rate (NMFR)
Percentage of electric utility revenues
from rate structures that (1)
are decoupled and (2) contain a lost
revenue adjustment mechanism
(LRAM)
Percentage of electric load served
by smart grid technology
Customer electricity savings from
efficiency measures, by market
The Company does not implement efficiency measures
for electricity savings on the customer’s side.
Total number of nuclear power
units, broken down by U.S. Nuclear
Regulatory Commission (NRC)
Action Matrix Column
Description of efforts to manage
nuclear safety and emergency
preparedness
Number of incidents of non-
compliance with physical and/
or cybersecurity standards
or regulations
(1) System Average Interruption
Duration Index (SAIDI), (2) System
Average Interruption Frequency Index
(SAIFI), and (3) Customer Average
Interruption Duration Index (CAIDI),
inclusive of major event days
Number of: (1) residential, (2)
commercial, and (3) industrial
customers served
Total electricity delivered to:
(1) residential, (2) commercial,
(3) industrial, (4) all other retail
customers, and (5) wholesale
customers
Length of transmission
and distribution lines
Total electricity generated,
percentage by major energy source,
percentage in regulated markets
Not applicable
Not applicable
Digitalisation and information security, p.190
Additional ESG Data, p.282
According to the legislation of the Russian
Federation, utilities must provide the electricity
without interruption. The Company has redundancy
infrastructure and backup plans to ensure 24/7/365
availability.
The regulatory framework for disconnecting electricity
is provided by Russian Federation Government
Resolutions No. 354 and No. 442.
Commercially sensitive information that may not
be disclosed.
Commercially sensitive information that may not
be disclosed.
Business model, p.20
Business model, p.20
IF-EU-000.E
Total wholesale electricity purchased
Additional ESG Data, p.281
COMPLIANCE OF EN+ RESULTS WITH REQUIRED
THRESHOLDS UNDER THE EU TAXONOMY
The European Commission, in order to meet climate
and energy targets by 2030 as part of the European Green
Deal, has developed the EU Taxonomy, a classification
system that establishes a list of sustainable economic
activities. The EU Taxonomy provides stakeholders
with science-based evidence on the sustainability
of economic sectors and enables them to better engage
with them, redirecting resources and investments towards
climate change mitigation to make societies more resilient
to environmental shocks. The EU Taxonomy is based
on the Taxonomy pack for feedback published in August
2021.
Currently, the average value of all En+ smelters by a margin
meets the updated technical selection criteria.
Name
En+ Metals segment, average
EU Taxonomy mitigation benchmark1
EU Taxonomy adaptation benchmark2
Specific GHG emissions from electrolysis (Scope 1+2[1])1 , t CO2eq/t Al
<3
<3
6
Direct GHG emissions per tonne in electrolysis
operations are 1,99 t CO2 e/t Al, evaluated in accordance
with an internally approved methodology of determination
of direct GHGs from primary aluminium production.
Average electricity consumption at aluminium smelters
of En+ Group is 14.71.
(average for KUBAL (Sweden), Alscon (Nigeria),
Boguchansky Aluminium Smelter, Bratsk Aluminium
Smelter, Volgograd Aluminium Smelter, Irkutsk Aluminium
Smelter, Kandalaksha Aluminium Smelter, Novokuznetsk
Aluminium Smelter, Sayanogorsk Aluminium Smelter,
Nadvoitsy Aluminium Smelter, Krasnoyarsk Aluminium
Smelter).
The Company does not conduct evaluation of greenhouse
gas emissions for electricity produced from hydropower
in accordance with the standards referenced in the EU
Taxonomy. The company did calculation based on actual
measurements and calculations that carrying out
in accordance with IHA (International Hydropower
Association) methodologies.
Aluminium
production3
Criterion 1. Direct emissions for primary aluminium
production is at or below the value of the related EU-ETS
benchmark of 1.514 tCO2e/t.
Criterion 2. Electricity consumption for electrolysis
is at or below 15.29 MWh/t (European average emission
factor according to International Aluminium Institute,
2017).
Production
of electricity
from
hydropower
The activity complies with all of the following criteria:
The life-cycle emissions of pollutants contributing
to the acidification potential are lower than
0.05/0.15/0.10 kg SO2 aeq per 1 MWh of electricity
output to the power grid or to directly connected
customers4.
The life-cycle emissions of pollutants contributing
to the photochemical ozone creation potential are lower
than 0.05 kg C2H2 aeq per 1 MWh of electricity output
to the power grid or to directly connected customers5.
The life-cycle emissions of pollutants contributing
to the photochemical ozone creation potential are lower
than 0.05 kg PO43 aeq per 1 MWh of electricity output
to the power grid or to directly connected customers6.
The life-cycle emissions of PM10 are lower than 0.05
kg/per 1 MWh of electricity output to the power grid
or to directly connected customers
The life-cycle emissions of PM10 are lower than 0.02
kg/per 1 MWh of electricity output to the power grid
or to directly connected customers.
1 / Scope 1 (1.5 t CO2e/tAl) + Scope 2 (15.5 MWh/t Al * 0.1 t CO2e/MWh) = 3.05 tCO2e/tAl = ~ 3 tCO2e/tAl
2 / Scope 1 (1.5 t CO2e/tAl) + Scope 2 (15.5 MWh/t Al * 0.27 t CO2e/MWh) = 5.68 tCO2e/tAl = ~ 6 tCO2e/tAl
3 / The topic is disclosed in accordance with the requirements of the Taxonomy Technical Report published in June 2019
4 / The calculation of the acidification potential includes all pollutants relevant for the activity, in particular NOx, SO2 and NH3
5 / The calculation of the photochemical ozone creation potential includes all pollutants relevant for the activity, in particular CO, NOx and relevant VOCs.
6 / The calculation of the eutrophication potential includes all pollutants relevant for the activity, in particular NOx, NH4+ , N, PO43- , P and COD (chemical oxygen demand).
Additional ESG Data, p.282
Topic
Metric and Required threshold
Response and reference
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Strategic report
Sustainable development
Financial statements
• APPENDICES
DISCLOSURE OF THE SECR REQUIREMENTS IN THE REPORT
The UK government’s Streamlined Energy and Carbon
Reporting (SECR) policy was implemented on 1 April 2019,
when the Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon Report)
Regulations 2018 came into force. SECR extends
the reporting requirements for quoted companies
and mandates new annual disclosures for large unquoted
and limited liability partnerships (LLPs).
Topic
Requirement
Response and reference
GHG emissions
Annual global GHG emissions (global scope
1 and 2 GHG emissions in tonnes of carbon
dioxide equivalent including all seven
gases included under the Kyoto Protocol)
from activities for which the company
is responsible, including combustion of fuel
and operation of any facility, and the annual
emissions from the purchase of electricity,
heat, steam or cooling by the company
for its own use
Emissions from business travel in rental cars
or employee-owned vehicles where company
is responsible for purchasing the fuel (Scope
3)
Energy use and GHG emissions figures from
previous year (exempt in 1st year)
The greenhouse gases included in the calculations are listed
in the Climate Leadership and energy efficiency section
of the Report.
The Company does not conduct evaluation.
The indicators are disclosed for 2020-2022.
Intensity
measurement
At least one emissions intensity ratio
Climate Leadership and energy efficiency, p.82
Energy use
Underlying global energy use
Climate Leadership and energy efficiency, p.83
Measures taken
to improve energy
efficiency
Quantification
and reporting
methodology
Narrative on energy efficiency measures
Climate Leadership and energy efficiency, p.82
Details of methodology used
The indicators on GHG emissions are evaluated in accordance
with 2006 IPCC Guidelines and Methodological Guidance
on the Quantification of Greenhouse Gas Emissions by Entities
Engaging in Business and Other Activities in the Russian
Federation (approved by Order No. 300 of the Ministry of Natural
Resources and the Environment of Russia dated 30 June 2015).
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Sustainable development
Financial statements
• APPENDICES
APPENDICES
GLOSSARY
Units of measurement
bn
CO2
CO2e
CO2e/t Al
EUR
Gcal
Gcal/h
GJ
GJ/t
Billion
Carbon dioxide
CO2 equivalent
CO2 equivalent per tonne of aluminium
Euro
Gigacalorie, a unit of measurement for heating energy
Gigacalorie per hour, a unit of measurement for heating power capacity
Gigajoules
Gigajoules per tonne
GJ/MWh
Gigajoules per megawatt-hour
GW
GWh
h
kA
km
koz
kt
kt CO2e
ktpa
kV
kW
kWh
lm
m3
MJ
mn
mt
MtCO2e
mtpa
MW
MWh
pcs.
p.p.
RUB
Gigawatt (one million kilowatts)
Gigawatt-hour (one million kilowatt-hours)
Hour
Kilo-amperes
Kilometre
Thousand troy ounces
Thousand metric tonnes
Thousand metric tonnes of carbon dioxide equivalent
Thousand metric tonnes per annum
Kilovolt
Kilowatt
Kilowatt-hour, a unit of measurement for produced electricity
Linear meters
Cubic metres
Megajoules
Million
Million metric tonnes
Metric tonnes of carbon dioxide equivalent
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
Pieces
Percentage point
Rouble
t, tonne
One metric tonne (one thousand kilograms)
ths
tpa
TW
TWh
USD
Thousand
Tonnes per annum
Terawatt (one billion kilowatts)
Terawatt-hour (one billion kilowatt-hours)
United States dollar
318
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Financial statements
• APPENDICES
Terms and abbreviations
ABS Ship
Adjusted EBITDA
Adjusted net profit
AIPP
Al
ALLOW
ALSCON
APQP
A&RC
ASI
ASW
ATS
Aughinish
B20
BAT
American Bureau of Shipping (ABS) rules and guidelines based on the principles of naval architecture,
marine engineering and related disciplines
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
All-Ireland Pollinator Plan
Aluminium
RUSAL’s aluminium brand with an independently verified low carbon footprint. Carbon footprint is less than
4t CO2e per tonne of aluminium (smelter direct and indirect emissions only)
Aluminium Smelter Company of Nigeria Ltd., a company incorporated in Nigeria and in which UC RUSAL
indirectly holds an 85% interest
Advanced Product Quality Planning
Audit and Risk Committee
Aluminium Stewardship Initiative (ASI)
Ash and Slag Waste
Joint-stock company “Administrator of the trading system of the wholesale electricity market”
Aughinish Alumina Refinery, Aughinish Alumina, or Aughinish Alumina Limited, a wholly owned subsidiary
of RUSAL incorporated in Ireland
Business 20
Best available technologies
BEMO, BEMO project
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 600,000 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
Business and Industry Advisory Committee to the OECD
Board of Directors of the Company
APPENDICES
CIS
CPLC
CO
Continuance Date
Commonwealth of Independent States
Carbon Pricing Leadership Coalition
Carbon Monoxide
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
COP
Conferences of the Parties
DAM, day-ahead
market
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
Directorate for Control
The Directorate for Control and Internal Audit
DNV Ship
DNV GL certification, ensuring that ships or their components meet a number of standards, also known
as class rules. These classes take into account safety, reliability and environmental impact criteria
Downstream Division
The new division of RUSAL, which includes enterprises for the production of foil and containers, as well as
powders and wheels
DTRs
EBITDA
ELIS
Eco-Søderberg
En+, EN+ GROUP,
En+, En+ Group, we,
the Company, the Group
The FCA’s Disclosure Guidance and Transparency Rules
Earnings before interest, taxes, depreciation and amortisation
Environmental labelling and information schemes
Eco-Søderberg is a technology developed by RUSAL to produce aluminium in modernised electrolysers,
the main advantage of which is the use of environmentally friendly mass with low pitch content
EN+ GROUP IPJSC and its subsidiaries, whose results are included in the consolidated financial statements
prepared in accordance with the International Financial Reporting Standards
EuroSibEnergo
JSC EuroSibEnergo is a 100% subsidiary of En+ Group, managing its power assets
ESG
ETC
Environmental, social and governance
Energy Transformation Commission
ETC (RUSAL)
Engineering and Technology Centre
EU
European Union
BIAC
Board, BoD
BrAZ
BRICS
BS
CAC
CAPEX
CBAM
CC
CCO
CCR
CCS
CCUS
CECC
CEO
CDP
CGC
CHP
320
Bratsk Aluminium Smelter or PJSC RUSAL Bratsk, a wholly owned subsidiary of RUSAL incorporated under
the laws of the Russian Federation
EurAllumina
EurAllumina S.p.A., a 56.2% subsidiary of RUSAL
EuroSibEnergo
JSC EuroSibEnergo, a 100% subsidiary of En+ Group managing its power facilities
Brazil, Russia, India, China and South Africa
Business System
Capacity Allocation Contracts
Capital expenditures
Carbon Border Adjustment Mechanism
Compliance Committee
Competitive capacity outtake
Coal Combustion Residual
Combined Charging System
Carbon capture, use and storage technology
Canada Eurasia Chamber of Commerce
Chief Executive Officer
Carbon Disclosure Project
Corporate Governance Committee
Combined heat and power plant
FCA
FCF
FCPA
FFI
FSSC 22000
GDR
GHG
The UK’s Financial Conduct Authority
Free cash flow
US Foreign Corrupt Practices Law
Fauna & Flora International
FSSC 22000 contains a complete certification Scheme for Food Safety Management Systems based
on existing standards for certification (ISO 22000, ISO 22003 and technical specifications)
Global depositary receipt
Greenhouse gas
GHG emissions Scope 1
GHG emissions Scope 2
Direct greenhouse gas emissions from sources owned or controlled by the Company, e.g., 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 are not
included in Scope 1, as they are reported separately
Indirect energy greenhouse gas emissions. Scope 2 accounts for GHG emissions resulting from
the generation of purchased heat and electricity consumed by a company. Purchased heat and electricity
is defined as electricity that is purchased or otherwise brought into the organisational boundary
of the company. Scope 2 emissions physically occur at the facility where heat and electricity are generated
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Financial statements
• APPENDICES
GHG emissions Scope 3
Greenhouse gas emissions from activities of assets not owned or controlled by the Company, but on which
it indirectly impacts in its value chain. Emissions include all sources outside the boundaries
of Scope 1 and 2, including those associated with the extraction and production of purchased materials,
fuels and services, transportation, outsourced activities, waste disposal, etc.
GR
GRI
GSEP
GSM
G20
HPP
HR
HS
HSE
HSE Committee
HSE Directorate
Hybrid perovskites
IAD
IAI
IATF 16949
ICS
IES
IESK
IFRS
ILM&T
INRTU
IUCN
IPBES
IPCC
IPO
I-REC
IRENA
IrkAZ
Irkutskenergo
IATF 16949
ISO 9001
ISO 14001
Government Relations
Global Reporting Initiative
Global Sustainable Electricity Partnership
General shareholders meeting
Group of Twenty
Hydropower plant
Human resources
Health & Safety
Health, safety and environment
Health, Safety and Environment Committee
Health, Safety and Environment Directorate
Сlass of semiconductor that combines the advantages of organic and inorganic semiconductors, finding
use as a more competitive material for solar cells than silicon
Internal Audit Directorate
International Aluminium Institute
IATF 16949 a quality management system for organisations in the automotive industry, using the Advanced
Product Quality Planning (Production Part Approval Process) approach
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
Irkutsk Electric Grid Company
International Financial Reporting Standards
Institute of Light Materials and Technologies
Irkutsk National Research Technical University
International Union for the Conservation of Nature and Natural Resources
Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services
Intergovernmental Panel on Climate Change
Initial public offering
International renewable energy certificates
International Renewable Energy Agency
Irkutsk Aluminium Smelter, a branch of RUSAL Bratsk in Shelekhov
Irkutsk Public Joint Stock Company of Energetics and Electrification, a power generating company
controlled by En+ by more than 30% of Irkutskenergo’s issued share capital
IATF 16949:2016, an international “Quality management systems” standard for the automotive industry
developed by the International Automotive Industry Task Force (IATF)
ISO 9001:2015, an international “Quality management systems – Requirements” standard developed
by the International Organisation for Standardisation setting the criteria for quality management systems
and the only standard in the family that can be certified to
ISO 14001:2015, an international “Environmental management systems – Requirements with guidance
for use” standard developed by the International Organisation for Standardisation setting the criteria
for an environmental management system and can be certified to
APPENDICES
ISO 45001
JORC
JSC
Kaizen
KPI
KrAZ
KUBAL
LIBOR
LIMS
LLC
LME
LR
LSE
LTIFR
ISO 45001:2018, an international “Occupational health and safety management systems — Requirements
with guidance for use” standard developed by the International Organisation for Standardisation setting
the criteria for health and safety management systems and can be certified to
Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute
of Geoscientists & the Minerals Council of Australia
Joint-stock company
An approach that promotes continuous process improvement. It is based on creating a corporate culture
based on communication and cooperation between employees for incremental process improvements
Key performance indicator
Krasnoyarsk Aluminium Smelter or JSC RUSAL Krasnoyarsk, a wholly owned subsidiary of RUSAL
incorporated under the laws of the Russian Federation
Kubikenborg Aluminium AB, a wholly owned subsidiary of RUSAL incorporated in Sweden
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)
(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
Laboratory Information Management System
Limited liability company
London Metal Exchange
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 calculated by the Group as the sum of fatalities and lost time injuries
per 200,000 man-hours
Management Team
Executive Directors and Officers of the Company
Market Council
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
MES
Manufacturing execution system
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• APPENDICES
Mineral Resource
MOEX
N\A
NC
Net debt
New Energy
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 subdivided, 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
Moscow Exchange
Not applicable
Nominations Committee
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
The New Energy Programme assumes largescale overhaul and replacement of the core equipment at
the Company’s largest Siberian HPPs, i.e. Krasnoyarsk, Bratsk, Irkutsk and Ust-Ilimsk. The programme
envisages the modernisation of hydroelectric generation units and the replacement of runners
NGO
Non-governmental organisations
Nikolaev Alumina
Refinery or NGZ
Mykolaiv Alumina Refinery Company Limited, a company incorporated under the laws of the Ukraine, which
is a wholly-owned subsidiary of RUSAL
NkAZ
Novokuznetsk Aluminium Smelter or RUSAL Novokuznetsk JSC, a company incorporated under the laws
of the Russian Federation, which is a wholly owned subsidiary of UC RUSAL
Norilsk Nickel
MMC NORILSK NICKEL PJSC, incorporated under the laws of the Russian Federation
OECD
OFAC
OFAC Sanctions
OHS
OHSMS
Organisation for Economic Cooperation and Development
The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury
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
Occupational health and safety
Occupational Health and Safety Management Systems
APPENDICES
Ore Reserves
PCB
PEFA
PFC
PLC
Power segment
PPE
QAL
Q&A
QMS
RA
RA-550
RAS
R&D
RemCom
RoW
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
Polychlorinated biphenyl
Primary Equivalent Foundry Alloys
Perfluorocarbons
Public limited company
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
Personal protective equipment
Queensland Alumina Limited, a company incorporated in Queensland, Australia, in which RUSAL indirectly
holds a 20% equity stake. On 20 March 2022, the Australian Government imposed an immediate ban
on exports of alumina and aluminium ores, including bauxite, to Russia
Question and answer
Quality management system
Rating agencies
RA-550 technology is recognised as a model solution in the sphere of aluminium reduction by leading
experts in the global aluminium industry
Russian Accounting Standards
Research and Development
Remuneration Committee
Rest of the World ex-China
RUSAL, the Metals
segment
United Company RUSAL Plc, incorporated under the laws of Jersey with limited liability (56.88% owned
by En+ Group)
RusHydro
RusHydro PJSC (Public Joint-Stock Company Federal Hydro-Generating Company – RusHydro) organised
under the laws of the Russian Federation, an independent third party
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Financial statements
• APPENDICES
SAZ
SASB
SBTi
SDG
Sayanogorsk Aluminium Smelter or RUSAL Sayanogorsk or Sayanogorsk smelter or RUSAL JSC
Sayanogorsk, a company incorporated under the laws of the Russian Federation, which is a wholly owned
subsidiary of UC RUSAL
Sustainability Accounting Standards Board
Science Based Targets initiative, a joint initiative by CDP, UN Global Compact, World Resources Institute that
was established to drive corporate ambition and help businesses pursue bolder solutions to climate change
Sustainable Development Goal
SDN list, Specially
Designated Nationals
List
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 licences issued by OFAC
SECR
SignAL
SMR
SPP
TCFD
TPP
UES
UN
UNESCO
UNFCCC
UNGC
UN SDGs
USRBC
VAP
VOCs
Wholesale electricity
and capacity market
Windalco
y-o-y
Streamlined energy and carbon reporting
En+’s corporate 24-hour hotline accessible through a variety of communication methods
Strikeforce Mining and Resources PLC
Solar power plant
Task Force on Climate-Related Financial Disclosures
Thermal power plant
Unified Energy System
United Nations
United Nations Educational, Scientific and Cultural Organisation
United Nations Framework Convention on Climate Change
United Nations Global Compact
United Nation’s Sustainable Development Goals
U.S. – Russia Business Council
Value-added products. Includes wire rod, foundry alloys, billets, slabs, high purity and others
Volatile Organic Compounds
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
West Indies Alumina Company, a company incorporated in Jamaica, in which RUSAL indirectly holds
a 100% stake
Year-on-year
APPENDICES
CONTACTS
KALININGRAD
8, Oktyabrskaya St., office 34, Kaliningrad, Kaliningrad
Region, 236006, Russia
Tel.: +7 401 269 7436
Fax: +7 401 269 7437
FOR INVESTORS
IR Department
Tel.: +7 495 642 7937
Email: ir@enplus.ru
MOSCOW
REGISTRAR
1 Vasilisy Kozhinoy St., Moscow, 121096, Russia
JSC “IRC”
Tel.: +7 495 642 7937
Fax: +7 495 642 7938
WEBSITE
www.enplusgroup.com/en/
Tel.: +7 495 234 4470
Email: info@mrz.ru
Website: www.mrz.ru
MEDIA ENQUIRIES
DEPOSITORY BANK
PR Department
Citibank, N.A.
Tel.: +7 495 642 7937
Email: press-center@enplus.ru
Tel.: +1 212 723 5435
Email: CitiADR@Citi.com
DISCLAIMER
The information presented in this Annual Report only reflects the Company’s
position during the review period from 1 January 2022 to 31 December 2022 (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,
Website: https://citiadr.factsetdigitalsolutions.com
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.
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En+ Group Consolidated Report 2022