En+ Group PLC Annual Report 2023

Plain-text annual report

CONSOLIDATED REPORT 2023 Energized for action Contents 8–69 70–243 244 332–344 01 Strategic report 10 14 16 18 20 22 24 28 42 64 Key events and indicators Our presence and scale Industry positioning Statement from the Chairman of the Board of Directors Statement from the Chief Executive Officer Business model Strategy Business review Financial review Investment programme and modernisation №1 En+ Group is the largest aluminium producer in the world (excluding China) For more details on the Metals segment, see page 30 02 Sustainable development 76 79 80 86 86 Sustainability management Materiality assessment Contribution to Sustainable Development Goals Climate and environment Climate change 100 Energy management 104 Environmental protection 126 People 126 138 153 Occupational health and safety Employees Contribution to local communities 168 Governance 168 Corporate governance 196 Information for shareholders and investors 200 Internal control and risk management 208 Corporate ethics and compliance 214 Stakeholder engagement 226 Responsible business practices 03 Financial Statement 246 Consolidated Financial Statement 04 Appendices 330 Additional ESG data 386 Glossary 392 Contacts Appendices are provided as a separate document Appendix 1. Report on Compliance with the Principles and Recommendations of the Russian Corporate Governance Code Appendix 2. List of the Company’s Branches For more details on the Company, visit our webpage at enplusgroup.com/en/ №1 independent hydropower producer globally For more details on the Power segment, see page 38 CONSOLIDATED REPORT 202332About the Report GRI: 2-3 En+ Group presents its Consolidated Report (the “Report”), an annual document for a wide range of stakeholders that reflects the Company’s key financial metrics and sustainability performance results for the period from 1 January to 31 December 2023 (the “Reporting Period”). En+ Group regularly reports its sustainability performance, in the form of Sustainability Reports until 2022 and Consolidated Reports afterwards. To ensure credible disclosure, En+ Group prepared its consolidated financial statements for the year ended 31 December 2023 in accordance with IFRS, including an auditor’s report, and engaged B1 as an independent practioners to verify the sustainability data. GRI: 2-5 By publishing this Report, En+ Group reiterates its commitment to transparency as the document presents the most reliable and complete information about the Company. The Report contains information about our business model, strategy, investment programme, operational and financial performance, consolidated financial statements, as well as ESG performance. The Report also describes how the Company contributes to the UN Sustainable Development Goals (SDGs) and complies with the principles of the UN Global Compact. The Report includes information that the Company believes to be material for stakeholders and the business. The independent practitioner’s assurance report on the Sustainable Development section is available on page 384 of this Report. GRI 2-14 The Report was preliminarily approved by the Company’s Board of Directors on 25 April 2024 (Minutes №73). The Report is aligned with the following requirements and recommendations: z Federal Law No. 39-FZ On the Securities Market, dated 22 April 1996 z EU Taxonomy for Sustainable Finance metrics z London Stock Exchange (LSE) requirements and z Regulations of the Bank of Russia No. 714-P On Information recommendations Disclosure by Issuers of Issue-Grade Securities, dated 27 March 2020 z The Corporate Governance Code recommended for use by joint stock companies by the Bank of Russia’s Letter No. 06-52/2463 dated 10 April 2014 (the “Russian Corporate Governance Code”) z The requirements of Directive 2014/95/EU implemented through the UK Companies, Partnerships and Groups (Accounts and Non- Financial Reporting) Regulations 2016 No. 1245 z The Aluminium Carbon Footprint Technical Support Document z A Guide for Issuers: How to Comply with Best Sustainability z The Listing Rules (the “LRs”) published by the UK’s Financial Practices released by the Moscow Exchange Conduct Authority (the “FCA”) as a competent authority under the Financial Services and Markets Act 2000 (the “FSMA”, as amended and supplemented), and the FCA’s Disclosure and Transparency Rules (the “DTRs”); the LRs and the DTRs collectively are referred to as the “Rules” unless otherwise stated z Global Reporting Initiative (GRI) Standards z Standards of the Sustainability Accounting Standards Board (SASB), including standards for the Metals & Mining and the Electric Utilities & Power Generators industries z Streamlined Energy and Carbon Reporting (SECR) z IFRS¹ sustainability disclosure standards z Technical guidance to comply with the Streamlined Energy and Carbon Reporting (SECR) z Guidelines provided by Russia’s Ministry of Economic Development for preparing sustainability reports z Voluntary ESG standard for the energy sector devised by the non- profit partnership Market Council z Bank of Russia’s recommendations for public joint stock companies to disclose non-financial information related to their activities z Bank of Russia’s recommendations on ESG rating methodology z Metrics tracked by key ESG ratings GRI 2-4 To ensure data comparability, the Company’s material performance metrics are provided for the last three years (2021–2023). There were no significant changes in the measurement methodology for the metrics in the Reporting Period. Nevertheless, the Report contains some restatements of information from previous years. Comments on the restatements and updated methodologies 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 different rounding methods used. Reporting boundaries GRI 2-1, 2-2 In this Consolidated Report, the terms “En+”, “En+ Group”, “EN+ GROUP”, or the “Company” in various forms mean EN+ GROUP IPJSC and its subsidiaries. Their performance results are presented in the Company’s consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS). The Sustainable Development and Additional ESG Data sections include performance results of the Company and its subsidiaries that are included in the Group’s IFRS consolidated financial statements and have significant ESG impact. The Report reflects information about the Group’s performance in two segments, Metals (including BoAZ) and Power. The Queensland Alumina Limited joint venture (Australia) is excluded from the reporting boundaries due to the ban on exports of alumina and bauxite to Russia imposed by the Australian government in April 2022. Data on Nikolaev alumina production are excluded from the reporting perimeter due to the suspension of production. Occupational health and safety data of KraMZ LLC and Strikeforce Mining and Resources PLC (SMR) were disclosed within the Metals segment reporting boundaries. Boundaries of the 2023 Report 2 METALS SEGMENT 56.88 % shareholding POWER SEGMENT 100 % shareholding 100 % consolidation in the Report 100 % consolidation in the Report Recognition of the 2022 Consolidated Report 1 place Secured first place in the Visionary Leaders in Change Management awards in three categories: Best Sustainability Report Under Non- Financial Reporting Standards, Best Economic Impact Disclosure, and Best Social Impact Disclosure. 2 place Awarded second place in the Best Annual Report of a Company with a RUB 200 bn+ Market Cap category at the 26th Moscow Exchange Annual Report Contest 2023. Certificate of Public Assurance of the Corporate Non-Financial Report. 1 To review the standards and partially restructure the Report’s thematic sections. Specific IFRS S2 components are disclosed in the Climate and Energy Efficiency Leadership section. 2 Unless otherwise stated, the Report covers the Group business units listed below. 4 5 CONSOLIDATED REPORT 2023Более подробно ознакомиться с Климатическими отчетами за 2021, 2022 и 2023 годы можно на сайте Компании. UPDATED LOGO OUR NEW MOTTO VALUES OF EN+ In 2023 En+ Group carried out a rebranding, the results of which will now be presented. We are confident that the rebrand will provide a powerful impetus for further growth and inspire our team to rally behind common goals. At the same time, we hope that it will enable us to strengthen our culture that is built around the values shared by every member of our team. En+ brings together the energy of the elements, the power of new ideas, and human will to enhance the impact of positive change. Our ideas are shared by thousands of committed individuals who are willing and ready to change the world around them. Together, we are charting new horizons and opportunities and bringing the future closer, not in words but in deeds. Focussing on results Looking to the future 1 2 3 Hybrid perovskites for solar cell applications Cryogenic tank containers for transporting liquid hydrogen Innovative inert anode technology with the world’s lowest carbon footprint En+ aims all its efforts towards achieving strong results 85.2 GW electricity generation +1.5% y-o-y 3,848 kt aluminium production +0.3% y-o-y En+ continuously improves process reliability and safety to ensure consistent operating results 12 5,948 ths Gj Health and safety audits carried out Energy savings through energy efficiency measures En+ engages its people on operational transformation 100 % of new employees completed business system training 86.2 USD mn benefit from the implementation of employee suggestions to improve production processes 6 6 energized for action emphasises the practical nature of En+’s activities: an approach focussed primarily on productivity and achieving results. Accelerated development Sense of belonging High energy En+ is consistently implementing measures to achieve carbon neutrality by 2050 − 35 % by 2035 En+’s updated medium-term climate target vs 2018 En+ published its second Pathway to Net Zero Progress Report Developing the regions of operation En+ invests in its regions of operation USD 62.3 mn social investments USD 3.9 mn investments by En+ until 2025 within public-private partnership projects En+ invests in future generations En+ contributes to regional economies 7 Multilabs built to promote engineering and IT education 265 students employed after graduation from targeted training programmes from 2013 to 2023 USD 111.4 mn spending on employee's welfare 62 % share of purchases from local suppliers 1,171 school students from >100 schools joined the Energy School project aimed at promoting careers in power engineering 491 USD mn payments to governments RUB 4.2 billion1 1 Calculated based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. 7 CONSOLIDATED REPORT 2023 01 04 Strategic report 10 14 16 18 20 22 24 28 42 64 Key events and indicators Our presence and scale Industry positioning Statement from the Chairman of the Board of Directors Statement from the Chief Executive Officer Business model Strategy Business review Financial review Investment programme and modernisation STRATEGIC REPORTCONSOLIDATED REPORT 202398Key figures Current geopolitical tensions and new economic restrictions are resulting in volatility in the financial, commodities, and currency markets, as well as in changes in supply chains and refusal of certain suppliers to fulfil previously agreed upon obligations. Nevertheless, the Company has leveraged its effective management model to quickly restructure raw-material supplies and logistics operations as well as successfully diversify sales channels. USD14,648 mn En+ Group’s 2023 revenue Operational performance POWER SEGMENT Total electricity production1, TWh HPPs CHPs 68.8 69.0 77.7 2023 2022 2021 Heat generation, mn Gcal 2023 2022 2021 16.4 14.9 12.7 85.2 83.9 90.4 27.4 27.6 28.5 2023 2024 z En+ Group presented its second report detailing progress z En+ Group’s Board of Directors approved towards carbon neutrality. In response to current circumstances, the Company announced adjustments to its medium-term goal, extending the target year for reducing greenhouse gas emissions by 35% from 2030 to 2035. The report was presented as part of the En+ Group Net Zero Day. z RUSAL and the Government of the Leningrad Region signed an agreement at the 26th St. Petersburg International Economic Forum to jointly implement a project for the construction and enhancement of infrastructure for a state-of-the-art alumina refinery. z On the sidelines of the Eastern Economic Forum, En+ Group signed agreements with the Russian Far East and Arctic Development Corporation, the Government of the Amur Region, and China Energy Investment Corporation to collaborate together on a project to construct a 1,058 MW wind farm in the region. z ACRA affirmed IPJSC En+ Group’s credit rating of A-(ru) and upgraded the outlook to positive. the appointment of Mikhail Khardikov as CEO of the Company effective 1 January 2024, succeeding Vladimir Kiryukhin, who retired from the position effective 31 December 2023. z The Expert RA agency assigned En+ Group ESG-II(b) rating (ESG-A according to the Bank of Russia’s scale). The rating signifies a very high level of alignment with sustainability considerations in critical decision-making processes. The rating outlook remains stable. z RUSAL’s first plant successfully implemented a pilot project to produce recycled aluminium. Operational performance METALS SEGMENT Aluminium production and sales, kt Aluminium production Aluminium sales 2023 2022 2021 3,848 4,153 3,835 3,896 3,764 3,904 ESG-A ESG rating from the Expert RA agency according to the Bank of Russia’s scale (or ESG-II(b)) For more details, see Business Review pages 28-41 Financial performance Power segment Metals segment Revenue, USD mn Net profit, USD mn Adjusted EBITDA2, USD mn Capital expenditure, USD mn Adjusted EBITDA margin, % 3,587 12,213 355 282 1,292 786 For more details, see Financial Review pages 42-63 2023 2022 2021 14,648 2023 3,885 13,974 384 1,793 16,549 2022 3,138 11,994 374 3,225 14,126 2021 716 1,846 3,534 2023 2022 2021 1,254 2,028 1,172 2,893 2,157 2023 3,119 2022 394 474 321 1,056 1,239 1,192 1,448 2023 1,711 2022 3,992 2021 1,513 2021 14.7% 18.8% 28.3% 1 Excluding Onda HPP (with the installed capacity of 0.08 GW), located in the European part of Russia, leased to RUSAL since October 2014. and equipment for the relevant period. 2 Adjusted EBITDA for any period represents the operating results adjusted for amortisation and depreciation, impairment charges, and gain/loss on disposal of property, plant 10 11 CONSOLIDATED REPORT 2023STRATEGIC REPORTKey figures E SEnvironmental Social 2.3 t of CO2e/t Al 28.4 % G Governance 66 % ALLOW aluminium’s carbon footprint Scope 1 and 2 31 % Share of ALLOW, our low-carbon aluminium. in the aluminium's total sales volume for 2023 USD 207 mn Environmental investments RUB 17.6 bn1 68 % of total waste reused or recycled 77 % Share of reused and recycled water 18 ASI-certified plants of employees are women of directors are independent as at 31 December 2023 0.76 Lost Time Injury Frequency Rate (LTIFR) per 1 million hours worked 85 % of employees covered by collective bargaining agreements USD 62.3 mn social investments RUB 5.2 bn1 323 employees have taken advantage of the preferential mortgage lending programme ↑ 14 % average salary increase for employees 33 % female representation on the Board of Directors as at 31 December 2023 > 80 % of employees trained on anti-corruption 374 employee reports received by the Signal hotline 62 % share of purchases from local suppliers USD 86.2 mn total economic benefit from the implementation of business system projects and suggestions RUB 7.3 bn1 ESG RATINGS ESG RANKINGS AND INDICES ESG AWARDS Sustainalytics as at 31 December 2023 Expert RA ESG rating ISS ESG’s E&S Quality Disclosure Score in 2023 38.2 1 100 “High risk” 12 ESG-A according to the Bank of Russia’s scale (or ESG-II(b)) 1 2 3 4 5 6 7 8 9 10 SOCIAL RATING 1 2 3 4 5 6 7 8 9 10 “GOOD” “EXCELLENT” National Rating Agency Expert RA National credit ratings Third round finalist One of the leaders in the ESG ranking of Russian industrial companies One of the leaders in the ESG transparency ranking among Russian companies and banks. The Company was an award winner in the High Level of ESG Transparency category High level in the ESG Index of Russian Business of the Responsible Business Leaders national award ENVIRONMENTAL RATING 1 Calculated based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. 13 CONSOLIDATED REPORT 2023STRATEGIC REPORTOur presence and scale № 1 En+ Group is the largest producer of low-carbon aluminium globally outside of China 5.5 % 68.8 TWh 19.5 GW of the world’s aluminium production Low-carbon hydropower production Total installed electrical capacity 6 GRI: 2-1 En+ Group is the world’s largest producer of low-carbon aluminium. The Group leverages the opportunities stemming from its well-established presence spanning five continents and a strong operational hub in Siberia, combining the assets of both its Metals and Power segments. The Group’s Metals segment benefits from well-diversified sales channels, enabling efficient access and operations across all key aluminium markets. The Group’s market research and analytical capabilities contribute significantly to its long-term operational and financial planning. The Power segment manages Siberia’s largest and most cost-efficient network of power plants, providing efficient and reliable service to its key customers in the region, including the largest smelters operated by our Metals segment. USD 14,648 mn En+ Group’s 2023 revenue 5 REVENUE BY REGION 42.6% CIS 30.1% Asia 20.1% Europe 7.2% Other Sweden Russia Ireland Germany Armenia Italy 4 REVENUE BY PRODUCT Guinea Jamaica 67.8% Primary aluminium and alloys 11.2% Electricity 5.9% Semi-finished products and foil 3.5% Alumina and bauxite 3.2% Heat 8.4% Other Guyana Nigeria7 METALS SEGMENT ASSETS POWER SEGMENT ASSETS 11 8 7 aluminium smelters1 alumina refineries2 bauxite mines 5 HPP 6 15 CHP Abakan solar power plant Australia9 TOTAL CAPACITY 4.2 mtpa 9.0 mtpa 3 22.0 mtpa TOTAL CAPACITY 15.2 GW6 4.3 GW 5.2 MW PRODUCTION LEVEL IN 2023 3.8 mt 5.1 mt 13.4 mt PRODUCTION LEVEL IN 2023 68.8 TWh8 16.4 TWh 6.0 GWh Excluding Boguchany Aluminium Smelter (BoAZ), a joint 50/50 project of RUSAL and strategic partner. 1 2 Eurallumina in Italy is mothballed. Since March 2022, production at Nikolaev (Ukraine) has been suspended. Moreover, the Company owns a 20% interest in Queensland Alumina Limited, located in Australia. Since April 2022, the Australian government has banned alumina and bauxite exports to Russia. Including the capacity of Queensland Alumina Ltd attributed to RUSAL. 3 4 Eurallumina in Italy is mothballed. 5 From external customers. Including Onda HPP with the installed capacity of 0.08 GW (located in the European part of Russia, leased to RUSAL). 6 7 ALSCON in Nigeria is mothballed. 8 Excluding Onda HPP. 9 Since April 2022, the Australian government has banned alumina and bauxite exports to Russia. 14 15 STRATEGIC REPORTCONSOLIDATED REPORT 2023Ukraine9Moscow Industry positioning En+ Group is a market- leading, vertically integrated low-carbon aluminium and hydropower producer. The Group’s asset mix and operations, coupled with its vast geographical footprint, offer strategic synergies. Its scale allows the Company to smartly manage the flows of aluminium products as well as alumina and other raw materials within the Company and enables proactive planning of electricity production and consumption targets. This helps the Group optimise capacity utilisation rates, maximise efficiency at smelters and refineries, and drive asset growth. Based on the current management structure and internal reporting system, the Group has defined two business segments: Metals segment, comprising RUSAL and its business assets Power segment, comprising mainly power assets 1 Taking into account the shutdown of alumina production at the Nikolaev Alumina Refinery and the Australian Government’s ban on exporting 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 been disclosing consolidated production data on Chalco and Yunnan Aluminium Co. Ltd. 16 METALS SEGMENT POWER SEGMENT In 2023, En+ Group’s Metals segment, represented by RUSAL, produced approximately 5.5% of global aluminium output and around 3.8% of the world’s alumina production. During the year, the Company maintained its position as one of the world’s largest producers of primary aluminium and alloys. RUSAL achieved approximately 65%1 self-sufficiency in alumina and over 85% in bauxite and nepheline. RUSAL’s production chain includes bauxite and nepheline ore mines, alumina refineries, aluminium smelters and casting houses, foil mills, packaging and wheel production facilities. RUSAL boasts a diversified product mix with a strong share of value- added products (1.55 mt per annum out of 4.15 mt of total sales in 2023) and a diversified sales mix. The Company supplies aluminium products to the domestic market and across all key global consuming regions (Europe, CIS, China, and other Asian countries). To achieve the Group’s ambitious net zero commitment, RUSAL plans to introduce a series of innovations throughout the entire production chain, including projects to switch to pre-baked anode technology. The planned conversion of certain capacities at Krasnoyarsk, Bratsk, Irkutsk, and Novokuznetsk aluminium smelters to pre-baked anode technology is scheduled for 2025–2030. The implementation of environmental modernsation will not only reduce energy consumption by 10%-15%, but also completely eliminate benzo(a) pyrene emissions and reduce fluorine emissions significantly below standards. RUSAL is also committed to further develop the groundbreaking inert anode technology. This technology will enable the substantial reduction of GHG emissions from primary aluminium production. Only a minimal portion of Scope 3 emissions will persist, primarily indirect emissions associated with producing raw materials used to manufacture inert anodes. The efficient aluminium production, combined with low-cost materials and power supply, secures the Company’s global leadership on the cost curve. Top aluminium producers globally 2 № COMPANY ALUMINIUM, mt 1. 2. 3. 4. 5. 6. 7. 8. 9. Chinalco 3 Hongqiao Group Metals segment (RUSAL) Xinfra Group Rio Tinto Emirates Global Alumnium SPIC Vedanta East Hope 10. Alcoa 7.1 6.3 3.8 3.6 3.3 2.7 2.7 2.3 2.2 2.1 En+ Group’s Power segment is Russia’s largest independent power producer by installed capacity and the world’s largest independent hydropower generator. Russia has a well-established power sector, which is crucial to supporting the nation’s energy-intensive economy. In 2023, the Unified Energy System of Russia had a total installed capacity of 248.2 GW, with a total electricity output of 1,134.0 TWh. Thermal power plants dominate the Russian energy market, accounting for 66% of the total installed capacity. Siberia’s generation capacity mix is divided almost evenly between hydropower (48.4%) and thermal (50.8%) plants, with a minor contribution from solar power plants (SPPs) at 0.8%. The Group’s generating assets are located in the East Siberian and Volga regions. The Power segment is engaged in every sector of Russia’s power industry, including electricity and heat generation, electricity, capacity and heat sales, heat distribution, retail energy sales, engineering services, and electricity distribution and transmission. Hydropower generation is the core business of the Power segment, with most of its assets located in Siberia. In 2023, En+ Group maintained its position as the largest power producer in Siberia, commanding a 36% share of installed capacity. Furthermore, 78% of its capacity is represented by hydropower assets, affording the Group utilisation priority over the regulatory range of thermal power plants. Coal prices are the key driver of day-ahead market prices, given that CHPs are marginal producers. The HPP output, driven by weather conditions, is also relevant, as it affects the production volumes additionally required from CHPs. The Power segment’s primary objective is to ensure a low-carbon hydropower supply, further reducing the Group’s overall carbon footprint and contributing to its net zero by 2050 goal. As part of this effort, the Group intends to build new power stations, including Krapiva HPP, Nizhneboguchany HPP, and Telmamskaya HPP. En+ Group is also advancing its New Energy programme focused on HPP upgrades, along with the CHP upgrade programme. Top power companies by installed hydro capacity globally 4 № 1. 2. 3. 4. 5. 6. 7. 8. 9. COMPANY / OWNERSHIP CYPC State 5 Eletrobas State HydroQuebec State RusHydro State Enel State EDF State SDIC Power State En+ Group Private Iberdrola Private 10. Verbund State 11. 12. EDP State 6 Engie Brasil State HYDRO SHARE 100% 95% 99% 81% 35% 18% 56% 78% 35% 95% 34% 77% POWER, GW 71.8 42.3 37.5 31.2 28.3 22.1 21.3 15.2 14.0 8.4 7.5 6.4 Competitive landscape in Siberia by installed capacity7, GW Thermal Hydro 36 % 78 % share of En+ in installed capacity of Siberia share of hydro in En+ total capacity 18.9 15.1 3.8 12.3 7.2 3.9 En+ Group 8 SGK RusHydro Inter RAO 3.0 BEMO project9 4 Company filings (latest reported data). 5 A subsidiary of China Three Gorges Corporation. 6 21.08% stake is held by the state-owned China Three Gorges Corporation. 7 Based on the Company’s internal data and peer companies’ publicly available 8 results, announcements, reports and other information. The Company’s assets capacity provided for Siberia only. The Company’s aggregate capacity is 19.5 GW, including 15.2 GW of hydropower. 9 BEMO (Boguchanskaya HPP) is a strategic partner-operated 50/50 JV between UC RUSAL and strategic partner. 17 CONSOLIDATED REPORT 2023STRATEGIC REPORTIn our metals business, despite geopolitical pressures, the aluminium market was, relatively speaking, balanced. With sustainability always at the top of our agenda, I was pleased to see the continued increase in demand for low-carbon aluminium, meaning for us, some 31% sales of our low-carbon ALLOW brand this year. In 2023 we began to produce primary aluminium with the lowest carbon footprint in the world—ALLOW INERTA—in the production of SAYANA foil. Despite the challenging times we and others face, we remain determined to be at the cutting edge and very top of low carbon aluminium and energy production. We also remain focused on modernizing both our power production facilities as well as our smelters and refineries. Over the past two years we have spent more than $3 billion on this effort, and have committed to make sure all our facilities are the most modern, worldwide, as we assiduously pursue our zero carbon goal. Our newest smelter, in Taishet, Russia, is the most modern in the world. Already in production, Taishet uses our own proprietary RA-400 "T" modification electrolysers developed by the company's Engineering and Technology team. The RA-400 is one of the most powerful electrolysers in the world capable of producing more than 3 tons of aluminium per day, with the highest energy efficient in the industry. The Taishet plant also is being built with a modern dry gas cleaning system with a capture efficiency of over 98.5%. Our RA-400T electrolysers are equipped with automatic alumina supply systems, which will further minimize harmful emissions. To our valued customers, our shareholders, and our employees across the world, we are deeply grateful for your loyalty in this most challenging world environment in a generation. Despite these challenges, we will continue to heat and power your homes and businesses, to provide the world with the lowest carbon aluminium, the purest aluminium essential to all aircraft manufacturing, the finest quality rolled aluminium with the lowest carbon footprint to support the burgeoning "EV" industry, while also helping conventionally manufactured automobiles reach even higher fuel efficiency standards by lowering the weight of all vehicles. Positive energy We continue to implement activities along the entire value chain; z To implement energy efficiency measures across the whole company. z Prepare all our plants for conversion to pre-baked anode technology. z Our inert anode technology has successfully passed international verification and confirmed its lowest carbon footprint (0.01 t CO2 per tonne of aluminium, Scope 1 and 2). z Mingtai Aluminum became the first company in China to test ALLOW INERTA™ aluminium, produced using RUSAL's revolutionary inert anode technology, at its plant. z We continue to advance the circular economy by including recycling content in the production of billets and slabs at our smelter in Sweden, and produce primary casting alloys with the recycling content for the automotive industry. z Our forest climate project was registered for the first time in the Carbon Unit Registry. RUSAL’s forest climate project for aviation forestry protection in the Krasnoyarsk Territory was registered in the Russian register of carbon units. Earlier, in November 2023, the project was validated, that is, an independent check for compliance with standards national legislation in the field of climate regulation. z The Group is also implementing a unique project of peatland watering for Russia in the Leningrad region. z Scientific work is being carried out to identify the impact of climate risks on HPPs; work is currently underway to create plans for adapting HPPs to climate change. z Global climate change affects biodiversity and ecosystems; therefore, in 2023, a Corporate Biodiversity Conservation Program was developed for the Angara Cascade of HPPs in order to create a sustainable system for managing the impact on biological diversity during the operation of HPPs. HON CHRISTOPHER BANCROFT BURNHAM Chairman of the Board Statement from the Chairman of the Board of Directors Energized for action The En+ Group is an exceptional global company that continues to be the largest producer of low carbon aluminium in the world, and the largest non-government hydropower company in the world. We are leading the world in the development of inert anode technology, we produce 5,5% of the world's aluminium, we produce nearly 70 TWh of power each year including 6 MWh from solar, and we are one of the largest producers of aluminium alloy and alumina in the world. We also lead the world with production of more than 1.3 million tons of ALLOW, our proprietary low-carbon aluminium product in the world, and continue to grow ALLOW INERTA product using the inert anode technology we have developed. ALLOW INERTA is the world's lowest carbon aluminium with less than 0.01 of CO2e produced per ton. The En+ Group has operations across five continents with around 90,000 employees worldwide. This includes tens of thousands of employees in Ghana, Guyana, Ireland, Germany, Sweden, Armenia, Jamaica, Italy and Nigeria and hundreds of thousands more employed in downstream aluminium production around the world. Millions of consumers, electric car manufacturers, can companies seeking the lowest carbon aluminium for their customers, let alone the millions of homes we heat across Siberia and Nizhny Novgorod, all depend on us a responsibility we take with the utmost seriousness. We also continue to certify our plants. There are now eighteen RUSAL sites certified according to the ASI Performance Standard and ASI Chain of Custody Standard as we continue our progress towards carbon neutrality. In September 2023, we released a report on that progress and while our commitment to carbon neutrality remains unchanged, we announced a revision of the medium-term target; the 35% reduction in greenhouse gas emissions was moved from 2030 to 2035 (based on 2018 emissions). This was caused by the disruption of supply chains, limited connections with international organisations, the postponement of gasification of Eastern Siberia, interruptions in the supply of equipment, and restrictions on us in the financial markets. 18 18 19 STRATEGIC REPORTCONSOLIDATED REPORT 2023MIKHAIL KHARDIKOV Chief Executive Officer Statement from the Chief Executive Officer 2023 proved to be another important milestone for our Group as we learned to live and navigate through international turbulence, which ended up being an opportunity for us to test our financial and operational resilience and outline key growth points. Despite all the headwinds, we remained true to our commitments and launched a range of new vitally important projects, both in production segments and in community investments. Notwithstanding lower overall financial performance of the Group due to the combination of external economic factors, we remain resilient and continue adapting to change. Against the backdrop of a challenging economic environment, the continuous appreciation of the US dollar, and a global decline in aluminium prices, our Company remains sharply focussed on reducing external debt, streamlining internal processes, and upgrading its production facilities. We are successfully developing the domestic market and continue the search for new partners. At the same time, we are addressing issues related to equipment import substitution and redesigning our supply logistics. I am confident that in the long term this will build a solid foundation for growth. In 2023, aluminium sales grew 6.6% amid the sale of inventories accumulated by 2022-end and due to an increase in aluminium production at our new Taishet Aluminium Smelter. The growth, however, was offset by a 16.8% y-o-y decline in aluminium prices on the London Metal Exchange (LME). The Power segment’s generation grew 1.5% y-o-y, demonstrating our continuous drive forward once again. Despite adjustments and external restrictions, we remain committed to our top priority, to achieve 100% carbon neutrality by 2050. Overall, we have succeeded in overcoming the challenges of 2023 and have a clear vision of where we need to go. Our efforts are centred around energy efficiency and the smooth operation of our enterprises with a strong focus on deploying technology innovations within the Group while driving digitalisation and transformation. We make sure to heavily invest in building a talent pipeline. This starts with promoting youth development and encouraging children from school age to consider vocational training through partnerships with schools to ensure a stable future for the Company and the wider country. Energized for action Energized for the future En+ Group has recently celebrated its milestone 20th birthday. It is a time to take a moment to do an in-depth analysis, review the results, and reflect on our journey. To mark this new milestone, we have decided to rebrand in 2024 – this effort will include all businesses of our Power segment. We aim to create a brand that is valued by both our partners and our employees, a brand that has a unique identity, is visible, engaging, and inspiring through its own aspirations and history. Our new slogan, “Energized for Action”, underlines the key feature of the En+ Group strategy – having a clear vision of where we need to go and focussing on delivering tangible results. We believe that this rebrand effort will help our team rally behind our common aspiration to reach even greater heights. For great change cannot be achieved alone but requires strength in numbers. We bring together the energy of the elements, the power of new ideas, and human will to enhance the impact of positive change. Our ideas are shared by thousands of committed individuals, willing and ready to change the world around them. Energized for life The Group has been actively promoting educational programmes and supports talented youth. This has included providing scholarships to students, participating in the Professionalitet federal project, and organising a specialised education programme for IT students under the IT Academy project. Other than collaborating with higher education institutions, we build a talent pipeline of future employees from a very young age. In 2023, we opened three new Multilab competency building centres for school students in Bratsk, Angarsk, and Nizhny Novgorod, bringing the total number of such centres to seven. We also run the Energy School educational project and Energy Classes, which provide free preparation for the Unified State Examination for energy-related programmes in Siberian universities. Energized for cooperation 2023 saw a 4.9% rise in aluminium consumption in China, while global growth was 1.7%. This significant increase in demand was driven by China’s decarbonisation efforts, as this metal forms a key component in the manufacturing of renewable energy products, from electric vehicles to solar panels. En+ Group remains an anchor company and a pivotal partner for Siberian regions. We are responsible for tens of thousands of our employees and their families as well as for local residents within our footprint. As such, we maintain all our commitments as an employer and continue to expand the scope of our social-impact programmes. We strive to improve quality of life, develop urban infrastructure, support educational and cultural projects, and promote sports. Furthermore, En+ Group remains committed to sustainability principles and is continuing with its New Energy HPP modernisation programme to drive not only GHG emissions reduction but also ensure the reliable operation of Siberian energy systems. Our Chinese partners, Mingtai Aluminum, were the very first company to test the ALLOW INERTA™ primary aluminium manufactured using our groundbreaking inert anode technology. In 2023, it successfully passed international verification and confirmed its lowest carbon footprint globally. On top of this, we signed an agreement with China Energy Investment Corporation to collaborate on a project to construct a 1,000 MW-plus wind farm in the Amur region. This initiative will be the largest investment project in the area, as capital investments are already estimated to be more than RUB 100 billion. Our Group is heavily involved in driving change in the quality of life across our operating regions. In 2023, we launched the Sustainable Cities Responsibility Index programme and identified our key development focus areas for cities across our footprint. Our priorities include improving urban infrastructure and building comfortable homes; enhancing healthcare; and promoting sports, education, and culture. Over the past year, we started constructing modern comfortable homes for employees and local residents in three operating regions; completed and launched three martial arts centres currently attended by hundreds of children; fitted out healthcare centres with new equipment; and acquired flats across Russian regions for housing mortgage programmes to address the shortage of doctors and teachers. The Baikal Energia bandy team, fully sponsored by us, reached new levels of victory during the year, while our healthy lifestyle and sports festival, Get on Your Skis, was held across dozens of cities. Additionally, our New Year street and square decorations were relished by hundreds of thousands of residents. We maintain a strong focus on our strategy to achieve net-zero GHG emissions, demonstrating our responsibility and commitment to building a sustainable future for the next generations. On top of this, we are taking extensive measures to minimise and avoid GHG emissions while also launching carbon offset projects. We ensure strict compliance with legal requirements, drive research and development, and contribute to the Clean Air federal project. Energized for creation Amid the continuously changing business landscape, we are proving to be extremely adaptive through promptly developing our strategies to enter new markets and launch innovative products. In this context, I would like to point to the high level of professionalism, responsibility, and creative approach to problem solving as demonstrated by the Company’s management. I would also like to express my gratitude to the entire team for their unwavering commitment to achieving our goals. I would like to extend a special thank you to shareholders and partners of our Company and to our employees for their trust and support in these challenging times. We are confident that our combined efforts, vast experience, expertise, and our shared vision for success will enable us to overcome any challenges and keep moving forward together. We know that it is the synergy of our skills and capabilities as well as close collaboration and partnerships that will underpin our joint success. Thank you for your commitment to our shared goals! 20 20 21 STRATEGIC REPORTCONSOLIDATED REPORT 2023Business model Capital SASB: IF-EU-000.D IF-EU-000.C Output Value for stakeholders NATURAL INTELLECTUAL POWER SEGMENT METALS SEGMENT 68.8 TWh Hydropower 13.4 mt Bauxites 4.5 mt Nephelines P R O D U C T I O N N C TI O U D P R O 27.4 mn Gcal Heat 16.4 TWh Thermal energy 56.9 TWh of electricity transmitted and distributed 83.5 TWh sales of electricity on the wholesale market 22.0 mtpa Total bauxite capacity 9.0 mtpa Total alumina capacity1 710.5 m3 Water consumption > 100 professional training and development programmes for En+ Group employees "А" ESG sustainable corporate governance rating of Russian companies by Da-Strategia Group consulting firm PRODUCTIVE HUMAN 19.5 GW Total installed electrical capacity ~ 90,000 employees on 5 continents 4.2 mtpa 79 % Aluminium capacity 2 Employee satisfaction 41,999 km of power lines in our networks FINANCIAL USD 26.4 mn Total assets USD 1.4 mn SOCIAL AND REPUTATIONAL A– (RU), "Positive " Credit rating ESG-A , "Stable" Capital expenditure ESG rating 5.1 mt Alumina 3.8 mt Aluminium 4.2 mt Aluminium S E L A S 23.6 TWh sales of electricity on the retail market S A L E S 162.5 GW sales of capacity 1.5 mt Value-added products EMPLOYEES USD 289 mn Pension plan payments USD 1,566 mn Employee wages, including total retirement costs CUSTOMERS 1.3 mt 4.17 out of 5 of low-carbon ALLOW aluminium sold Average customer satisfaction score SUPPLIERS 13.7 % ~62 % Share of purchases from SMEs Share of purchases from local suppliers SHAREHOLDERS AND INVESTORS USD 3.1 bn USD 2.2 bn Market capitalisation Adjusted EBITDA LOCAL COMMUNITIES AND NGOS USD 62.3 mn Social investments USD 491 mn Payments to governments RUSAL attributable capacity. 1 2 Excluding Boguchany Aluminium Smelter (BoAZ), a joint 50/50 project of RUSAL and strategic partner. Ten aluminium smelters in operation (ALSCON in Nigeria is mothballed). For more details on value creation, see pages 334-335 For more details on stakeholder engagement, see page 214 Strategy 22 1 MAXIMISING EFFICIENCY 2 INCREASING CAPACITY 3 DRIVING INNOVATION 4 ENSURING A STABLE FINANCIAL POSITION 5 COMMITTING TO SUSTAINABILITY For more details on key risks, see page 204-207, on strategy, see pages 24-27 23 CONSOLIDATED REPORT 2023STRATEGIC REPORT23222322Strategy GRI 3-3 The Group’s strategy is focused on leading the Company to become the world’s foremost vertically integrated producer of high-value-added products made from low-carbon aluminium by utilising self-produced renewable energy and raw materials. We maintain our commitment to the Group’s sustainable development strategy by enhancing manufacturing technology and modernising assets, simultaneously aiming to boost the production of cost-efficient aluminium, which will have a positive impact on our profit margins, financial stability, and debt burden. STRATEGIC PRIORITIES STRATEGIC OBJECTIVES 2023 HIGHLIGHTS REFERENCE TO UN SDGs Maximising efficiency 1 1 Taking into account the loss of control over the Nikolaev Alumina Refinery and the Australian Government’s ban on exporting alumina and aluminium ores to Russia. 24 Vertical integration to secure a supply of raw materials The Company prioritises achieving self- sufficiency in raw materials. The Metals segment is therefore committed to the following objectives: z Return to at least 100% self- sufficiency in alumina for aluminium production z Achieve 100% self-sufficiency in anodes for aluminium production z Attain at least 100% and 80% self-sufficiency in flux and master alloys, respectively, for aluminium production By using self-generated hydropower in the aluminium smelting process, we not only generate income for the Power segment by providing steady baseload demand for electricity but also effectively reduce the carbon footprint of primary aluminium production as almost 100% of energy used for smelting is renewable. Production cost savings To cut production costs, the Company aims to achieve independence from external raw material suppliers and strategically positions aluminium smelters near HPPs, capitalising on cost savings from location synergies. En+ Group is dedicated to enhancing operational efficiency through digital transformation initiatives and robust business system integrations. > 90 % of energy used in aluminium smelting is the Company’s own hydropower supply > 85 % Self-sufficiency in bauxites and nephelines ~ 65 %1 Self-sufficiency in alumina USD 11,366 mn Total cost of sales 86.2 USD mn Total economic benefit from the implementation of business system projects at En+ Group (RUB 7.3 bn) 2 STRATEGIC PRIORITIES STRATEGIC OBJECTIVES 2023 HIGHLIGHTS REFERENCE TO UN SDGs Increasing capacity 2 Higher profitability The Metals segment is prioritising the expansion of high-value-added product (VAP) capacity. The Aluminium Division is actively expanding its VAP capacity to offer more products like foil, powders, extrusions, and aluminium wheels. 1,547 kt VAP sales volumes Aluminium capacity expansions The Group is consistently growing its aluminium capacity: z In 2023 Taishet Aluminium Smelter was in the process of being commissioned marking it as the Group’s most up-to- date and advanced aluminium operation, featuring state-of-the-art electrolysers z Currently, the Company is planning for the second stage of Taishet and Boguchany Aluminium Smelter projects Ramp-up of renewable generation capacity The Company is actively pursuing the development of new renewable-energy facilities, including: z new HPP projects z solar capacity additions z a wind farm project. The New Energy programme for upgrading hydro capacity is also underway, aimed at boosting plant unit reliability and overall generation levels. 540 ktpa Planned capacity of the second stage of the Taishet project 2.5 GW Aggregate capacity of new hydro projects 2.4 billion kWh additional generation through the New Energy programme starting from 2026 1 GW Potential capacity of the proposed wind farm 2 Calculated based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. 25 CONSOLIDATED REPORT 2023STRATEGIC REPORT Strategy STRATEGIC PRIORITIES STRATEGIC OBJECTIVES 2023 HIGHLIGHTS REFERENCE TO UN SDGs STRATEGIC PRIORITIES STRATEGIC OBJECTIVES 2023 HIGHLIGHTS REFERENCE TO UN SDGs Ensuring a stable financial position En+ Group remains focused on adapting to evolving circumstances and external influences, aiming to maintain robust liquidity and a solid financial standing. 3 Driving innovation 4 Advancing and scaling aluminium and alloy production technologies Key focal points in the Group’s technology portfolio are refining our proprietary RA-400 aluminium production cells, priming our inert anode technology for commercial use, and scaling production technology for aluminium-scandium alloy-based VAPs. Driving renewable technology innovation The Company's Power Segment R&D projects include research into tandem perovskite solar panels, energy storage, green hydrogen transport. USD 14,648 mn Revenue USD 2,157 mn Adjusted EBITDA 14.7 % Adjusted EBITDA margin 0.01 t CO2 e GHG emissions per tonne of aluminium (Scope 1 and 2) produced with inert anode technology 85 % Самообеспеченность бокситами и нефелинами 85 % Самообеспеченность бокситами и нефелинами 85 % Самообеспеченность бокситами и нефелинами Committing to sustainability 5 Achieving carbon neutrality The Company has set climate targets to achieve net-zero emissions by 2050 and to reduce GHG emissions by at least 35% by 2035 (from a 2018 baseline). We have also unveiled a detailed roadmap to achieve carbon neutrality. 65.9 mt of CO2 e Total GHG emissions (Scope 1, 2, and 3) Mitigating our environmental impact To eliminate or mitigate its environmental footprint across all businesses, En+ Group is strongly focused on driving R&D, adopting best available technology, and investing in modernisation. USD 207 mn Total environmental protection spending1 12.8 % Employee turnover USD 62.3 mn Social investments (RUB 5.3 bn) 1 Human capital development Our key HR objectives are to recruit and retain highly skilled talent, boost employee engagement, and provide a supportive working environment with attractive working conditions that foster professional growth among our people and promote the well-being of their families. Positive contribution to the development of our operating regions En+ Group’s social investments are directed towards enhancing public health, facilitating opportunities for physical activity, ensuring equal access to high-quality and innovative education, developing accessible infrastructure, and providing support to individuals facing challenging circumstances. 26 27 Providing safe work environment Safety is our absolute priority in everything we do. En+ Group is committed to ensuring a safe working environment for its people, contractors, and partners. 0.76 Lost Time Injury Frequency Rate (LTIFR) per 1 million working hours 1 Calculated based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. CONSOLIDATED REPORT 2023STRATEGIC REPORT Business review METALS SEGMENT REVIEW Market overview GLOBAL ALUMINIUM DEMAND In 2023, aluminium consumption outlook remained bleak amid global economic uncertainty, rampant inflation, and persistent recession fears. Geopolitical tensions continue to put pressure on the global economy, disrupting supply chains and markets. In 2023, the London Metal Exchange (LME) average aluminium price fell by USD 455 per tonne to USD 2,252 per tonne, hitting the lowest point of USD 2,068.5 per tonne in August 2023 after reaching USD 2,636 per tonne in mid-January 2023. However, despite all these challenges, aluminium consumption increased to 70.2 mt in 2023 , up 1.7% year-on-year. Consumption in China increased to 42.8 mt1, up 4.9% year- on-year. China’s decarbonisation efforts drove an increase in demand for aluminium, which is a key component in the manufacturing of renewable energy products, from electric vehicles to solar panels. Aluminium consumption in the rest of the world (excluding China) decreased by 2.8% year-on-year to 27.4 mt1 in 2023, hitting the 2015–2016 levels. Demand was primarily supported by sectors specifically linked to the green transition, namely the automotive and power generation industries. These two sectors were the only contributors to consumption growth in 2023. 70.2 mt Worldwide consumption of primary aluminium in 2023 +1.7 y-o-y The largest aluminium end-consumer sector is the automotive industry. In 2023, it accounted for nearly 25.5% of total consumption1. The increased focus on sustainability and environmental awareness around the world is driving the rapid growth of the electric-vehicle industry, with many countries setting ambitious targets to phase out internal combustion engine vehicles and promote the production of electric vehicles (EVs). According to market research firm Rho Motion, global sales of fully electric and plug-in hybrid electric vehicles (PHEVs) increased by 31% in 2023, down from 60% growth in 2022. Sales of fully electric or battery electric vehicles (BEVs) were 9.5 million units out of the 13.6 million EVs sold globally in 2023, the rest being hybrid vehicles. In 2024, the share of electric vehicles in global vehicle sales is expected to hit around 20% (14% for fully electric vehicles), up from around 17% in 2023 2. The construction sector remains the second largest aluminium consumer, accounting for 21.4% of the total 1. The construction industry continues to be under pressure, with new-build sales, new construction starts, and construction in progress all remaining in the negative territory in most countries for the year to date. High borrowing costs and uncertainty over monetary policy have affected aluminium demand. Packaging sector consumption in 2023 accounted for 16.1% of total global consumption1, which is 5.1% lower year-on-year due to weaker consumer demand amid high inflation. The other sector showing aluminium consumption growth this year was the power generation industry, accounting for 15% of total consumption in 20231.According to the International Energy Agency (IEA), the pace of global renewable capacity expansion in 2023 was the fastest in the past 20 years, which could accelerate the world’s progress towards its key climate goals by the end of this decade. According to the IEA data, global annual renewable capacity additions increased by 50% to 510 gigawatts (GW) in 2023, making it the 22nd year in a row that renewable capacity additions set a new record. GLOBAL ALUMINIUM SUPPLY The worldwide supply of primary aluminium was up 3.5% year- on-year to 70.5 mt in 2023. Production in the rest of the world (excluding China) increased by 0.9% to 29.0 mt, driven by production restarts and capacity expansions in South America and India. Annual capacity totalling some 1.1 mt of aluminium in Europe remains suspended due to high electricity costs in previous years. Aluminium production in China increased by 3.4% year-on- year to 41.5 mt in 2023 and is expected to continue growing in 2024 as new capacity comes online. By end-2023, the Chinese manufacturing sector posted net capacity additions of about 1.5 mt, taking into account new capacity additions totalling 3.9 mt and the restarts of production suspended earlier, as well as suspended capacity totalling 2.4 mt amid temporary supply cuts in certain regions. China’s aluminium production capacity reached 45.3 mt by the end of 2023. 70.5 mt Worldwide supply of primary aluminium in 2023 +3.5 y-o-y LME aluminium price performance 3, USD/t Overall, the global aluminium market was roughly balanced in 2023. Chinese exports of unwrought aluminium and alloys to other countries was down year-on-year in 2023 due to weak external demand. In 2023, Chinese exports of unwrought aluminium, alloys, and semi-finished products decreased by 14.0% year- on-year to 5.7 mt. At the same time, imports of unwrought aluminium and alloys to China soared by 37.5% year-on-year to 2.7 mt in 2023. China plans to increase primary metal imports in the coming years due to capacity constraints amid stable aluminium demand. In 2023, following a rise amid high trading volatility in the first five months of the year, aluminium inventories at the London Metal Exchange trended downwards until mid-December but then jumped by 120 kt to 566 kt towards the end of the year, bolstered mainly by metal deliveries from Russia, accounting for 90% of total inventories at the London Metal Exchange by 2023-end. The volume of metal stored outside of LME-approved warehouses (reported off-warrant stocks) fluctuated throughout 2023 and by the end of November increased by 166 kt to 439 kt. Overall, regional aluminium premiums were mostly falling during the first 11 months of 2023 due to higher supply and weaker global spot market demand. In December 2023, the US Midwest aluminium premiums stabilised at about 18.80 cents per pound but started rising in Europe due to large price markups charged by sellers for delayed payments, sanctions against Russian aluminium, and supply chain risks in the Middle East. By end-2023, the European P1020 duty unpaid premium in-warehouse Rotterdam was USD 145 per tonne. 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 Jan. 2022 March 2022 May 2022 July 2022 Sept. 2022 Nov. 2022 Jan. 2023 Feb. 2023 April 2023 June 2023 Aug. 2023 Oct. 2023 Dec. 2023 28 28 29 1 CRU. Long-term forecast for the aluminium market, December 2023, analysis by UC RUSAL. 2 Global electric car sales rose 31% in 2023 – Rho Motion | Reuters. 3 LME data. CONSOLIDATED REPORT 2023STRATEGIC REPORTBusiness review BAUXITES AND NEPHELINES DOWNSTREAM PROJECTS Operational performance GRI 2-6 SASB EM-MM-000.A ALUMINIUM ALUMINA RUSAL owns 111 aluminium smelters located in three countries: Russia (nine plants), Sweden (one plant), and Nigeria (one plant). The Company’s core operating assets are located in Siberia, Russia, accounting for approximately 94% of the Company’s total aluminium output in 2023. Among those, BrAZ and KrAZ collectively represent over half of RUSAL’s aluminium production. The Company also holds an 85% stake in a Nigeria-based smelter. Throughout 2023, RUSAL continued to implement a comprehensive programme to control costs and streamline operating processes, reinforcing 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 2023 remained flat year-on-year at 3,848 kt. In 2023, VAP sales were 1,547 kt out of total sales of 4,153 kt. As of the end of 2023, the Group owned eight2 alumina refineries. RUSAL’s alumina refineries are located in five countries: Ireland (one plant), Jamaica (two plants, one legal entity), Italy (one plant), Russia (four plants), and Guinea (one plant). In addition, the Company holds a 20% stake in QAL, an Australia-based alumina refinery. In 2023, RUSAL’s total alumina production declined by 13.8% year-on-year to 5,133 kt, due primarily to: z the shutdown of alumina production at the Nikolaev Alumina Refinery, prompted by the introduction of martial law in Ukraine z the imposition of sanctions by the Australian government, resulting in the inability for Queensland Alumina Ltd to supply alumina to Company facilities z reduced alumina output by the Aughinish Alumina Refinery caused by increased natural gas prices in Ireland. Bauxite and nepheline are essential raw materials for alumina production. In 2023, the Group was more than 85% 4 self-sufficient in both materials. 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 robust raw material base helps it secure sufficient supply for prospective expansion of its alumina production capacity. In addition, the Group sells bauxite to third parties. The Group’s total attributable bauxite output5 was 13,376 kt in 2023, as compared with 12,319 kt in 2022. The higher output for 2023 was driven primarily by the resumption of operations at the Compagnie des Bauxites de Kindia mine thanks to bauxite exports to third parties and partially to the Aughinish Alumina Refinery. Nephelines RUSAL’s total nepheline syenite production was 4,519 kt in 2023, up from 4,363 kt in 2022. The 3.6% rise in output was driven by the need to meet the nepheline ore demand of the consumer plant. Foil and packaging In 2023, the Group’s foil production volume was 110.6 kt, a decrease of 0.7 kt, or 0.6%, from 2022. Domestic supply of plain foil, converted foil, and tape increased by 12.9 kt, or 18.5%, driven by a shift in focus towards the domestic market. At the same time, the output of plain foil for export dipped by 13.7 kt, down 33.15% from 2022, amid lower demand for domestically produced foil. Wheel business Wheel output surged by 41% in 2023, propelled by the recovery of the aluminium wheels market after the 2022 crisis. In 2023, SCAD took steps to increase its share of the primary sales channels, boosting its presence in the OEM 6 channel from 40% to 70% year-on-year and in the aftermarket segment from 55% to 70% year-on-year. Aluminium production, kt Bauxite production 3, kt Foil production, kt Russia (Siberia) Russia (other than Siberia) Other countries Russia Guinea Jamaica For domestic market (Russia and the CIS) For exports 126 119 6,181 5,579 1,616 82.90 27.50 3,602 3,581 134 120 3,507 133 124 2023 2022 2021 Alumina production 3, kt Russia Ireland Jamaica Ukraine Guinea Australia (JV) 2023 2022 2021 3,022 3,080 3,053 1,383 456 273 1,629 422 300 340 182 1,878 448 1 769 414 742 3,848 3,835 3,764 5,133 5,953 8,304 2023 2022 2021 5,780 4,909 1,631 5,679 7,489 1,863 13,376 12,319 15,031 2023 2022 2021 70.10 41.18 66.13 42.71 Nepheline mines (Achinsk), kt, wet Wheel business, ths pcs. 2023 2022 2021 4,519 4,363 4,390 2023 2022 2021 10 aluminium smelters in operation (Alscon in Nigeria has been mothballed). 1 2 Seven alumina refineries in operation now (Eurallumina in Italy is mothballed). 3 Pro-rata share of production attributable to the Group. 4 Taking into account the shutdown of alumina production at the Nikolaev Alumina Refinery and the Australian government’s ban on exporting alumina and aluminium ores to Russia. 5 Bauxite output data: 1) were calculated based on a pro-rata share of the Company’s interest in the corresponding bauxite mines and mining complexes; 2) include the total production volume by the Company’s fully consolidated subsidiary, Bauxite Company of Guyana Inc., notwithstanding that minority interests in all similar subsidiaries are held by third parties; 3) are reported as wet weight (including moisture). 6 Original equipment manufacturer. 30 110.40 111.30 108.83 2,346 1,667 3,034 31 CONSOLIDATED REPORT 2023STRATEGIC REPORTBusiness review OTHER BUSINESSES Secondary alloys The amount of dross and aluminium-containing waste recycled into secondary aluminium decreased by 9 kt, or 56%, in 2023 compared to the previous year, which was attributed to the modified scrap recycling process within the Group. Silicon production Silicon output in 2023 rose by 15.7% to 50.9 kt compared to 2022. Other mining assets RUSAL’s mining portfolio encompasses 15 mines and mining complexes, which include bauxite operations (whose resources are detailed above), two quartzite mines, one fluorite mine, two coal mines, one nepheline syenite mine, and two limestone mines. The Company’s long position in alumina capacity is supported by RUSAL’s bauxite and nepheline syenite resource base. RUSAL jointly owns two coal mines with Samruk-Energy, 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-Energy. In 2023, the company produced approximately 42.93 mt of coal. As of 31 December 2023, Bogatyr Coal LLP held coal reserves across layers 1, 2, and 3, totalling 1.962 billion tonnes. Bogatyr Coal LLP recorded sales of approximately USD 247 million in 2022 and USD 286 million in 2023. Russian and Kazakh customers contributed approximately 24% and 76% of sales, respectively. RUSAL’S PRODUCTS CREATED IN 2023 Ligatures for high-tech alloys (production will meet half of the Company’s demand for ligatures); PEFA foundry alloys for the automotive industry con- taining aluminium scrap; Aluminium pigment pastes with enhanced anti-corro- sion properties; High-strength thin foil for batteries (20% higher strength compared to alloy 1050 foil); Heat-resistant powder alloy for 3D printing; High-strength AlZn alloy (up to 15% weight reduction in wheels and car suspension parts). Investment in Norilsk Nickel Norilsk Nickel is the world’s largest producer of palladium and high-grade nickel and one of the leading producers of platinum, copper, and cobalt. As of the most recent reporting date, RUSAL held a 26.39% shareholding in Norilsk Nickel. RUSAL’s shareholding in Norilsk Nickel allows for significant earnings diversification through Norilsk Nickel’s exposure to platinum group metals (PGMs) and non-ferrous metals (nickel, copper, and cobalt) and broadens RUSAL’s strategic prospects. 26.39 % RUSAL shareholding in Norilsk Nickel USD 7,273 million the market value of RUSAL’s investment in Norilsk Nickel Norilsk Nickel’s profile and financial results1 As of 31 December 2021, Norilsk Nickel’s resource base on the Taimyr Peninsula and Kola Peninsula consisted of 1,293 mt of proved and probable ore reserves and 1,824 mt of measured and indicated mineral resources. Its primary assets are situated in the Norilsk Industrial District, the Kola Peninsula, and the Trans-Baikal Territory in Russia, as well as in Finland. In 2021, the proven and probable ore reserves on the Taimyr Peninsula and Kola Peninsula saw a notable increase, primarily driven by the commencement of mining projects and the development of design documentation. In 2023, Norilsk Nickel produced 209 kt of nickel (a 5% decrease year- on-year), 425 kt of copper (a 2% decrease year-on-year), 2,692 koz of palladium (a 4% decrease year-on-year), and 664 koz of platinum (a 2% increase year-on-year). In 2023, production of non-ferrous metals such as nickel and copper declined due to reduced ore extraction volumes stemming from testing and commissioning of mining equipment from new suppliers. Additionally, process adjustments were made to enhance the quality of copper cathodes to meet the specifications of new customers. In PGMs, in 2023, palladium production was down, while platinum production was up. These mixed trends were linked to shifts in the share of PGMs in the feedstock mix. Norilsk Nickel maintains diversified metal sales across various regions. Meanwhile, in 2023, the proportion of sales to Asia and Russia rose compared to 2022, whereas sales to Europe, North America, and South America saw a decline. As of 31 December 2023, the market value of RUSAL’s investment in Norilsk Nickel stood at USD 7,273 million, representing a decrease compared to the market value as of 31 December 2022 (USD 8,775 million). Norilsk Nickel’s ongoing market value decline is driven by escalating geopolitical tensions, the imposition of economic restrictions against Russia by several countries, lower prices for key metals, particularly palladium, and an increasing tax burden on the company. Ni 28 209 kt Norilsk Nickel produced in 2023 1 Production, financial, and operational data in this section are derived from https://nornickel.com/. 32 33 CONSOLIDATED REPORT 2023STRATEGIC REPORTBusiness review BEMO project The project pursued by the Boguchany Energy and Metals Complex (BEMO) involves the construction of the 3,000-MW Boguchany HPP (with a projected average annual electricity output of 17.6 billion kWh) and Boguchany Aluminium Smelter (BoAZ), capable of producing 600 kt of metal per annum in the Krasnoyarsk Territory in Siberia. Boguchany HPP represents the fourth phase of the Angara cascade HPP, constituting Russia’s largest hydro project ever completed. Construction of the power plant was suspended in Soviet times due to the lack of financing but was resumed in May 2006 by RUSAL and strategic partner, who agreed to join efforts to complete the project. BoAZ was constructed in two phases, each designed to produce 298 kt of aluminium annually. The initial segment of the first stage, producing 149 kt of aluminium annually with 168 electrolysers, was launched in 2015. Subsequently, the second segment of the first stage came online in March 2019. In May 2019, the first stage of the smelter reached its design capacity. In 2023, production of aluminium and alloys reached 300 kt, marking an increase of 2 kt year-on-year. The potential construction of the second stage of the BoAZ plant will be considered jointly with the strategic partner, contingent upon market conditions and project funding availability. 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 Boguchany HPP commenced operation between 2012 and 2014. The total installed capacity of all nine operating hydropower units amounts to 2,997 MW. The hydropower plant started commercial electricity supply to the wholesale electricity and capacity market on 1 December 2012. In 2023, the hydropower plant produced and supplied 19.924 TWh of electricity to the wholesale electricity and capacity market, marking a 0.6% increase of 0.116 TWh compared to 2022. Assets overview Aluminium smelters Alumina refineries Achinsk Alumina Refinery Bogoslovsk Aluminium Smelter Urals Aluminium Smelter PGLZ Alumina Refinery Friguia Alumina Refinery Location Installed capacity 2022 production 2023 production Capacity utilisation rate (%) Russia (Krasnoyarsk Territory) Russia (Sverdlovsk Region) Russia (Sverdlovsk Region) Russia (Leningrad Region) 1,069 ktpa 913 kt 872 kt 85% 1,030 ktpa 994 kt 988 kt 96% 900 ktpa 917 kt 918 kt 102% 265 ktpa 256 kt 244 kt 92% Guinea 650 ktpa 340 kt 273 kt 42% Queensland Alumina Ltd.6 Australia 3,950 ktpa 182 kt 1,085 ktpa – 0 kt – 0% 0% 1,990 ktpa 1,629 kt 1,383 kt 69% 1,210 ktpa 422 kt 456 kt 1,759 ktpa 300 kt – 38% 17% Italy Ireland Jamaica Ukraine Eurallumina2 Aughinish Alumina Refinery Windalco Nikolaev Alumina Refinery5 Bauxite mines Location Installed capacity 2022 production 2023 production Capacity utilisation rate (%) Location Installed capacity 2022 production 2023 production Capacity utilisation rate (%) Bratsk Aluminium Smelter Krasnoyarsk Aluminium Smelter Sayanogorsk Aluminium Smelter Novokuznetsk Aluminium Smelter Khakas Aluminium Smelter Irkutsk Aluminium Smelter Taishet Aluminium Smelter1 Kandalaksha Aluminium Smelter Volgograd Aluminium Smelter KUBAL ALSCON 2 Russia (Irkutsk Region) Russia (Krasnoyarsk Territory) Russia (Republic of Khakassia) Russia (Kemerovo Region) Russia (Republic of Khakassia) Russia (Irkutsk Region) Russia (Irkutsk Region) Russia (Murmansk Region) Russia (Volgograd Region) Sweden Nigeria 1,009 ktpa 1,005 kt 1,005 kt 100% 1,019 ktpa 1,017 kt 1,014 kt 100% 542 ktpa 539 kt 538 kt 99% 215 ktpa 213 kt 204 kt 99% 297 ktpa 306 kt 304 kt 103% 422 ktpa 424 kt 425 kt 101% 428 ktpa 78 kt 112 kt 76 ktpa 64 kt 57 kt 26% 79% 69 ktpa 70 kt 69 kt 106% 128 ktpa 120 kt 119 kt – – – 93% 0% Boguchany Aluminium Smelter 3 Russia (Krasnoyarsk Territory) 292 ktpa 298 kt 300 kt 100% Timan Bauxite North Urals Bauxite Mine Russia (Komi Republic) Russia (Sverdlovsk Region) Compagnie des Bauxites de Kindia Guinea Friguia Bauxite and Alumina Complex 2 Guinea Bauxite Company of Guyana Inc.6 WINDALCO Bauxite Company of Dian-Dian Guyana Jamaica Guinea 3,500 ktpa 3,542 kt 3,923 kt 112% 3,000 ktpa 2,238 kt 2,258 kt 75% 3,500 ktpa 831 kt 2,670 kt 76% 2,100 ktpa 1,253 kt 837 kt 40% 1,700 ktpa – – 4,000 ktpa 1,631 kt 1,616 kt 4,200 ktpa 2,825 kt 2,072 kt 0% 40% 49% Pre-commissioning and verification tests began in December 2021. 1 2 Mothballed. 3 A 50/50 joint venture between RUSAL and strategic partner. The capacity and production volumes of the BEMO project 4 Pro-rata share of capacity and production attributable to RUSAL. 5 Since March 2022, production has been terminated. 6 As of February 2020, production was mothballed. 34 35 CONSOLIDATED REPORT 2023STRATEGIC REPORTBusiness review POWER SEGMENT Market overview1 OVERVIEW OF THE RUSSIAN POWER SECTOR The Russian Federation’s power sector is among the largest in the world: as of 2023, total installed capacity of power plants within the United Energy System of Russia (UES of Russia) was 248.2 GW, generating a total of 1,134.0 TWh of electricity in 2023. The UES of Russia covers the most populated areas of the country. Grid interconnections between various energy systems are limited due to vast distances, so the Russian wholesale electricity and capacity market is divided into two pricing zones and four non-pricing zones. The first pricing zone, the Europe-Urals zone,2 encompasses the European region of Russia and includes integrated energy systems (IES) such as the North-West, Central, Middle Volga, Urals, and South. The second pricing zone, the Siberian IES, encompasses Siberia. The electricity prices of the two pricing zones are driven by the differences in capacity and fuel mix in the respective pricing zones. Network constraints play a significant role in the second pricing zone. Non-pricing zones include the Kaliningrad Region, Arkhangelsk Region, Komi Republic, and Russian Far East regions. These regions operate under special electricity pricing rules rather than market conditions. Most of the Group’s energy assets are located in the second pricing zone, within the Siberian IES. The Siberian IES has an operational area of 4,944,300 km2, with a population of more than 19 million. The Siberian IES comprises 122 power plants with a total installed capacity of 52.4 GW, including 25.4 GW of HPPs (48%), 26.6 GW of CHPs (51%), and 400 MW of solar power plants (1%). The backbone grid of the Siberian IES consists3 of 110-kV, 220-kV, 500-kV, and 1,150-kV lines, with a total length of 103,771 km. A unique feature of the Siberian IES is the significant role of HPPs in both the installed electrical capacity mix and electricity output. Thermal power in the Siberian IES communities is generated mainly through coal-fired power plants, primarily located near coal-mining regions. ELECTRICITY DEMAND Electricity consumption in the UES of Russia rose by 1.4% year-on-year to 1,121.6 TWh in 2023. Electricity consumption in the Europe-Urals pricing zone grew by 1.0% to 845.8 TWh and 2.3% to 229.9 TWh in the Siberian IES. ELECTRICITY GENERATION As of 1 January 2024, total installed electrical capacity of the UES of Russia was 248.2 GW, reflecting an increase of 0.6 GW in 2023. This growth was attributed to the commissioning of new capacity totalling 0.7 GW, retirement of obsolete generation with a combined capacity of 0.4 GW, and the capacity increase of 0.2 GW due to other factors such as uprating. In 2023, electricity production in the UES of Russia increased by 1.1% year-on-year, reaching a total of 1,134.0 TWh. ELECTRICITY AND CAPACITY PRICES Within the Siberian IES, electricity spot prices are dictated by the marginal costs of the least efficient coal-fired power plants among those in demand, with HPPs operating as price takers. Over the long term, electricity prices tend to move with thermal coal prices. A significant proportion of the power generated by Siberian CHPs is produced using locally sourced brown coal. Due to seasonality in demand and the fluctuating availability of hydropower, electricity prices can exhibit significant fluctuations throughout the year. One of the primary factors with significant medium-term influence is the inflow and water reserves in Siberian HPPs’ reservoirs, driving the availability of low-cost hydropower in the wholesale market. The capacity market operates somewhat differently from the electricity market, reflecting the long-term nature of decision making. The primary method for selling capacity on the wholesale market is through competitive capacity auctions (CCAs), enabling the selection of the most suitable mix of generating capacities to meet projected demand and establishing a single capacity price within each pricing zone. Currently, CCA capacity prices are set through to 2026 and are then adjusted annually using the Consumer Price Index (CPI) from the previous year minus 0.1%, from 1 January of the CCA year until 1 January of the delivery year. Capacity prices Price determined in capacity auctions (ex. CPI, RUB'000/MW/month) Second pricing zone 2022 264 2023 267 2024 279 2025 303 2026 299 Capacity prices (including CPI minus 0.1% adjustment), ths RUB/MW/month First pricing zone Change y-o-y Second pricing zone 2023 2022 217.2 +14.1% 338.6 +12.9% 190.4 299.9 The CCA-resulting price for the first pricing zone increased by 14.1% year-on-year, including the CPI minus 0.1% adjustment, while the capacity price for the second pricing zone rose by 12.9% year-on-year, including the CPI minus 0.1% adjustment. A key contributor to higher CCA prices in 2023 vs 2022 was adjustment for actual 2022 inflation rate of 11.94%. Electricity prices Electricity spot prices 4, RUB/MWh First pricing zone Nizhny Novgorod Region Second pricing zone Irkutsk Region Change y-o-y Krasnoyarsk Territory 2023 2022 1,591 +10.2% 1,248 +7.4% 1,625 +10.5% 1,159 +17.4% 1,201 +3.8% 1,444 1,162 1,470 987 1,157 In 2023, the average spot price in the day-ahead market for the second pricing zone reached RUB 1,248 per MWh, a 7.4% increase from 2022. This upward trend was caused by lower HPP generation between January and May amid increased electricity consumption as well as by higher CHP price bid levels with changes in the bidding mix. In 2023, the average spot prices in the Irkutsk Region and Krasnoyarsk Territory stood at RUB 1,159 per MWh and RUB 1,201 per MWh, respectively, marking a 17.4% and 3.8% year- on-year increase, respectively. The price growth rate in the Irkutsk Region exceeded that in the Krasnoyarsk Territory due to several factors: lower generation from the Angara cascade HPPs between January and May, increased electricity consumption in the Irkutsk Region, and higher CHP price bids levels amid ongoing transmission constraints for cross-flows to the Irkutsk Region. 1,134 TWh Total generation of UES Russia in 2023 +1.1% y-o-y 1 Unless otherwise stated, data sources in the Market Overview section include TSA, NP Market Council Association, and System Operator of the United Energy System. 2 Comprises the Central, Middle Volga, Urals, North-West, and South energy systems. 3 According to the System Operator of the United Energy System of Russia (www.so-ups.ru). 4 Day-ahead market. NP Market Council Association data. 36 3737 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Business review Operational performance GRI 2-6 As of 31 December 2023, the Group’s total installed electrical capacity stood at 19.5 GW1, while the aggregate installed heat capacity was 14.2 Gcal/h. As of 31 December 2023, HPPs represented 77.9% of the installed electrical capacity, while the remaining 22.1% was accounted for by predominantly coal-fired CHPs and one solar power plant. In 2023, the Company generated 85.2 TWh2 of electricity, constituting 37.9% of the Siberian IES’ total electricity production for the period. En+ Group’s installed capacity by generation type 3, % CHPs HPPs Abakan SPP 78 % HYDROPOWER GENERATION Hydropower generation is the main focus of the Group’s Power segment. The Group operates five HPPs 4, including three of the five largest HPPs in Russia and of the twenty largest HPPs globally, in each case in terms of installed electrical capacity. In 2023, the Power segment’s HPPs produced 68.8 TWh of electricity, or 80.79% of the Group’s total electricity production. In 2023, the total output of the Group’s Angara cascade HPPs (Irkutsk, Bratsk, and Ust-Ilimsk) decreased by 2.0% year- on-year to 53.1 TWh. This decline can be attributed to the high water reserves in Lake Baikal and the Bratsk reservoir in the beginning of 2022 and on average in 2022. In 2023, water levels in Lake Baikal reached 457.15 m (38 centimetres above the long-term average), an increase from 456.86 m in 2022. Additionally, the Bratsk reservoir water level in 2023 was 402.01 m (3.2 m higher than the long-term average), compared to 401.28 m in 2022. Total generation from Krasnoyarsk HPP rose by 6.8% year-on- year in 2023, from 14.8 TWh to 15.8 TWh. The increase was the result of a more intensive state-regulated drawdown in the Krasnoyarsk reservoir compared to 2022, driven by increased hydro resources. The maximum level of the Krasnoyarsk reservoir reached 236.05 m, marking an increase of 2.03 m compared to the 2022 level and remaining 3.63 m below the long-term average annual maximum. CHP ELECTRICITY AND HEAT GENERATION Power generation by the Group’s CHPs rose by 10.1% year-on-year to 16.4 TWh in 2023. The increase was driven primarily by a 4.0% (increase by 295 MW) year-on-year surge in electricity consumption within the Irkutsk energy system, along with reduced generation from the Angara cascade HPPs in the first half of 2023. Heat generation totalled 27.4 million Gcal and experienced a 0.7% year-on-year decrease, which was attributed to weather conditions. The average monthly temperature in 2023 was 0.2°C higher than in 2022. SPP ELECTRICITY GENERATION Abakan SPP generated 6.0 GWh in 2023, marking a 1.7% year-on-year increase attributed to more sunny days during the reporting period. Total electricity production 5, TWh Angara cascade HPPs6 Yenisei cascade HPP7 CHPs RETAIL 53.1 54.2 53.0 2023 2022 2021 15.8 16.4 14.8 14.9 24.7 12.7 Heat generation, mn Gcal 2023 2022 2021 85.2 83.9 90.4 27.4 27.6 28.5 COAL PRODUCTION The Coal segment provides the Group’s CHPs with a self- sufficient coal resource base and covers its internal coal demand. Part of the coal production (18% in 2023) is sold to third parties. The Company purchases electricity on the wholesale market, sourcing it from both the Group’s generating companies and third-party suppliers through its subsidiaries Irkutskenergosbyt LLC, Volgaenergosbyt JSC, and MAREM+ LLC, and then resells this electricity on the retail market to both industrial consumers without access to the wholesale market and household consumers. The Group directly sells heat and electricity to end consumers. In 2007, the Group’s subsidiaries in the Irkutsk and Nizhny Novgorod Regions were designated as guaranteeing suppliers within their respective regions. This status requires the Group to enter into an electricity supply contract with any consumer within the boundaries of these operational areas who applies for such a contract. ELECTRICITY TRANSMISSION AND DISTRIBUTION As of 31 December 2023, the Group operated a transmission and distribution system comprising approximately 42.0 thousand km of high- and low-voltage lines, facilitating an annual net electricity output of approximately 56.9 TWh. Through this system, the Group delivers electricity generated by the Angara cascade HPPs to both wholesale and retail customers, including aluminium smelters within the Metals segment. Other generating facilities within the Group, such as Krasnoyarsk HPP and Avtozavodsk CHP, do not rely on this transmission network as they do not fall within its service area. 22 % 0.03 % 38 1 Including Ondskaya HPP, with an installed electrical capacity of 80 MW (located in the European part of Russia, leased to UC RUSAL); excluding Boguchanskaya HPP, with an installed electrical capacity of 2,997 MW (a 50/50 JV between UC RUSAL and strategic partner). 2 Excluding Ondskaya HPP, with an installed electrical capacity of 80 MW (located in the European part of Russia, leased to UC RUSAL) and Boguchanskaya HPP (a 50/50 JV between UC RUSAL and strategic partner). 3 As of 31 December 2023. 4 Including Ondskaya HPP with an installed capacity of 80 MW (located in the European part of Russia, leased to UC RUSAL). 5 Excluding Ondskaya HPP, with an installed power capacity of 80 MW (located in the European part of Russia, leased to UC RUSAL), and Boguchany HPP, with an installed power capacity of 2,997 MW (a 50/50 JV between UC RUSAL and strategic partner). Includes Irkutsk, Bratsk, and Ust-Ilimsk HPPs. 6 7 Krasnoyarskaya HPP. 39 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Business review Assets overview GRI EU-1 Hydropower plants Location Irkutsk HPP Russia (Irkutsk Region) Combined heat and power plants Location Installed capacity 2022 production 2023 production Avtozavodsk CHP Russia (Nizhny Novgorod Region) Installed capacity 732,5 MW 2022 production 2023 production 4.7 TWh 4.6 TWh Electricity Heat generation Solar power plants 480 MW 1.6 TWh 1.6 TWh 2,172.0 Gcal/h 3.3 mn Gcal 3.1 mn Gcal Bratsk HPP Russia (Irkutsk Region) 4,500 MW 25.9 TWh 25.1 TWh Ust-Ilimsk HPP Russia (Irkutsk Region) 3,840 MW 23.7 TWh 23.4 TWh Location Installed capacity 2022 production 2023 production Krasnoyarska HPP Russia (Irkutsk Region) 6,000 MW 14.8 TWh 15.8 TWh Abakan SPP Russia (Republic of Khakassia) 5.2 MW 5.9 mn kWh 6.0 mn kWh Combined heat and power plants CHP-10 Electricity Heat generation CHP-9 Electricity Heat generation Location Russia (Irkutsk Region) Russia (Irkutsk Region) Installed capacity 2022 production 2023 production 1,110 MW 4.6 TWh 4.9 TWh 574.0 Gcal/h 0.4 mn Gcal 0.3 mn Gcal 540.0 MW 2.0 TWh 2.5 TWh 2,190.5 Gcal/h 5.8 mn Gcal 6.0 mn Gcal Other assets 1 Electricity Heat generation Installed capacity 136.4 MW 2022 production 2023 production 0.7 TWh 0.6 TWh 2,660.0 Gcal/h 4.5 mn Gcal 4.1 mn Gcal energized for action 726 MW 2.8 TWh 3.3 TWh En+ Group’s electric charging stations Novo-Irkutsk CHP Russia (Irkutsk Region) Electricity Heat generation Ust-Ilimsk CHP Russia (Irkutsk Region) Electricity Heat generation CHP-11 Electricity Heat generation CHP-6 Electricity Heat generation Russia (Irkutsk Region) Russia (Irkutsk Region) 1,959.2 Gcal/h 5.8 mn Gcal 5.9 mn Gcal 515 MW 0.9 TWh 0.9 TWh 1,015.0 Gcal/h 2.0 mn Gcal 2.1 mn Gcal 320.3 MW 0.8 TWh 0.7 TWh 1,056.9 Gcal/h 1.0 mn Gcal 1.0 mn Gcal 284.9 MW 0.7 TWh 0.9 TWh 1,769.1 Gcal/h 3.5 mn Gcal 3.3 mn Gcal Novo-Ziminsk CHP Russia (Irkutsk Region) Electricity Heat generation 260 MW 1.2 TWh 1.3 TWh 773.0 Gcal/h 1.5 mn Gcal 1.5 mn Gcal The En+ Group network of electric charging stations comprises 19 locations, with 18 situated in the Irkutsk Region and one additional location in Krasnoyarsk. These stations serve all districts of the regional centre, as well as key routes, including sections of the federal highways Baikal and Siberia and roads to the Olkhonsky District and Listvyanka. At the end of 2023, the number of charging sessions at En+ Group’s electric charging stations exceeded 100 thousand. Altogether, over 530 thousand kWh of electricity has been consumed since 2020, when the first stations were opened, with 260 thousand kWh consumed in 2023 alone, highlighting the growing popularity of charging stations. Moreover, more than 1,500 people became new customers. 100 ths number of charging sessions at En+ Group’s electric charging stations as of the end of 2023 1 Other assets include Onda HPP and small-scale generating and heat-producing facilities. 40 41 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Financial review Key highlights The following table presents selected data from the Group’s key financial information, USD mn 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, trading, and supply. It also includes supporting operations engaged in the supply of coal to the Group. The Metals segment consists of RUSAL, including RUSAL’s equity investment in Norilsk Nickel. When making period-to-period comparisons of operating results, the Group presents consolidated results after intersegmental eliminations in order to analyse changes, developments, and trends by reference to the individual segment’s results (the Power and Metals segments). Amounts attributable to the segments are presented before intersegmental eliminations. As at or for the year ended 31 December REVENUES Revenue 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 debt 4 Net working capital 5 Free cash flow6 Basic earnings per share7 Equity attributable to shareholders of the Company 2023 14,648 3,282 22.4% 1,030 7.0% 876 716 4.9% 2,157 14.7% 8,717 3,417 642 1.186 6,921 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 Change in revenue and adjusted EBITDA, USD mn Power segment Metals segment Change 2022 to 2023 (%) −11.5% −30.8% 16,549 8 −12.6% 3,119 8 −61.2% 3,885 (1,761) −7.7% (298) 14,648 8 3,587 1,254 (1,242) +3.0% 38 13,974 12,213 2,028 2022 Revenue Metals segment Power segment 2023 Revenue 2022 Adjusted EBITDA Metals segment Power segment 42 The following table presents the Group’s revenue from sales broken down by core product, for the years indicated: USD mn Sales of primary aluminium and alloys Sales of electricity Sales of alumina and bauxite Sales of semi finished products and foil Sales of heat Other revenue Total revenues Year ended 31 December 2023 9,933 1,646 513 864 476 1,216 14,648 2022 11,384 1,844 557 921 525 1,318 16,549 2021 9,766 1,525 612 767 465 991 14,126 The following table presents the Group’s revenue from sales broken down by core product, USD mn Sales of primary aluminium and alloys Sales of electricity Sales of alumina and bauxite Sales of semi finished products and foil Sales of heat Other revenue 2023 2022 2021 9,933 1,646 513 864 476 1,216 11,384 1,844 557 921 525 1,318 9,766 1,525 612 767 465 991 14,648 16,549 14,126 2,157 8 1,292 786 2023 Adjusted EBITDA 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 segment, 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 segment, 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 segment, or Metals segment, as the case may be. 4 Net debt represents the sum of loans, 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 segment, or Metals segment, as the case may be. 5 Net working capital represents inventories plus short term trade and other receivables (excluding dividends receivable from related parties) less trade and other payables (excluding dividends payable) as at the end of the relevant period, in each case attributable to the Group, Power segment, 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. The earnings per share calculation is based on a weighted average number of shares of 502 million in 2023 and 2022. 7 8 After consolidation adjustments. 43 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review The following table presents the Group’s revenue by business segment for the years indicated: USD mn Metals segment Power segment Business segment revenues Elimination of intersegmental revenues Total revenues Year ended 31 December 2023 12,213 3,587 15,800 (1,152) 14,648 2022 13,974 3,885 17,859 (1,310) 16,549 2021 11,994 3,138 15,132 (1,006) 14,126 Group’s revenue by business segment, USD mn Metals segment Power segment Elimination of intersegmental revenues 2023 2022 2021 12,213 11,994 13,974 3,587 (1,152) 3,138 (1,006) 3,885 (1,310) 14,648 16,549 14,126 The Group’s revenue is mainly attributable to the Metals segment’s operations. The Group’s revenue decreased by USD 1,901 million, or 11.5%, from USD 16,549 million in 2022 to USD 14,648 million in 2023. The decline was primarily driven by lower revenue in the Metals segment due to a 16.8% drop in the LME aluminium price to an average of USD 2,252 per tonne in 2023, from USD 2,707 per tonne in 2022. This was partially offset by a 6.6% year-on-year increase in primary aluminium and alloys sales volume. The Group’s revenue was also negatively affected by a significantly stronger dollar during the year, resulting in a 7.7% decline in revenue for the Power segment. GROSS PROFIT DISTRIBUTION, GENERAL AND ADMINISTRATIVE EXPENSES The Group’s gross profit for 2023 decreased by USD 1,211 million, or 27.0%, to USD 3,282 million from USD 4,493 million in 2022. The Group’s gross profit margin declined from 27.1% in 2022 to 22.4% in 2023. The Group’s distribution, general and administrative expenses decreased by USD 146 million, or 7.8%, to USD 1,718 million in 2023 from USD 1,864 million in 2022. The decline was primarily attributed to a persistent dollar appreciation during the year, partially offset by the newly imposed export duties. ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND RESULTS FROM OPERATING ACTIVITIES The Group’s results from operating activities decreased by USD 976 million, or 48.7%, to USD 1,030 million in 2023 from USD 2,006 million in 2022. results from operating activities from the Power segment increased by USD 178 million, or 21.0%, from USD 849 million in 2022 to USD 1,027 million in 2023. Results from operating activities attributable to the Metals segment decreased by USD 1,395 million, or 106.0%, from USD 1,316 million in 2022 to USD (79) million in 2023. Conversely, The Group’s operating profit margin decreased from 12.1% in 2022 to 7.0% in 2023. The following graph reconciles the Group’s adjusted EBITDA to the Group’s results from operating activities for the periods indicated, USD mn Results from operating activities Impairment of non current assets Amortisation and depreciation (Profit)/Loss on disposal of property, plant and equipment 2023 2022 2021 1,030 765 366 (4) 2,006 720 370 23 2,898 822 267 5 2,157 3,119 3,992 COST OF SALES The following table sets forth the Group’s adjusted EBITDA and adjusted EBITDA margin by segment (before intersegmental elimination) for the years indicated: The following table presents the Group’s cost of sales by segment for the years indicated: Year ended 31 December USD mn Metals segment Power segment Business segment cost of sales Elimination of intersegmental cost of sales Total cost of sales Year ended 31 December 2023 10,445 2,143 12,588 (1,222) 11,366 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 reflects costs directly associated with the sale and production of the core products and services of both groups of companies. For the Power segment, the cost of sales primarily includes the costs of electricity and capacity purchased for resale, raw materials and fuel, personnel expenses, and depreciation and amortisation. For the Metals segment, the cost of sales mainly consists of the cost of energy, alumina, bauxite, other raw materials, personnel expenses, and depreciation and amortisation. The Group’s cost of sales decreased by USD 690 million, or 5.7%, from USD 12,056 million in 2022 to USD 11,366 million in 2023, mainly due to a weaker rouble. USD mn, except % Adjusted EBITDA Metals segment Adjusted EBITDA Power segment Adjusted EBITDA Adjusted EBITDA margin Metals segment Adjusted EBITDA margin Power segment Adjusted EBITDA margin Group 2023 786 1,292 2,157 6.4% 36.0% 14.7% 2022 2,028 1,254 3,119 14.5% 32.3% 18.8% 2021 2,893 1,172 3,992 24.1% 37.3% 28.3% The Group’s adjusted EBITDA decreased by USD 962 million, or 30.8%, to USD 2,157 million in 2023 from USD 3,119 million in 2022. The year-on-year decline was mainly due to the same factors that impacted the Group’s operating results. 44 45 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review SHARE OF PROFITS OF ASSOCIATES AND JOINT VENTURES The Group has a number of associates and joint ventures, which are accounted for in its Financial Statements under the equity method. The principal associates and joint ventures include Norilsk Nickel, and the BEMO Project. The Group’s share of profit of its associates and joint ventures decreased by USD 801 million, or 51.6%, to USD 752 million in 2023 from USD 1,553 million in 2022. The change in the share of profit of associates and joint ventures in 2023 as compared to 2022 can primarily be attributed to lower profit from the Group’s investment in Norilsk Nickel. USD mn Share of profit in Norilsk Nickel Effective shareholding of En+ Group Share of profit in the BEMO project Effective shareholding of En+ Group Share of profit in other associates / joint ventures Share of profits of associates and joint ventures FINANCE INCOME AND COSTS Year ended 31 December 2023 629 15.01% 93 28.44% 30 752 2022 1,440 15.01% 102 28.44% 11 1,553 2021 1,762 15.01% 58 28.44% (18) 1,802 The Group’s finance income primarily consists of interest income and net foreign exchange gains. The Group’s finance costs primarily consist of interest expense on interest bearing liabilities and net foreign exchange loss. The Group’s finance income decreased by USD 64 million, or 34.8%, to USD 120 million in 2023 from USD 184 million in 2022, mainly as a result of lower interest income driven by changes in the Central Bank’s key rate. The Group’s finance costs decreased by USD 264 million, or 20.5%, from USD 1,290 million in 2022 to USD 1,026 million in 2023, as a result of interest expense decline driven by changes in the Central Bank’s key rate as well as lower net losses from changes in the fair value of derivative financial instruments between the comparable periods, which was partially offset by losses from the revaluation of investments measured at fair value through profit and loss as compared to a gain in 2022. 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 Year ended 31 December 2023 2022 2021 93 27 – 120 (748) (85) (99) (94) 115 38 31 184 (988) (111) (191) – 65 22 – 87 (709) (33) (352) (47) (1,141) Total finance costs (1,026) (1,290) 46 PROFIT BEFORE TAXATION Due to the above factors, the Group recorded a profit before tax of USD 876 million in 2023 as compared to USD 2,453 million in 2022. In 2023, the Power segment generated a pre-tax profit of USD 550 million compared to USD 619 million in 2022. The Metals segment posted a pre-tax profit of USD 244 million as compared to USD 2,166 million in 2022. INCOME TAX EXPENSE PROFIT FOR THE YEAR For the reasons described above, the Group’s profit for the year ended 31 December 2023 was USD 716 million, compared to a profit of USD 1,846 million for the year ended 31 December 2022. The Group’s income tax expense decreased by USD 447 million, or 73.6%, to USD 160 million in 2023 from USD 607 million in 2022, as a result of lower pre-tax profit in 2023 as compared to 2022. In 2023, current tax expense decreased by USD 183 million, or 33.1% year-on-year, mainly due to lower taxable profit. Deferred taxes increased by USD 264 million, from USD 54 million in deferred tax liabilities in 2022 to USD 210 million in deferred tax assets in 2023, primarily due to the tax effect of the accrual of certain temporary differences related to foreign currency gains. Analysis of results by segment METALS SEGMENT In 2023 and 2022, the Metals segment accounted for 77.3% and 78.2% of the business segments’ revenues (before adjustments), respectively. As at 31 December 2023 and 31 December 2022, the assets of the Metals segment represented 67.3% and 68.0% of the Group’s total assets (before adjustments), respectively. The following table presents selected data of the Metals segment for the periods indicated USD mn Revenue 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 2023 12,213 1,768 14.5% 244 282 2.3% 786 6.4% 73 702 5.7% 2022 13,974 3,204 22.9% 2,166 1 793 12.8% 2 028 14.5% 725 2,165 15.5% 2021 11,994 3,721 31.0% 3,641 3,225 26.9% 2,893 24.1% 1,536 3,298 27.5% 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 after-tax profits. 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. 47 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review REVENUES COST OF SALES The following table presents components of the Metals segment’s sales data (before intersegmental elimination) for the years indicated: The following table presents components of the Metals segment’s cost of sales (before intersegmental elimination) for the years indicated: Sales of primary aluminium and alloys Revenue, USD mn Sales volumes, kt Average sales price (USD/t) Sales of alumina Revenue, USD mn Sales volumes, kt Average sales price (USD/t) Sales of foil and other aluminium products, USD mn Other revenue, USD mn Total revenues Year ended 31 December 2023 2022 2021 10,129 4,153 2,439 340 759 448 550 1,194 12,213 11,593 3,896 2,976 550 1,169 470 581 1,250 13,974 9,966 3,904 2,553 610 1,677 364 515 903 11,994 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 2023 2,029 235 3,074 656 2,288 513 667 455 (12) 540 10,445 2022 1,847 331 3,835 940 2,658 481 781 532 171 (806) 10,770 2021 741 506 3,387 696 2,070 572 618 407 28 (752) 8,273 The Metals segment’s revenue decreased by USD 1,761 million, or 12.6%, to USD 12,213 million in 2023 from USD 13,974 million in 2022. Revenue from sales of primary aluminium and alloys was down by USD 1,464 million, or 12.6%, to USD 10,129 million in 2023 from USD 11,593 million in 2022. The decline was primarily due to an 18.0% decrease in the weighted-average realised aluminium price per tonne (to an average of USD 2,439 per tonne in 2023 from USD 2,976 per tonne in 2022), driven by lower LME aluminium price (down to an average of USD 2,252 per tonne in 2023 from USD 2,707 per tonne in 2022), which was partially offset by a 6.6% increase in sales volumes between the comparable periods. Revenue from sales of alumina was down by 38.2% to USD 340 million for the year ended 31 December 2023 from USD 550 million for the year ended 31 December 2022 due to a decrease in alumina sales volume by 35.1% and a 4.7% decrease in the average sales price. Revenue from sales of foil and other aluminium products declined by USD 31 million, or 5.3%, to USD 550 million in 2023 compared to USD 581 million in 2022 due to a 11.9% decrease in revenue from sales of foil between the comparable periods. Other revenue, which includes sales of other products, bauxite, and electricity, decreased by 4.5% to USD 1,194 million for the year ended 31 December 2023 compared to USD 1,250 million for the previous year. The decline was driven by lower sales of other materials (such as anode blocks down by 12.1%, aluminium powder by 15.3%, silicon by 28.0%), which was partially offset by higher revenue from bauxite sales, and also due to a 27.0% decrease in service revenue (mainly a 36.8% decline in revenue from sales of energy services). The Metals segment’s cost of sales decreased by USD 325 million, or 3.0%, to USD 10,445 million for the year ended 31 December 2023 compared to USD 10,770 million for the year ended 31 December 2022. The cost of alumina increased by USD 182 million, or 9.9%, to USD 2,029 million in 2023 compared to USD 1,847 million in 2022, primarily due to an 11.9% increase in alumina purchase volumes between the periods, partially offset by lower alumina purchase price. The cost of raw materials (other than alumina and bauxite) and other costs decreased by 19.8% for the year ended 31 December 2023 compared to the same period of 2022 due to lower purchase prices for raw materials (raw pitch coke was down by 38.3%, pitch by 16.3%, anode blocks by 28.1%, and caustic soda by 28.9%). Energy costs decreased by USD 370 million, or 13.9%, to USD 2,288 million for the year ended 31 December 2023 compared to USD 2,658 million for the year ended 31 December 2022. The decline was due to a 13.9% decrease in the average electricity tariff between the comparable periods (3.18 USD cents per kWh in 2023 compared to 3.69 USA cents per kWh in 2022), caused by the weakening of the Russian rouble against the US dollar during the reporting period. Finished goods mainly consist of primary aluminium and alloys (approximately 95%). Changes between reporting periods were driven by fluctuations in the physical inventories of primary aluminium and alloys: a 27.7% decrease in 2023 and a 33.3% increase in 2022. 48 49 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review POWER SEGMENT ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN The Metals segment’s adjusted EBITDA (before intersegmental elimination) decreased by USD 1,242 million, or 61.2%, to USD 786 million in 2023 from USD 2,028 million in 2022. Adjusted EBITDA margin was 6.4% in 2023 compared to 14.5% in 2022. The factors that contributed to lower adjusted EBITDA and adjusted EBITDA margin were the same as those affecting the operating results. In 2023 and 2022, the Power segment accounted for 22.7% and 21.8% of the business segments’ revenues (before adjustments), respectively. As at 31 December 2023 and 31 December 2022, the assets of the Power segment accounted for 32.7% and 32.0% of the Group’s total assets (before adjustments), respectively. The following table reconciles the Metals segment’s adjusted EBITDA to its results from operating activities for the periods indicated: The following table presents selected data of the Power segment for the periods indicated Year ended 31 December USD mn 2023 2022 2021 Year ended 31 December Adjusted EBITDA reconciliation Results from operating activities Adjusted for: • amortisation and depreciation • loss on disposal of property, plant and equipment • impairment of non current assets Adjusted EBITDA (79) 540 4 321 786 1,316 2,079 503 13 196 596 9 209 2,028 2,893 The following table reconciles the Metals segment’s adjusted net profit and recurring net profit to its net profit for the periods indicated: USD mn 2023 2022 2021 Adjusted net profit reconciliation Net profit for the period 282 1,793 3,225 Year ended 31 December Adjusted for: • share of profits and other gains and losses attributable to Norilsk (629) (1,440) (1,762) 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 Added back: • share of profits of Norilsk Nickel, net of tax Recurring net profit 99 – 321 73 629 702 176 – 196 725 1,440 2,165 356 (492) 209 1,536 1,762 3,298 USD mn Revenue 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 REVENUES 2023 3,587 1,444 40.3% 1,027 28.6% 550 355 9.9% 1,292 36.0% 2022 3,885 1,463 37.7% 849 21.9% 619 384 9.9% 1,254 32.3% 2021 3,138 1,317 42.0% 889 28.3% 566 374 11.9% 1,172 37.3% The Power segment’s revenue decreased by USD 298 million, or 7.7%, to USD 3,587 million in 2023 from USD 3,885 million in 2022. The decline in revenue in dollar terms was mostly driven by a significant depreciation of the rouble against the US dollar during the year (the average USD/RUB exchange rate for the reporting period increased by 24.4%), while the Power segment’s revenue in rouble equivalent was up amid higher electricity prices and sales volumes. For the reasons described above revenue from electricity sales decreased by 7.6% year-on-year to USD 1,719 million. Revenue from capacity sales decreased by 5.2% year-on-year to USD 567 million in 2023, mainly due to a negative effect from a rouble exchange rate fluctuations, it was partially offsetted by higher average selling price. Revenue from heat sales decreased by 9.1% year-on-year to USD 428 million in 2023, reflecting the negative effect of the rouble exchange rate fluctuations, partially offset by higher heat prices. The Power segment’s electricity generation increased from 83.9 TWh in 2022 to 85.2 TWh in 2023. In 2022, HPPs produced 69.0 TWh of electricity, or 82.2% of the total electricity generated by the Power segment, while in 2023 they produced 68.8 TWh of electricity, or 80.8% of the Power segment’s total electricity production. The decrease in HPP generation was primarily driven by high water levels in Lake Baikal and the Bratsk Reservoir in the beginning of 2022 and on average in 2022 compared to 2023. 50 51 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN The following table presents components of the Power segment’s sales data (before intersegmental elimination) for the years indicated: The following table presents the Power segment’s adjusted EBITDA and adjusted EBITDA margin for the years indicated: Year ended 31 December Year ended 31 December USD mn Adjusted EBITDA (HPP) Adjusted EBITDA (CHP) Adjusted EBITDA (Other and unallocated items) Adjusted EBITDA (Power segment) Adjusted EBITDA margin (HPP) Adjusted EBITDA margin (CHP) Adjusted EBITDA margin (Power segment) 2023 1,142 60 90 1,292 83.9% 7.6% 36.0% 2022 1,257 42 (45) 1,254 84.0% 5.0% 32.3% 2021 1,076 38 58 1,172 86.4% 5.2% 37.3% In 2023, the Power segment’s adjusted EBITDA (before intersegmental elimination) increased by USD 38 million, or 3.0%, to USD 1,292 million from USD 1,254 million in 2022. The change was largely driven by higher electricity and capacity prices as well as an increase in electricity sales volumes. The following table reconciles the Power segment’s adjusted EBITDA to its results from operating activities for the periods indicated: Year ended 31 December USD mn 2023 2022 2021 Adjusted EBITDA reconciliation Results from operating activities 1,027 849 889 Adjusted for: • amortisation and depreciation • (gain)/loss on disposal of property, plant and equipment • impairment of non current assets 228 (8) 45 221 10 174 Adjusted EBITDA 1,292 1,254 229 (4) 58 1,172 Average RUB/USD rate 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 ths/MW) Sales of heat Revenue, USD mn Sales volumes, mn Gcal Average sales price (RUB/Gcal) Sales of semi finished products, USD mn Other revenue, USD mn Total, USD mn COST OF SALES 2023 85.25 1,719 107.1 1,368 567 162.5 297 428 24.1 1,452 309 564 3,587 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 following table presents components of the Power segment’s cost of sales (before intersegmental elimination) for the years indicated: USD mn Electricity and capacity Cost of materials Personnel expenses Depreciation and amortisation Electricity transmission costs Other Total cost of sales Year ended 31 December 2023 2022 2021 599 450 416 217 157 304 2,143 642 564 503 211 194 308 428 428 358 216 160 231 2,422 1,821 The Power segment’s cost of sales decreased by USD 279 million, or 11.5%, to USD 2,143 million for the year ended 31 December 2023 compared to USD 2,422 million for the year ended 31 December 2022.The decrease in the Power segment’s cost of sales was driven mainly by the depreciation of the rouble against the US dollar during the year. 52 53 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review Net assets In 2023, the Group’s net assets decreased by USD 1,151 million to USD 11,581 million as at 31 December 2023, down from USD 12,732 million as at 31 December 2022. In 2023, the Metals segment’s net assets decreased by USD 1,291 million, or 10.5%, to USD 11,016 million as at 31 December 2023 compared to USD 12,307 million as at 31 December 2022. This was mainly driven by a reduction in total assets, primarily due to decreases in interests in associates and lower inventories, cash and cash equivalents, and total liabilities, mainly stemming from a decrease in outstanding financial debt. The Power segment’s net assets as at 31 December 2023 increased by USD 61 million, or 1.1%, to USD 5,824 million from USD 5,763 million as at 31 December 2022. The increase was mainly due to a decrease in the value of property, plant and equipment (resulting from the depreciation of the rouble against the US dollar during the year) and lower total liabilities (primarily due to a decrease in outstanding financial debt). 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 2023 2022 2021 18,020 8,368 (10,015) (4,792) 11,581 13,522 7,942 (6,729) (3,719) 11,016 9,608 819 (3,297) (1,306) 5,824 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 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 dividends receivable), less trade and other payables (excluding dividends payable). In 2023, net working capital decreased by 23.6% from 2022, mainly due to sales of inventories, accumulated at the end of the previous year. As at 31 December 2023, the Group’s net working capital was USD 3,417 million compared to USD 4,474 million as at 31 December 2022. The following table presents the calculation of net working capital of the Group, Power segment, and Metals segment as at the dates indicated: USD mn Group Inventories Short term trade and other receivables Dividends receivable Trade and other payables Dividends payable Net working capital Metals segment Inventories Short term trade and other receivables Dividends receivable Trade and other payables Dividends payable Net working capital Power segment Inventories Short term trade and other receivables Trade and other payables Net working capital Year ended 31 December 2023 2022 2021 3,575 2,330 (412) 4,383 2,514 – 3,731 2,655 (827) (2,081) (2,423) (2,806) 5 3,417 3,599 2,112 (412) (1,639) 5 3,665 164 373 (675) (138) – 4,474 4,489 2,263 – (1,919) – 4,833 161 363 (693) (169) – 2,753 3,692 2,473 (827) (2,408) – 2,930 158 306 (602) (138) 54 55 CONSOLIDATED REPORT 2023STRATEGIC REPORT Financial review Liquidity and capital resources In 2023, the Group’s liquidity requirements primarily related to funding working capital, capital expenditures, and debt servicing. The Group used a variety of internal and external sources to finance its operations. During the periods under review, short and long term funding sources included mostly 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 the Power and Metals segments. DIVIDENDS During the years ended 31 December 2023 and 31 December 2022, EN+ GROUP IPJSC neither declared nor paid any dividends. Cash flows from operating activities Cash flows (used in) / generated from investing activities The Group’s cash flows from operating activities were up year-on- year to USD 2,721 million, an increase of USD 2,149 million from USD 572 million in 2022, caused by a decrease in working capital. The Company’s net cash flows used in investing activities for the year ended 31 December 2023 were USD 1,419 million compared to net cash of USD 47 million generated from investing activities in the previous year. Changes were mainly due to the absence of dividends received from associates in 2023, compared to USD 1,639 million received in 2022. Cash flows (used in) / generated from financing activities The Group’s cash flows used in financing activities for 2023 were USD 2,277 million. A decrease of USD 3,019 million (in 2022, cash flows generated from financing activities were USD 742 million) was primarily due to net repayment of loans and bonds totalling USD 1,559 million for the year ended 31 December 2023 compared to net proceeds from borrowings of USD 2,122 million for the previous year. CASH FLOWS The following table presents the Group’s selected cash flow data for the periods indicated: En+ Group free cash flow Free cash flow for 2023, USD mn Year ended 31 December USD mn Cash flows from operating activities Cash flows (used in) / from investing activities Cash flows (used in) / from financing activities Net change in cash and cash equivalents Cash and cash equivalents at the beginning of the period, excluding restricted cash 2023 2,721 (1,419) (2,277) (975) 3,474 Effect of exchange rate changes on cash and cash equivalents (154) Cash and cash equivalents at the end of the period, excluding restricted cash1 Free cash flow 2,345 642 2022 572 47 742 1,361 2,328 (215) 3,474 (633) 2021 2,168 285 (2,691) (238) 2,549 17 2,328 1,705 2,723 2 1,760 963 Cash flow from operating activities (361) (237) (598) (1,056) (394) (1,450) 2, 3 Power segment Metals segment (33) 4 642 311 331 Net interest Capital expenditure Other financial expenses Free cash flow 1 Restricted cash of USD 2 million and USD 3 million is included in cash and cash equivalents as at 31 December 2023 and as at 31 December 2022, respectively 56 2 Before consolidation adjustments. 3 Capital expenditure represents cash flow related to investing activities – acquisition of property, plant and equipment and intangible assets, adjusted for one-off acquisition of assets. The calculation does not include investments in subsidiaries and joint ventures. 4 Restructuring fee and payments from settlement of derivative instruments. 57 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review The following table reconciles the free cash flow to the cash flows from operating activities for the periods indicated: USD mn Year ended 31 December Free cash flow reconciliation 2023 2022 2021 Group Cash flows generated from operating activities 2,721 572 2,168 Adjusted for: Capital expenditures (acquisition of property, plant and equipment and intangible assets) (1,448) (1,711) (1,513) Dividends from associates and joint ventures Proceeds from partial disposal of associates Interest received Interest paid Restructuring fees and expenses related to the issuance of shares Settlement of derivative financial instruments Free cash flow Metals segment – – 84 (682) (31) (2) 642 1,639 – 104 (987) (21) (229) (633) 620 1,421 63 (703) (36) (315) 1,705 Cash flows generated from operating activities 1,760 (412) 1,146 Adjusted for: Capital expenditures (acquisition of property, plant and equipment and intangible assets) (1,056) (1,239) (1,192) Dividends from associates and joint ventures Proceeds from partial disposal of associates Interest received Interest paid Restructuring fees Settlement of derivative financial instruments Free cash flow Power segment – – 61 (422) (30) (2) 311 1,639 – 70 (428) (17) (229) (616) 620 1,421 37 (380) (34) (315) 1,303 Cash flows generated from operating activities 963 986 1,022 Adjusted for: Capital expenditures (acquisition of property, plant and equipment and intangible assets) Interest received Interest paid Restructuring fees and expenses related to the issuance of shares Free cash flow (394) 23 (260) (1) 331 (474) 34 (559) (4) (17) (321) 26 (323) (2) 402 Capital expenditures In 2023 and 2022, the Group’s capital expenditures (including the acquisition of property, plant and equipment as well as the acquisition of intangible assets) were USD 1,448 million and USD 1,711 million, respectively. The Group’s subsidiaries financed their cash requirements through a combination of operating cash flows and borrowings. The Metals segment recorded a total capital expenditure of USD 1,056 million for the year ended 31 December 2023. The table below presents the capital expenditures (before adjustments) of the Metals and Power segments for the periods indicated, USD mn Metals segment Power segment 1,056 1,239 1,192 2023 2022 2021 394 474 321 The Metals segment’s capital expenditure in 2023 was aimed at maintaining existing production facilities. Maintenance capex amounted to 63% of total capex for 2023. In 2023, capital expenditure by the Power segment amounted to USD 394 million, down 16.9% year-on-year due to the depreciation of the rouble against the US dollar. Maintenance capex accounted for 55% of total capital expenditure. The Group’s Power segment continued to invest in connections to its power supply infrastructure and improving the efficiency of the Group’s CHPs, further advancing its New Energy HPP modernisation programme. Cash As at 31 December 2023 and 31 December 2022, the Group’s cash and cash equivalents, excluding restricted cash, were USD 2,345 million and USD 3,474 million, respectively. As at 31 December 2023 and 31 December 2022, the Power segment’s cash and cash equivalents were USD 260 million and USD 281 million, respectively. Meanwhile, the Metals segment’s cash and cash equivalents were USD 2,085 million and USD 3,193 million, respectively. ANNA MALEVINSKAYA Chief Financial Officer Appointed: 2 May 2023 Joined the Group: from 2000 Anna Malevinskaya began her career at RUSAL in 2000, where she worked in various positions until 2012. In 2013, Anna joined En+ as a financial controller, and since 2018 she held the position of Deputy Chief Financial Officer of En+, where she was responsible for business planning, financial reporting and business process automation, participated in major projects and transactions, including the Company's entry into IPO in 2017. Anna Malevinskaya is a Candidate of Economic Sciences, graduated Lomonosov Moscow State University, was awarded corporate awards, and was also awarded with Gratitude and a Certificate of Honor from the Ministry of Energy of the Russian Federation. “I highly appreciate the trust, and at the same time I understand the high level of responsibility placed on me. I have been working with the Group almost since its founding, and I believe that En+ has exceptional potential. I am confident that thanks to a sustainable business model, strategic vision and the cohesion of our team, we will be able to maximise all opportunities available to the Company.” 58 5959 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review Loans and borrowings The nominal value of the Group’s loans and borrowings was USD 6,818 million as at 31 December 2023, excluding bonds, which represented additional USD 4,227 million. Below is an overview of certain key terms of selected facilities in the Group’s debt portfolio as at 31 December 2023: Debt portfolio breakdown as of 31 December 2023 By currency RUB CNY USD EUR AED By interest rate Floating rate Fixed rate 3.4% 1.3% 0.4% 5.3% 24.8% Metals segment 89.5% Power segment 1 75.2% 23.0% 28.1% Metals segment Power segment 1 Facility/lender Principal amount outstanding as at 31 December 2023 Tenor/repayment schedule Pricing METALS SEGMENT Credit facilities Pre-export credit facilities USD 367 mn Until November 2024, equal quarterly repayments starting from January 2022 3-m SOFR plus credit spread adjustment plus 1.7%–2.1% p.a. CNY 10.7 bn Bullet repayments at final maturity dates, the last repayment on January 2026 3.75%—1Y LPR + 2.75% p.a. Russian bank loans CNY 15.8 bn December 2027, equal quarterly repayments starting from March 2024 4.75% p.a. RUB 18.7 bn Quarterly repayments, the last repayment on December 2035 Key rate of the Bank of Russia plus 3.15% p.a. Bonds Yuan bonds POWER SEGMENT Credit facilities CNY 23.5 bn 10 tranches, the last repayment in July 2027, repayments at final redemption dates 3.75%–6.7% p.a. 77.0% 71.9% Russian banks loans RUB 211.5 bn Repayment 2024–2032 3.0–18.75% p.a. SECURITY As at 31 December 2023, the Metals segment’s debt (save for several unsecured loans and bonds) was secured, among others, by the assignment of receivables under specified contracts, certain pledges of shares and interest in a number of the Group’s subsidiaries, designated accounts, and shares in Norilsk Nickel (representing 25% + 1 share of Norilsk Nickel’s total nominal issued share capital). As at 31 December 2023, the Power segment’s debt was secured, among others, by pledges of shares and interests in certain operating and non-operating companies and property, plant and equipment. Bonds CNY bonds CNY 5.6 bn 4 tranches, the last repayment is in May 2026, repayments at final redemption dates 4.45%–5.45% p.a. 1 Nominal debt – USD 3,151 mn. Nominal debt includes USD 460 mn of ruble nominated facilities used to finance operational activities. 60 61 CONSOLIDATED REPORT 2023STRATEGIC REPORTFinancial review Contingencies The summary of the Group’s principal contingencies is set out below. For a detailed discussion of the Group’s contingencies in 2023, including environmental contingencies, risks and considerations, see Note 22 of the Annual Financial Statements. LEGAL CONTINGENCIES The Group’s business activities expose it to a variety of lawsuits and claims which are monitored, assessed, and contested on an ongoing basis. Where management believes that a lawsuit or another claim would result in an outflow of economic benefits for the Group, a best estimate of such outflow is included in provisions in the consolidated financial statements. The amount of claims where management assesses outflow as possible is disclosed in Note 22 (с) of the Annual Financial Statements. 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 Group’s transactions and activities, may be challenged by relevant local, regional, or federal authorities. Notably, recent developments in the Russian legal landscape suggest that tax authorities in Russia are increasingly taking a tougher stand when interpreting or enforcing tax legislation, particularly in relation to the use of certain commercial and trade transaction structures which can be used by taxpayers but might be in conflict with the authorities’ earlier interpretations or practices. Recent events in the Russian Federation suggest that the tax authorities are taking a more assertive and substance-based position in their interpretation and enforcement of tax legislation. The Group’s tax risks, along 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. Financial ratios GEARING INTEREST COVERAGE RATIO The Group’s gearing ratio—the ratio of total debt (including both long-term and short-term borrowings and bonds outstanding) to total assets—was 41.9% and 44.3% as at 31 December 2023 and 31 December 2022, respectively. The Group’s interest coverage ratio—the ratio of earnings before interest and taxes to net interest—was 1.6x and 2.3x for the years ended 31 December 2023 and 31 December 2022, respectively. RETURN ON EQUITY The Group’s return on equity—the amount of net profit as a percentage of total equity—was 6.2% and 14.5% as at 31 December 2023 and 31 December 2022, respectively. Going concern The Group closely monitors and manages its funding position and liquidity risk throughout the year, including monitoring forecast results, to ensure that it has access to sufficient funds to meet forecast cash requirements. Cash forecasts are regularly produced and sensitivities considered for, but not limited to, changes in power and aluminium prices, foreign exchange 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 the Australian government and the situation in Ukraine, as well as volatility in commodity, stock, and FX 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 events. The Group’s management expects that prices on the world commodity markets will grow and improve results from our operating activities. The Group is also redesigning its supply and sales chains, ensuring an optimal equity and debt ratio, searching for resolutions to logistics issues, as well as ways to meet its obligations in order to adapt fast to the current economic changes to support the Group’s operations. For a detailed discussion of the Group’s going concern in 2023, 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 in 2023, USD ths Russia Kazakhstan Guinea Guyana Jamaica Total Production fees − − − Taxes or levies on corporate sales, production, or profits 77,214 30,764 3,499 Royalties Dividends Signing-on, discovery and production bonuses Licence fees, rental charges, entry fees, and other consideration for licenses and/or concessions − − − − − − 4,807 1,053 Infrastructure improvement payments 2,403 299 − − − − − − − − − − − − 8,892 120,369 − − − − − − 146 149 6,155 − − 2,702 Total 84,425 32,115 3,499 146 9,041 129,226 62 63 CONSOLIDATED REPORT 2023STRATEGIC REPORTInvestment programme and modernisation METALS SEGMENT Modernisation to support transition to pre-baked anodes technology GOALS DESCRIPTION z Significantly cut power consumption z Reduce GHG emissions, such as fluoride and benzo(a)pyrene z Improve gas removal efficiency z Reduce the potroom pollutant emissions into the environment by 30% The global transformation of aluminium smelters in Siberia entails the establishment of new production facilities incorporating the advanced pre-baked anode technology and environmentally friendly electrolysers designed by RUSAL in-house. The project is expected to span a decade for completion. 1,380 ktpa Total capacity to be modernised 10 years project implementation period Our investment programme and a push for modernisation are fully aligned with the Group’s strategic objectives. For more details on En+ Group’s strategy, see the Strategy section on page 24-27. Production enterprise expansions GOALS z Improve raw-material security z Increase production capacity z Cut primary aluminium production costs z Increase the share of value-added products DESCRIPTION z One of RUSAL’s flagship projects is the Taishet Aluminium Smelter (TAZ) located in the Irkutsk Region. The initial stage, Stage 1, came online at the close of 2021, boasting a capacity of 428.5 ktpa. Ramp-up to full capacity is expected to be completed before the end of 2024. z To ensure uninterrupted supply of high-quality pre-baked anodes to Siberian aluminium smelters and reduce primary aluminium production costs, the Group is progressing with its key CAPEX project to construct the Taishet Anode Factory (TAF). This initiative aims to produce approximately 400 kt of pre-baked anodes annually. 428.5 kt Aluminium production capacity of the TAZ project’s first stage RESULTS TAZ’S KEY SUSTAINABILITY BENEFITS: RESULTS In 2023, design documentation of KraZ and BraZ received positive opinions from the Main Department of State Expertise (Glavgosexpertiza) and the State Environmental Review Office. z Pre-baked anode technology was integrated z 100% of required power supply will be covered by hydro to support low-carbon, green aluminium production z A closed-loop water recycling system to cut costs and reduce the environmental impact z Modern gas cleaning equipment such as dry alumina scrubbers with a 99.5% purification efficiency z In 2023, significant progress was made on the TAF project, including assembling frames for main process buildings and structures, ongoing installation of enclosing and interior structures, as well as the construction of engineering infrastructure facilities. Furthermore, the supplies and installation of core process equipment at all production stages are on track. z During 2023, the TAZ project continued to achieve further commissioning milestones, with 85 RA-400 electrolysers up and running, bringing the total count to 166 by the year-end. 64 65 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Investment programme and modernisation POWER SEGMENT STRATEGIC REPORT New Energy programme 2023 RESULTS FROM 2026 PLAN GOALS DESCRIPTION z Modernise the Angara and Yenisei cascade HPPs z Ramp up generation from the same volume of water passing through HPP turbines z Improve safety and reliability of the HPPs, which will mitigate the risks associated with cavitation and address the HPP generator wear problem z Reduce the Company’s environmental footprint by curbing the GHG emissions from the Company’s coal- fired power plants The New Energy Programme targets large-scale overhauls and upgrades to core equipment at Group’s major Siberian hydropower plants, i.e. Krasnoyarsk, Bratsk, Irkutsk, and Ust- Ilimsk HPPs. This initiative involves upgrades to hydraulic units and the replacement of runners to enhance efficiency. The upgraded runners, boasting improved blade designs and new materials, are projected to increase efficiency by up to 8%. Modernisation CAPEX is expected to total RUB 21 billion by 2026 (USD 234.1 million ), including investments already made (RUB 17 billion2). 2.2 TWh Increase in electricity production 2.4 TWh additional generation RESULTS 2023 highlights include a runner replacement at Bratsk HPP, with work started to replace another runner. A runner was also replaced at Krasnoyarsk HPP, with another runner replacement now underway. 2.515 mt CO2e 2.8 mt of СО2e per year Avoided GHG emissions from coal-fired generation Avoided GHG emissions from coal-fired generation Bratsk HPP Ust-Ilimsk HPP Krasnoyarsk HPP Irkutsk HPP 18 16 12 8 15 2007–2023 3 by 2026 4 2014–2018 5 2016–2023 3 2019–2023 0 100% of planned work completed 3 by 2025 году 1 by 2024 году 1,375,580 304,966 294,244 195,454 Hydraulic units Runners replaced Runners to be replaced Total incremental generation from hydraulic units with new runners, 2023 actual, MWh Energized for action 1 Calculated based on the RUB/USD exchange rate of RUB 89.6883 per dollar as at 31 December 2023. 2 USD 227.5 million at the RUB/USD exchange rate of RUB 89.6883 per dollar as at 31 December 2023. 66 An important achievement of the company in the field of digitalisation is the creation and implementation of automatic predictive diagnostic systems The predictive diagnostic system is based on artificial intelligence The data-driven, AI-powered solution leverages historical data to and allows to predict defects and prevent accidents on predict defects and prevent generating equipment failures. The generating equipment based on historical data. The programme solution has been patented and is currently being rolled out at received a patent and is currently being implemented at the Bratsk HPP, due for deployment at Ust-Ilimsk HPP this year. Bratsk HPP. This year it is planned to install it at the station in Ust-Ilimsk. 67 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Investment programme and modernisation Small HPP projects CHP modernisation programme GOAL DESCRIPTION GOALS DESCRIPTION z Increase energy generation from small HPPs 8.1 MW Expected generation capacity of small-scale Segozerskaya HPP To advance its strategic goal of boosting hydropower capacity, En+ Group’ has built a preliminary project portfolio equivalent to up to 200 MW total installed capacity. Feasibility studies for these projects will determine their viability and implementation timelines. En+ Group is making progress on the small-scale Segozerskaya HPP project in Karelia, Russia, taking advantage of a state programme supporting renewable-energy projects through the Capacity allocation contracts (CACs) mechanism. The project’s total expected CAPEX is RUB 3 billion (USD 33,4 million1). RESULTS The small-scale Segozerskaya HPP construction and installation works progressed in 2023, including excavations for the HPP building, tail race channel construction, and pipeline laying for local treatment facilities. Plans for 2024 encompass completing construction tasks such as erecting the HPP base build, installing local treatment facilities, and assembling core hydraulic equipment. Wind power project GOAL DESCRIPTION z Promote renewable generation in the Russian Far East 1 GW En+ Group and CHN Energy signed a joint letter of intent to promote collaboration with a focus on developing the low- carbon energy sector in Russia with support from the Russian Far East and Arctic Development Corporation and the Amur Region government. The two companies will explore electricity export potential to China via existing transmission lines, and construction of new grid infrastructure. Potential capacity of wind farm in Amur Region RESULTS Currently, En+ Group is assessing wind energy feasibility in the Amur Region to select the best wind farm configuration and estimate the capital costs required for the project implementation. The Company is also considering possible options for the grid connection design. Collaboration between En+ Group and CHN Energy focuses on engaging potential technology partners to support project implementation. The project timeline encompasses key parameter development over 6 to 12 months, followed by the implementation phase involving design, construction, and capacity ramp-up and spanning up to three years. z Enhance the reliability and safety of En+ Group’s CHPs equivalent to 1,445 MW total installed capacity z Improve local environmental conditions in the Irkutsk Region 33.6 % En+ Group participated in the state programme for CHP modernisation ensuring a guaranteed return on investment. The programme involves signing CACs with buyers, market regulators (ATS), and generating companies in the wholesale market, setting the key criteria for participation in the modernisation programme, parameters of capacity supply after the modernisation, and return on investment. En+ Group anticipates a return of up to 14% on its investments into modernisation projects, with a total expected CAPEX estimated at around RUB 26.4 billion (USD 294.4 million1) by 2026. Planned upgrade of the total installed CHP capacity RESULTS In 2023, TA-1 transformers at CHP-6 (Bratsk), TG-2 turbo generators and a K-4 boiler unit at CHP-10 (Angarsk) were put into operation. Full supply of power from TG-3 to Novo-Irkutsk CHP (Irkutsk) commenced. Core equipment was delivered to CHP-9 (Angarsk) and Ust-Ilimsk CHP (Ust-Ilimsk). CHP-11 highlights: design activities, core equipment deliveries, and TA-3 certification were completed. In 2024, there are plans to continue programme implementation at CHP-6, CHP-9, CHP-10, CHP-11, Novo- Irkutsk CHP, and Ust-Ilimsk CHP. DESCRIPTION En+ Group is evaluating the feasibility of constructing new solar power plants in its regions of operation, i.e. the Krasnoyarsk Territory, Irkutsk Region, Republic of Buryatia, and Trans-Baikal Territory. Solar energy projects GOALS z Increase solar generation 107 million kWh RESULTS Additional generation of solar power plant expansion projects Through a partnership with Unigreen Energy, Russia’s largest manufacturer of renewable energy equipment, the Company is formulating a project to expand the capacity of Abakan SPP in the Republic of Khakassia from the current 5.2 MW to 25 MW using domestically produced equipment. 1 Calculated based on the RUB/USD exchange rate of RUB 89.6883 per dollar as at 31 December 2023. 68 69 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 202302 04 Sustainable development 76 79 80 Sustainability management Materiality assessment Contribution to Sustainable Development Goals 86 86 Climate change 100 Energy management 104 Environmental protection Climate and environment 126 People 168 Governance 126 138 153 Occupational health and safety 168 Corporate governance Employees 196 Information for shareholders and investors Contribution to local communities 200 Internal control and risk management 208 Corporate ethics and compliance 214 Stakeholder engagement 226 Responsible business practices STRATEGIC REPORTSUSTAINABLE DEVELOPMENTCONSOLIDATED REPORT 202370717170SUSTAINABILITY IS IN OUR DNA Why is sustainability important to En+ Group? Part of our culture Long-term value creation Meeting the interests and expectations of stakeholders En+ Group complies with standards and rules for honest business conduct and ethics, respects human rights, and implements projects to reduce the impact on the environment and climate in the regions of responsibility. For more details, see the Corporate Ethics and Compliance section En+ Group is highly focused on developing sustainable products, using advanced best available technologies to create long-term value. En+ Group follows responsible business practices and takes into account the needs and interests of all stakeholders. For more details, see the Stakeholder Engagement section Supporting our business model Mitigating our risks Sustainability and global best practices are embedded into everything we do, with a commitment to sustainable development core to En+ Group’s ethos. As part of this commitment, the Metals segment continues certification according to ASI standards. En+ Group effectively identifies and manages ESG risks in alignment with the Company’s specific business profile. Risk management procedures follow a precautionary approach across all business facets. 72 73 For more details, see the Business Model section For more details, see the Internal Control and Risk Management section STRATEGIC REPORTCONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTExpansion of Low-Carbon Product Line Expansion of Low-Carbon Product Line GRI 305-5 The growing consumer demand for products with a lower carbon footprint fuels our efforts to expand and promote a dedicated line of sustainable products that meet these demands. As global demand for low-carbon energy keeps growing every year 1, En+ Group is riding this trend by expanding its renewable capacity across hydro, wind, and solar. En+ Group has a large portfolio of renewable capacity expansion projects. 1 LOW-CARBON ALUMINIUM BRAND ALLOW 2 ALLOW INERTA LOW-CARBON ALUMINIUM BRAND ALLOW aluminium is the Company’s flagship brand, offering customers the opportunity to significantly reduce their carbon footprint associated with aluminium products. The carbon footprint of ALLOW aluminium (Scope 1 and 2) is five times lower than the industry average, which was verified internationally. In the reporting year, En+ Group completed the inert anode technology testing phase. The introduction of the ALLOW INERTA brand represents a breakthrough in sustainable aluminium production, as it leverages inert anode technology to eliminate GHG emissions and cut down production costs. This technology has undergone comprehensive international carbon footprint verification process and found its application in the production of Sayana foil towards the end of 2023. <2.3 t of СО2 e/t Al ALLOW aluminium carbon footprint (Scope 1 and 2) 31 % the share of ALLOW low-carbon aluminium in the aluminium total sales volume for 2023 ALLOW sales volume, kt 0.01 t of СО2 e/t Al carbon footprint of ALLOW INERTA aluminium (Scope 1 and 2) 4,400 tonnes of aluminium produced using inert anode technology since the launch RENEWABLE ENERGY Current installed capacity 15.2 GW Installed hydro capacity 5.2 MW Installed solar capacity Expected installed capacity +2.5 GW Total installed capacity of new HPP projects +200 MW Total installed capacity of new small-scale HPP projects +1 GW Potential capacity of the wind farm in the Amur Region 1 300 3 USE OF RECYCLED ALUMINIUM RENEWABLE ENERGY CERTIFICATES 1 200 955 662 375 196 126 The Company actively incorporates recycled aluminium into its production processes, expanding the line of recycled products with a focus on the following areas: z closed scrap loop z using recycled metal in billet and slab production at KUBAL and billets at VgaZ z producing primary foundry alloys for the automotive industry from recycled materials. En+ Group is contributing to the growing demand for renewable energy by selling green/renewable energy certificates. These certificates authenticate the generation of electricity from renewable sources, i.e. energy from water, aligning with the national voluntary Carbon Zero standard and unlocking an additional revenue stream for the Company. Renewable energy certificates help: z cut Scope 2 GHG emissions and product carbon footprints z offer proof of the origin of the consumed low-carbon electricity. 2017 2018 2019 2020 2021 2022 2023 74 1 According to data from https://www.lowcarbonpower.org. 75 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTSustainability management Sustainability governance in the Power and Metals segments Power segment Metals segment For more details on the roles of each governance body, see the Additional ESG Data section. E z Environmental Policy z Biodiversity Policy S z Policy on Human Rights z Health, Occupational, Industrial, and Fire Safety Policy z Stakeholder Engagement Policy z Diversity and Equal Opportunities Policy G z Corporate Code of Ethics z Board of directors Diversity Policy z Anti-bribery and Corruption Policy z Quality Policy z Supplier Standards BOARD OF DIRECTORS, EN+ BOARD OF DIRECTORS, METALS SEGMENT, RUSAL HEALTH, SAFETY, AND ENVIRONMENT COMMITTEE HEALTH, SAFETY, AND ENVIRONMENTAL COMMITTEE E z Biodiversity Policy CEO, EN+ CEO, RUSAL PUBLIC EXPERT COUNCIL ON SUSTAINABLE DEVELOPMENT SUSTAINABLE BUSINESS DEVELOPMENT DEPARTMENT S z Communication Policy z Health, Occupational, Industrial, and Fire Safety Policy z Policy on Human Rights SUSTAINABLE DEVELOPMENT DIRECTORATE SUSTAINABILITY PROJECTS DEPARTMENT ENVIRONMENT DEPARTMENT CLIMATE RISKS DEPARTMENT SUSTAINABLE DEVELOPMENT DIRECTORATE OCCUPATIONAL HEALTH, INDUSTRIAL AND FIRE SAFETY DEPARTMENT DEPARTMENT OF ECOLOGY AND CLIMATE FUNCTIONAL VERTICALS AND ENTERPRISE UNITS FUNCTIONAL VERTICALS AND ENTERPRISE UNITS G z Internal Audit Policy z Corporate Code of Ethics 76 77 Appointments/instructions Review of resolutions, preparation of recommendations / implementation of resolutions Appointments/instructions Review of resolutions, preparation of recommendations / implementation of resolutions CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTSustainability management GRI: 3-3 Sustainability management at En+ Group contributes to inclusive economic growth, more equitable social development, environmental sustainability, and ecosystem safety. It comprises a range of initiatives and measures that drive the achievement of our sustainability goals while incorporating stakeholder views and needs and minimising negative impacts on the environment and people, including on human rights and the economy. GRI: 2-12 GRI: 2-13 GRI: 2-14 Sustainability management is embedded within the Company’s corporate governance system, enabling a focus on sustainability issues throughout the organisation: from the boardroom to the expert units and the shop floor. Within the Metals segment, sustainability management responsibilities lie with RUSAL’s Board of Directors. En+ Group, through its representatives on RUSAL’s Board of Directors, monitors the Metals segment’s advancement of the sustainability agenda. Periodically, the Board committees of En+ Group (Health, Safety, and Environment Committee) and RUSAL (Health, Safety, and Environment Committee) hold joint meetings to track the sustainability strategy status. For more details on the roles of each governance body see p. 76 GRI: 2-25 En+ Group takes a holistic approach to managing the environmental, social, and economic impacts of its business as it consistently builds a robust management system based on international ISO standards and certifies its production facilities to these standards. IS0 9001:2015 Quality management systems IS0 14001:2015 Environmental management systems 22 enterprises of the Metals segment1 and all HPPs and CHPs , included in LLC "BEK", of the Power segment are certified to ISO 14001 25 enterprises of the Metals segment are certified to ISO 9001 IS0 45001:2018 Occupational health and safety management systems All business units of the Power segment are certified to ISO 45001 13 business units of the Metals segment are certified to ISO 45001 ISO 37001:2016 Anti-bribery management systems ISO 50001:2018 Energy management systems In 2023, our anti-corruption management system was independently assessed for compliance with ISO 37001:2016 Aughinish Alumina Refinery holds an international ISO 50001 certificate ISO 27001:2005 Information security management systems ISO 26000:2012 Guidance on social responsibility The Metals segment also maintains certification to the ASI Performance and Chain of Custody Standards. 18 sites certified by the end of 2023. Materiality assessment GRI 3-1 GRI 3-2 Materiality assessment is an integral part of En+ Group’s integrated reporting process. When conducting the assessment, the Company leverages its proprietary methodology to analyse its context and engage stakeholders into the process. Based on stakeholder feedback, En+ Group experts generated a ranked list of impacts and curated a prioritised list of 18 impact topics divided into three priority groups. In 2023, a new theme was highlighted—“Just energy transition and low-carbon products”. GRI 2-25 The materiality assessment process remained unchanged in 2023: the Company continued to be guided by the GRI standards. Having analysed its operating environment, En+ Group revisited the list of impacts on the environment, economy, and people, including impact on their human rights. All impacts were grouped into negative and positive across environmental (E), social (S), and governance (G) pillars. Stakeholder views were incorporated through a dedicated survey where the respondents could not only rate our listed impacts but also could add other impacts they were concerned about. In 2023, this survey covered 157 representatives from En+ Group’s diverse stakeholder community. GRI 2-14 The finalisation of material topics was subject to review and approval by the Board’s Health, Safety, and Environment Committee, with the final list thoroughly detailed in the Consolidated Report 2023. For more information on the materiality assessment process, see the Additional ESG Data section on page 332-333. Material topics GRI 3-2 I Priority II Priority III Priority z Environmental compliance and the best available technologies (BAT) z Corporate governance z Economic performance z Safe waste management z Human rights z Social and cultural diversity and equal opportunity z Occupational health and safety z Sustainable supply chain z Just energy transition and low-carbon products z Employees management and engagement z Air quality z Local community engagement z Energy management z Climate change z Water and wastewater management z Biodiversity z Innovation management z Business ethics 78 1 Excluding mothballed capacities. 7979 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT Sustainability management En+ Group’s materiality assessment stages GRI 3-1 1 Identification of the Company’s impacts 2 Assessment of the significance of impacts 3 Prioritising and grouping impacts into topics 4 Approval of the list of material topics Determination of the method to incorporate stakeholder views Setting a threshold to filter out less significant impacts Review and approval of the final list of material topics by En+ Group’s senior management and Board of Directors Conducting an online survey of stakehold- ers to identify the most significant positive and severe negative impacts Grouping significant impacts into topics Prioritising material topics based on their resulting significance Testing material topics against internation- al standards, industry best practices, and guidelines Analysis of En+ Group’s context by internal experts: business model, Company strategy, business activities (bauxite mining, alumina refining, aluminium production, electricity and heat generation), and business rela- tionships (relationships with partners and within the supply chain) Analysis of feedback from stakehold- ers, their suggestions and comments, including through feedback channels Benchmarking of impacts and mate- rial topics that were disclosed in the reports of Russian and international metallurgical, mining, and energy companies in previous reporting period Analysis of the requirements set forth in international industry stan- dards and initiative guidelines OUTPUT a list of En+ Group’s actual and potential positive and negative impacts OUTPUT OUTPUT OUTPUT a list of impacts ranked by stakeholders significant impacts grouped into topics list of approved material topics Contribution to Sustainable Development Goals GRI 2-23 En+ Group embraces the United Nations Sustainable Development Goals (UN SDGs) and aligns its business activities with them. Recognising the importance of all 17 UN SDGs, En+ Group concentrates its efforts on nine goals most pertinent to its businesses and stakeholders. In line with the UN SDGs and the global sustainable development agenda, En+ Group integrates these sustainability aspirations into its business model, translating them into measurable targets. The Health, Safety, and Environment (HSE) Committee is tasked with monitoring progress against these set targets. The measurable targets in line with the Goals are detailed in the sections covering relevant sustainability pillars. For more details on En+ Group’s contribution to SDGs, see the SDG Report for 2023. 80 81 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT2/4 Sustainability management NATIONAL GOAL EN+ GROUP PROJECT 2023 RESULTS Contribution to the national development goals of the Russian Federation GRI 2-23 En+ Group actively contributes to Russia’s national development goals by implementing various projects and organising events to engage its stakeholders. En+ Group’s efforts are focused on supporting strategic initiatives that contribute to economic development, social welfare, science and technology advances, as well as on ensuring environmental sustainability and enhancing the quality of life for people across Russia. For more details on En+ Group’s contribution to the national goals of the Russian Federation, see the SDG Report. NATIONAL GOAL EN+ GROUP PROJECT 2023 RESULTS Preservation of the population, the healthand welfare of the people z Setting up corporate healthcare centre and facilitating access to medical care for employees 100 % Employees got access to VHI RUB 424.1 mn (5.0 USD mn) 1— investments in healthcare z UNIVER training portal > 100 Number of courses available for employee training z My Career 2.0 programme 30 Employees are to be promoted following their participation in the My Career programme z World with a Plus Sign and Helping Is Easy volunteer support programmes RUB 77.1 mn (USD 0.9 mn1)— investments in volunteer projects 6,037 people Number of participants in Project 360 in 2023 2 z Employment of people with disabilities 900 People with disabilities employed by the Company z Provision of access to sports facilities for employees z Get on Your Skis project z Construction of martial arts centres RUB 790.2 mn (9.3 USD mn1)— investments in sports facilities 3 Martial arts centres were built z Support for cultural initiatives Comfortable and safe environment z Preferential mortgage schemes and a housing programme for employees RUB 39 mn (0.5 USD mn1)— investments in culture promotion 323 Employees have purchased housing on preferential terms Conditions for self-fulfilment and the unlocking of talent z Knowledge with a Plus Sign programme ~ RUB 2 bn (23.2 USD mn1)— investments in educational projects 3 Multilabs Opened in Angarsk, Bratsk and Nizhny Novgorod z Support for infrastructure projects RUB 1.2 mn 46 PPP 3 (13.8 USD mn1)— investments in infrastructure projects Projects co-financed in the Irkutsk Region 1 Hereinafter, calculated based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. 82 82 RUB 400 thsd (4.69 USD thsd1) — The amount of grants for the winners of the Energy Lab project z Environmental project grant competition 21 projects were supported as part of the Environmental project grant competition 2 Project “360” is one of the largest environmental volunteer initiatives in Russia, has been successfully developing for 13 years and implements projects to increase environmental awareness among local communities. 3 Public-private partnership. 83 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT3/4 Sustainability management NATIONAL GOAL EN+ GROUP PROJECT 2023 RESULTS Contribution to the national development goals of the Russian Federation NATIONAL GOAL EN+ GROUP PROJECT 2023 RESULTS z Environmental risk management plan RUB 17.6 bn 68 % (USD 207 mn)— investments in environmental projects Share of reused and recycled waste z Participation in the Clean Air federal project z Climate Strategy implementation 350.5 hectares Land reclaimed –16.6 % Reduction of intensity of air emissions per revenue (mn RUB) in Power segment compared to 2021 > 30 mn Carbon Zero certificates sold by En+ Group 2.3 t CO2e/t Al intensity of GHG emissions (Scope 1 and 2) 5,948 thousand GJ ↓ 12.9 % Energy saved through energy-efficiency measures intensity of GHG emissions from electrolysis operations for the Metals segment (compared to 2014) z Biodiversity conservation programmes 79 2,830 m z Lake Baikal protection programme Number of identified fisheries offences fishing grounds seized by fisheries protection 12 flag species 26 background species Biodiversity indicators for Angara HPPs 13,190 Number of new employee hires 26 members of the Baikal plastic free Association 5 years of Integrated Environmental Scientific Monitoring of Lake Baikal RUB 9.5 bn Spending on employee welfare 79.8 % Employee satisfaction Decent and effective jobs and successful enterprise z Setting up workers’ associations in various forms (youth councils, work councils, women’s councils) z Support for the Dobroservice advisory support line z Meal allowance for employees z Pension plans for employees z Occupational health strategy implementation RUB 5.2 bn (USD 64 mn)— OHS investments –5.9 % LTIFR reduction compared to 2021 z Support for Russian suppliers, small and medium-sized businesses 62 % 13.7 % Share of purchases from local suppliers Share of purchases from SMEs Digital transformation z Development of an internal electronic document management system z Implementation of the Digital Transformation Strategy z The IT Academy project 700 people 226 Number of participants in the RoboSib robotics festival Number of participants in the IT Academy project 84 84 85 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT4/484Comfortable and safe environment Climate and environment Climate change INTERNAL REGULATIONS z Environmental Policy z Regulations on Risk Management MATERIAL TOPICS z Climate change z Energy management z Just energy transition and low- carbon products by 35 % Reduction of GHG emissions by 2035 compared to 2018 Governance GRI 3-3 En+ Group’s climate change management and climate-related risks mitigation system ensures effective task resolution and control. GRI 2-13 Within the Company’s governance structure, the HSE Committee assumes a pivotal role in monitoring and reporting these risks to the Board of Directors for prompt consideration. Senior management is actively engaged in climate-related decision-making processes, with a specific Climate Change Taskforce, led by the Chief Operating Officer, driving initiatives towards achieving climate goals and reporting to the HSE Committee. For more details on climate risks management efforts of the Company, see the Risks Management section on page 94. In 2023, En+ Group revamped its climate risk management structure, the Environmental and Climate Risk Management Department was transformed into the Climate Risks Department and the Environment Department. The Climate Risks Department is tasked with evaluating and addressing climate risks. Climate-related KPIs are set across management levels, from top management to line management, with target values established by En+ Group based on in-depth analyses of processes and employee contributions towards climate goals. 2.3 t CO2e/ t Al Intensity of GHG emissions (Scope 1 and 2) 5,948 ths GJ of energy saved through energy-efficiency measures GRI 2-25 En+ Group’s cornerstone internal document addressing climate change issues is its Environmental Policy. It sets guiding principles for climate change mitigation encompassing: z Consideration of climate risks z Setting long-term strategic goals z Stakeholder engagement z Participation in global and local climate change initiatives The Company’s risk assessment methodology for environmental and climate risks relevant to it is described in the Regulations on Risk Management. En+ Group regularly communicates its key achievements in combatting climate change through publications on the website netzero.ru and in its annual Climate Reports. For more details on the Climate Reports for 2021, 2022, and 2023, visit the Company website. 86 86 87 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTБолее подробно ознакомиться с Климатическими отчетами за 2021, 2022 и 2023 годы можно на сайте Компании. Climate and environment Strategy Management structure for climate-related topics and climate risks GRI 3-3 En+ RUSAL BOARD OF DIRECTORS, EN+ oversees the implementation of ESG policies, monitors the achievement of climate targets BOARD OF DIRECTORS, METALS SEGMENT oversees the implementation of ESG policies, monitors the achievement of climate targets HEALTH, SAFETY, AND ENVIRONMENT COMMITTEE assists the Board of Directors in addressing climate-related issues AUDIT AND RISK COMMITTEE ensures the effectiveness of the risk management system, including climate risks HEALTH, SAFETY, AND ENVIRONMENTAL COMMITTEE assists the Board of Directors in addressing climate-related issues GRI 3-3 SASB EM-MM-110a.2 IF-EU-110a.3 En+ Group is working towards achieving carbon neutrality by following these key principles: Net Zero Day SASB EM-MM-110a.2 IF-EU-110a.3 In September, En+ Group in collaboration with leading climate experts held a Net Zero Day. Company representatives showcased En+ Group’s key ESG projects and initiatives aimed at reducing climate impact. The event culminated with a presentation of the Pathway to net zero report prepared by the Company. As part of Net Zero Day, participants planted trees. Reduction of emissions Avoidance of emissions Impact offsetting and remediation It has developed a decarbonisation roadmap which sets the estimated timeline for planned reductions in GHG emissions for each segment. CEO, EN+ CEO, RUSAL Decarbonisation Roadmap, mt СО2 e CLIMATE CHANGE TASKFORCE CHIEF OPERATING OFFICER DIRECTOR FOR SUSTAINABLE DEVELOPMENT HEAD OF THE CLIMATE CHANGE TASKFORCE DEPUTY HEAD OF THE CLIMATE CHANGE TASKFORCE DIRECTOR FOR SUSTAINABLE DEVELOPMENT DEPUTY HEAD OF THE CLIMATE CHANGE TASKFORCE CHIEF TECHNICAL OFFICER Power Metals Offsetting Balance 0% 0% 0% 0% 0% 9% 21% 23% 35% 57% 100% ACHIEVING NET-ZERO GHG EMISSIONS 67.1 61.1 61.5 65.3 65.5 61.0 42.0 38.6 38.9 40.5 39.4 39.7 41.3 43.2 53.2 51.5 43.6 45.2 41.8 31.7 29.0 CHIEF TECHNICAL OFFICER DIRECTOR OF ALUMINA BUSINESS 25.1 22.9 23.0 25.2 26.5 23.1 22.7 21.3 18.3 16.2 15.7 DIRECTOR OF CAPITAL MARKETS AND FINANCIAL PRODUCTS DIRECTOR FOR SALES AND MARKETING DIRECTOR FOR INTERNATIONAL COOPERATION OFFICIAL SPOKESPERSON 0 −0.4 −0.4 −0.4 −0.4 −1.9 −10.8 −13.0 −19.7 −29.0 0 CARBON NEUTRALITY −47.4 Appointments/instructions Review of resolutions, preparation of recommendations / implementation of resolutions 88 2018 2020 2021 2022 2023 2025 2030 2032 2035 2040 2050 89 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTClimate and environment Emission reduction measures Measures to achieve carbon neutrality GRI 305-5 METALS SEGMENT Alumina production MEASURES 1/2 Increase in energy efficiency Projects are carried out on a regular basis across all enterprises of the Division 33% Progress Share in the carbon footprint For more details on the measures, see the Energy Management section on page 100. MEASURES 1/2 Estimation of GHG emissions from reservoirs From 2020 to 2022, the Company conducted a large-scale campaign to measure anthropogenic GHG emissions from the reservoirs of the Irkutsk, Brask and Ust- Ilimsk HPPs according to the international methodology of the International Energy Agency. Measurements have shown that emissions from reservoirs are lower than global average levels. In 2023, together with the Institute of Global Climate and Ecology, average coefficients for the Russian Federation were calculated for reservoirs in boreal and temperate climatic zones. Progress POWER SEGMENT Hydro generation <1% Share in the carbon footprint Greenhouse gas capture HPP modernisation Achinsk Alumina Refinery is actively engaged in a pilot operation employing pollution control technology utilising sludge wet scrubbers to capture carbon dioxide, where a curtain of alkali-infused droplets formed in the device reacts with СО2 to form soda. This project is expected to reduce emissions from sintering furnaces. The New Energy programme endeavours to revamp En+ Group’s HPPs with the objective of boosting hydro generation to replace current generation volumes from CHPs. In 2023, the growth in annual electricity production reached 2.2 billion kWh, resulting in a substantial reduction of emissions by 2.515 mt СО2 e. Progress Progress Aluminium production 27% Share in the carbon footprint Conversion to Eco-Soderberg technology Eco-Soderberg technology, featuring upgraded electrolysers, was implemented in 2023, resulting in reduced energy consumption, lower GHG emissions as well as lower pollutant emissions. Progress 309 new electrolysers were installed in 2023. New HPP construction The project is designed to provide the regions with renewable energy. Plans are made to put Motyginskaya, Krapiva, Nizhneboguchany, Telmanskaya, and Segozerskaya HPPs into operation. These projects are progressing at various stages. The launch of Motyginskaya HPP is geared to facilitate green hydrogen production. For more details on the measures, see the Investment Programme and Modernisation section on page 64. Progress Switching to inert anodes CHP conversion to gas Generation at CHP Transitioning to inert anodes as a substitution for the traditional carbon technology is set to almost entirely eliminate GHG emissions. Progress The project is not only aimed at curbing GHG emissions, but is also expected to address and overcome relevant environmental challenges. The government of the Irkutsk region, together with a gas production company, is developing a gasification program for the Irkutsk region, within the framework of which the possibility and conditions of converting the Group’s CHPs to gas fuel are being considered. Progress 34% Share in the carbon footprint 9191 90 90 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTClimate and environment METALS SEGMENT MEASURES 2/2 27% Share in the carbon footprint Switching to pre-baked anodes GHG emissions from the electrolysis process are expected to be reduced by at least a quarter. Taishet aluminium smelter, using such technology, has been launched in commissioning mode. The aluminium smelters modernisation projects envisaging the conversion to the pre-baked anode technology have passed the State Environmental Expertise. Progress Scrap recycling MEASURES 2/2 Increase in energy efficiency Progress For more details on the measures, see the Energy Management section on page 100. For more details on the measures, see the Investment Programme and Modernisation section on page 64. POWER SEGMENT 34% Share in the carbon footprint Hydrogen energy VgaZ uses the scrap to produce billets. KUBAL uses the scrap to produce slabs and billets. During the reporting period, the Metals segment launched the production of the PEFA alloy designed for the automotive industry. The product contains 20% of aluminium scrap, plans are made to increase this to 30% in the future. Development of cryogenic tank containers One of the challenges encountered in the advancement of the hydrogen energy sector is the need to maintain low temperatures during hydrogen transportation. The Company is actively engaged in developing cryogenic containers, a specialised technology designed to avert hydrogen evaporation. En+ Group is currently conducting R&D activities to refine the design of tank containers. Progress Progress Offsetting Peatland watering In the reporting period, an initiative to neutralise GHG emissions through peat deposit secondary watering in the Leningrad Region was launched by En+ Group in partnership with the Centre for Sustainable Technologies. In 2023, specialists selected promising peat deposits for watering in the Dedovo Pole peatland. The initiative is projected to yield a reduction in emissions by 9–10 tonnes of СО2e per hectare annually. Development of the hydrogen transport infrastructure concept A project is being implemented to develop infrastructure for passenger hydrogen transport in pilot regions (Irkutsk, Krasnoyarsk). The Company is holding negotiations with government officials and other stakeholder. Progress Forest aerial protection Hydrogen production by electrolysers Since 2019, the Metals segment has been implementing a forest aerial protection and forest fire prevention initiative. The project was officially registered within the Register of Carbon Units in 2023. Its implementation is expected to result in the absorption of GHG emissions of over 5 million tonnes of СО2e by 2033. The Company is currently exploring the possibilities of hydrogen transportation and consumption. Progress 92 92 CCUS technology En+ Group is exploring the integration of carbon capture, storage, and utilisation technologies, collaborating with partners from the oil and gas sector. Capture 93 93 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTGeneration at CHPAluminium productionRisks are considered over three planning horizons. The greatest number of risks are deliberated in the long term. Physical risks factors Acute Climate and environment Risk management GRI 201-2 In 2021, En+ Group conducted an assessment of climate-related risks and opportunities following the Task Force on Climate-related Financial Disclosures (TCFD) guidelines 1, encompassing over 50 enterprises across various regions. Every year the Company updates the list of climate risks and planning horizons. In the reporting year, as part of this initiative, two additional enterprises in Volgograd and Krasnoturinsk were included in the risk assessment scope. For the risk assessment purposes, the Company uses three Shared Socioeconomic Pathways (SSP) climate change scenarios Climate risk assessment stages Benchmarking and analysis of data associated with climate-related risks and opportunities SHORT-TERM MEDIUM-TERM LONG-TERM by 2025 by 2030 by 2050 SSP1-2.6 1.5–2 °C warming Sustainability SSP2-4.5 2–4 °C warming “Middle of the road” SSP5-8.5 4–7 °C warming “Increasing use of fossil fuels and accelerating global warming” Scenario-based assessment of the climate risks priority (to determine it, statutory regulations, available technologies, the situation in product markets are analysed; the time frame of risks and the severity of their impacts are taken into account) Assessment of risk compliance with En+ Group’s overall risk management principles, encompassing the planning of mitigation measures as necessary 1 2 3 Physical risks and opportunities Transition risks and opportunities En+ Group incorporates any identified physical climate risks into its business strategy to proactively address potential impacts on its operations and financial performance. Physical risks stemming from diverse factors: The principal risks of the transition period, if occurred, may result both in financial losses and reputational damages to the Company. z Unusually hot or cold temperatures z Flooding, road erosion due to prolonged and heavy rains and showers z Floods due to abnormal rainfalls z Storms z Drought z Wildfires z Strong winds Chronic z Gradual increase in average annual temperatures z Increased number of zero- temperature phase transitions z Increased rainfall volume Physical climate risks z Infrastructure disruptions z Breaching of the integrity of production facilities z Supply disruptions z Reduced productivity Transition climate risks Regulatory z Tightening of ASI main requirements z Development of the Aluminium Sector Greenhouse Gas Pathway by IAI z Development of the Carbon Border Adjustment Mechanism z Emergence of new Russian legislation requirements in the field of GHG emissions regulation Reputation z Reputational costs caused due to a failure to comply with new legal requirements in the field of emissions regulation Technology z Costs of introducing new technologies to reduce the product carbon footprint z Unstable operation of new equipment z Increased volume of emissions caused due to the use of technology innovations and new materials Market z Loss of consumer interest in the Company’s products due to their high carbon footprint, if compared with products of competitors z Lower demand for coal Opportunities associated with physical climate factors Opportunities associated with transition climate factors z Construction of new renewable energy generation facilities due to a wider use of renewable energy sources z Saving money and fuel resources to a reduced heating season z Use of new modern and effective technology innovations z Profit growth due to increased volume of sales of low carbon footprint products z Penetrating new and evolving markets z The possibility of obtaining additional profit due to the emergence of new economic instruments: renewable energy attribute certificates, carbon units from the implementation of climate projects. A complete list of the Company’s physical and transition climate risks is provided in the Additional ESG Data section on page 336. Prior to any construction or modernisation endeavours, En+ Group meticulously evaluates the potential negative impacts of natural factors to minimise the likelihood of their occurrence. This measure allows the Company to safeguard enterprise structures against climate related hazards. The impact of such risks is considered both in the short and long term perspective. Furthermore, En+ Group integrates these physical climate risks into emergency response planning. In 2023, no new physical or transition climate risks threatening the Company were identified. None of the risks previously identified occurred. 1 TCFD—Financial Stability Board (FSB) Task Force on Climate-Related Financial Disclosures. From 2024, the responsibility for companies’ climate disclosures monitoring is transferred from the TCFD to the International Sustainability Standards Board (ISSB) of the IFRS Foundation. 94 95 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT Assessment of the impact of climate change on the Angara HPP cascade GRI 201-2 In 2023, the Company continued work on its project launched in 2022 focusing on Angara HPP cascade adaptation to climate change. The project is implementing in collaboration with the Yu.A. Izrael Institute of Global Climate and Ecology and the Water Problems Institute of the Russian Academy of Sciences, who have provided scientific support and assistance The approach to climate change adaption of HPPs was adopted in line with the Hydropower Sector Climate Resilience Guide (developed by the IHA)1 built on the consistent scenario-based assessment of climate-related risks, stress testing, and the development and implementation of climate change adaptation measures. Historical climate change data was assessed and key trends that have the potential to magnify risk were identified. For the selected climate scenarios—the most probable (SSP2-4.5) and stressful (SSP5-8.5)—the main climate risk factors (changes in temperature, precipitation and humidity) were determined over three planning horizons—2030, 2050, 2100. Based on this data, a detailed register of physical climate risks was compiled. A hydrological model of the river flow in the Lake Baikal basin and the Angara river to the Ust-Ilimsk HPP was set. It was used to calculate scenario-based forecasts of the useful water inflow into the cascade reservoirs for the specified planning horizons. In 2024, a number of calculations are going to be conducted using a model simulation of the Angara river water management system in its upper and middle courses. This will help the Company develop scenario-based forecasts in regard to electricity generation at the HPP, and water levels in the reservoirs. It will also allow for an assessment of the sufficiency of water supply to consumers and offer reasonable recommendations as to which measures should be taken to ensure adaptation to the predicted changes. These outcomes will serve not only En+ Group but also government bodies at federal and regional levels. The findings from the 2023 evaluations laid the groundwork for regional adaptation projects in the Irkutsk Region, under guidance from the Adaptation of Russian Regions to Climate Change PBL programme initiated by the Agency for Strategic Initiatives. 1 IHA (International Hydropower Organization) - International Hydropower Association, the largest association of hydropower manufacturers, developer of global industry standards. 96 97 97 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Climate and environment96Climate and environment Metrics and targets SASB EM-MM-110a.2 IF-EU-110a.3 CLIMATE TARGETS OF EN+ GROUP GOALS STATUS PROGRESS made in 2023 z Reduce GHG emissions by 35% by 2035 compared with 2018 z On track z Achieve net zero GHG emissions z On track balance by 2050 z GHG emissions in scopes 1, 2 and 3 increased by 0.3% compared with 2022 due to the low water supply of the Yenisei, the increase in energy consumption in the Irkutsk region and the associated increase in condensation generation from CHPs. z The Path to Carbon Neutrality report for 2023 specifying in detail the status of the climate projects implementation was published on the Company’s website on September 29, 2023 GRI 3-3 SASB EM-MM-110a.2 IF-EU-110a.3 GRI 305-1, 305-2, 305-3 SASB EM-MM-110a.1 In order to achieve its targets, En+ Group actively pursues initiatives to prevent and reduce GHG emissions while implementing compensatory measures. In 2023, the Board of Directors of En+ Group approved the decision to extend the medium-term climate target deadline set for 2030 to 2035. The decision was made based on the compelling need, and the Company’s commitment, to aligning its operations with evolving challenges and contemporary realities. IF-EU-110a.1, IF-EU-110a.2 The Company accounts for GHG emissions in scopes 1, 2 (market approach) and 3. The calculated metrics included emissions of carbon dioxide, methane, perfluorocarbon, and nitrous oxide. The following guidelines were used to carry out the calculations: z Greenhouse gas protocol Scope 3 Calculation Guidance z IPCC Guidelines for National Greenhouse Gas Inventories z Order No. 371 of the Ministry of Natural Resources and Environment of the Russian Federation On Approval of Methodology for Quantitative Determination of Greenhouse Gas Emissions and Greenhouse Gas Absorptions, dated 27 May 2022 z Methodology for determining direct GHG emissions during the production of primary aluminium z Methodology for determining direct GHG emissions during the production of alumina z Methodological guidance on the quantitative assessment of GHG emissions from the production of electricity supplied from the energy system of the Russian Federation In 2023, the Company’s gross GHG emissions across its three scopes were 65.9 million tonnes CO2e, increasing by 0.3% compared with 2022. At the same time, emissions from the Metals segment decreased by 3% and amounted to 39.5 million tonnes CO2e, while emissions from the Power segment increased in 5%, reaching 26.5 million tonnes CO2e. This dynamics was caused by a decrease in output from HPPs by 0.3% and an increase in output from CHPs by 10.1%, which was due to an increase in electricity consumption in the Irkutsk energy system by 4.0% in 2023. GRI 305-1, 305-2, 305-3 IF-EU-110a.1 IF-EU-110a.2 SASB EM-MM-110a.1 Direct (Scope 1) and indirect (Scope 2 and 3) GHG emissions, mt CO2e Scope 1, Metals segment Scope 1, Power segment Scope 2, Metals segment Scope 2, Power segment Scope 3, Metals segment Scope 3, Power segment 27.2 28.3 28.6 1.1 11.1 1.2 11.0 25.0 23.7 1.4 8.9 21.6 0.5 0.9 0.5 1.0 0.5 1.0 65.9 65.7 61.9 2023 2022 2021 GRI 305-4 Specific GHG emissions (carbon dioxide, methane, perfluorocarbon, nitrous oxide) released during the electrolysis operations that were carried out by the Metals segment decreased by 12.9% in the reporting period compared with 2014 baseline. At the same time, GHG emissions intensity of Power segment increased by 5% compared to 2022. ↓ 12.9 % the intensity of specific GHG emissions from aluminuim electrolysis decreased compared to 2014 GRI 305-4 GRI 305-4 Intensity of GHG emissions from electrolysis operations for the Metals segment, t CO2e/ t Al GHG emissions intensity, mn t CO2e /billion kWh METALS SEGMENT POWER SEGMENT 2023 2022 2021 1.98 2.00 2.02 2023 2022 2021 0.23 0.22 0.19 For more information on climate impacts, see Additional ESG Data on page 336. 98 99 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT98 Climate and environment Energy management Metrics and targets EN+ GROUP’S KEY GOALS IN ENERGY EFFICIENCY Governance Strategy GOALS STATUS PROGRESS made in 2023 GRI 2-13, 3-3 A more efficient use of energy resource also facilitates GHG emissions reduction. Reducing energy consumption at all stages of the production cycle is the basis of the Company's Technical Policy. Energy efficiency issues are within the Board of Directors’ scope of responsibility. The HSE Committee, under the Board of Directors, reviews energy efficiency reports provided by the CEO and makes decisions regarding recommendations to the Board of Directors. In the Metals and Power segments, the Technical Directorate is responsible for improving energy efficiency. Indicators related to energy consumption and energy efficiency are incorporated in to KPIs of Company employees. The Aughinish alumina refinery holds an ISO 50001 certificate, which allows the enterprise to follow a systematic approach in achieving consistent improvement of the energy system, including energy efficiency, energy security and energy consumption. 81% of the total volume of energy produced in 2023 is renewable. En+ Group increases renewable electricity generation from HPPs through implementation of the New Energy programme. Other projects aimed at increasing the volume of energy produced by renewable sources are also being implemented: the construction project assessment of a wind power plant in the Amur Region is underway. In addition to this, En+ Group is considering the possibility of expanding the Abakan SPP. For more details, see the Investment Programme and Modernisation on page 64. GRI 302-4 An equally important area for the Company is ensuring uninterrupted supplies of electric power and heat energy to customers, and to reduce losses in the networks of its operating facilities. Measures are being taken by the Power segment to reduce the costs related to its own electricity and fuel consumption. This is done through modernisation and organisational steps, to cut losses of electricity, steam and condensate, to ensure optimal loads on equipment at CHPs by saving energy resources and temperature control. As a result of the implementation of all energy efficiency projects, the energy savings of En+ Group’s Power segment amounted to 5,958 thousand GJ. The Metals segment is implementing various initiatives aimed at modernising equipment and improving technological processes which would allow the Company to reduce the consumption of electricity and heat energy. In 2023, the technologies relating to the use of weak liquid solutions in furnace charge mix production, preventing ore settling in the hoppers of wet grinding mills, were developed and applied, as well as energy-efficient and ultra-energy-efficient electrolysers being designed. Risk management In the reporting year, risks associated with energy management were not regarded as significant and were not included in the general list of En+ Group’s risks. In order to minimise the risks associated with energy consumption and energy efficiency, En+ Group implements energy efficiency measures at each of its enterprises. z Reduce the average carbon z On track z In order to achieve the target, intensity of electricity produced and consumed the Company is developing initiatives focused on bolstering the capacity of renewable energy production, executing energy efficiency schemes, and pursuing research to identify techniques for optimising load flexibility within a cluster of CHPs to leverage the advantages of combined generation more effectively. z Increase the use of alternative energy sources by 2030 z On track z En+ Group’s Metals segment has reached the target. SASB EM-MM-130a.1 The Metals segment continues to produce aluminium using carbon- free energy sources. The Power segment is increasing the production of electricity from renewable sources through improving the efficiency of existing HPPs, it is also formulating initiatives aimed at increasing the volume of renewable energy production (HPPs, wind power plants, solar power plants). z Annual hydroelectricity output surged by 2.2 TWh, leading to a decrease in annual emissions by 2.8 mt CO2 e. This increase in hydroelectric power production enabled the Company to partially replace the electricity generated by CHPs to meet the demand z Increase the efficiency z On track of HPPs, increase the production of clean electricity by 2.5 TWh, prevent emissions of over 2.5 mt CO2 equivalent per year from coal-fired power plants starting from 2025 100 101 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT101 Climate and environment 2024 GRI 302-1 SASB EM-MM-130a.1 GRI 302-1 SASB EM-MM-130a.1 In 2023, the Company consumed a total of 353.0 energy, which is 0.8% more than in the previous year. Energy consumption, mn GJ2 PLANS FOR 2024 AND BEYOND 2023 2022 2021 GRI 302-3 The energy intensity metrics of the Metals segment for the period reached 117.4 GJ per ton of aluminium, which is 7% less than since 2021. Energy intensity of the Power segment for the period was 2.658 GJ/MWh, increased by 25% compared to 2021 due to reduction of HPP generation and increase in CHP generation. GRI 302-3 GRI 302-3 Energy intensity 1, GJ/t of aluminium Energy intensity, GJ/MWh METALS SEGMENT POWER SEGMENT 2023 2022 2021 117.4 119.0 127.2 2023 2022 2021 353.0 349.9 307.1 2.658 2.486 2.132 1 The 2021–2022 indicators differ from those given in the 2022 Sustainability Report due to changes in the calculation methodology. The energy data used in the calculation includes purchased electricity and heating. 2 Hereinafter energy data does not include Onda HPP. Data for 2021-2022 was changed due to clarification of coefficients. 102 For more information on energy consumption, see the Additional ESG Data section on page 332. Complete the assessment of the climate change impact on the Baikal regions and the operation of the Angara cascade HPPs. Develop proposals for adaptation measures 1 Continue the transition of aluminium smelters to the pre-baked anode technology Introduce and incorporate energy efficiency measures Increase low-carbon energy generation Develop hydrogen energy support projects Implement offsetting projects (forest aerial protection, peatlands watering) 3 6 Identify and initiate new projects to offset GHG emissions 4 7 2 5 103 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT103 Climate and environment Environmental protection INTERNAL REGULATIONS z Environmental Policy z Biodiversity Policy z Regulations on the Health, Safety, and Environment Committee z Supplier Standards z Corporate Code of Ethics MATERIAL TOPICS z Air quality z Water and wastewater management z Safe waste management z Biodiversity z Environmental compliance and the best available technologies (BAT) 207 USD mn investments in environmental protection 77 % share of recycled and circulating water 68 % of waste was recycled 350.5 were reclaimed hectares Governance GRI 3-3 GRI 2-25 En+ Group acknowledges its environmental responsibility and is committed to preventing and mitigating the impact of its operations on the atmosphere, water bodies, land resources, and biodiversity. The Company adheres strictly to legal regulations, engages in R&D activities, actively participates in the Clean Air federal project, and continuously upgrades its equipment. Throughout these processes, En+ Group engages with stakeholders and takes into account their environmental protection priorities. In a bid to minimise its environmental impact, the Company deploys best available technologies at its operating facilities. BAT technologies are assessed for conformity during the acquisition of integrated environmental permits for facilities. All En+ Group structural units, from the boardroom to the function room, are involved in delivering on the environmental agenda. Furthermore, environmental performance metrics are integrated into KPIs set for managers overseeing the implementation of investment projects and environmental protection initiatives. Environmental departments and their functions Board of Directors HSE Committee Sustainable development Directorate Environmental protection teams at enterprises z Provide environmental stewardship at the segment level z Identifies and evaluates environmental risks z Develops environmental risk management measures z Exercises control over the implementation of measures to eliminate or minimise environmental risks z Oversees the imple men- tation of the Company’s environmental protection policies z Oversees progress against environmental protection targets z Manages risks, including environmental risks z Feeds into the policy development process z Makes recommendations to the Board of Directors z Oversees the Company’s compliance with legal requirements and standards governing environmental protection z Evaluates the Group’s environmental protection performance (The Regulations on the HSE Committee contain a detailed description of its roles) For more details on the roles of the Environment Department, see the Additional ESG Data section on page 331. In the reporting year, the following topics were raised at the HSE Committee meetings: The development status of the environmental and climate strategy Environmental risk management Urgent information regarding the biodiversity strategy Progress against the KPIs set for environmental protection and climate 104 104 105 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT Climate and environment The main corporate documents regulating environmental protection issues at En+ Group Environmental Policy En+ Group’s main document governing environmental protection. Describes the Company’s principles regarding environmental stewardship, the environmental agenda key focus areas, and the respective obligations of the CEO Supplier Standards Contain requirements obliging suppliers to comply with environmental laws, deploy environmental tracking systems, and assess environmental risks Corporate Code of Ethics Establishes the Company’s commitments to preventing incidents that cause harm to environmental media, complying with environmental requirements, and running educational environmental events for employees. Agreements that the Company enters into with contractors and suppliers stipulate compliance with En+ Group’s Environmental Policy, encompassing obligations for both parties. The Company’s environmental management system (EMS) is certified to ISO 14001:2015 and the Russian GOST R ISO 14001-2016 Environmental management systems. En+ Group constantly expands its EMS, notably extending its coverage to JSC Irkutsk Grid Company in 2023 with the development of well-documented procedures, including for managing environmental aspects. Throughout its operations, En+ Group is guided by the requirements of Russian law, including the Federal Law On Environmental Protection №7. Strategy GRI 3-3 The operating activities of En+ Group impact air quality, with emissions primarily originating from aluminium smelters in the Metals segment and CHPs in the Power segment. In order to mitigate the emissions of pollutants, En+ Group ensures compliance with the Federal Law On Protection of Atmospheric Air, and the Order of the Ministry of Natural Resources and Environment On Approval of Requirements for Measures to Reduce Emissions of Pollutants into the Atmospheric Air in National Emergencies. The Company strives to reduce pollutant emissions. Environmental operational control (EOC) at the Company encompasses instrumental measurements of pollutant concentrations at all operations to ensure compliance with established limits and standards. En+ Group’s facilities situated within city limits in Krasnoyarsk, Bratsk, and Novokuznetsk actively participate in the Clean Air federal project, targeting a 20% reduction in emissions across 12 cities by 2026. Efforts to reduce emissions include modernising aluminium smelters at the Metals segment and installing dust collection equipment at the Power segment, alongside the Company’s ongoing initiatives to boost energy production efficiency. Throughout the reporting period, Company facilities implemented measures to minimise air pollution, embedding actions within the Clean Air project: APPLICATION OF BEST AVAILABLE TECHNOLOGIES INSTALLATION AND UPGRADE OF GAS CLEANING UNITS AND ELECTROSTATIC PRECIPITATORS R&D ACTIVITIES FITTING OUT FIXED SOURCES WITH AUTOMATIC EMISSION CONTROL AND ACCOUNTING SYSTEMS The Company is consistent in its efforts to action the conversion to Eco-Soderberg and pre-baked anodes MODERNISATION OF ALUMINIUM SMELTERS MODERNISATION OF GAS PURIFICATION SYSTEMS AT COAL-FIRED CHPS GRI 3-3, 303-1, 303-2 The Company’s operational demands necessitate significant water resources. Consequently, the Company continually improves water management efficiency by boosting the share of reused and recyclable water and consistently enhancing wastewater treatment processes. Regular assessments monitor the Company’s impact on water resources, ensuring continuous monitoring of industrial wastewater quality. These measures are taken, inter alia, as part of environmental operational control efforts. When doing so, the Company is guided by legislative, sanitary, and epidemiological requirements applicable to the discharge and quality of wastewater, as well as by the following documents: z Decision to grant the right to use water bodies z Permission to discharge pollutants and microorganisms into water bodies z Integrated environmental permit z Environmental impact statement z Standards for permissible discharges of pollutants into water bodies 106 107 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT Climate and environment SASB IF-EU-140a.3 GRI 3-3 SASB EM-MM-150a.1 GRI 3-3 SASB EM-MM-160a.2 The Power segment, while managing the water use of HPP reservoirs, adheres to the requirements stipulated by the Federal Water Resources Agency of the Russian Federation. Accredited laboratory specialists conduct sampling of wastewater and reservoir water to monitor the concentrations of priority pollutants such as petroleum products and suspended particles. In order to prevent pollutants from entering water bodies, Company specialists inspect, on a regular basis, the integrity of power generating and auxiliary equipment. In 2023, the Metals segment published its first voluntary Water Resources Management Report. GRI 3-3, 306-1, 306-2 SASB EM-MM-150a.1 The operational activities of En+ Group’s Power segment produce waste materials such as overburden rock, ash, and slag, while the Metals segment generates overburden rock, red and nepheline slime, and spent carbon lining. Processes associated with waste generation include coal combustion at Power segment CHPs and the refining of bauxite and nepheline ores at the Metals segment. The primary environmental impact of waste arises from the Company’s disposal practices at designated facilities. To mitigate this impact, the Company enhances the environmental safety of its waste storage and disposal facilities, conducts regular monitoring of disposal site safety, implements separate waste collection initiatives at production sites and offices, and facilitates waste transfer for recycling and utilisation to enable further consumer use. GRI 3-3 SASB EM-MM-150a.10 SASB EM-MM-150a.9 Waste management operations at the Power segment are guided by the internal Waste Management Standard, governing the collection, treatment, recycling, reuse, disposal, and landfilling of waste products. Compliance with this standard at Company facilities was audited in 2023, with the Power segment devising a long-term ash and slag waste management programme in the same year. The Power segment places a particular focus on ash and slag utilisation. Potential applications for waste products include road construction, waste site remediation, mine workings and quarry applications, as well as land infilling, grading, and levelling. Taking into account global trends in the disposal of ash and slag, specialists are also exploring avenues for selling ash and slag to construction material manufacturers and extracting iron-containing concentrate from these materials. Ash dry-stacking initiatives are implemented as scheduled, as well as initiatives focused on bolstering the residual capacity of existing coal ash disposal sites. The Metals segment aligns its activities with its own industrial Waste Management Strategy to 2030, guided by the Zero Waste to Landfill principle. In 2023, inventories of generated and stored waste stock were tallied across the Group’s enterprises, safe waste management programmes for 2024–2029 were approved, and relevant performance targets were set. SASB EM-MM-540a.1, EM-MM-540a.2, EM-MM-540a.3 The Metals segment is committed to preventing emergencies (leaks and spills) at hydraulic structures (HS) where sludge is stored. Emergency containment and management plans are in place for all hydraulic structures, describing the most likely emergency scenarios, providing action procedures in emergencies, and estimating the resources required for accident containment. In 2023, comprehensive inspections were undertaken for all hydraulic structures, finding the facilities in good operating condition. The segment ensured structures were ready for the flood season and conducted relevant trainings and briefings for relevant responsible persons involved. In 2024, the segment is planning to approve the Safe Sludge Dumps Management Policy it previously developed. Sludge reuse In 2023, the Company put 1,860,000 tonnes of sludge back to economic use. The waste was used by the segment’s enterprises and sold to other companies. The industries in which generated sludge can be used include ferrous metallurgy, production of building materials, and road construction. Energized for action Green Office Since 2022, En+ Group has been progressively introducing the Green Office initiative to establish a comfortable and healthy work environment, thus minimising environmental impact and promoting a prudent use of natural resources. A pivotal element of the programme is to ensure efficient separate waste collection and optimal utilisation practices. Company employees attend training sessions to better understand the importance of sorting waste and proper handling procedures. Separate waste collection bins (for glass, metal, plastic, and mixed waste) have been installed in offices at various locations, such as Moscow and Irkutsk, Irkutsk, Bratsk, Krasnoyarsk and Ust-Ilimsk HPPs, and multiple CHPs. In 2023, the initiative expanded to include battery and clothes collection, with gathered waste being subsequently transported to waste processing facilities for further treatment. An important area of En+ Group’s efforts to minimise its environmental impact is remediation, as prescribed by internal subsoil use documents. Land rehabilitation also plays a key role in preserving biodiversity across our footprint. The Company prevents acid waste generation across its facilities to avoid changes in soil chemical compositions and adverse impact on plant life. Due to the absence of sulphide-rich rocks in the Metals segment’s bauxite and nepheline deposits, acidic effluents do not arise from these sources. 350.5 ha recultivated in 2023 LAND RECLAMATION ENCOMPASSES SEVERAL STAGES Completion of open-pit mining and decommissioning of waste disposal sites Development and approval of remediation projects Restoration of disturbed terrain and soil upon completion of open-pit mining, waste disposal site remediation, and reclamation of disturbed and contaminated lands Monitoring vegetation cover of reclaimed land Land rehabilitation and reclamation at our Guinea operation Green Wave GRI 304-3, MM1 GRI 304-3 At the Metals segment, disturbed land reclamation efforts launched at COBAD’s mining site in 2021. In the reporting period, 26 hectares were rehabilitated. Specialists restored the ground surface by reinserting overburden into excavated bauxite mines. Subsequently, the soil cover was reinstated, vegetation was planted, and the site’s status was observed for a duration of five years. Should any plants die, replacements will be planted. Furthermore, a two-year ban on livestock grazing and equipment passage is in place at the site. As a mining business, En+ Group places significant emphasis on reforestation efforts. In 2023, the Metals segment continued its forest restoration efforts, with the recurring Green Wave campaign being a highlight for the Company. In 2023, volunteers from Yerevan and Boksitogorsk, as well as En+ Group employees based in Divnogorsk and Irkutsk, joined this campaign for the first time. Throughout the reporting period, a total of 1,240 volunteers planted over 2,200 seedlings across 18 cities as part of the initiative. Concurrently, a project aimed at safeguarding forests from fires using aerial equipment made good progress. 108 109 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT Climate and environment En+ Group consistently organises training sessions for its employees and runs specialised programmes for environmental safety specialists within the Company. Ecological Dictation The annual national Ecological Dictation was held across En+ Group entities for the fifth year. In 2023, the event attracted over 250 Company employees. They answered questions related to geology, biology, energy, and sustainable development. The event serves to promote environmental awareness and foster interest in nature conservation efforts. Lectures on eco-conscious behaviours for HPP employees During the reporting year, a lecture on eco-conscious behaviours was delivered to employees from Irkutsk, Bratska, and Ust-Ilimsk HPPs, focusing on promoting responsible consumption practices, guidelines for sorting waste, Green Office standards, and sustainable procurement methods. Participants were also taught the significance of conserving energy and water. Trainings and workshops for ecologists In 2023, a business game workshop convened over 30 ecologists from enterprises categorised as having a Class I significant environmental impact. The event dived into the processes surrounding the acquisition of integrated environmental permits and the intricacies of developing programmes to improve environmental performance. In March 2023, employees of Irkutsk, Bratsk, and Ust-Ilimsk HPPs joined forces with staff from the management office to participate in training sessions focusing on biodiversity conservation practices at a corporate level. Risk management GRI 3-3 En+ Group conducts regular environmental risk assessments for each operational site. In 2023, the risk assessment conducted revealed no new risks, and previously identified risks did not materialise. The Power segment developed its own environmental risk management plan and is systematically implementing relevant measures. The plan outlines specific measures to manage identified risks and lays out a timeline for achieving the set targets related to risk mitigation. Strategic Plan for Environmental Risk Management at the Power segment GRI 3-3 Event Implementation period Progress made in 2023 Environmental risk assessment 2021–2032 The remedial action plan is being updated. As of 2023, no new environmental risks were identified, and the assessment continues Continuous improvement of the environmental management system 2022–2026 As of 2023, all Company HPPs and CHPs have been certified Minimisation of sulphur emissions into the atmosphere Active participation in environmental stewardship initiatives Increased involvement of management and employees in environmental protection and climate change mitigation activities and promotion of environmental awareness at work Increased involvement of suppliers and consumers in environmental protection and climate change mitigation activities Development and implementation of a long-term programme to reduce discharge of untreated wastewater and minimise non-production water losses Implementation of projects focused on achieving BAT targets at Vostsibugol’s operational sites Improvement of wastewater treatment processes at HPPs Implementation of measures to increase the share of recycled and reused waste and ensure its safe disposal, accumulation, and utilisation 2023–2032 Sulphur emissions decreased by 1% compared with 2020 2022–2032 2022–2032 2022–2032 2021–2031 The Company continues to participate in the Baikal without Plastic initiative Educational events were held for Company employees, including environmental protection specialists En+ Group monitors compliance with waste disposal requirements by its suppliers and contractors Design documentation for local treatment facilities at Bratsk and Ust-Ilimsk HPPs is being finalised 2021–2031 BAT targets will be achieved in 2024 upon receipt of the integrated environmental permit Construction and installation activities commenced at Irkutsk HPP (wastewater treatment facilities design documentation was completed last year) In 2023, the Roadmap for Large-Scale Use of Ash and Slag Waste was developed. 63% of waste was recycled or reused in 2023 GRI 3-3, 303-1, 303-2 According to the Aqueduct Water Risk Atlas compiled by the World Resources Institute (WRI), some En+ Group enterprises, including RUSAL Armenal (Yerevan, Armenia), operate and withdraw water in regions with high water stress risk. To minimise the impact on water resources within these high-risk areas, the Company deploys recycled water supply systems. In 2023, RUSAL Armenal continued to roll out this system, addressing and rectifying any shortcomings. Required equipment was supplied and installed, with the scheduled completion of this effort set for 2024. 110 111 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT Climate and environment Metrics and targets GRI 2-27 SASB EM-MM-140a.2 IF-EU-140a.2 GRI 3-3 Throughout the reporting period, no incidents occurred that would have resulted in significant1 environmental harm. Following supervisory inspections, any warnings and remediation orders received were duly acknowledged, and corrective action plans were formulated. RUB 17.6 bn (USD 207 mn) was earmarked for environmental initiatives for the period. Most of the funds were allocated to atmospheric air emission protection. Overall, the cost ratio remained consistent with the previous year. Fees for negative environmental impact totalled RUB 1,065.5 mn. Total environmental protection costs2, % Air protection Land rehabilitation Waste management Environmental equipment maintenance Water protection Other expenditures 3.1 8.7 2.1 20.3 USD 207 mn 3.0 62.9 GRI 305-7 SASB EM-MM-120a.1 IF-EU-120a.1 In 2023, pollutant emissions totalled 691.6 kt which is 4.4% higher than in 2022. This dynamics was caused by a decrease in output from HPPs by 0.3% and an increase in output from CHPs by 10.1%, which was due to an increase in electricity consumption in the Irkutsk energy system by 4.0% in 2023. At the Metals segment, emissions were mainly caused by carbon monoxide (66.7%), and by sulphur oxides (59%) at the Power segment. Notes: 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. Atmospheric emission intensity indicators Total air emissions (excluding GHG emissions), kt Power segment Metals segment 2023 2022 2021 371.7 362.6 368.9 319.9 299.6 274.4 691.6 662.2 643.3 Pollutant Metals segment. kt/kt Power segment. kt/TWh 2021 2022 2023 2021 2022 2023 Nitric oxides (NOx) 0.006 0.052 0.006 0.3701 0.4476 0.4310 Sulphur oxides (SOx) 0.0120 0.012 0.010 1.2992 1.4809 1.6065 Particulate matter 0.01 0.01 0.01 0.4720 0.5787 0.64 Volatile organic compounds (VOCs) 0.0003 0.0002 0.003 0.0032 0.0025 0.0032 Notes: To track the results of measures to reduce the negative impact on environmental components, the Company calculates emission intensity indicators tied to the volume of aluminium produced (for the Metals segment) and the volume of thermal and electrical energy produced (for the Power segment). The denominator values are indicated in the appendices and are common to all specific environmental indicators of the segments in the “Climate and Environmental protection” section. THE COMPANY SETS TARGETS FOR ENSURING LEGALLY COMPLIANT AIR QUALITY IN ITS REGIONS OF OPERATION GRI 3-3 THE COMPANY’S ENTERPRISES ARE MAKING PROGRESS WITH EFFORTS TO ACHIEVE THE TARGETS TO MINIMISE NEGATIVE IMPACT ON WATER RESOURCES GRI 3-3 GOALS STATUS PROGRESS made in 2023 GOALS STATUS PROGRESS made in 2023 By 2027: z On track z Reduce above-limit air emissions by 100%. By 2035: z Provide a significant reduction in emissions of pollutants per tonne of aluminium, including total fluorides by 25%. z On track z Modernisation of aluminium plants, installation of new gas treatment facilities, use of air pollution monitoring systems continue. z Push the share of recirculating water supply in the production of alumina, aluminium, and finished products to 100% by 2027 z On track z Eliminate the discharge of untreated wastewater generated by the Power segment by 2030 z On track z Retrofit ash collectors at Novo-Irkutsk z On track z Installation operations CHP, Ust-Ilimsk CHP, and CHP-6 for the electrostatic precipitators of boiler units Nos. 3 and 5 at CHP-6 are complete, as is the development of design documentation and delivery of core equipment for boiler unit No. 7 at CHP-6 Impacts resulting in fines exceeding 1 USD mn are regarded as significant. 1 2 Some subtotals may not add up to totals due to rounding. Calculated based on the 2023 average RUB/USD exchange rate of RUB 85.25 per dollar. 112 z Streamline technological systems to minimise non-production water losses at the Power segment by 2030 z On track z The share of recirculating water in the total amount of water used for production was 91.9% in 2023 z Projects related to the modernisation and construction of new treatment facilities for HPP generation, coal mining, and municipal wastewater treatment sites are at various stages of implementation. Ongoing efforts are also directed towards mitigating the risk of untreated wastewater discharges from heat generation facilities. z In 2024, the Company plans to conduct an inventory of other facilities and determine waste treatment plans z Analysis is underway to explore avenues for optimising fresh water usage and minimising discharges 113 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTClimate and environment GRI 303-3, 303-4, 303-5 SASB EM-MM-140a.1 IF-EU-140a.1 The water usage procedures at En+ Group encompass water withdrawal, consumption, and discharge processes. Water withdrawal 1 Water consumption Water discharge2 1,035 million m3 710.5 million m3 587.5 million m3 Sources Sea water 2.1% Third-party organisations 20.8% Surface water bodies 70.9% Other water 1.4% Withdrawn water consumption Water outflows Ground water 0% Surface water bodies 91.2% Public utilities 5% Water used in recirculating water systems Ground water 4.8% Sea water 3.8% Water-related intensity metrics Metric Metals segment , mn m3/kt Power segment, mn m3/TWh Total water withdrawal Total water discharge 2021 0.047 0.013 2022 2023 0.045 0.042 0.012 0.012 2021 5.88 3.60 2022 7.05 4.37 2023 7.45 4.66 GRI 303-3 SASB EM-MM-140a.1 IF-EU-140a.1 GRI 303-5 SASB EM-MM-140a.1 IF-EU-140a.1 En+ Group withdraws water from surface, underground, and sea water bodies; third-party organisations also supply water to the Company. In 2023, water was withdrawn from the surface. In the reporting period, Company enterprises withdrew 1,035.3 of water, which is 4% more than in 2022. Water withdrawal increased due to an increase in CHP generation, due to an increase in energy consumption in the Irkutsk region by 4%. The Power segment, due to the specifics of its operating processes, accounts for the majority of water withdrawal (84.2%). Fresh water withdrawal amounted to 1,006.3 million m3, which is 4.4% more than in 2022. The share of water withdrawal in the regions with water stress was 1% for the Metals segment. The metrics remained flat on the previous year. During the reporting period, the Company’s facilities consumed 2 710.5 million m3 of water, up by 6% from the previous year. The majority of this water (87%) was consumed by the Power segment. 77% was reused, reusable, or recycled water. GRI 303-4 In the reporting period, 587.5 million m3 of water was discharged, up by 5% from the previous year. The greatest amount of water was discharged by the Power segment (93%). The fresh water discharge rate was up by 5% year-on-year to 564.9 million m3 in 2023. 97% of fresh water was discharged by the Power segment. GRI 303-3 SASB EM-MM-140a.1 IF-EU-140a.1 Total water withdrawal, million m3 Fresh water. Metals segment Sea water. Metals segment Fresh water. Power segment Other water. Power segment GRI 303-5 SASB EM-MM-140a.1 IF-EU-140a.1 Total consumption of water 3, million m3 Amount of water consumed in regions with water stress. Metals segment Amount of water consumed in other regions. Metals segment Amount of water consumed in other regions. Power segment Amount of water consumed in regions with water stress. Power segment GRI 303-4 Total water discharge 4, million m3 Fresh water. Metals segment Sea water. Metals segment Fresh water. Power segment 140.9 22.6 865.4 6.5 149.9 22.8 813.3 6.9 155.4 23.0 720.2 6.8 2023 2022 2021 1 035.3 992.8 905.4 1.7 89.8 0 2023 1.5 97.4 2.0 2022 619.0 565.4 1.0 106.5 1.9 478.4 2021 19.0 22.6 545.9 23.0 22.8 509.7 25.9 22.7 446.3 2023 2022 2021 710.5 665.3 585.9 587.5 557.0 494.9 En+ Group data for 2023. 1 2 Water used in operating processes. 114 Industrial water. 3 4 Data for the Metals segment for 2021 were recalculated and include only industrial water. 115 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTClimate and environment GRI 3-3 EN+ GROUP CONSISTENTLY MEETS ITS WASTE MANAGEMENT TARGETS GOALS STATUS PROGRESS made in 2023 z Ensure a progressive reduction z On track of non-recyclable and non-reusable waste generation intensity by at least 10% per tonne of metal, and safe disposal of 100% of such waste by 2030 in the Metals segment z Put back to economic use or utilise at least 15% of alumina production waste and at least 95% of aluminium and silicon production waste by 2035 z On track z Implement large-scale projects z On track related to the use of ash and slag waste under BEC LLC’s plan z To ensure the safety of waste disposal, a comprehensive inspection of hydraulic structures, sludge collectors and ash dumps was conducted z The Metals segment reused 1,516 kt of red and nepheline slime and transferred another 344 kt to external consumers. Advancements are being made in developing technology for producing scandium oxide from red slime z The Power segment managed to reuse 63% of ash and slag waste GRI 306-3 SASB EM-MM-150a.4, EM-MM-150a.5, EM-MM-150a.7 GRI 306-4 SASB EM-MM-150a.8 In 2023, En+ Group facilities generated a total of 225 mt of waste, which is 12.5% more than in the previous year. This was due to increase in CHP generation in Power segment. The vast majority of said waste was non-hazardous waste. In 2023, En+ Group utilised 1 152.7 mt of waste (68% of the total amount of waste), which is more than in the previous year. The majority of such waste was utilised by the Power segment (96%). – 5 % decrease in the amount of waste from the Metals segment compared to 2022 68 % total share of all waste recycled by En+ GRI 306-3 Total volume of waste broken down by hazardous and non-hazardous waste, mt Hazardous waste. Metals segment Non-hazardous waste. Metals segment Hazardous waste. Power segment Non-hazardous waste. Power segment GRI 306-4, 306-5 SASB EM-MM-150a.8 0.8 59.7 0.002 164.6 2023 2022 2021 0.8 62.8 0.012 137.1 0.7 83.5 0.003 131.1 225.0 199.9 215.3 Total volume of reused, reusable, and recycled waste broken down by hazardous and non-hazardous waste, mt Hazardous waste. Metals segment Non-hazardous waste. Metals segmentт Hazardous waste Power segment Non-hazardous waste. Power segment 0.7 3.6 0.002 0.8 2.6 0.011 0.7 2.4 0.02 118.6 148.4 122.9 152.7 126.3 121.7 2023 2022 2021 GRI 306-5 Total volume of disposed waste broken down by hazardous and non-hazardous waste, mt Hazardous waste. Metals segment Non-hazardous waste. Metals segment Hazardous waste. Power segment Non-hazardous waste. Power segment Waste intensity metrics Metric 0.024 56.4 0.001 18.5 0.024 59.1 0.011 15.4 0.036 81.2 0.002 13.5 2023 2022 2021 74.8 74.5 94.8 Metals segment, kt/kt Power segment, kt/TWh Total waste generation intensity 2021 0.022 2022 0.016 2023 0.016 2021 1.06 2022 1.18 2023 1.17 GRI MM3 SASB IF-EU-150a.1 In the reporting period, En+ Group generated 12.1 mt of red and nepheline slimes (1.1% was recycled) as well as 148.6 of ash and slag, which fall under the non-hazardous waste category. 63% of all ash and slag waste generated by En+ Group facilities was recycled. 1 According to the requirements of Russian legislation, waste utilisation involves the recycling and reuse of waste products 116 117 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTClimate and environment GRI 304-3 GRI MM1 As of the beginning of the reporting period, the area of disturbed but yet not reclaimed land at the Company amounted to 23,223 ha; as of the end of the period it was 23,390 ha. In 2023, 390 ha of land was disturbed. The Company managed to rehabilitate 350 ha, which is 273 ha more than in the previous year. Total area of land disturbed and reclaimed, hectares METALS SEGMENT Total area of disturbed land Total area of reclaimed land POWER SEGMENT Total area of disturbed land Total area of reclaimed land 245 107 2021 77 45 2022 290 164 214 60 227 226 2023 2021 2022 60 2023 GRI 304-3 291 hectares of forest were restored in 2023, as a result of reforestation efforts For more details on the Group’s land rehabilitation efforts, see the Additional ESG Data section on page 348. For more details on quantitative environmental protection metrics, see the Additional ESG Data section on page 324. PLANS FOR 2024 AND BEYOND 118 Introduce and deploy an automated data collection system for environmental protection Complete the water recycling system deployment at RUSAL Armenal Complete a scientific study regarding the possible impact of air holes in the ice on air quality in Krasnoyarsk and publish key findings 1 2 3 2024 119 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTClimate and environment Biodiversity conservation Governance GRI 3-3, 304-1, 304-2 SASB EM-MM-160a.1 En+ Group does not operate in protected areas or areas of high biodiversity value. Baikal Plastic Free Alliance One of En+ Group’s standout initiatives is the establishment of the in 2022. The Alliance comprises over 25 companies, including educational institutions, government bodies, and non-profits. The goal of this Alliance is to change the attitude of society towards the problem of pollution of Lake Baikal. The Alliance advocates for the immediate development of a range of measures to curb microplastic pollution in the lake. Its members support legislation banning disposable plastic utensils and bags in the Baikal natural territory. In addition, the Alliance assists the regional government in developing infrastructure for the collection, sorting and recycling of plastic waste. An equally urgent task is to increase the environmental literacy of the population. The Alliance organises events, including educational programmes, to engage both the business community and the public, considering it as one of its core pillars. The Company has a clear division of responsibilities for managing biodiversity conservation and ecosystem services: In its biodiversity conservation efforts, the Company is guided by the following internal and external documents: SELECTED EVENTS FOR THE PERIOD INCLUDE: Board of Directors z Oversees issues related to the implementation of the Company’s Biodiversity Policy z Oversees progress against biodiversity-related targets HSE Committee z Manages biodiversity conservation-related risks z Contributes to the development of policies z Makes recommendations to the Board of Directors z Oversees the Company’s compliance with legal requirements and standards governing biodiversity conservation z Evaluates the Company biodiversity performance Sustainability Projects Department z Develops a strategy and evaluates compliance with the Biodiversity Policy z Initiates biodiversity conservation programmes, oversees and monitors their implementation For more details on the roles of the Sustainability Projects Department, see the Additional ESG Data section on page 332. Russian Federal Law No. 16-FZ On the Ratification of the Convention on Biological Diversity, dated 17 February 1995 International Finance Corporation Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources Hydropower Sustainability Standard Environmental Policy Biodiversity Policy Corporate Biodiversity Conservation Programme SASB EM-MM-160a.1 En+ Group’s Biodiversity Policy incorporates the Company’s fundamental operating principles, namely a commitment to apply a modern and effective approach to the conservation of biological diversity, to promote biodiversity conservation across its footprint, and to foster awareness among partners regarding this crucial area. GRI 2-28 En+ Group is a member of the Working Group on Entrepreneurship and Biodiversity Conservation Issues under the Ministry of Natural Resources and Environment of the Russian Federation and contributes to the ASI Biodiversity and Ecosystem Services Working Group in collaboration with the International Union for Conservation of Nature and Natural Resources (IUCN), Fauna & Flora International (FFI), and the Chimbo Foundation. The Ballet on Baikal. Buryatia performance The event was arranged in partnership with the Buryat State Academic Opera and Ballet Theatre. The dancers performed excerpts from famous masterpieces on the shores of Lake Baikal. The event was aimed at spotlighting the conservation issues around the lake. A scientific and educational conference at the Chemistry of the Future science school It was organised in partnership with Irkutsk National Research Technical University (IRNTU). The target audience of the project included students, postgraduate students, and young research chemists. The conference discussed plastic recycling, creating biodegradable plastic materials, and promoting alternative packaging solutions. The Modern Trends and Challenges in the Tourism Sector of the Baikal Area Eco-lessons at children’s camps and schools Participants discussed green initiatives implemented in the tourism industry around the world, pointing out that unorganised tourism is a critical contributor to pollution in the area. They emphasised the need to encourage conscious behaviour among tourists. The agenda also included the issue of banning single-use plastic tableware and bags in the environmental areas of the Baikal natural territory. The conference became a platform for developing and discussing practical solutions for preserving the natural ecosystems, as well as attracting tourists. The Alliance planned and delivered eco-lessons at 21 children’s camps in the Irkutsk, Angarsk, and Olkhonsky Districts, as well as in educational institutions of the Irkutsk region. At the events, children learned about the fauna of Lake Baikal and the problem of environmental pollution of the reservoir, in particular, plastic. Meetings and round tables with locals from Baikal protected areas Meetings and round tables were held with the main topic being the build-up of plastic in various parts of the Baikal ecosystem. Participants delivered presentations highlighting the shortcomings of legislative regulation regarding environmental monitoring of the lake’s nearby areas. 120 121 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT120120 Climate and environment Strategy GRI 3-3, MM2 One of the highlights of the reporting period was the initiation of a Corporate Biodiversity Conservation Programme for Irkutsk, Bratsk, and Ust-Ilimsk HPPs by the Power segment. During the project’s development phase, En+ Group engaged with experts and stakeholders to discuss biodiversity conservation activities, their scopes, and associated timelines. A holistic, three-year Biodiversity Conservation Action Plan for the Angara HPPs was also devised. This plan contains in-depth information concerning scheduled tasks, resource allocations, and specific indicator species requiring observation and support. These species encompass a diverse array of animals and plants, including ospreys, grey ducks, harlequin ducks, steppes rat snake, whitefish, tugun, and others. En+ Group intends to run field studies within the areas of potential impact of HPPs when the programme enters its active phase. Given their vast geographical scope, these studies are slated to take place between 2024 and 2026. In 2022, the Company developed instructions for handling wild animals. All employees are familiar with the instructions, which are posted on information stands on the territory of En+ enterprises. Also in 2022, the Company installed 1.5 thousand bird protection devices on power line supports in the ecological zones of the Baikal natural territory. Biodiversity impact of Irkutsk, Bratsk, and Ust-Ilimsk HPPs Map of potential impact areas Direct potential impact area Indirect potential impact area Area of potential indirect impact on Lake Baikal HPP Ust-Ilimsk HPP Bratsk HPP Irkutsk HPP Monitoring in Baikal protected areas Scientific monitoring of Lake Baikal In 2023, a fifth expedition took place to monitor the condition of the coastal waters of Lake Baikal and its drainage basin. As in previous years, the expedition was conducted with backing from the Severtsov Institute of Ecology and Evolution, Russian Academy of Sciences, and was staffed by scientists from Lomonosov Moscow State University and the Moscow Institute of Physics and Technology (MIPT). The experts placed special attention on waterborne microplastics. According to the researchers’ findings, the level of microplastics in the waters of Baikal is comparable to levels seen in European and American lakes; however, pollutants started to enter into Lake Baikal later, which indicates a rapid pace of pollution. Also within the framework of the research, the problems of endemic organisms such as sponges and amphipoda were studied. Biodiversity risks are assessed as part of the Strategic Plan for Environmental Risk Management of the Power segment. GRI 304-1, 304-2 In 2023, in collaboration with the Strana Zapovednaya (Protected Land) Foundation, the Company initiated a project aimed at monitoring the ecological status of nature reserves and national parks bordering the lake. As part of this endeavour, a single holistic programme was crafted to monitor shoreline ecosystems in the protected areas of Lake Baikal. This initiative enabled a uniform approach to evaluating the state of ecosystems, broke down the silos between protected areas, and helped orchestrate strategies to mitigate human impact on the areas while safeguarding environmental media. As part of monitoring efforts, the following measures are proposed: z biodiversity assessment of areas z monitoring the impact of water level fluctuations on shoreline ecosystems z assessment of pollutant concentrations in pine needles and snow z establishment of the permissible levels of human-tourism impact on ecosystems. These measures will be applied to the following protected areas of federal significance: the Federal State Budgetary Institution Zapovednoye Pribaikalye (Irkutsk Region), the Federal State Budgetary Institution Zapovednoye Podlemorye (Republic of Buryatia), and the Federal State Budgetary Institution Baikal State Nature Biosphere Reserve (Republic of Buryatia). Risk management GRI 3-3 En+ Group prioritises biodiversity conservation and adheres to the precautionary principle. The Company assesses potential risks that could lead to material impacts on the flora and fauna within the local areas. Upon identifying such risks, steps are taken to address them in accordance with the mitigation hierarchy: Offset Rehabilitation/restoration Minimisation Avoidance 122 123 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTClimate and environment GRI 304-4 The areas in which the Company operates have protected and endangered species, among which the following were selected as indicator species: To minimise biodiversity risk, the Company works hand-in- hand with key stakeholders, including government officials, research institutions, and non-profit organisations. POWER SEGMENT z Lenok z Taimen z Tugun z Steppes rat snake z Harlequin duck z Osprey z Horned pondweed (Zannichellia palustris ssp. repens) z Fringed water lily (Nymphoides peltata) z Dwarf yellow water lily (Nuphar pumila) z Whitefish z Gray duck z Quadrangular water lily The company also delivered environmental education for the public, developed biodiversity conservation programmes, conducted environmental monitoring in the area of HPP's impact. Metrics and targets EN+ GROUP IS COMMITTED TO AVOIDING AND MINIMISING THE IMPACT OF ITS ACTIVITIES ON BIODIVERSITY GOALS STATUS PROGRESS made in 2023 z By 2024, develop biodiversity z On track conservation programmes and action plans for pilot facilities (three operating facilities in each segment) z By 2030, develop biodiversity conservation programmes and action plans for En+ Group’s facilities, with identified biodiversity risks z On track 124 z The Metals segment is 30% complete (one of three stages completed for each facility). The Power segment has developed a biodiversity conservation programme and action plan z The Metals segment is assessing potential biodiversity impacts and reviewing ecosystem services for its ASI-certified facilities. Currently, this effort is nearing completion at three of the 18 certified enterprises. z In the Power segment, the Company has kicked off work to preserve aquatic biological resources: an initiative supporting public fish conservation efforts in the Bratsk Reservoir is on track. The installation of artificial spawning grounds and measures to protect the patterned snake are planned for 2024. More than 700 thousand juvenile valuable fish species have been released into the Bratsk Reservoir. Artificial spawning grounds are also planned to be established in the reservoir, and their impact will be monitored. In 2024, the Company will continue its efforts in these areas. In 2023, fish protection structures were installed at CHP-10 to prevent juvenile fish from entering water intakes. By doing so, the Company will minimise impact on populations of 12 fish species. The cost of purchasing and installing such structures and devices amounted to RUB 30 million (USD 351,9 thousand). They have an expected service life of more than 50 years. It was not only aquatic biological resources that were covered by the biodiversity protection projects run by the segment. In 2023, a protective fence was installed at the Tulunugol open pit mine to prevent wild animals from entering the site. Animals are repelled by electrical impulses that are not dangerous but unpleasant to them. RUB 3.4 million was spent on the construction of the fence (USD 39,8 thousand). Support for community fishery inspectors The first voluntary Biodiversity Conservation Report In 2023, as part of a project to protect aquatic biological resources in the area affected by Bratsk HPP, fishery inspectors from the Federal Agency for Fishery (Rosrybolovstvo) were supported by community inspectors and the Strana Zapovednaya (Protected Land) Foundation to identify 79 fishing violations and seize more than 2,830 m of illegally used fishing nets. The Company actively supports community inspectors, who assist state fishery inspectors: provides the necessary equipment and supplies. In 2024, it is planned to extend this practice to the Irkutsk and Krasnoyarsk reservoirs. Energized for action PLANS FOR 2024 AND BEYOND In 2023, the Metals segment released its first voluntary Biodiversity Conservation Report encompassing the period from 2015 to 2022. The report extensively outlines the projects implemented by the Company around the monitoring and restoration of biological resources. It also details our land reclamation efforts and collaborations with research institutions. Furthermore, the report discloses information on a pilot assessment of ecosystem services conducted at segment enterprises. The report is aligned with both international standards and national regulations, which the segment voluntarily upholds. Approve the previously developed internal documents of the Metals segment Implement biodiversity conservation projects in the Irkutsk Region, including a programme for mounting bird protection devices on electricity pylons, the rollout of successful public fish conservation practices, the establishment of artificial spawning grounds, etc. 1 2 Conduct field verification of the biodiversity conservation programme for the Angara HPPs (scientific monitoring) Continue environmental monitoring of Lake Baikal and its drainage basin with tributaries 3 4 2024 125 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTPeople Occupational health and safety INTERNAL REGULATIONS z Health, Occupational, Industrial, and Fire Safety Policy z Regulations on the Health, Safety, and Environment Committee MATERIAL TOPICS z Occupational health and safety 1.05 total recordable work-related injury rate (TRIR)2 compared with 1.33 in 2022 Governance GRI 3-3, 403-1, 403-2, 403-4, 403-8 The Company prizes its people as its core asset and places paramount importance on the safety of its workforce. En+ Group is dedicated to achieving zero fatalities and injuries among its employees. In order to meet this goal, the Group focuses on boosting staff competencies in occupational health and safety (OHS), fostering a robust safety culture, and implementing preventative measures to safeguard against emergencies while minimising the impact of occupational hazards. En+ Group has established a comprehensive OHS management system that encompasses all enterprises, employees, and contractors. The OHS system is aligned with national regulations, international standards, and best practices. Regular assessments are conducted to ensure corporate documents align with current OHS requirements. En+ Group’s core occupational health and safety management document is the Health, Occupational, Industrial, and Fire Safety Policy. It outlines the Company’s baseline OHS principles and responsibilities, including the right of employees to decline work that poses a threat to their life and health. Additionally, it stipulates the CEO’s obligation to role model a personal commitment to the Policy’s objectives and principles, and to actively support and promote its implementation. In 2022, all units of the Power segment were certified to the international standard ISO 45001:2018. In the Metals segment, 13 enterprises have been successfully certified, 3 of which received a certificate in 2023. 0.76 Lost time injury frequency rate (LTIFR)1 compared with 0.81 in 2022 5.3 RUB bn (64 USD mn)—OHS costs at the Group 7 % decrease in lost-time injuries 1 2 LTIFR is calculated per 1 million person-hours worked and includes cases of fatal, severe, and minor injuries causing temporary incapacity for work, recorded by the Company for the specified period. TRIR is calculated per 1 million person-hours worked and includes work- related fatal severe and minor injuires, injuries causing temporary and permanent incapacity for work, injuries requiring professional medical care, and/or transfer to another job. 126 127 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People OHS Management structure GRI 2-13 En+ RUSAL BOARD OF DIRECTORS, EN+ BOARD OF DIRECTORS, METALS SEGMENT, RUSAL HEALTH, SAFETY, AND ENVIRONMENT COMMITTEE HEALTH, SAFETY, AND ENVIRONMENTAL COMMITTEE The Company is pushing ahead with its digital transformation of occupational health processes using the 1C platform. This initiative enables continuous monitoring of OHS progress and accelerates decision making. Within the Power segment, additional management reports were developed for each module of the system in 2023, significantly enhancing previously established modules such as Special Assessment of Working Conditions (SAWC), Health Protection, Training and Knowledge Testing, Audits and Inspections, Personal Protective Equipment (PPE), and Cleaners and/or Disinfectants (C&D). In the Metals segment, the Occupational Safety automated information system was developed by adding modules such as Contractor Management; Risk Identification, Assessment, and Management; Occupational Health Operational Control; and Dashboards, while other auxiliary platforms were also successfully integrated. For more details on digital transformation at En+ Group, see the Digitisation and Responsible business practices section on page 232. CEO, EN+ HEALTH AND SAFETY DIRECTORATE HEALTH AND SAFETY DIRECTORATE CEO, RUSAL Contractor management Appointments/instructions Review of resolutions, preparation of recommendations / implementation of resolutions The OHS governance structure remained unchanged in 2023. The Health, Safety, and Environment Committee holds its meetings at least once a quarter to consider strategic issues related to the operation of the OHS management system and make recommendations to the Board of Directors concerning the approval of OHS goals, policies, and strategies. For more details on EN+ Group’s Health, Safety, and Environment Committee, see the Corporate governance section on page 191. The coordination of the OHS management system is overseen by the OHS Department, which holds a range of primary responsibilities such as: z managing local OHS teams z conducting internal audits of facilities to evaluate the performance of the OHS management system and foster interaction with employees z providing trainings to employees and conducting behavioural safety audits (BSAs). In the reporting year, the OHS Department undertook 12 on-site inspections, and routinely conducted one-day on-site audit visits to enterprises located in a close proximity. Conducting behavioural safety audits during these on-site inspections assists the OHS Department in establishing direct communication channels with employees. Group En+ spoke about its occupational health best practices In April 2023, Irkutsk HPP hosted an on-site meeting of the HSE Committee of the Chamber of Commerce and Industry of Eastern Siberia. The meeting brought together large industrial enterprises and small and medium-size businesses. Participants also took a guided tour around the plant and discussed pressing occupational health-related matters. En+ Group specialists were excited to share their experiences and accomplishments in developing the OHS management system and enhancing safety culture. They shared their experience in arranging five-minute safety briefings with colleagues, highlighting the significance of the Golden and Basic safety rules and providing real-world examples where employees have the right to refuse work that poses an injury risk or jeopardises their life. Attendees acknowledged that such on-site gatherings play a vital role in enabling entrepreneurs to swiftly and effectively adopt occupational health best practices. Regular audits and inspections are conducted on contractors to ensure compliance with OHS requirements. Most common violations, including failure to use PPE, are identified during the execution of tasks, such as working at height, excavation activities, with tools and equipment. GRI 403-1, 403-2, 403-5 En+ Group recognises the critical importance of ensuring contractor safety in parallel with the protection of its own employees. Contractual agreements and the Agreement for Occupational Health, Industrial, and Fire Safety govern the OHS obligations and responsibilities of contractors. Prior to commencing work and during the work process, En+ Group evaluates contractors’ compliance with regulatory and corporate safety standards to ascertain their suitability for the job. In 2023, En+ Group took significant efforts to enhance the contractor management process. The Group revised procedures for approving work execution plans, schedules, and process sheets. Reporting procedures and the assignment of approver roles were refined, while a consolidated list of ongoing projects was drafted. Each contractor employee takes mandatory induction briefings conducted by the OHS team, focusing on corporate safety requirements, proper PPE usage, and potential risks at the Company’s production sites. Leveraging a risk-based approach commensurate with the nature of the contractor’s work, En+ Group runs additional face-to-face meetings and conversations. The Metals segment introduced a segment-wide practice of collective responsibility, ensuring that if one contractor employee breaches OHS regulations, the entire team faces suspension, disciplinary discussions, briefings, and retraining. 128 129 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT129 People Strategy In 2023, the Power segment commissioned an independent contractor for an external safety culture audit, which informed the development of Strategic Action Plans for 2024–2026. The Metals segment continues to implement the 2023 OHS Strategy, targeting a 50% reduction in work-related injury rates and serious occupational accidents, with the ultimate goal of zero fatal injuries. Enterprises within the segment actively promote safety culture and health initiatives, delivering relevant health and safety training to support these objectives. Safety culture GRI 403-2, 403-5 En+ Group continued to use its supervisory practices to manage employees’ workplace behaviour in line with its single Behavioural Safety Audit (BSA) procedure, with the ultimate goal of fostering safe habits and reducing the human factor to reduce work-related injury rates. In 2023, the Group introduced its Train the Trainer programme, which is focused on spreading awareness about behavioural safety audits and saw over 600 employees successfully completing training. In the same year, the Company developed a comprehensive training course on BSA issues, and a BSA registration information system was piloted at the Aluminium Division of the Metals segment. Safe behaviour Within the Metals segment, enterprises are running a project to foster safe behavioural skills among employees. This initiative commits focus to developing both soft skills (such as memory, critical thinking, communication, openness, and friendliness) and hard skills (including education, knowledge of corporate requirements, operational procedures, and step-by-step operation guidelines and sheets). En+ Group’s specialists analyse individual employee traits and evaluate safety processes across all levels of the organisation, from top management to employees. Employee interviews and surveys are leveraged to tailor individual development plans. Health protection GRI 2-25, 403-3, 403-6, 403-10 En+ Group applies proactive medicinal approaches, including routine healthcare and preventive medical support to reduce occupational risk impacts: z Additional medical insurance z Free medical care at corporate healthcare centres and medical aid posts located at industrial sites z Reimbursement of medical procedures and surgical interventions that cannot be provided at the Company’s healthcare centres z Pre-trip and pre-shift medical examinations z Screening and regular medical examinations z Health resort treatment z Vaccination against influenza and tick-borne encephalitis z Drug and alcohol testing z Psychological support. Medical staff take regular advanced training to enhance their skills and expertise in delivering quality medical services. Employee health data is securely maintained and stored at medical aid posts following prescribed data security standards. The Company ensures secure communication channels are used to transfer personal health information anonymously to other healthcare services. En+ Group is expanding its healthcare services by opening new healthcare centres and establishing new departments at existing healthcare centres. For example, in 2023, a new healthcare centre with a day-care unit was opened in Krasnoyarsk, and another day-care unit in Kamensk-Uralsky; outpatient clinics were renovated in Achinsk, Sayanogorsk, Krasnoturinsk, and Shelekhov; and equipment was purchased and physiotherapy service offerings were expanded across multiple departments. This expansion aims to provide rapid medical assistance to a greater number of employees, aiding in the early detection of occupational diseases, initiating prompt treatment, and preventing health deterioration. En+ Group consistently monitors the epidemiological landscape in its operating regions, enforcing mask mandates and reducing business travel as necessary to curb the spread of seasonal infectious diseases. In its mission to promote healthy lifestyle among employees, the Company organises various sporting events. For more details on En+ Group’s sporting events, see the Contribution to Local Communities section on page 162. Lockout and tagout at power facilities Preventing cardiovascular diseases Healthy eating The Group is progressively implementing lockout and tagout systems at the power facilities of its Alumina Division. In 2023, these systems were introduced at Achinsk Alumina Refinery and Boksitogorsk Alumina Refinery to enhance employee safety during equipment maintenance and repairs at industrial sites. The Company has initiated cardiovascular disease (CVD) prevention programmes within its healthcare units. By identifying CVD risk groups based on medical examinations and test results, employees at risk can receive additional tailored health studies and treatment and preventive healthcare recommendations and ongoing monitoring to track their health status effectively. En+ Group has also launched a healthy eating project at its canteens to match the physical and mental stress employees face at the workplace. The project encompasses four stages, from analysing the physical condition of employees to monitoring health indicators and dynamically evaluating the effectiveness of implemented measures. A large- scale study was conducted to identify workers with gastrointestinal ailments, excess weight, unhealthy habits, and other health issues, leading to the development of multiple job-specific menus by the Company’s experts that account for the impact of harmful workplace factors, inter alia. 130 131 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People Emergency preparedness GRI 403-2, 403-7 GRI 413-1 Given the fact we operate hazardous production facilities and are situated in locations prone to natural disasters such as earthquakes, floods, and wildfires, En+ Group recognises the heightened risk of natural and man-made emergencies. To ensure rapid and efficient emergency response, the Company undertakes a series of proactive measures: z Developing and coordinating Emergency Response Plans with emergency rescue teams for hazardous production facilities, outlining effective emergency risks and response strategies z Collaborating with local authorities to establish Civil Defence Emergency Action Plans, emergency prevention and response strategies, and fire safety plans, including for water bodies z Providing theoretical and practical training for employees, governance bodies, emergency rescue teams, and workforce to implement civil defence measures z Maintaining operational local warning systems z Establishing financial and material reserves to tackle emergencies. For facilities at risk of petroleum product spills, En+ Group formulates and approves Spill Prevention, Control, and Countermeasure (SPCC) Plans following established protocols. All employees are required to familiarise themselves with both the Emergency Response Plans and SPCC to ensure preparedness. Emergency management theory is taught to employees through civil defence and emergency management instructions and training sessions. Employees refine their emergency management and first-aid skills through practical scenarios during emergency and fire drills. Fire-rescue and emergency response teams actively participate in these training sessions. Large-scale exercises and drills involve state supervisory bodies such as the Russian Ministry of Energy, EMERCOM, and the Federal Environmental, Industrial, and Nuclear Supervision Service of Russia (Rostechnadzor). To promote collaboration and information sharing in addressing challenges related to forecasting, preventing, and responding to emergencies, the Group has signed emergency- related information exchange agreements with the Ministry of Emergency Situations of Russia and city administrations spanning all En+ Group enterprises. En+ Group has established an emergency-related data exchange system to facilitate seamless data sharing, particularly during the emergency forecasting phase. A dedicated hotline serves as a channel for employees and external parties to report threats and violations linked to En+ Group’s operations as well as current or impending emergencies. To alert residents in our operating regions, the Company leverages local warning systems integrated with municipal alert mechanisms. Commensurate with its commitment to averting equipment- related accidents and incidents, En+ Group prioritises timely maintenance, industrial safety reviews, upgrades, and overhauls encompassing equipment, structures, and facilities. The Group’s local documents set industrial safety standards for hazardous production facilities and establish protocols for safety reviews and subsequent corrective actions based on review outcomes. To mitigate machinery risks, the following measures are implemented An emergency stock of spare parts is maintained Initiatives to transition the procurement of equipment and components to reliable Russian manufacturers and companies from friendly countries are implemented Emphasis is being placed on adopting modern approaches and management techniques within the Company Cutting-edge technologies are integrated into operating, maintenance, and repair processes OHS training GRI 403-5 En+ Group is committed to fostering a robust safety culture and conducts training and competency enhancement programmes for employees, emphasising compliance with Basic and Golden Safety Rules for both employees and contractors. Mandatory training covers a wide spectrum of topics, including occupational health and safety, safe equipment operation at hazardous production facilities, fire safety, civil defence, emergency prevention and response, and industrial safety standard assessments. The cadence and content of training sessions for specific workforce categories are driven by legal requirements, with HR specialists monitoring schedule compliance to ensure timely provision of training. Trainees undergo knowledge assessments and provide feedback through post-training satisfaction surveys, enabling the Company to evaluate training effectiveness. Electrical safety training In 2023, the Company delivered training sessions for power grid operational staff, with equipment suppliers enlisted as trainers. These sessions targeted installation and maintenance staff dealing with high-voltage bushings, microprocessor terminals, microprocessor relay protection units, and emergency control systems. Train the trainer In 2023, the Power segment prioritised the training of internal trainers specifically designated to deliver OHS programmes to employees through various corporate initiatives. A total of 330 internal trainers sat specialised training sessions. The Company has developed and refined several programmes and courses, including: z a corporate course focused on internal incident investigation z a training programme tailored to line managers to enhance safety manager skills z a Safety Awareness programme dedicated to fostering a risk-based approach and understanding individual psychological traits. 132 133 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENT People Risk management GRI 3-3, 403-2, 403-4 En+ Group’s OHS management system emphasises a risk-based approach, allowing for proactive risk management strategies. The Company conducts thorough safety risk analyses, takes proactive steps to mitigate identified risks, and implements corrective measures based on incident investigation outcomes. The evaluation of safety risks forms an integral part of the corporate risk assessment process. Besides routine risk assessment practices, employees are expected to identify and report unsafe conditions and activities before and during work. There are various communication channels (including anonymous ones) for employees to report unsafe or hazardous conditions and practices: z Telephone and e-mail z Labour dispute commissions, OHS commissions, and ad-hoc commissions z Monthly meetings on OHS issues z The Signal hotline z Speak-up boxes z An incident warning system for managers Hazardous operations have an increased injury potential. Each Group enterprise has drafted a list of hazardous operations. Each operation in this category is accompanied by risk assessment processes and corresponding risk management measures by relevant responsible staff. To mitigate the risks associated with drug or alcohol impairment in the workplace, the Company carries out drug testing for all employees. Furthermore, En+ Group conducts special assessment of working conditions at least once every five years 1. The most prevalent harmful workplace factors, as noted in the Power segment’s assessment, include occupational noise, heightened dust levels in working areas, and general vibrations. In the Metals segment, nearly half of job roles are categorised as having hazardous working conditions, often attributed to the severity of the tasks involved. OHS-related risks, process risks, and force majeure risks (natural disasters, large-scale accidents, epidemics, etc.) are included in the overall list of sustainability risks at En+ Group. These risks are subject to comprehensive analysis by the Group’s top management. For more details on OHS risk mitigation activities, see the Strategy subsection on page 130. Metrics and targets OHS targets are set by En+ Group on an annual basis. KEY 2023 GOALS GOALS STATUS PROGRESS made in 2023 z Decrease LTIFR by 10% z Not achieved z Zero fatal accidents at the workplace z Not achieved z External safety culture audit and z On track review of the Strategic Action Plan for 2024–2026 z LTIFR decreased by 7% from 0.81 to 0.76 z One fatal accident occurred at the Power segment and one at the Metals segment z An external safety culture audit was conducted at the Power segment z A Strategic Action Plan was developed z Certification audits of OHS z On track z The project is on track management systems across all enterprises z Development of an additional z On track company-wide OHS training system for all employee groups, including a revision of existing training programmes and the development of additional ones z The Corporate University is on track to develop and revise existing training programmes 1 In accordance with the classification provided in the Federal Law On Special Assessment of Working Conditions. 134 135 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People GRI 3-3, GRI 403-1 Assessment of OHS management effectiveness is a continuous process at En+ Group, involving the review of internal and external audit results as well as tracking OHS key performance indicators (KPIs) for managers. Monitoring procedures follow the Regulations on Ongoing OHS Status Monitoring, where managers across all levels conduct monthly assessments of the prevalent OHS situation according to the prescribed protocol. Subsequent reporting of these data to the OHS team enables the identification of areas for improvement in OHS. GRI 403-2, 403-9 SASB EM-MM-320a.1, IF-EU-320a.1 En+ Group meticulously maintains records of work-related injuries, accidents, and occupational diseases among both employees and contractors. Incidents are rigorously investigated in compliance with local legislation and corporate standards, following which corrective measures, unscheduled safety instructions, and training interventions for the workforce are planned and actioned. In 2023, two fatal accidents were reported at En+ Group. There was group accident in Metals segment: one employee lost his life and the other was injured during a group accident while performing repairs on an electrolyser. The accident resulted from a breach of critical safety rules, specifically the use of water to cool the trunk line. As a preventive measure, the Company decided to design and deploy a mobile disconnect kit to prevent staff from descending to the trunk line during electrolyser shutdown operations. There was fatal accident in Power segment: a fatal accident occurred during shutdown work on a boiler unit due to inadequate work management, deficient malfunction detection and monitoring procedures, improper delegation of authority, and failure to follow operational staff communication protocols. Following this incident, En+ Group conducted a comprehensive inspection of all drains, revised the operational protocols for high-pressure steam valves, issued detailed regulations on operational staff communication procedures, and revised job descriptions to improve the allocation of responsibilities. In 2023, the Company recorded 113 workplace accidents involving employees and 28 workplace accidents involving contractors. Root cause analysis suggests that accidents at En+ Group can be related to: z slips, trips, and falls z improperly handling hot melts z improperly maintaining and servicing equipment and tools z a failure to observe precautions while working at height z staying or moving in a fenced hazardous area. GRI 403-9 SASB EM-MM-320a.1, IF-EU-320a.1 Injury rates for En+ Group employees and contractors in 2023 At the Power segment, the most common injuries included extremity injuries, chemical and thermal skin burns, and head injuries. At the Metals segment, the majority of injuries resulted from slips, trips, and falls. Employees Contractors 2 16 95 Fatal injuries Severe injuries Minor injuries 2 10 16 136 GRI 403-9 GRI 403-9 SASB IF-EU-320a.1 Lost Time Injury Frequency (LTIFR) for Company employees, per 1 million man-hours worked Total Reportable Injury Rate (TRIR) for Company employees, per 1 million man-hours worked Power segment Metals segment 2023 2022 2021 0.9 0.89 0.87 Power segment Metals segment 0.52 0.67 0.68 0.76 2023 0.81 2022 0.81 2021 1.2 1.15 1.35 0.77 1.66 1.125 In 2023, En+ Group documented 255 cases of occupational disease. At the Power segment, the prevalent occupational diseases include hand-arm vibration syndrome, sensorineural hearing loss, bronchitis, bronchial asthma, polyneuropathy, and osteoarthritis. The Metals segment reports common diseases like arthrosis, periarthrosis, chronic fluorine intoxication, hand-arm vibration syndrome, sensorineural hearing loss, chronic obstructive pulmonary disease, bronchitis, and oncological diseases. Throughout 2023, the Power segment recorded no natural or man-made emergencies. The Metals segment reported 57 fires, primarily stemming from violations of electric installation operation regulations and process non-conformance, including failure to follow hot work procedures. For more details on injury metrics and rates, see the Additional ESG Data section on page 348. GRI 403-10 Recorded occupational diseases suffered by Company employees1 Power segment Metals segment 142 113 123 114 65 91 2023 2022 2021 1.05 1.33 1.26 255 188 205 PLANS FOR 2024 AND BEYOND Reduce LTIFR by 10% and strive for zero fatalities Spearhead OHS digitisation and automation projects 1 2 Increase share of enterprises whose occupational safety and health management system complies ISO 45001 standard 3 Develop new OHS training courses Improve the Company’s emergency responses and fire safety measures 4 5 1 Statistics on occupational diseases include only registered cases suffered by existing employees. Figures exclude cases of occupational disease that were first detected within the post-contact period. 2024 137 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People 28.4 % of the workforce represented by women compared with 27.6% in 2022 People Employees INTERNAL REGULATIONS z Diversity and Equal Opportunities Policy z Policy on Human Rights z Corporate Code of Ethics MATERIAL TOPICS z Employees management and engagement z Human rights z Social and cultural diversity and equal opportunities 85 % of employees covered by collective bargaining agreements compared with 86.3% in 2022 90,064 employees at the end of 2023 Management GRI 3-3 HR management structure GRI 2-13 En+ RUSAL BOARD OF DIRECTORS, EN+ BOARD OF DIRECTORS, METALS SEGMENT REMUNERATION COMMITTEE NOMINATIONS COMMITTEE REMUNERATION COMMITTEE • Conducts the first- • Runs the Board of • Develops and stage review of matters related to establishing effective and transparent remuneration practices • Oversees the implementation of the remuneration policy and incentive programmes • Supervises disclosures on remuneration of the members of the Board of Directors and the CEO Directors' self-evaluation process • Arranges for an external performance evaluation of the Board of Directors • Determines the individual responsibilities of the Management Board members regularly reviews the remuneration policy • Reviews matters related to the establishment of effective and transparent remuneration practices CORPORATE GOVERNANCE AND NOMINATION COMMITTEE • Sets the Company's priority business areas • Runs a detailed formalised procedure for the self-evaluation or external performance evaluation of the Board of Directors and its committees • Plans appointments CEO CEO HR DIRECTORATE OF THE POWER SEGMENT Coordinates the implementation of the HR policy across the Company HR DIRECTORATE OF THE METALS SEGMENT Carries out strategic HR management in the Metals segment HR UNITS AT INDIVIDUAL PRODUCTION FACILITIES HR UNITS AT INDIVIDUAL PRODUCTION FACILITIES Carry out day-to-day HR management at the enterprise level Carry out day-to-day HR management at the enterprise level Appointments/instructions Review of resolutions, preparation of recommendations / implementation of resolutions GRI 2-27 In its relationships with employees, En+ Group strictly adheres to the prevailing labour laws applicable in the countries where it operates. In 2023, no significant violations of labour laws or the Group’s regulations were recorded. To evaluate its HR management, the Company routinely reviews progress against KPIs and the results of annual employee satisfaction and engagement surveys. Performance on all metrics, including labour productivity gains, minimal employee turnover, and consistently positive engagement survey results, demonstrates strong HR management across the Company. Achieving En+ Group’s strategic goals and objectives is impossible without human capital, which is why the Company makes every effort to support and develop its people. En+ Group’s HR policy is driven by a desire to create equal conditions and opportunities for all employees. The Group’s core business principles are geared towards supporting the Company’s sustainability goals as outlined in its Diversity and Equal Opportunities Policy. Its oversight lies with the HSE Committee, which annually reports on workforce diversity to the Board of Directors. Our HR management approach is further formalised in the Policy on Human Rights and the Corporate Code of Ethics, which apply throughout the organisation, from the boardroom to the shop floor. Moreover, En+ Group expects similar compliance from its counterparties. 138 139 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT Bonuses are paid to employees based on the achievement of target KPIs. Through UNIVER, the Company’s intranet portal, employees can check their KPIs and report progress against them. For better performance evaluation, the Company conducts monthly preliminary reviews of progress against targets, with employees preparing quarterly reports detailing their work progress. En+ Group uses the 32 parameters of SHL methodology to assess its employees’ competencies. The metric scores are grouped into the Talent Management, Task Management, and Self-Management pillars, reflecting every aspect of job performance. In the reporting year, employees were also evaluated using the 9-box model, which helps identify talents and growth vectors for each employee group. The assessment was completed by 100% of managers, specialists, and office-based staff, as well as approximately 9,932 blue-collar employees. People Strategy En+ Group’s HR management strategy seeks to provide opportunities for the professional development and social well-being of its employees. Incentives and remuneration En+ Group offers its employees competitive pay above the market average, thereby boosting their motivation and overall job performance. Employees’ compensation comprises a basic salary and additional payments contingent upon their performance evaluation. Additional payments include: z bonuses awarded to heads of subsidiaries from a dedicated bonus pool z annual performance bonuses, as well as quarterly and monthly bonuses to provide additional incentives z payments to employees actively contributing to the Company’s social projects z payments to recipients of corporate, national, or agency awards. Social support to employees GRI 401-2 En+ Group offers its employees a wide range of social programmes beyond those required by law and also provides equal benefits regardless of the type of their employment contract. Social support to employees and their families GRI 403-6 SUPPORT PROGRAMME DESCRIPTION 2023 RESULTS Preferential mortgage programme z The Company’s preferential mortgage programme for the Power segment was launched in 2020. Employees have the opportunity to purchase a new-build or second-hand housing on preferential terms or use the option to refinance existing mortgages. A total of 323 employees within the Group have taken advantage of the preferential mortgage programme z The partner bank offers housing loans at an annual interest rate of 9.5% for 10, 15, or 20 years, with no down payment required. z The Company covers 50% of the monthly payment. The programme is available to employees who have worked at the Group’s facilities for a minimum of three years, as well as to young specialists employed by the Group for at least a year. SUPPORT PROGRAMME DESCRIPTION 2023 RESULTS Supplementary health insurance z The Company strives to ensure that every employee has access to quality healthcare and allocates funds for supplementary medical insurance programmes to achieve this goal. 100% of employees are covered by VHI programmes Health resort treatment z Every year, the Company sponsors employee health improvement programmes at recreational medical facilities and resorts or through weekend getaways, as well as offers vouchers for holiday centres and hotels, and organises vacations for employees’ children. Employees can enjoy a stay at a health resort once every two or three years by paying just 10% to 20% of the voucher cost. The remaining costs are covered by the Company. Moreover, En+ Group reimburses up to 70% of the expenses for family members’ vacations. About 1,500 employees’ children benefitted from vouchers for children’s camps, with approximately 5,000 employees receiving vouchers for health resort treatment Supporting employed parents z Assistance is provided to large families and schoolchildren’s parents through financial support, along with the distribution of school supplies during the annual Get a Child Ready for School campaign and New Year gifts for employees’ children. 57.9% Retention rate of employees that took parental leave z Furthermore, parents of children with special needs are entitled to a monthly allowance of RUB 10,000 per child until the child reaches the age of 18, along with reimbursement of preschool costs. Meal allowance z The Company provides subsidised meals to all employees of its Power and Metals segments. Promotion of sports and healthy lifestyle z The Company promotes a healthy lifestyle among its employees and encourages them to take part in various sports activities. More than 10 thousand people from 23 cities participated in the "Get on Your Skis” festival Retiree support z Retired employees of En+ Group entities are entitled to partial compensation of health resort treatment costs. The Group has distributed approximately 500 vouchers Dobroservice advisory support line z Since 2022, the Company has been collaborating with the Dobroservice employee support centre. The hotline is available for psychological and legal support as well as personal finance advice. Upon receiving a support request, the customer service manager schedules a convenient time for a consultation or facilitates an immediate connection with an expert if the issue is urgent. The service is available 24/7. All information and advice are confidential. 140 141 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People Involvement of work, women’s, and youth councils GRI 413-1 Human rights GRI 3-3 Signal hotline GRI 2-30, 401-2 SASB EM-MM-310a.1 Council Involvement To ensure effective social support for its employees, the Company listens to their wishes and needs, guided by the principle of social partnership. En+ Group fosters positive dialogue with employee representatives from trade union committees and negotiates collective bargaining agreements with them. Moreover, representative bodies formed from among employees, including work, women’s, and youth councils, help facilitate effective communication with employees. Women’s councils Work councils Active at the Metals segment facilities and at Krasnoyarsk HPP. Women’s councils conduct workshops, speaker sessions, and career guidance meetings. They also initiate public-private partnership projects for community improvement and coordinate monthly family cultural and sporting events. Responsible for facilitating communication between employees and the employer regarding labour and living conditions, production development, compensation, and other related matters. Additionally, they hold volunteer, leisure, and sporting events for employees. Youth councils Their efforts are directed towards involving young specialists at the Company in the decision-making process. Rights and freedoms of En+ Group employees and suppliers GRI 2-23 En+ Group does not tolerate discrimination on any grounds and provides employees and candidates with equal opportunities in hiring, compensation, performance evaluation, and training. The Diversity and Equal Opportunities Policy is the key document formalising this principle. En+ Group respects human rights, works to prevent human rights violations at its facilities, and expects the same from its counterparties. The HR Department is responsible for ensuring human rights compliance across the Group. Human rights risks are incorporated into the Company’s overall risk management system. En+ Group conducts regular assessments of these risks. Workforce diversity metrics z Age z Disability z Sex or gender identity z Sexual orientation z Ethnic or national identity z Religion and beliefs z Marital status z Pregnancy and motherhood z Other characteristics protected by the law To ensure human rights protection, the Company strongly relies on feedback mechanisms. Complaints about violations of labour rights or discriminatory behaviour, as well as any concerns that may arise for employees, partners, and other stakeholders, can be reported via the 24/7 Signal hotline. by phone by email 8 (800) 234-56-40 signal@enplus.ru No complaints of labour rights violations were recorded in 2023. HUMAN RIGHTS COMPANY APPROACH 2023 KEY FIGURES VIOLATIONS RECORDED IN 2023 1 UN SDGS Right to work and favourable working conditions The Company operates in strict compliance with the labour laws of the regions where it operates, ensuring favourable and decent working conditions as well as adequate leisure time for its employees. z Social expenses for personnel amounted to RUB 9.5 billion z 40% employees have taken training No violations have been recorded Right to health En+ Group respects the rights of its employees and local communities in the regions where it operates to healthcare and takes measures to mitigate adverse impacts from operations. At its facilities, the Company ensures compliance with occupational health and safety standards and implements measures to prevent occupational diseases. Employees are offered VHI policies. The Company invests in healthcare infrastructure in its host cities and promotes healthy lifestyle among local communities. z 100% of employees are eligible to take No violations have been recorded part in our VHI programmes GRI 406-1 Gender equality and non-discrimination The Company does not tolerate any form of discrimination in its relationships with employees, safeguarding their rights to equal opportunities for professional development, training, and career advancement. We are also committed to equal pay for equal work. z 33% women representation on the Board No violations have been recorded of Directors of EN+ GROUP IPJSC z 0.95 the female-to-male basic salary ratio in Power segment GRI 408-1, 409-1 No child, forced, or compulsory labour En+ Group does not tolerate child, forced, or compulsory labour at its own facilities or among its counterparties. z The Company and its counterparties are not exposed to child, forced, or compulsory labour risks No violations have been recorded The right to safe environment En+ Group respects the rights of its employees and local communities to a safe environment and acknowledges the extent of its impact on the environment in the regions where it operates. En+ Group takes all necessary measures to mitigate its impact and conducts the relevant assessments when planning and conducting its activities. z RUB 17.6 mn (207 USD mn)2 was allocated to environmental protection No violations have been recorded The right to privacy En+ Group respects the privacy of its employees and other stakeholders and takes all necessary measures to protect personal data. No violations have been recorded 142 143 Including violations recorded at En+ Group facilities as well as among suppliers. 1 2 Calculated based on the average USD/RUR exchange rate of 85.25 for 2023 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People Employee training and development En+ Group provides its employees with ample opportunities for development and training. The Company allocated 244.8 RUB mn (2.8 USD mn)1 in 2023 (excluding travel expenses) for these purposes. Additionally, the Group spent RUB 485.4 mn (5.66 USD mn) on training its succession pool (including employer-sponsored education for students of secondary vocational and higher education institutions). GRI 404-2 Training opportunities for employees include: z programmes and courses offered through the corporate learning portal UNIVER z professional training (including professional education programmes for blue-collar jobs, professional development programmes for managers and specialists, and simulation training for CHP staff across boiler, turbine, and boiler-turbine shops) z subsidised higher education programmes at universities in the Group’s regions of operation, with the employee covering the tuition fees for the first semester only z corporate development programmes and other options. Within the Professional Training pillar, the Company employs the Web Expert programme to train and assess En+ Group managers and specialists on technical standards and laws and regulations before and during examinations. Such training and assessment serve as the first step preceding the knowledge assessment by the facility’s certification committee, conducted annually to confirm job fit in accordance with the HR Policies and Procedures. Upon completing the Web Expert test, the employee is issued a protocol, which they present to the certification committee. 1,708 people took the Web Expert tests in 2023. En+ Group is strongly focused on getting young people into engineering and manufacturing starting as early as their schooling and university years. Additionally, the Company runs a range of programmes to train and employ young talent. 2023 performance highlights of the Corporate University: Eleven remote learning courses were developed, including courses on identifying and documenting instances of electricity usage for cryptocurrency mining, compliance with international sanctions, business correspondence, safe ways of working, and mentoring Six remote learning courses and webinars were updated, including those on leadership, time management, and teaching Initiatives implemented in 2023 as part of young talent support PROGRAMME DESCRIPTION RESULTS Attracting students Partnerships with higher and specialised secondary education institutions During the reporting year, the Company entered into two new cooperation agreements: one with the Balakhna branch of the Lobachevsky State University of Nizhny Novgorod, and the other with the Ivanovo Energy College. Several project agreements have been signed with Moscow Power Engineering Institute and Lomonosov Moscow State University. The IT cluster of the Professionalitet programme maintains partnership relations with the Ust-Labinsk Social Pedagogical College. z There are currently 17 contracts in effect in 2023: five with secondary vocational education institutions and 12 with higher education institutions. Employer-sponsored education Employer-sponsored education for students of secondary vocational education institutions, such as the Irkutsk Energy College and the Divnogorsk Hydropower Technical College, focuses on providing secondary vocational education and blue-collar training, ensuring subsequent guaranteed employment at En+ Group. Scholarship programme The scholarship programme was designed as a system to incentivise talented and promising students studying energy, metallurgy, medicine, and pedagogy subjects. En+ Group also enters into employer-sponsored education contracts with students from Russian higher education institutions, granting additional monthly scholarships sponsored by the Company. Corporate training and research centres (CTRCs) CTRCs offer employer-sponsored training hosted by the INRTU and Bratsk State University (BrSU) training centres. In 2023, one of the CTRCs launched a procurement training programme for EuroSibEnergo Trading House. IT Academy The IT Academy is an additional training programme designed for IT and communication students in higher education institutions. Its purpose is to build unique competencies and enhance opportunities for employment at En+ Group and RUSAL. Students from four Siberian universities (INRTU, ISU, BrSU, and SibFU) take a 2.5- or 3-year training programme encompassing a core curriculum and specialised tracks. These tracks include information security, web programming and software development, industrial automation and digitisation, network and server infrastructure, telecommunication systems, and ERP platforms. In the reporting year, the IT Academy was nominated for a WOW!HR award, a major international HR award. z Between 2013 and 2023, 265 individuals completed employer-sponsored training and were subsequently employed by En+ Group. Dedicated investments amounted to 14.6 RUB mn (171 USD thsd). z In 2023, the Company offered scholarships to 177 future steelworkers, energy workers, educators, and doctors. z Over the course of three years, 422 students have received scholarships. Dedicated investments amounted to 29.34 RUB mn (344 USD thsd). z Over the span of 15 years (2008–2023), En+ Group has trained and employed 727 graduates with degrees in energy. z In 2023, 62 students completed their training CTRC-based programmes. z Between 2021 and 2023, 550 individuals participated in the programme, with 226 individuals joining in 2023 alone. Upon finishing their studies, students are offered positions at En+ Group facilities: in spring 2023, 22 graduates of the first cohort were welcomed by the Group. Dedicated investments amounted to 105.7 RUB mn (1.2 USD mn). 1 Calculated based on the average USD/RUR exchange rate of 85.25 for 2023 144 145 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTPeople PROGRAMME DESCRIPTION RESULTS Initiatives implemented in 2023 as part of young talent support Young talent training PROGRAMME DESCRIPTION RESULTS Attracting students Professionals As part of the Moscow Urban Forum, En+ Group and the Federal Institute for the Development of Vocational Education and Training (FIDVET) forged a partnership agreement to advance the All-Russian Championship Movement Professionals. Energy Lab The annual grant programme inviting students to take part in production-related case studies was designed to search for innovative solutions for further implementation at En+ Group energy facilities. The project operates in the accelerator format, where students’ innovative solutions are curated and implemented by business experts and academic supervisors. The project is open to students from all over Russia. The winners receive grants of up to 400 RUB thsd (4.6 USD thsd)1 to implement ideas that help address real production challenges faced by En+ Group. The total grant fund for 2023 was 1,050 RUB thsd (12.3 USD thsd). z We plan joint projects to promote advanced workforce training standards, facilitate youth employment, foster a new operational culture, and enhance the significance of blue-collar jobs in Russia. z Over the course of six years, the programme has trained 1,101 students, with 321 participating in 2023. By that year, the programme had expanded nationwide, involving students from all federal districts of the country. DHTC-based Energy Lab scientific and experimental complex In 2023, the Divnogorsk Hydropower Technical College (DHTC) inaugurated its new scientific and experimental complex, the Energy Lab. It comprises two specialised classrooms equipped with state-of-the-art scale models of hydraulic turbine and generator units, complemented by training simulators designed to develop assembly skills. The virtual laboratory solutions installed on desktop PCs create an immersive experience, allowing students to feel like they are running tests in actual laboratory settings. z The project has been allocated over RUB 20 mn (USD 234.6 thsd)1 to support its implementation. Young talent training The reporting period saw the completion of the application process for the My Career 2.0 programme. Four out of the programme’s five stages have been successfully completed, and in the final stage, 30 individuals with the highest scores will be selected to join the Company’s talent pool. They will be provided with internship opportunities for their new positions and receive support in preparing for their target roles. Each year, programme finalists are rotated into vacant positions. 1 Calculated based on the average USD/RUR exchange rate of 85.25 for 2023 My Career 2.0 corporate development programme 146 146 En+ Group Leaders (Future Leaders) The En+ Group Leaders programme is a company- wide initiative focused on implementing key projects to unlock additional business benefits for the Company. The programme involves employees from the talent pool who have been selected through internal competitions and assessment processes and are willing to take on extra responsibilities and advance professionally and in their careers. As part of the programme, participants take training, implement strategic and local projects, and speak at conferences. z At the end of 2023, the number of participants was 100. Mentoring En+ Group is developing a single mentoring system, which will be supported by a draft company-wide regulation governing the shop-floor mentoring process. Mentors will take a remote dedicated course themed En+ Group Mentorship. z In 2023, a deep-dive into the existing mentorship system, including a benchmarking exercise, was used to inform a series of proposals to improve the current situation. Employee training Professional training The Company runs professional training programmes across 54 blue-collar professions, alongside various professional development programmes for managers and specialists. Additionally, simulation training is provided for CHP operational staff across boiler, turbine, and boiler-turbine shops. Subsidised higher education A subsidised higher education programme for En+ Group employees was launched in 2020. The programme covers the employee’s tuition costs from the second semester onwards, with the employee covering the expenses for the first semester themselves. The programme involves partner universities in all regions where En+ Group operates. z In 2023, 9,640 individuals received training in various areas2. z A total 303 employees from En+ Group’s eight CHPs completed simulation training. z A total 28 professional training programmes for blue-collar jobs were run, with 749 people completing the training. z In 2023, 19 En+ Group employees participated in the programme, bringing the total number of participants between 2020 and 2023 to 68 individuals. The programme was financed for a total of RUB 2.27 mn (USD 26.6 thsd). z In 2023, 20 students successfully completed the entire course, comprising four in-person modules and a final business game, with the programme hitting 100% of its scope target. 2 Including safe equipment operation in hazardous settings, occupational health, civil defence, Russia’s nationwide disaster management system, fire safety, traffic safety, blue-collar jobs, and professional development and retraining for engineers and technicians. 147 z Following the review process, 209 individuals were selected from a pool of 477 applications filed by En+ Group employees. Kommersant corporate development programme Dedicated talent pool development programme for employees of EuroSibEnergo Trading House. Duration of the programme is one year. STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTPeople Energized for action Professionalitet Professionalitet Federal Programme was launched by the Russian Ministry of Education in 2022 across 42 regions. Its key purpose is to implement an industry-driven workforce training model by integrating colleges and industrial enterprises (anchor employers) into clusters focused on the key sectors of the economy. The Group’s Power and Metals segments are actively involved in the programme as anchor employers across three clusters. cluster METALLURGY cluster ENERGY cluster IT 1,655 students were enrolled in the programme in 2022 and 2023 Specifically, in 2023: 250 people 667 people 100 people in the Metallurgy cluster in the Energy cluster in the IT cluster As part of the programme, the Company allocated RUB 279.2 mn (USD 3.2 mn)1 for the renovation of classrooms and laboratories and the construction of an additional academic building for students based in the Krasnodar Territory. Krasnodar Territory Digital Excellence Centre In September 2023, the Krasnodar Territory Digital Excellence Centre, an education and industrial hub focused on information technology (IT cluster), was established in Ust-Labinsk. It will focus on workforce training in the following areas: z computer systems and networks, training computer systems specialists z information systems and programming, training software engineers. The IT cluster is hosted by the Ust-Labinsk Social Pedagogical College, a state-budget education institution located in the Krasnodar Territory. In 2023, students were invited to enrol in the Information Systems and Programming tracks within the IT cluster. There were 910 applications for the 50 available government-funded places and 163 applications for the 50 places available through self-funding. Due the involvement in the federal project and the support offered by En+ Group’s partner company as part of the Proffesionalitet Federal Programme, the participating education institutions have received the following assistance: renovation of premises construction of a new academic building and overhaul of the dormitory and the existing academic building at the host college campus upgrades to education institutions’ facilities building and fitting-out specialised areas tailored to different types of tasks (such as laboratories, testing facilities, and production sections) development and alignment of the core education programmes’ structure for various specialties, including defining graduate competency models providing training through the professional development programme for regional management teams of education and production centres (clusters), faculty, and company employees Risk management HR management risks were deemed insignificant during the reporting year and, therefore, were not included in the En+ Group’s overall list of risks. In order to mitigate HR-related risks, the Group arranges employee training Metrics and targets Each year, the Group sets HR management targets. and development, in addition to offering a variety of social programmes for its people. For more details on risks, see the Internal Control and Risk Management section on page 200. GOALS STATUS PROGRESS made in 2023 z Conduct employee appraisals z Completed z Ensure high levels of qualification z On track among existing employees to match the specific hazardous production settings and raise requirements for mandatory knowledge and skills z In 2023, a total of 1,708 employees took the Web Expert tests. Power segment completed the goal. z The Company remains committed to advancing the skills and qualifications of its people z Hold events to bring high-potential employees into the Future Leaders programme z Completed z The programme was joined more than 280 employees z Develop a company-wide mentoring z On track system z A draft company-wide regulation governing the shop-floor mentoring process has been developed, and the dedicated remote learning course themed En+ Group Mentorship has been published on the UNIVER portal z Improve data collection on internal training by automating UNIVER portal processes z Completed z Training-related data collection through UNIVER has been automated z Increase the number of scholarship z Completed recipients employed or wishing to be employed by the Company z The number of scholarship recipients majoring in energy-related fields and employed by the Company has increased. In 2023, there were a total of 177 scholarship recipients 1 Calculated based on the average USD/RUR exchange rate of 85.25 for 2023 148 149 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTA joint project between the Power and Metals segments. People GRI 2-7, 401-1 SASB EM-MM-000 At the end of 2023, En+ Group’s headcount was 90,064, down by 6,553 year-on-year. The majority of employees are employed under full-time (98.9%) permanent (93.8%) employment contracts. The Company is also focused on promoting gender equality and is committed to achieving a gender-balanced workforce. Women account for 28.4 of the total workforce. During the reporting year, 13,190 employees were hired, 32.7% of whom were women, consistent with industry averages. The proportion of women on the Board of Directors of EN+ GROUP IPJSC stood at 33% in 2023. When recruiting for its facilities and units, the Company prioritises local hiring1.The proportion of locally hired managers stood at 98.2% in Russia and 60.7% in other countries in 2023. GRI 2-7 SASB EM-MM-OOO.B Total headcount as at the year-end5 En+ Group provides employment and professional development opportunities to people with special needs 2. In 2023, the average headcount of disabled employees was 900, comprising 1% of the total workforce. GRI 2-8 Workers who are not employees include contractors and subcontractors engaged under civil law contracts. They participate in construction and repair operations and contribute to technological developments, employee training, and marketing campaign planning. Employee turnover 3 during the reporting period was 12.8%, up 2.3 p.p. In 2023, labour costs totalled RUB 133.5 billion (USD 1,566 million)4. Expenses for social security of personnel amounted to 9.5 billion rubles (USD 111.4 mn). En+ Group contributes to improving the quality of life for its people and promotes their financial well-being. In November 2023, salaries for employees saw an average increase of 14%. The average salary in the Power segment was 84,728 rubles, in the Metals segment—103,491 rubles. In 2023, the female-to-male salary ratio in the Power segment was 0.95, compared to 1.3 in the Metals segment. The average basic salary of men at the Company is higher than that of women. This is because statutory restrictions prevent women from working in hazardous setting, where higher pay rates are offered. Average pay of En+ Group employees in Russia in 2023, RUB Metals segment Power segment GRI 405-2 Female-to-male basic salary ratio at Russian entities, 20237 Metals segment Power segment On average, across the segment Blue-collar employees Specialists Middle-level management Senior management 1.3 1.4 1.4 1.1 1.3 103,491 84,728 0.95 1.06 1.34 1.19 1.32 Metals segment Power segment GRI 405-1 57,100 59,463 57,933 2023 2022 2021 32,964 37,154 35,256 90,064 96,617 93,189 Gender diversity, 2023, % Employee breakdown by age, 2023, % Women Men Below 30 30–50 Over 50 Total workforce Blue-collar employees Specialists Middle-level management Senior management6 Board of Directors8 28.4 21.7 57.0 23.8 22.3 33 71.6 78.3 43.0 76.2 77.7 67 Total workforce Blue-collar employees Specialists Middle-level management Senior management Board of Directors 13.0 14.6 12.6 3.1 1.2 61.6 25.4 59.6 25.8 66.6 20.8 67.0 29.9 60.2 38.7 0 33 67 For more details on En+ Group employees, broken down by age groups, see the Additional ESG Data section on page 351. The geography-based definition of a local community includes the country of operation. 1 2 Pursuant to Federal Law On Social Protection of Disabled Persons in the Russian Federation and to fill quota-based positions with the required number of disabled employees, the Company enters into agreements with local branches of the All-Russian Society of Disabled People in its regions of operation. This allows Group facilities to meet their quota obligations through such agreements. In the Power segment, employee turnover is calculated as the number of employees who left during the reporting period (under Art. 77(1)(3) of the Labour Code of the Russian Federation) divided by the total headcount as of 31 December. In the Metals segment, employee turnover is calculated as the number of employees who left during the reporting period (irrespective of the reason or the article of the Labour Code of the Russian Federation) divided by the total headcount as of 31 December. 3 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. 4 Calculated based on the average USD/RUR exchange rate of 85.25 for 2023 5 6 Senior managers include a president, vice-presidents, directors of enterprises, production units and other functions, as well as their deputies. 7 8 Board of directiors of En+ Group without RUSAL The basic salary excludes any additional remuneration, such as payments for overtime or bonuses. 150 85 % 9.5 RUB bn The percentage of total employees covered by collective bargaining agreements remains stable En+ Group spent on employee welfare in 2023 USD 111.4 mn 151 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTPeople Contribution to local communities In order to gauge team morale and tension, the Company conducted an annual survey using online questionnaire forms. This helped establish employee engagement and job satisfaction levels. 2023 satisfaction and engagement survey results 58,654 Group employees participated in the survey 75.6 75.6 % 79.8 % Employee engagement level 9% higher than in 2019 Employee satisfaction level 9,1% higher than in 2019 67.8 67.8 Ensure the implementation of the Scholarship programme, facilitating employment at the Company or the conclusion of employer-sponsored training contracts with a minimum of 55% of scholarship recipients Continue the IT Academy educational programme through partnerships with IRNITU, ISU, BrSU, and SibFU to ensure that our needs for IT talent are covered 1 2 Run the Energy Lab acceleration project engaging at least 15 higher and secondary vocational education institutions Grow the En+ Group Leaders programme in accordance with the action plan Employee engagement and satisfaction levels, % Satisfaction Engagement 79.8 73.8 71.5 2023 2022 2021 PLANS FOR 2024 AND BEYOND As part of the Professionalitet project, ensure the implementation of the approved action plan, commence dedicated training programmes at the Irkutsk Energy College and the Ust-Labinsk Social Pedagogical College, and apply for the registration of a new Coal cluster for review 3 4 5 152 2024 INTERNAL REGULATIONS z Stakeholder Engagement Policy MATERIAL TOPICS z Community engagement z Social and cultural diversity and equal opportunities >5,000 employees participating in volunteer programmes Management RUB bn GRI 3-3 5.3 total social investments by En+ Group 62.3 USD mn En+ Group cares about the well-being of people living in the regions where it operates, contributing to addressing the social and economic challenges they may face. GRI 2-29 The primary document governing the Group’s efforts within its areas of responsibility is the Stakeholder Engagement Policy. The document formalises the core principles and procedures for liaising with government bodies, local communities, non-profit organisations (NPOs), and Company employees, who are also part of local communities. GRI 413-1 SASB EM-MM-210a.3 The Company’s social investment initiatives encompass developing social and urban infrastructure, providing accessible and high-quality education and healthcare, and promoting culture and sports. The Company identifies the focus areas for its social initiatives at the local level, aligning them with the voices and interests of the residents within its areas of responsibility. The Group conducts an annual social survey to identify local issues for subsequent development of programmes to address them. En+ Group also routinely hosts forums and meetings with local community members and actively engages local communities on the Company’s volunteer initiatives. 153 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People Sustainable Cities Responsibility Index En+ Group’s Power and Metals segments evaluate the performance of social projects using the Sustainable Cities Responsibility Index analytical tool. It provides a framework for a comprehensive assessment of the appeal our regions of operation have as a place to work and live, enables the identification of pressing issues, and helps set objectives for the development of local communities and robust engagement with municipal authorities. In 2023, the Index covered 42 cities and municipalities, with the respondent base exceeding 5,000 individuals from the regions where the Metals segment operates and over 2,500 people from the cities and municipalities within the Power segment’s footprint. Based on the survey findings, the Sharypovsky District of the Krasnoyarsk Territory, Nizhny Novgorod, and Krasnoyarsk emerged as Index leaders owing to their balanced development. These regions boast the highest quality of life and area improvements, including dimensions such as the availability of affordable housing, decent levels of income, diverse job opportunities in the labour market, and robust healthcare and education systems. The Index also facilitated the identification of areas for improvement specific to the surveyed locations. Specifically, the following issues were identified in the lagging cities and municipalities: unemployment stemming from limited career prospects; low accessibility and quality of medical services, education, and transportation; polluted air and water; frustration with municipal solid waste management; elevated public safety concerns; lack of infrastructure for leisure and recreation; and population outflow. Through identification of problem areas, En+ Group is able to better allocate community investments to improve living standards in its operating regions. By 2025, the Group intends to allocate 100% of its social investments in the regions of operation based on measurable metrics derived from the Sustainable Cities Responsibility Index methodology. GRI 203-2 En+ Group respects the rights of local communities and is committed to promoting their social and economic well-being. Thus, during the hiring process, local hiring is prioritised. Candidates from other regions are only considered if the skills and competencies matching the En+ Group’s requirements and standards are not available locally. Settlement Region Sharypovsky District Krasnoyarsk Territory Nizhny Novgorod Nizhny Novgorod Region Krasnoyarsk Krasnoyarsk Territory Sayansk Irkutsk Volgograd Irkutsk Region Irkutsk Region Volgograd Region Krasnoturyinsk Sverdlov Region Kandalaksha Sayanogorsk Murmansk Region Republic of Khakassia Boguchansk District Krasnoyarsk Territory Novokuznetsk Kemerovo Region Angarsk Ust-Ilimsk Irkutsk Region Irkutsk Region Kamensk-Uralsky Sverdlov Region Irbeyskoye Village Krasnoyarsk Territory Bratsk Shelekhov Irkutsk Region Irkutsk Region Tayozhny Settlement Krasnoyarsk Territory Divnogorsk Achinsk Cheremkhovo Severouralsk Chita Krasnoyarsk Territory Krasnoyarsk Territory Irkutsk Region Sverdlov Region Trans-Baikal Territory Cheremkhovsky District Irkutsk Region Tulun Irkutsk Region Zheleznogorsk-Ilimsky Irkutsk Region Kyzyl Baikalsk Ulan-Ude Tyva Republic Irkutsk Region Republic of Buryatia Nizhneudinsk Irkutsk Region Sorsk Taishet Belogorsk Algatuy Usolye-Sibirskoye Ziminsky district Nadvoitsy Krasny Chikoy Republic of Khakassia Irkutsk Region Kemerovo Region Irkutsk Region Irkutsk Region Irkutsk Region Republic of Karelia Trans-Baikal Territory ENVIRONMENT POTENTIAL VALUES t n e m n o r i v n e n a b r U s n o i t i d n o c g n i s u o H l a t n e m n o r i v n e s n o i t i d n o c l a c o L 56 73 65 82 47 36 66 50 26 38 49 58 15 61 24 28 36 43 54 38 54 26 33 36 39 20 24 n/a n/a 23 22 23 7 36 30 23 0 17 75 57 65 66 60 47 59 52 59 53 47 50 52 64 77 52 52 55 48 46 52 73 44 45 47 47 42 41 25 31 57 41 58 46 50 55 55 32 65 68 70 74 44 64 53 63 70 41 59 63 79 47 65 71 59 56 55 60 43 61 53 46 61 60 41 71 52 58 28 50 54 34 61 60 57 43 h t l a e H 67 59 58 50 66 59 50 50 49 64 56 51 49 40 50 45 57 45 45 47 63 43 53 36 57 53 58 62 n/a 57 46 57 51 n/a 37 45 36 43 n o i t a c u d E 61 50 47 52 27 52 61 64 54 51 43 43 61 51 45 43 42 40 47 62 33 51 43 59 44 51 39 53 17 34 40 28 28 33 37 45 35 66 k r o w t n e c e D 40 70 69 34 76 41 29 42 45 43 45 43 47 35 33 54 42 67 30 43 26 21 56 27 21 37 40 32 54 30 13 35 46 10 40 24 18 33 y t i l i b o M s t h g i r l i v i C 61 60 39 51 46 42 55 65 43 60 73 54 42 51 45 61 52 22 67 41 51 63 58 52 47 42 56 41 74 70 59 26 73 78 28 29 54 37 77 61 69 74 58 74 66 64 59 57 46 65 54 59 64 64 58 71 54 59 52 56 45 59 59 35 53 18 60 50 36 70 62 57 53 44 61 51 y t i n u m m o C 87 59 35 44 41 50 40 39 55 17 40 31 33 44 17 22 26 26 43 34 34 28 42 64 37 30 47 11 75 29 67 38 12 34 20 22 44 27 y t e f a s c i l b u P 59 72 61 64 54 54 70 49 63 69 47 60 58 60 50 65 62 64 47 58 52 79 48 42 31 55 41 22 57 21 47 43 54 54 41 13 27 17 e r u s i e l t n e c e D s e i t i n u t r o p p o 90 61 62 61 40 49 60 81 42 61 69 55 36 75 86 35 24 12 48 51 47 37 30 77 66 57 28 69 41 54 54 33 39 75 45 80 51 71 n o i t c a f s i t a S 41 74 63 70 45 68 70 41 45 54 51 56 45 66 50 53 51 59 78 44 59 49 33 66 50 37 41 43 22 67 69 43 10 69 48 30 53 23 e r o c s x e d n I l a t o T 64 62 58 55 54 53 53 52 52 52 51 50 50 50 49 49 48 48 48 48 47 47 47 47 46 46 46 45 44 44 44 43 43 42 40 40 40 39 154 Note: the score is from 0 to 100, where 0 is the lowest score, 100 is the highest score. 155 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People Strategy En+ Group social investment and project management structure GRI 2-13 Development of infrastructure and urban environment BOARD OF DIRECTORS, EN+ CEO GRI 203-1 En+ Group is focused on improving and developing the regions and cities where it operates. The Company is working on improving electricity supply and invests in projects to develop and improve urban areas, including through public-private partnerships (PPP) initiatives. In 2023, En+ Group, the Irkutsk Region government, and the Irkutsk Region Development Corporation signed an agreement to roll out the Regional Investment Standard. Infrastructure projects implemented in 2023 Project Objective Investments Outcomes DEPUTY CEO FOR PUBLIC RELATIONS COMMITTEES ON SOCIAL INVESTMENTS PUBLIC RELATIONS DIRECTORATE DEPARTMENT OF COMMUNICATION AND SOCIAL PROJECTS COMMITTEES ON SOCIAL PROJECTS AT ENTERPRISES - Directly engage with host communities; review queries and assistance requests - Develop recommendations on the social policy for committees - Approve social investments at the enterprise level Power segment Improving electricity supply Ensuring local residents have access to reliable and high-quality energy supply PPP projects Improving the Irkutsk Region infrastructure through project co-financing PUBLIC EXPERT COUNCIL ON SUSTAINABLE DEVELOPMENT BOARD OF DIRECTORS, METALS SEGMENT CEO Metals segment Public parks Improving public park areas RUB 482 mn (USD 5.6 mn) En+ Group delivered on its promise to open five new substations in Irkutsk and the Irkutsk and Shelekhov Districts. In 2023, thousands of customers benefitted from improved electricity supply En+ Group co-financed 46 PPP projects. A skate park was opened in Bratsk. Investments will help start the construction of over 25 public transport stops and improve 20 public spaces. Additionally, road sections, including pedestrian areas and lighting systems, will be repaired, and equipment for social infrastructure facilities will be provided The Troitsky Park renovation project was completed in Achinsk, with progress made on the renovation projects for the Central Park in Krasnoyarsk and the public park in Taishet SUSTAINABLE DEVELOPMENT DIRECTORATE Develops social investment strategy and priorities under the Sustainable Development Strategy SOCIAL POLICY COMMITTEE Approves the social investment strategy, priorities, and budget, as well as the content and scope of funding for social programmes and projects in each region of operation CENTRE FOR SOCIAL PROGRAMMES CORPORATE CHARITABLE FOUNDATION Carries out day-to-day management of charitable activities and social investments in the regions of operation Monitors and evaluates social projects Prepares proposals to improve existing programmes and develop new ones REGIONAL COMMITTEES ON SOCIAL INVESTMENTS COMMITTEES ON SOCIAL PROJECTS AT ENTERPRISES - Review charitable assistance requests received by enterprises - Make proposals on social investments in respective regions Environmental project grant competition In 2023, the competition was held for the fourth time. Bratsk joined the participating regions, and a new category, Baikal without Plastic, was added. A record 211 applications were received, with 21 projects eventually approved for support. A combined total of 21 offline and online events were delivered, including four training webinars attended by 355 people. The competition’s primary objectives include promoting the En+ Group brand as a socially oriented business, fostering loyalty among local residents across the Company’s footprint, and building local sustainable communities. Local communities cite the strong educational thrust of the competition and the dedicated, in-depth advisory support provided at every step of the competition. In 2023, a record nine eco-trail improvement projects were completed, five of which involved the construction of scenic and comfortable picnic areas. Appointments/instructions Review of resolutions, preparation of recommendations / implementation of resolutions 156 156 157 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTPeople Support for environmental projects GRI 203-2, 413-1 En+ Group strives to both mitigate the environmental impact of its operations and implement environmental protection initiatives through volunteer engagement and partnerships with non-profits and national parks. Initiative participants contribute to maintaining the natural state of nature reserves, restoring eco- trails, collecting and sorting waste, and planting trees. En+ Group engages with NPOs, activists, and local communities to organise annual environmental, scientific, and educational events. In partnership with Pribaykalsky National Park and Krasnoyarsk Pillars National Park, the Company facilitates educational programmes focused on environmental conservation. Environmental projects implemented in 2023 Project Objective Investments Outcomes Power segment Environmental project grant competition Preserving aquatic ecosystems and biodiversity and maintaining the ecological balance of natural areas within En+ Group’s areas of responsibility Ecological and educational volunteer camps Promoting a sense of environmental responsibility among employees and their children RUB 1 mn (USD 11.7 thsd) Winners were selected across the competition’s six categories, including Local Initiatives, Pooling Resources, Sharing Expertise, Science and Practice, and Sustainability Commitment. Grants of up to 600 RUB thsd (7 USD thsd)1 were awarded to 21 projects out of a record 211 applications received. In collaboration with the Krasnoyarsk Pillars National Park, En+ Group held various events for Krasnoyarsk HPP employees and their children, including children’s environmental and educational trips, children’s environmental holidays, and family environmental and educational outings. A total of 55 people participated in the programme. Metals segment River Day Marathon annual environmental initiative Cleaning the banks of rivers and other water bodies within areas of responsibility A total of 37 tonnes of waste were collected, sorted, and properly disposed of. Green Wave traditional environmental initiative Running urban greening initiatives selected based on the findings of the Sustainable Cities Responsibility Index study Over 1,240 individuals from 18 cities participated in the event. Project 360 environmental volunteer initiative Energized for action Project 360 environmental volunteer initiative is an integral part of En+ Group’s comprehensive programme World with a Plus Sign focused on protecting Lake Baikal and protected areas from negative environmental impacts. The Project’s history dates back to 2011 when 100 employee volunteers gathered together to clean up the shores of Lake Baikal. The project’s reach and geographical coverage have expanded significantly since launch. OVER THE PAST 13 YEARS: > 158 thsd people 4,669 t of waste became environmental volunteers was collected and properly disposed of in various regions of Russia thousands of volunteers, hundreds of organisations, and dozens of municipalities joined the movement Aside from annual large-scale clean-ups, Project 360 volunteers are engaged in installing eco-trails, planting trees, improving tourist infrastructure, and maintaining protected areas. THE PROJECT IS RUN IN THREE DIFFERENT FORMATS 1 2 3 Environmental campaigns in host cities – Irkutsk, Bratsk, Ust-Ilimsk, Divnogorsk, Miass, and Nizhny Novgorod. In 2022 and 2023, the campaign was also run in Severobaykalsk, Ulan-Ude, and Krasnyj Chikoj In the reporting year, it took place for the first time in Tulun and Cheremkhovo An online marathon for those seeking to adopt eco-friendly lifestyle. The traditional clean-up at Lake Baikal, supported by En+ Group, involves municipalities situated in close vicinity to the lake in the Irkutsk Region and the Republic of Buryatia. PROJECT 360 RESULTS IN 2023 6,037 participants 2,080 participants 1,713 residents 100,746 kg including 2,244 participants across 11 En+ Group host cities (Irkutsk, Bratsk, Ust- Ilimsk, Divnogorsk, Miass, Nizhny Novgorod, Ulan-Ude, Severobaykalsk, Krasnyj Chikoj, Tulun, and Cheremkhovo) joined the online marathon designed for individuals seeking to adopt eco-friendly lifestyle the traditional clean-up event at Baikal brought together in the Irkutsk Region and the Republic of Buryatia The total amount of litter collected and sorted stood 1 Calculated based on the average USD/RUR exchange rate of 85.25 for 2023 158 159159 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT People Support for education GRI 203-2 One of En+ Group’s social policy priorities is promoting education in its operating regions as well as ensuring its accessibility and quality. The Company strives to enhance the skills and competencies of both its employees and future young talent, including students from schools, secondary specialised colleges, and universities. En+ Group’s investments in education are made through various projects, including the Energy Lab and IT Academy for additional professional training as well as through olympiads and scholarships awarded to talented school and university students. In addition, the Company offers targeted support to educational institutions and actively participates in forums and career fairs. Energy in Every Drop As part of an umbrella programme to promote education across En+ Group’s operating regions, the Company developed an educational and methodological course themed Energy in Every Drop. It uses robotics kits to introduce students from grades 5 to 9 to the basic principles of hydropower plant operation. The project aims to present the job of a power engineer in an engaging educational format, highlighting its significance for the operation of production and social infrastructure facilities and thus spark an interest in students to pursue careers in this field. The programme participants are invited to take part in training sessions, workshops, educational games, project-based courses, and robotics competitions. At the end of 2023, the programme had over 180 registered participants, including educational institutions from 38 regions across Russia and cities such as Irkutsk, Bratsk, Ust-Ilimsk, Divnogorsk, Krasnoyarsk, Nizhny Novgorod, and Miass. 2023 HIGHLIGHTS 60 teachers and school students from 18 cities across Russia received training as part of the project’s second education camp held on the shores of Lake Baikal Each participating teacher received a state-approved certificate of profession- al development confirming completion of the programme developed specifically for the camp A special hybrid webinar was organised to train teachers who could not attend Educational projects implemented in 2023 Project Objective Investments Outcomes Power segment Energy School and Energy Classes The Company offers career guidance for school students and free tutoring for the Unified State Examinations for admission to Siberian universities, focusing mainly on specialties required in the energy sector RUB 6.727 mn (USD 78.9 thsd)1 A total of 1,293 individuals (1,171 students, 63 teachers, and 59 parents) have registered on the Energy School’s portal. Multilabs Establishing state-of-the-art centres for building and enhancing competencies in robotics, electronics, engineering design, and multimedia Over RUB 83.9 mn (USD 984 thsd) over 2022–2023 RoboSib robotics festival Promoting robotics among young inventors aged 4 to 18 nationwide RUB 23.2 mn (USD 272 thsd) Retiree course Assisting older people with navigating online services Metals segment RUSAL FestivAL#Science 2023 Unlocking the potential of school students in En+ Group’s operating regions Over 100 schools in the Irkutsk Region are participating in the project. Between 2015 and 2023, a total of 379 people graduated from the Energy Classes programme, with 40 school students participating in the programme in 2023. En+ Group continued to implement its Multilab En+ project, hosting its second competition in 2023 and opening competency building centres in Bratsk, Angarsk, and Nizhny Novgorod. In total the Company has unveiled seven multimedia classrooms. Scale: z 700 participants z 86 teams, with 52 achieving success as winners or runners-up across various categories z 4,000 attendees over the two days of the festival Ten teams received vouchers totalling 100,000 RUB thsd (1,200 USD) for purchasing robotics equipment, while seven teams were awarded with trips to the All-Russian finals of the FIRST ROBOTICS CHAMPIONSHIP— Yekaterinburg 4.0. As part of the event, 130 teachers from the Irkutsk Region attended workshops on new AVRORA Robotics solutions. A record number of retirees in the Irkutsk Region enrolled in the Granny Online course offered by Irkutskenergosbyt as part of the city’s Active Ageing project, with nearly 700 participants. Platforms were set up for assembling quadcopters, testing augmented reality technologies, and other activities. Participants: school students from 13 cities. 160 161 1 Calculated based on the average USD/RUR exchange rate of 85.25 for 2023 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTPeople Support for sports and healthy lifestyle En+ Group strongly promotes healthy lifestyles among its employees, their families, and local communities. The Company invests in both amateur and professional sports development, provides financial support to professional sports teams, and implements sports infrastructure projects. Get on Your Skis In 2023, our large-scale sports project Get on Your Skis celebrated its 7th birthday. Since 2016, En+ Group, with the support of the Russian Ski Racing Federation, has been developing and promoting ski racing as one of the most accessible sports. In terms of geography, the project covers the Komi and Khakassia Republics, Krasnoyarsk Territory, and the Irkutsk and Kemerovo Regions. Local residents from the Nizhny Novgorod, Sverdlovsk, Chelyabinsk, Sakhalin, and Novosibirsk Regions, Perm and Primorye Territories, as well as the Republic of Sakha (Yakutia). Sports and healthy lifestyle promotion projects implemented in 2023 Project Objective Outcomes Sokol martial arts centres Supporting the development of martial arts in the operating regions, enhancing the quality of life in small towns by providing beneficial recreational opportunities to children and young adults Investments were directed towards constructing and expanding martial arts centres (MAC). At the end of 2023, there were three centres in operation, there are plans to open an additional 7 MAC. THE PROJECT IS RUN ACROSS FIVE MAIN AREAS 1 2 3 GET ON YOUR SKIS CHAMPIONSHIP The annual cross-country ski championships are open to athletes aged between 13 and 16. The championship is divided into three stages—two preliminary rounds followed by the final—and attracts over 1,500 participants annually. In 2023, the championship final took place in Krasnoyarsk. 350 athletes from 14 regions > 500 thsd people viewers tuned in to watch the live broadcasts of the competitions GET ON YOUR SKIS FESTIVAL The festival is held annually in different cities of Russia and is open to all individuals. During the 2022–2023 ski season, over 10,000 people from 23 cities participated in the festival. They were offered contests, mass ski races, and entertainment programmes for children and adults. thsd people > 10 from 23 cities participated in the festival SCHOOL PROJECT SKIING AT SCHOOL The initiative was launched in 2022 in Angarsk, Irkutsk Region, and Divnogorsk, Krasnoyarsk Region. In line with its purpose, local schools have integrated compulsory physical education ski classes into their curricula. These lessons are hosted by certified coaches on prepared ski tracks, with bus transportation provided to school students. Between 2022 and 2023, 625 ski sets, two snowmobiles, and six drying units were acquired. Over 5,500 school students are participating in the project. 4 5 BEST SKI COACH OF THE YEAR COMPETITION DEVELOPMENT OF SKI INFRASTRUCTURE Since 2019, the competition has been held annually to recognise the top children’s and youth cross-country ski coaches. The winners receive a monthly stipend for the season, ski equipment, and access to career enhancement courses. In 2022–2023, the competition expanded nationwide, covering 25 regions of the country selected based on performance in the previous season. To create comfortable conditions for ski racing, En+ Group constructs and renovates ski tracks and facilities and supplies equipment for their maintenance. In recent years, the ski facilities at the Divnogorsk Technical College of Forest Technologies have been revamped. RUB 35 mn the total investment reached 410.5 USD thsd 162 163163 HEALTHY LIFESTYLESTRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTA joint project between the Power and Metals segmentsPeople Promoting culture To promote culture across its footprint, En+ Group supports external cultural events, runs its own initiatives, and allocates funds towards the development of cultural and artistic institutions. In 2023, the Group continued its support for the Baikal Dance Festival by acting as a partner of the event. Guests and participants of the festival were treated to the exclusive Ballet on Baikal: Buryatia programme that took place in the Peski special economic zone in the Pribaykalsky District. Aside from its cultural dimension, the event’s key goal is to raise public awareness about the imperative need to conserve and safeguard Lake Baikal’s unique natural treasures. Volunteering Integral to En+ Group’s social policy and community engagement is the active involvement of volunteers, including both employees and non-employees, in social and environmental initiatives. With this in mind, En+ Group is strongly focused on fostering a culture of volunteering and engaging people on addressing the social challenges our regions face. The Metals segment runs volunteer initiatives as part of the Helping is Easy programme, which introduces technologies to involve local communities in social-impact activities. Volunteer projects implemented in 2023 Project Objective Outcomes Power segment World With a Plus Sign Protecting Lake Baikal and protected areas from negative environmental impacts Key outcomes of the World with a Plus Sign programme so far include: z as part of the environmental project grant competition, the programme successfully implemented 81 initiatives, providing training to 1,700 activists. Additionally, over 100 environmental events and 13 scientific expeditions were organised z a remarkable 158,000 volunteers participated in the Project 360 initiative z in collaboration with NPOs, we installed 12 km of eco-trails and collected over three tonnes of clothes for those in need Metals segment Helping is Easy programme Promoting corporate and community volunteer initiatives A sociological survey was conducted to determine employee attitudes towards volunteering and the recognisability of the Company's social projects. 691 people took part in the survey. Charity The Company supports local communities in its operating regions through targeted assistance to those in need. En+ Group’s charitable efforts target the most vulnerable segments of the population, including adults and children with special needs, orphaned children, and low-income families. The Metals segment provides charitable assistance across all countries where it operates. As an illustration, in 2023, the Company offered aid to victims of the explosion at an oil terminal in Conakry, Guinea. Medical supplies and personal protective equipment for healthcare workers were supplied to local hospitals. The World with a Plus Sign programme won the People Are Key award In 2023, En+ Group’s efforts were recognised with an award at the People Are Key All-Russian Corporate Projects Competition. The judging panel praised the World with a Plus Sign initiative as one of the best ESG and CSR projects, awarding it the Natural Heritage Conservation Award. 164 165 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTPeople Risk management En+ Group’s current list of key risks does not include risks associated with the impact of its operations on local communities. Potential risks may involve violations of the rights of local communities resulting from the Company’s operations. To mitigate these risks, En+ Group regularly organises forums and meetings with local communities to discuss its projects and works to develop feedback mechanisms. Metrics and targets For more details on risks, see the Internal Control and Risk Management section on page 200. EVERY YEAR, EN+ GROUP SETS OBJECTIVES FOR COMMUNITY INVESTMENTS AND ENGAGEMENT GOALS STATUS PROGRESS made in 2023 z Expand social initiatives and z Achieved z The Group implemented Social investments in 2023 Educational projects Culture Development of infrastructure and urban environment Volunteering Sports Healthcare Developmant of NGOs and local communities Social support Environment and animal protection Other 3.9% 0.1% 4.1% 37.2% USD 62.3 mn 7.5% 8% 14.9% 1.5% 0.7% 22.1% When implementing projects to support local communities, En+ Group prioritises those that promote and support social initiatives and programmes contributing to long-term goals. Project funding is allocated by the Company through a transparent and competitive process, ensuring equal opportunities for all participants and beneficiaries of the programmes. engagement with stakeholders, including fostering robust dialogue with youth and work councils and partnering with NGOs and national parks z Develop innovative tools to engage local community members through workshops, task-based activities, games, etc. infrastructure projects through partnerships with local authorities, environmental projects in partnership with national parks, and social initiatives through partnerships with NPOs PLANS FOR 2024 AND BEYOND z Achieved z The Group implemented environmental volunteer projects, engaging communities in its operating regions through interactive events and innovative communication channels, including chatbots z The Metals segment opened several new martial arts centres in host cities z A new skate park was opened z Commission several sports z Achieved infrastructure facilities, including a football pitch and a multi-use track for bicycles, kickscooters, and skateboards z Expand the volunteer movement z Achieved z Over 5,000 volunteers participated in our initiatives z Align 100% of community z On track z The methodology investments with the Sustainable Cities Responsibility Index methodology as part of the Metals segment’s transformational project of the Local Community Life Quality and Sustainable Development Index has been incorporated into the Company’s system for assessing, planning, and implementing social investments 166 Implement projects in accordance with the Sustainable Cities Responsibility Index 1 Continue with the Energy School and Energy Classes projects while expanding the participant base Develop digital technology programmes tailored for school and university student Continue holding the Energy Lab competition to source promising innovations for integration into En+ Group’s operations and to ensure the implementation of at least three finalist solutions 2 3 4 2024 167 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGovernance Corporate governance INTERNAL REGULATIONS z Regulations on the Board of Directors z Corporate Code of Ethics z Board of Directors Diversity Policy MATERIAL TOPIC z Corporate governance 8 out of 12 directors are independent and non-executive 12 directiors on the Board1 6 Board committees All Board committees are chaired by independent non-executive directors GOALS STATUS PROGRESS made in 2023 z To conduct self-evaluation and z On track independent evaluation of the Board of Directors, its members, and committees in order to assess the Board’s performance z To arrange for professional advanced training of Board members, which was cancelled or postponed due to the COVID-19 pandemic and the geopolitical situation z On track z Independent evaluation of the Board’s performance in 2023 was conducted z The planned training session on sanctions compliance was conducted in October 2023 as part of an off-site strategy session GRI 3-3 The Company is committed to high standards of corporate governance. The Group intends to further improve its performance in this area and to adhere to internationally recognised standards of corporate governance, transparency, disclosure, and accountability applicable to listed companies. The Company overhauled its corporate governance practices after OFAC imposed sanctions on the Company and its subsidiaries on 6 April 2018 and subsequently lifted them on 27 January 2019. With these amendments, the Company has proven its commitment to stringent international standards of corporate governance. In accordance with the Barker Plan 2 and the conditions for removing the Company from OFAC’s Specially Designated Nationals List (SDN List), on 28 January 2019, the Company announced the immediate appointment of seven new independent non-executive directors. On 8 February 2019, Lord Barker was appointed Executive Chairman of the Board and Christopher Burnham was appointed Senior Independent Director. Lord Barker’s appointment came with additional powers and responsibilities designed to enhance the control exercised by the Board over the corporate governance systems and procedures in place at the Company. The appointment was meant to further increase collaboration between the Board and management to drive the Company’s continued success. As an international company 3, En+ Group aims to comply with the recommendations of the Russian Corporate Governance Code insofar as appropriate and practicable in the Group’s context. In corporate governance, the Company is also guided by the Listing Rules of Moscow Exchange. As a company incorporated in Russia, with GDRs listed on the Official List of the UK Financial Conduct Authority and admitted to trading on the Main Market of the London Stock Exchange 4,the Company is not required to comply with the provisions of the UK Corporate Governance Code. The Company has nonetheless chosen to comply with the UK Corporate Governance Code insofar as appropriate and practicable in the Group’s context. We consider the following corporate governance principles to be fundamental to our operations: Compliance with the recommendations and principles of the Bank of Russia’s Corporate Governance Code Transparency Open and clear decision making Fully complied with Not complied with Partially complied with Not applicable Legal compliance, including clear and robust compliance with requirements for the Company to be and remain clear from OFAC’s sanctions Ongoing growth in the Company’s value for the benefit of all stakeholders 2023 2022 2021 56 53 18 14 20 5 1 47 22 9 1 For more details on compliance with the recommendations and principles of the Corporate Governance Code, see Appendix No. 1. 1 As at the date of this Report. 168 2 Lord Barker’s plan for lifting OFAC’s sanctions from the Company was announced on 27 April 2018 and subsequently approved by the Board of Directors on 18 May 2018. The plan envisaged reducing Mr. Deripaska’s shareholding to below 50% and appointing a number of new Directors so that the majority of new directors on the Board were independent. Further details of the Barker Plan were disclosed, in particular, in the Company’s Annual Report 2018, available on the Company’s website at https://enplusgroup.com/en/investors/results-and-disclosure/annual-reports/. 3 As defined by Federal Law No. 290-FZ On International Companies and International Funds dated 3 August 2018. 4 Trading in the Company’s global depository receipts on the Main Market of the London Stock Exchange was suspended on 3 March 2022. 169 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023 GOVERNANCE CHANGES IN 2023 3 April 2023 James Schwab was elected to the Board. 29 June 2023 The Annual General Shareholders Meeting re-elected all Board members except for Elena Nesvetaeva and Timur Valiev and elected Anastasia Gorbatova and Andrey Plugar. Governance Maintaining high standards of corporate governance is key to attracting new investment, strengthening the Group’s competitive position, and boosting shareholder value. Good governance is based on the clarity of roles and responsibilities, and the Company aims to ensure that its governance procedures are applied at all levels of decision making across the Group. The Company’s corporate governance system outlines the relationship between the Company’s shareholders, the Board, and the CEO, as well as the roles and responsibilities of the Board committees. The Company’s Board of Directors is responsible to all of the Group’s stakeholders for the strategic management of the Company. The day-to-day management of the Company falls within the remit of the CEO1. However, the Board retains responsibility for the approval of certain matters which affect the nature and profile of the Company’s risks (see details below). In 2023, the Company did not record any: GRI 2-27 z instances of unethical behaviour of Board members or the CEO GRI 2-15 z conflicts of interest involving Board members or the CEO Corporate governance structure GRI 2-9, 2-13 The Company’s corporate governance structure includes the following key elements: 1. General 2. Board of Directors 3. CEO—sole Shareholders Meeting executive body Auditor’s report on the Company’s financial statements RAS EXTERNAL AUDITOR GENERAL SHAREHOLDERS MEETING CORPORATE SECRETARY Approval Support for activities Authorisation of appointment Reliable, unbiased, and complete information on the Company’s activities Election BOARD OF DIRECTORS DIRECTOR OF THE INTERNAL AUDIT DIRECTORATE Accountability Appointment Implementation of resolutions Appointment CEO t n e m t n o p p A i BOARD COMMITTEES AUDIT AND RISK COMMITTEE CORPORATE GOVERNANCE COMMITTEE REMUNERATION COMMITTEE NOMINATIONS COMMITTEE COMPLIANCE COMMITTEE HEALTH, SAFETY, AND ENVIRONMENT COMMITTEE s n o i t a d n e m m o c e r d n a s r e t t a m i f o w e v e r y r a n m e r P i l i 1 The Charter contains the term “General Director”, which is used interchangeably with the term “CEO” in public disclosures made by the Company. 170 171 Appointments/instructions Review of resolutions, preparation of recommendations / implementation of resolutions STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023 Governance General Shareholders Meeting Report on meetings held during the year The General Shareholders Meeting (the “GSM”) is the highest governance body of the Company. The Charter details the matters that fall within the remit of the GSM. Resolutions of the GSM may be adopted either by holding a meeting in person or by absentee voting. In 2023, the Annual GSM of the Company was held on 29 June by absentee voting, attended by shareholders holding 84.4105% of votes between them. If the agenda of a GSM includes matters relating to the election of the Board of Directors, approval of the Company’s auditor for the accounting (financial) statements prepared in accordance with Russian Accounting Standards (RAS), or approval of the Company’s Annual Report and annual accounting (financial) statements, it may only be held in person. However, due to the COVID-19 pandemic, from 2021 to 2024, Russian joint stock companies were allowed 1 to hold GSMs with the above- mentioned agenda items by absentee voting. An Extraordinary GSM may be held based on a resolution of the Board either adopted on its own initiative or at the request of a shareholder (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 (shareholders) holding no less than 10% of voting shares in the Company shall be held within 50 days of the date of the request to convene the extraordinary GSM. Information (materials) to be provided to persons entitled to attend the GSM should be made available no later than 20 days before the GSM, and if the GSM agenda includes a proposed reorganisation of the Company, no later than 30 days before the GSM. 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. Voting at a GSM is conducted on the basis of the “one share, one vote” principle. Resolutions 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 a special resolution (i.e. voting by a 2/3 majority), including: z amendments and additions to the Charter or approval of the restated Charter z change in the Company’s status to non-public or obtaining public status z reorganisation of the Company by way of merger, consolidation, spin-off, or transformation z liquidation of the Company z split, conversion, or consolidation of Company shares z acquisition by the Company of outstanding shares z increase or reduction in the Company’s share capital. The GSM is quorate if attended by shareholders holding in aggregate more than 50% of outstanding voting shares in the Company. If a quorum required for holding an Annual GSM is not met, the GSM shall be reconvened at a later date with the same agenda. If a quorum required for holding an Extraordinary GSM is not met, the GSM may be reconvened at a later date with the same agenda. A reconvened GSM is quorate if attended by shareholders holding in aggregate no less than 30% of outstanding voting shares in the Company. Annual GSM The Annual GSM must be convened by the Board of Directors between 1 March and 30 June of each year, with the following agenda items: z The election of Board members z The approval of the Company’s auditor for the accounting (financial) statements prepared in accordance with RAS z The approval of the Company’s Annual Report z The approval of the Company’s annual accounting (financial) statements z The distribution of profits, including the payment (declaration) of dividends, except for the payment (announcement) of interim dividends The Annual GSM considered and passed the following resolutions: 1. To approve the Company’s 4. To elect the Company’s 5. To approve Centre for Audit Consolidated Annual Report 2022 2. To approve the Company’s annual accounting (financial) statements for 2022 3. Not to distribute the Company’s net profit for 2022 and not to pay dividends on shares for 2022 Board of Directors, consisting of 12 members, from the list of candidates approved by the Board: Technologies and Solutions—Audit Services as the Company’s auditor for the accounting (financial) statements prepared in accordance with Russian accounting legislation. Christopher Burnham Lyudmila Galenskaya Vadim Geraskin Anastasia Gorbatova Thurgood Marshall Jr. Andrey Plugar J. W. Rayder Olga Filina Zhanna Fokina Andrey Sharonov James Schwab Andrey Yanovsky 1 In accordance with Federal Law No. 17-FZ dated 24 February 2021, Federal Law No. 25-FZ dated 25 February 2022, Federal Law No. 519-FZ dated 19 December 2022, and Federal Law No. 625-FZ dated 25 December 2023. 172 173 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance 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. BOARD RESPONSIBILITIES BOARD COMPOSITION AND ATTENDANCE AT MEETINGS The matters specifically reserved for the Board under the Charter include, inter alia, the following: 1. Determination of the priority areas for the Company’s activities 2. Approval of the Company’s long-term strategy and objectives, as well as its overall management mechanism 3. Day-to-day control over the implementation of the Company’s long-term strategy and objectives 4. Approval of consolidated annual budgets and material amendments thereto 5. Control over the Company’s core business, regular evaluation of the Company’s performance in the context of its long-term strategy and objectives, and discharge of obligations contemplated by law and the Charter 6. Convening of Annual and Extraordinary GSMs 7. Establishment and termination of committees, commissions, councils, and other structural units of the Board of Directors, approval of their personnel composition and regulations governing their activities 8. Approval of the Company’s internal documents (or making amendments or additions thereto) on environmental protection, insurance, and risk management for the Company 9. Approval of the Company’s dividend policy 10. Approval of certain transactions with a value exceeding 75 USD mn 11. Approval of share incentive plans and schemes for Company employees, as well as annual KPIs for the CEO 12. Approval of the Company’s auditors (for financial statements prepared in accordance with IFRS or other internationally recognised rules) 13. Approval of the Company’s register holder 14. Appointment of the Company’s sole executive body (the CEO) The Board of Directors has taken steps to ensure that Board members (in particular, non-executive directors) develop a better understanding of major shareholders’ views on the Company. Directors, including the Chairman, have direct face-to-face contact with shareholders at regular investor meetings. As at 31 December 2023, the Board consisted of 12 directors, including eight independent non-executive directors, one of them being the Chairman of the Board, and four non-executive directors. As at the date of this Report, the composition of the Board remains the same. The high level of professionalism and solid track record of the Directors, coupled with a balanced Board composition, are intended to enhance the Board’s performance. GRI 2-10 The Nominations Committee proposes candidates to the Board of Directors based on various factors, such as independence, cultural and individual diversity, age, impeccable reputation, skills, qualifications, personal experience, knowledge of the Company’s core businesses and business specifics, and willingness to devote sufficient time to discharging their duties as a Board member, with account of the existing composition, succession planning, and the needs of the Board and its committees. The directors’ job descriptions are drafted based on these criteria. Independent directors help put together an objective view of the Company’s business and the strength of its strategy, provide constructive challenge, and bring to the Board and management an unbiased perspective on the state of risk management and internal controls, management’s performance, as well as the strength of the Company’s financial model and policies. SUSTAINABILITY BIOGRAPHICAL DETAILS OF THE DIRECTORS AS AT THE DATE OF THIS REPORT Full biographies are available on the Company’s website at enplusgroup.com/en/company/ corporate-governance/ board-of-directors/ Committee chair A Audit and Risk Committee C Compliance Committee G Corporate Governance Committee R Remuneration Committee H Health, Safety, and Environment Committee N Nominations Committee A THE HON. CHRISTOPHER BURNHAM GRI 2-11 Chairman of the Board, Independent Non-Executive Director Appointed: 27 January 2019 Appointed as Chairman of the Board: 25 March 2022 Christopher has a distinguished career in government, diplomacy, banking, and private equity. He is a globally recognised expert on reporting and transparency, having served as UN Under-Secretary- General for Management, Under Secretary of State for Management (acting), Assistant Secretary of State for Resource Management, and CFO of the US Department of State. Christopher serves as Chairman of the Board of Directors and CEO at Cambridge Global Capital, which he co-founded. He is the former Vice Chairman and Managing Director of Deutsche Asset Management. He completed Georgetown’s National Security Studies Programme and graduated from Washington and Lee University and Harvard University, where he earned an MPA in 1990. C R OLGA FILINA Non-Executive Director Appointed: 15 December 2021 H G N ZHANNA FOKINA Independent Non-Executive Director Appointed: 26 May 2021 Olga has over 15 years of experience in internal control and compliance (including senior positions at Deloitte and KPMG). Her primary areas of focus include complex fraud investigations, corruption investigations (including financial investigations and audits for compliance with the US Foreign Corrupt Practices Act (FCPA)), setting up and testing compliance functions, hotline outsourcing and support, and managing internal audit and internal control projects. Before joining RUSAL, she worked at Rosprirodnadzor (Federal Service for Supervision of Natural Resources) and in the pharmaceutical industry. In 2009, she graduated from Siberian Federal University. Zhanna has an extensive track record in environmental regulatory and supervisory authorities. Currently, she leads the environment department at RUSAL Krasnoyarsk. Zhanna is in charge of preparing and approving environmental reports, arranging for environmental monitoring, overseeing the execution of environmental initiatives, as well as supporting and conducting government environmental supervision activities. 174 175 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance H N C LYUDMILA GALENSKAYA Independent Non-Executive Director Appointed: 18 May 2022 H R VADIM GERASKIN Non-Executive Director Appointed: 8 February 2019 C G ANASTASIA GORBATOVA Non-Executive Director Appointed: 29 June 2023 C R H THURGOOD MARSHALL JR. Independent Non-Executive Director Appointed: 26 May 2021 Lyudmila started her career at Angarsk Polymer Plant, leading a team of 150 people. After she moved from Angarsk to Irkutsk, she secured a new job at Irkutskenergo. Currently, Lyudmila is responsible for ecology and environmental protection as the Head of the Environmental Safety and Rational Use of Natural Resources Service at Baikal Energy Company. She supports all of the company’s environmental activities, engages with government authorities, and communicates with the entire company and all its branches. She ensures that the public is informed about the company’s environmental efforts and participates in environmental events and discussions. She engages with the media on environmental matters and actively shares experience with all environmental safety teams within the Group. She is open to new ideas and participates in developing new projects and bringing them to life. Vadim has extensive experience in government relations at the national as well as regional level. Since September 2012, as the Deputy CEO for Government Relations at Basic Element, he has been heavily involved in promoting the company’s socioeconomic development programmes in the regions where it operates. Vadim led RUSAL’s Natural Monopolies Administration for eight years before joining Basic Element, and prior to that he headed up RUSAL’s Transport and Logistics Administration and Transport Department. From 1997 to 2000, he served as CEO of Zarubezhcontract, a company focused on the non-ferrous metals market. From 1993 to 1997, he worked for AluminProduct. Vadim graduated from Lomonosov Moscow State University with a degree in Physics. She graduated with honours from the International Law School of the Moscow State Institute of International Relations (MGIMO University). Anastasia has a remarkable track record with leading law firms, having acted as an adviser to major Russian and international companies on multi-billion- dollar M&A, EPC, and corporate finance deals, as well as capital markets transactions. Anastasia served on the Board of Directors of EN+ GROUP IPJSC as a non-executive director from 2019 to 2021 and is currently engaged in private legal practice. Тhurgood has extensive experience at the intersection of law, business and politics. Throughout his career, Thurgood has served as a partner at an international law firm, was a member of boards of listed companies, and held a wide range of positions in the US Government, including Staff Director and Chief Counsel to Senator Al Gore, Director of Legislative Affairs and Deputy Counsel to Vice President Al Gore. Thurgood also practiced law in Washington, DC, where he completed his judicial clerkship. He earned his Bachelor of Arts (BA) in 1978 and a Juris Doctor (JD) degree in 1981 from the University of Virginia. C ANDREY PLUGAR Non-Executive Director Appointed: 29 June 2023 A C R J. W. RAYDER Independent Non-Executive Director Appointed: 25 May 2022 N G A JAMES SCHWAB Independent Non-Executive Director Appointed: 3 April 2023 G A N ANDREY SHARONOV Independent Non-Executive Director Appointed: 27 January 2019 Andrey has extensive experience in international law and providing legal advice on M&A transactions. He has led investment (M&A) and legal departments at major Russian companies with diversified asset portfolios. Andrey graduated from the International Law School of the Moscow State Institute of International Relations (MGIMO University). He has a diploma of international lawyer with knowledge of foreign languages (English, French). He currently heads the investment department at Impulse Group, where he manages investment projects and is responsible for M&A transactions. He graduated from University of Arkansas (BSBA in Accounting, JD) and Georgetown University Law Center (LL. M). J. W. Rayder has been involved in or led significant corporate restructuring projects, financings and M&A deals; he also has a solid track record in negotiating numerous power and natural gas supply contracts on behalf of his clients. He also advises clients on a myriad of legislative, regulatory and transactional matters related to energy markets and federal taxation. James has 30 years of general management and private equity experience across a variety of industries, including logistics, the paper and forest industry, telecommunications, government, etc. He has held board positions at CrimStone portfolio companies, Western Marketing, Cimcon Finishing, Waples Manufacturing and Greenscape Landscaping. James holds a Bachelor’s degree (with distinction) in Mathematics from the United States Naval Academy and a Master of Business Administration (MBA) from Harvard Business School. Andrey is the CEO of the National ESG Alliance, Chairman of the Board of Directors of NefteTransService, and member of the Board of Directors at the Skolkovo Foundation and several other organisations. of the Board of Directors at Troika Dialog, Deputy Mayor of Moscow for Economic Policy, Chairman of the Regional Energy Commission, and headed the Executive Committees of the Moscow Urban Forum and the Open Innovations Forum. He was a People’s Deputy of the USSR, Chairman of the State Committee for Youth Affairs of Russia, a key figure at the Ministry of Economic Development and Trade, a Managing Director and Chairman He graduated from Ufa State Aviation Technical University and the Russian Presidential Academy of Public Administration and holds a PhD in Sociology. 176 177 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance R A H ANDREY YANOVSKY Independent Non-Executive Director Appointed: 25 September 2020 Andrey has been the CEO of the European Medical Center and member of its Board of Directors since 2014. and Personnel at TNK-BP (2009– 2013), and Director for Strategy and Organisational Development at NefteTransService (2013–2014). During his career, Andrey was the CEO of the Coca-Cola Company franchise in Russia, CEO of Nidan Juices (2003–2009), Vice President for Organisational Development Andrey graduated from the Riga Higher Military Political School and received an MBA in Strategic Management from Kingston University. BIOGRAPHICAL DETAILS OF THE DIRECTORS WHO SERVED ON THE BOARD IN 2023 AND RESIGNED IN 2023 ELENA NESVETAEVA Non-Executive Director Appointed: 8 February 2019 Resigned: 29 June 2023 TIMUR VALIEV Non-Executive Director Appointed: 26 May 2021 Resigned: 29 June 2023 Elena has extensive experience working in the investment and banking sectors. She worked in the banking sector and for a timber-processing holding company. 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, asset valuation, acquisition projects and M&A transactions. Elena graduated with distinction from the Faculty of Economics of Syktyvkar State University, the Academy of National Economy under the Government of the Russian Federation, and the Institute of Business Studies with a degree in Management. Timur has extensive professional experience in legal proceedings and contract management, legal support of M&A projects, and the creation of joint ventures. From 2013 to 2019, he held the position of General Counsel of En+ Group. Prior to his career at En+ Group, Timur Valiev served as Director for International Projects and M&A at Basic Element. Prior to joining Basic Element, Timur worked at the international law firm Dewey & LeBoeuf, the legal department of TNK-BP, and at a number of Russian consulting firms. Vadim graduated from Lomonosov Moscow State University with a degree in Law. THE BOARD’S COLLECTIVE ESG KNOWLEDGE AND EXPERIENCE Power industry Strategic management Occupational health and safety Environmental management Legal and corporate governance Ethics and compliance Risk management and audit Christopher Burnham Olga Filina Zhanna Fokina Lyudmila Galenskaya Vadim Geraskin Anastasia Gorbatova Thurgood Marshall Jr. Andrey Plugar J. W. Rayder James Schwab Andrey Sharonov Andrey Yanovsky Distribution of members of the Board of Directors by key characteristics 33% 24% 17% 8% 34% Gender diversity 1 Age diversity 1 17% Board independence1 67% Male Female 42% 35–45 46–55 56–65 65+ 58% Chairman Independent directors Non-executive directors 178 179 1 As at 31 December 2023. STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance THE BOARD’S FOCUS DURING THE YEAR BOARD ATTENDANCE AND NUMBER OF MEETINGS IN 2023 AREA OF FOCUS MATTERS CONSIDERED AND DECISIONS ADOPTED Appointed on Resigned on Attendance 1 27.01.2019 15.12.2021 08.02.2019 29.06.2023 − − − − 08.02.2019 29.06.2023 29.06.2023 − 11/11 11/11 11/11 6/6 5/5 26.05.2021 29.06.2023 5/5 26.05.2021 18.05.2022 26.05.2021 25.05.2022 03.04.2023 27.01.2019 25.09.2020 − − − − − − − 11/11 11/11 11/11 11/11 8/8 11/11 11/11 11 During 2023, the Board held 11 meetings, all by absentee voting. Prior to the COVID-19 pandemic and the aggravated geopolitical situation, the Board primarily discussed important sustainability matters in person. Given the current circumstances, the Board has reviewed such matters remotely via videoconference, where each director could give comments, followed by absentee voting. Chairman of the Board Christopher Burnham Non-executive directors Olga Filina Vadim Geraskin Anastasia Gorbatova Elena Nesvetaeva Andrey Plugar Timur Valiev Independent non-executive directors Zhanna Fokina Lyudmila Galenskaya Thurgood Marshall Jr. J. W. Rayder James Schwab Andrey Sharonov Andrey Yanovsky Total number of meetings 100 % Attendance at all meetings of all Board of directors GRI 2-16 Nature and number of critical issues brought escalated to the Board of Directors, % Economic and financial matters Approval of transactions Social and environmental matters Other Corporate governance 12 12 10 2023 2022 2021 34 34 47 47 7 7 30 40 10 10 Strategy and risk z The Board z The Board approved z The Board approved preliminarily approved theConsolidated Annual Report 2023. the Company’s Development Strategy 2023. the Company’s Business Plan for 2024. Sustainable development z The Board considered the latest updates on health and safety matters and COVID-19. z The Board took note z The Board updated the Company’s climate ambitions. z At its strategy session in October 2023, the Board reviewed environmental upgrades, infrastructure projects, and digital initiatives. of the reports of management and committee chairs covering, among other things, performance in occupational health, industrial safety, and environmental protection; the Company’s climate goals; the status of the environmental and climate strategy (including progress towards net zero); and the implementation of the biodiversity strategy. Succession and leadership Corporate governance z The Board elected z The Board updated z The Board appointed James Schwab as a new Board member. the composition and appointed chairpersons of all Board committees after the Annual GSM. a new CEO of the Company. z The Board approved overall levels of D&O (Directors and Officers) liability insurance. z The Board approved z The Board approved the results of the assessment of the 2022 KPI achievement by the CEO. the CEO’s KPIs for 2024. z The Board approved the Board Chairman’s KPIs for 2024. Financial performance z The Board approved the consolidated interim condensed financial statement for the six months ended 30 June 2023. z The Board preliminarily z The Board approved approved the Company’s annual accounting (financial) statements for 2022. the IFRS consolidated financial statements for the year ended 31 December 2022. 1 The number of meetings attended / maximum number of meetings the Director could attend. 180 181 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023 Governance RESPONSIBILITY STATEMENT The members of the Board confirm that, to the best of their knowledge: z 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. z 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. DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE The liability of all Board members related to the discharge of their duties at the Company is insured under a D&O liability insurance policy that covers any damage caused during the Directors’ tenure. COMPARATIVE RESULTS OF A SELF-ASSESSMENT SURVEY OF THE MEMBERS OF THE BOARD IN 2021–2023 Section Mandate Strategy Agenda Leadership Succession Support ESG Total Committee Audit and Risk Corporate governance Nominations Remuneration Health, Safety and Environment Compliance BOARD PERFORMANCE EVALUATION GRI 2-17 In 2023, the Company decided to engage an independent consultancy to evaluate the Board’s performance. TRAINING AND PROFESSIONAL DEVELOPMENT OF BOARD MEMBERS GRI 2-17 The Corporate Secretary runs the induction training programme for new members of the Board of Directors and coordinates all involved parties with the assistance of the Corporate Governance Committee and the Nominations Committee. As part of the training and professional development of its members, the Board also conducts regular training sessions on various matters, often led by external advisors. In October 2023, a planned training session on sanctions compliance was delivered. New Directors take induction training upon their appointment. The key elements of the programme include, inter alia: GRI 2-18 As at the date of this Report, the Company has adopted a procedure for evaluating the performance of Board members, the Board of Directors, and its committees. z meetings, in person or remotely, with the CEO, the Chairman of the Board of Directors, the Corporate Secretary, management team, and/or heads of corporate business units z familiarisation with operations, including site visits to the Group’s production facilities with operational and management briefings and meetings with local management teams z provision of Board information packages, including internal reporting documents for previous periods z provision of internal documents and Q&As with the management team z attending meetings of all Board committees as invitees z mandatory training, including by external advisors, on matters relating to insider trading, disclosures, and compliance with sanctions. Energized for action 2021–2022 2022–2023 Δ Value (5-max) 1 SCALE 4.69 4.58 4.61 4.93 4.25 4.82 4.62 4.64 4.80 4.45 4.50 4.78 5.00 4.65 4.66 4.70 4.83 4.98 4.50 4.91 4.78 4.77 4.85 4.70 4.90 4.64 4.96 4.82 −0.03 0.12 0.22 0.05 0.25 0.09 0.16 0.13 0.05 0.25 0.40 −0.14 −0.04 0.17 If the overall component score is ≥4,6 – excellent/effective. The component corresponds to the best practice in most of the estimated parameters. If the overall component score is ≥4,3 <4,6 good/effective. The component is generally consistent with good practices. Some aspects require adjustments and can be inproved. If the overall component score is ≥3,9 <4,3 – satisfactory/ineffective. Most aspects of the component do not comply with good practices and require adjustments. If the overall component score is <3,9 – critical. Urgent intervention and significant changes are required. The assessment was carried out by an independent consultant RosExpert, a Russian consulting company that specializes in the assessment, formation and development of management teams, and has been operating in the market of Russia, Turkey and the CIS countries for more than 20 years. The evaluation methodology included individual interviews, processing of self- assessment questionnaires for members of the Board and benchmarking with relevant international companies. All 12 members of the Board took part in the self- assessment and interviews with representatives of the independent consultant. Consultants note the high level of organization of the work of the Board and its committees, the high quality and timeliness of the materials presented, the active participation of members of the Board in all meetings, the organizing role of the Chairman of the Board and the professional work of the corporate secretary’s office. The composition of the Board is sufficient in number to ensure work on the committees of the Board, and is balanced in terms of the set of professional competencies. The agenda for the meetings of the Board is balanced and corresponds to the role of the Board as a strategic and supervisory body for the management of the company 1. Analysis of the results of self-assessment of members of the Board demonstrated stable and improving performance of the Board and its committees compared to the previous year. The results of the Board evaluation showed the following positive aspects: z the Company’s commitment to high standards of corporate governance; z attention to the analysis of production and financial results of the company’s activities and risk management, including compliance with the requirements of regulators and exchanges; z active interaction of the Board with executive management. Based on the results of the evaluation, the Board identified a number of areas for further improvement, including increasing attention to new technologies, succession planning and professional development of members of the Board, strengthening the role of the Board in matters of sustainable development and social responsibility. 1 Taking into account the topics of meetings of committees of the Board of directors, discussions at the in-person strategic session and discussion of the regular report of management at each meeting of the Board of directors. 182 183 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance SHARE DEALING CODE Upon admission to the Main Market of the London Stock Exchange in November 2017, the Company adopted a code for dealing in securities regulating the trading of its GDRs, ordinary shares, and any other securities of the Company, which is based on the requirements of EU Market Abuse Regulation No. 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 applicable UK and Russian law provisions). SHAREHOLDINGS OF DIRECTORS As at the date of this Report, none of the Directors directly or indirectly hold shares in the Company or concluded any transactions with Company shares. SHAREHOLDINGS OF THE 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. In 2023, neither the CEO nor members of the management team concluded any transactions with Company shares. CONFLICTS OF INTEREST AND LOANS ISSUED TO MEMBERS OF THE BOARD AND THE CEO In 2023 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 governance bodies of the Company’s competitors). In 2023, no loans were issued by the Company (or any Group company) to members of the Board or the CEO. Sole executive body—CEO Under the Charter, the CEO acts as the sole executive body of 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. The CEO is responsible for overseeing the Company’s day-to-day operations and holds all powers falling outside the exclusive competence of the GSM and the Board of Directors, including, inter alia: acting on behalf of the Company without a power of attorney (including representing the Company and entering into transactions on its behalf) 1 passing resolutions to establish branches and representative offices of the Company issuing powers of attorney, authorising their holders to represent the Company 2 3 Currently, the CEO position is held by Mikhail Khardikov MIKHAIL KHARDIKOV CEO On 20 December 2023, the Board of Directors resolved to appoint Mikhail Khardikov as the Company CEO for a period of three years starting from 1 January 2024. CEO as at 31 December 2023 VLADIMIR KIRYUKHIN CEO Appointed: 1 November 2018 Joined the Group: January 2000 Mikhail graduated from the Academy of National Economy under the Government of the Russian Federation and the Russian Presidential Academy of Public Administration and holds a postgraduate degree in Economics. He has a Letter of Gratitude from the President of Russia and a Certificate of Merit from the Russian Ministry of Energy. Mikhail joined EuroSibEnergo (part of En+ Group) in 2010 as Director for Investor Relations, then held the position of Director for Corporate Finance from December 2012 to June 2014. In July 2014, Mikhail was appointed as CFO of the Company, and in 2018, he became the CEO of EuroSibEnergo. In 2019, he stepped up to the position of Deputy CEO, CFO of En+ Group, and in December 2022, he was appointed as Group’s COO. Prior to joining the Company, Mikhail held various positions at Russian metals and energy companies, including OGK-3, HC Metalloinvest, and Bashkirenergo. Vladimir oversaw the Company’s long- term strategy, business development, and engagement with key partners and external stakeholders, including regulators. Vladimir’s long track record at En+ Group includes roles such as the CEO of EuroSibEnergo, senior positions at Russian Aluminium and MAREM+, Chairman of the Boards of Directors at Irkutskenergo and Krasnoyarsk HPP, and member of the Board at RUSAL. He graduated from the All-Union Institute of Interindustrial Information with a PhD in Engineering. 184 185 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance Corporate Secretary Pursuant to the Regulations on the Corporate Secretary, the Corporate Secretary of the Company is responsible for ensuring the Company’s efficient ongoing communication with shareholders, coordinating the Company’s activities to protect the rights and interests of shareholders, and supporting the effective operation of the Board and Board Committees. The functions of the Corporate Secretary include: participating in preparation and holding of GSMs supporting the activities of the Board and the Board Committees Board committees OVERVIEW As at the date of this Report, the Board has established six Committees to assist it in exercising its functions: 1. Audit and Risk Committee 2. Remuneration Committee 3. Compliance Committee 4. Corporate Governance Committee 5. Nominations Committee 6. Health, Safety, and Environment Committee All the Committees are advisory bodies, whose primary function is to make recommendations to the Board on the matters within their remit. On 29 June 2023, the compositions of the Committees were reshuffled. Information on each Committee is detailed below. All Board members attended at least 95% of meetings of the Board Committees. 1 2 Committees attendance and number of meetings in 2023 1 implementing the Company’s disclosure policy and ensuring the storage of the Company’s corporate documents liaising between the Company and its shareholders and preventing corporate conflicts improving the Company’s corporate governance system and practices 3 4 5 SERGEY MAKARCHUK Corporate Secretary Appointed as Secretary of the Board of Directors: 10 April 2019 Appointed as Corporate Secretary of En+ Group: 14 November 2019 The Corporate Secretary can be contacted by e-mail CS@enplus.ru Following stints at various law firms, Sergey worked for RUSAL Group in 2007–2010 at the Corporate Governance Department of RUSAL Global Management B.V., managing corporate legal proceedings at Group entities and providing support to the RUSAL Board of Directors and Board Committees. He was also involved in RUSAL’s IPO on the Stock Exchange of Hong Kong and NYSE Euronext. From 2011 to 2013, Sergey was Deputy Director of the Corporate Governance Department at TNK-BP Management. After the acquisition of TNK-BP by Rosneft, he stayed on as Deputy Head of the Foreign Assets Department and Project Director of the Corporate Governance Department. Sergey graduated from Lomonosov Moscow State University with a degree in Law in 2004. Audit and Risk Committee Compliance Committee Corporate Governance Committee Health, Safety, and Environment Committee Nominations Committee Remuneration Committee Chairman of the Board Christopher Burnham 6/6 Non-Executive Directors Olga Filina Vadim Geraskin Anastasia Gorbatova Elena Nesvetaeva Andrey Plugar Timur Valiev Independent Non-Executive Directors Zhanna Fokina Lyudmila Galenskaya Thurgood Marshall Jr. J. W. Rayder James Schwab Andrey Sharonov Andrey Yanovsky 6/6 3/3 6/6 6/6 1/1 2/2 1/1 1/1 1/1 2/2 2/2 Total number of meetings 6 2 3/3 5/5 5/5 2/2 5/5 5 1/1 1/1 2/3 2/3 4/4 4/4 4/4 4 1/1 1/1 1/1 1/1 1/1 1 5/5 5/5 5/5 5/5 5/5 5 186 1 The number of meetings attended / maximum number of meetings the Director could attend. 187 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance Audit and Risk Committee COMPOSITION Pursuant to the revised Regulations on the Audit and Risk Committee, approved by the Board on 23 June 2022, the Committee consists of members considered by the Board to be independent, as defined in the Listing Rules of Moscow Exchange. The Committee meets at least once per quarter of the Company’s financial year. THE CURRENT COMPOSITION OF THE AUDIT AND RISK COMMITTEE IS AS FOLLOWS: 1. J. W. Rayder, as Chairman 2. Christopher Burnham 3. James Schwab 4. Andrey Sharonov 5. Andrey Yanovsky The responsibilities of the Audit and Risk Committee include, inter alia, the following: 1. Overseeing the integrity, completeness, accuracy, 7. Monitoring and assessing any important new systems and reliability of the Company’s financial statements and the Group’s consolidated financial statements (including IT systems) and ensuring that related controls are adequate, reliable, and effective 2. Reviewing material aspects of the accounting policies 8. Ensuring that the internal audit function is independent at the Company and its subsidiaries to ensure that they are fit for purpose and consistently applied and unbiased 3. Reviewing the Company’s Annual Report (including the annual consolidated financial statements) and making recommendations to the Board on its contents 9. Evaluating the performance of the internal audit function 10. Monitoring the performance of the whistleblowing system for reporting potential wrongdoing by Group employees or third parties and other irregularities within the Group 4. Reviewing material matters and judgments (including significant financial reporting estimates and judgements) regarding the Company and its consolidated financial statements GRI 2-5 5. Monitoring the adequacy, reliability, and effectiveness of operation of the Group’s risk management and internal control systems 6. Reviewing and assessing the implementation of risk management and internal control policies to ensure that risk management and internal control systems are adequate and operating effectively The Audit and Risk Committee is also responsible for reviewing the effectiveness of the external audit process, in conjunction with other Board committees. In 2023, the Committee held six meetings. The agenda included financial statements, internal audit reports, work plan for 2024, external audit reports, and internal control and risk management reports. AUDITOR’S REMUNERATION FOR AUDIT AND NON-AUDIT SERVICES For the year ended 31 December 2023, the accured fees for audit and non-audit services provided by the Group’s external auditor, B1, totalled as follows: Power segment Metals segment En+ Group USD mn1 RUB mn % USD mn RUB mn1 % USD mn RUB mn % 0.5 0.2 0.7 65 35 39.3 21.0 60.3 4.1 1.1 5.2 78 22 345.5 96.3 441.8 4.6 1.3 5.9 78 22 384.8 117.3 502.1 Audit services Non-audit services Total fees paid to the audit firm1 Corporate Governance Committee COMPOSITION Pursuant to the Regulations on the Corporate Governance Committee, approved by the Board on 1 December 2020, the majority of Committee members are independent directors as defined in the Listing Rules of Moscow Exchange. The Committee meets at least three times a year. The Committee’s primary role is to oversee the Company’s and the Group’s corporate governance matters. THE CURRENT COMPOSITION OF THE CORPORATE GOVERNANCE COMMITTEE IS AS FOLLOWS: 1. Andrey Sharonov, as Chairman 2. Zhanna Fokina 3. Anastasia Gorbatova 4. Andrey Plugar 5. James Schwab The Corporate Governance Committee is responsible for the following: 1. Setting the Group’s priorities in corporate governance 2. Assessing the Company’s corporate governance system and values for alignment with its goals and objectives, the scale of its business, and risk profile In 2023, the Corporate Governance Committee held one meeting to approve the Company’s D&O liability insurance. 188 1 Calculated based on the average USD/RUB exchange rate of RUB 85.25 per USD in 2023. 189 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance Nominations Committee COMPOSITION Pursuant to the Regulations on the Nominations Committee, approved by the Board on 1 December 2020, Committee members are independent directors as defined in the Listing Rules of Moscow Exchange. The Committee meets at least three times a year. The Committee’s primary role is to develop recommendations to the Board of Directors on Board performance evaluation and planning internal appointments. THE CURRENT COMPOSITION OF THE NOMINATIONS COMMITTEE IS AS FOLLOWS: 1. James Schwab, as Chairman 2. Zhanna Fokina 3. Lyudmila Galenskaya 4. Andrey Sharonov The primary responsibilities of the Nominations Committee include, inter alia, the following: 1. Running a detailed formal process to conduct an annual self-evaluation and external performance evaluation of the Board, its members, and the Board Сommittees, and determining priority areas to strengthen the Board 5. Determining the independence of Board members 6. Taking part in the regular advanced professional training of Board members 2. Commissioning external performance evaluations 7. Reviewing the Company’s current and expected needs of the Board, its members, and the Board Сommittees 3. Engaging with shareholders (including minority shareholders) to develop recommendations to shareholders regarding voting in Board elections 4. Planning appointments, including to ensure CEO succession, making recommendations to the Board regarding candidates for the Corporate Secretary role (or the unit head acting as the Corporate Secretary) and recommendations regarding candidates for the roles of the head of the Internal Audit Service and the CEO of the Company in terms of professional qualifications of the Company’s CEO to support the Company’s continued competitiveness and future growth, and ensuring succession planning for this role The Nominations Committee met five times during 2023 to consider the proposed appointment of James Schwab to the Board, the appointment of Mikhail Khardikov as the Company’s CEO, and the Company’s Regulations on Performance Evaluation of the Board of Directors. Compliance Committee COMPOSITION GRI 2-15 The Compliance Committee was set up after the Company was removed from OFAC’s SDN List. The Committee holds meetings at least once per quarter of the Company’s financial year. THE CURRENT COMPOSITION OF THE COMPLIANCE COMMITTEE IS AS FOLLOWS: 1. Thurgood Marshall Jr., as Chairman 2. Olga Filina 3. Lyudmila Galenskaya 4. Anastasia Gorbatova 5. J. W. Rayder The primary responsibilities of the Compliance Committee include, inter alia, the following: 1. Driving the build-out of the Group’s compliance management system 2. Contributing to the development of the Company’s policies and other internal regulations concerning compliance, and consistently identifying compliance requirements 3. Ensuring adequate compliance controls are in place at the Group 4. Conducting due diligence in the event of any reasonable doubt regarding the observance of compliance requirements and the provisions of compliance documents Health, Safety, and Environment Committee COMPOSITION The Health, Safety, and Environment Committee meets at least once per quarter of the Company’s financial year. The Compliance Committee reviews its own performance and reassesses the adequacy of regulatory compliance procedures and guidelines. In 2023, the Committee held two meetings and reviewed regular Company compliance reports, as well as compliance with the terms of removal from OFAC’s SDN List given the current geopolitical situation. THE CURRENT COMPOSITION OF THE COMMITTEE IS AS FOLLOWS: 1. Zhanna Fokina, as Chairwoman 2. Lyudmila Galenskaya 3. Vadim Geraskin 4. Thurgood Marshall Jr. 5. Andrey Yanovsky The primary responsibilities of the Health, Safety, and Environment Committee include, inter alia, the following: 1. Exploring leading international research studies and 5. Monitoring the Company’s compliance with international best practices in health, safety, and environment, and, if necessary, assessing their impact and preparing respective strategy recommendations to the Board in relation to the Group 2. Preparing recommendations to the Board on formulating Group strategies, policies, and instructions on health, safety, and environment 3. Contributing to the development of the Company’s policies and other internal documents on health, safety, and environment 4. Preparing recommendations to the Board on possible discussions, cooperation, and consultations on health, safety, and environmental matters with government authorities, NGOs, and other companies or associations standards, applicable laws, and the Company’s internal documents on health, safety and environment 6. Benchmarking the Group’s occupational safety and environmental performance against global best practices, and reviewing the results of such benchmarking exercises In 2023, the Health, Safety, and Environment Committee held five meetings and reviewed regular HSE reports, the environmental and climate strategy development updates, the Company’s environmental risk management status, performance against HSE KPIs in 2023 and target KPIs for 2024, the biodiversity strategy update, and En+ Group’s HSE roadmap for 2024. 190 191 STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Governance Remuneration Committee COMPOSITION The majority of the Remuneration Committee’s members are independent directors. The Committee meets at least three times during the Company’s financial year. THE CURRENT COMPOSITION OF THE REMUNERATION COMMITTEE IS AS FOLLOWS: 1. Andrey Yanovsky, as Chairman 2. Olga Filina 3. Vadim Geraskin 4. Thurgood Marshall Jr. 5. J. W. Rayder The responsibilities of the Remuneration Committee include, inter alia, the following: 1. Developing and intermittently revising the Company’s remuneration policy for Board members, the CEO, the Corporate Secretary, and the Head of the Internal Audit Service, as well as setting the parameters of short-term incentive programmes 2. Supervising the adoption and implementation of the remuneration policy and various incentive programmes at the Company, and revising the policy and programmes as and when necessary 3. Conducting preliminary year-end performance evaluation of the CEO against established remuneration criteria, and a preliminary review of the CEO’s progress against the targets of the long-term incentive programme 4. Developing recommendations to the Board on the amount of remuneration and the bonus eligibility criteria for the Company’s Corporate Secretary, conducting a preliminary year-end performance evaluation of the Company’s Corporate Secretary, and submitting proposals for bonus payments to the Company’s Corporate Secretary 5. Supervising the disclosure of remuneration policies and procedures and the ownership of Company shares by Board members and the person acting as the CEO both in the annual report and on the Company’s website. GRI 2-20 In 2023, the Remuneration Committee met four times to review the CEO’s KPIs and the remuneration arrangements for the CEO appointed from 1 January 2024. Remuneration report Remuneration policy objectives GRI 2-19 Our remuneration policy is based on the following principles: Attract, remunerate, and retain skilled talent supporting the achievement of the Company’s strategic goals Maintain the right balance between the Company’s short-term operating results and long-term goals Create value for our shareholders, given the risks that may impact the variable component of remuneration 1 2 3 Stakeholders are not involved in determining remuneration. The Company’s remuneration system is driven by its internal regulations. The Remuneration Committee, which is majority comprised of independent directors, oversees the remuneration policy for the Board and the CEO in line with stakeholders’ interests. The Remuneration Committee may engage external independent advisers when reviewing certain remuneration aspects within its remit. REMUNERATION STRUCTURE The Group’s remuneration structure is designed to ensure a balance between attracting and retaining high-calibre leaders 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 retain key executives, and reflects the qualifications, experience, scope of responsibility, personal achievements, and other characteristics of each manager. The variable component consists of annual bonuses and may also include one-off payments, bonuses for meeting KPIs, and other payments linked to KPI achievement. REMUNERATION OF KEY EXECUTIVES 1 In 2023, the remuneration of key executives, including the CEO, amounted to USD 11.7 million, including a base salary of USD 6.0 million and bonuses of USD 5.7 million. Remuneration of key executives Total remuneration of key executives, including the CEO Base salary Bonuses 2021 USD mn 15.4 8.2 7.2 2022 USD mn 11.6 6.2 5.4 2023 USD mn 11.7 6.0 5.7 192 193 1 Accrual basis. STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023 Governance Remuneration structure for key executives Remuneration component Approach Links to metrics Base salary Base salary is determined by the employment contract concluded with each member of the Group’s management team and is aimed at attracting and retaining high-calibre professionals Not applicable The salary level is set to ensure competitive pay vs Russian and global industry peers. The fixed remuneration component reflects the qualifications, scope of responsibility, personal achievements, and professional experience of the respective manager Benefits Provided to encourage strong job performance by reimbursing additional job-related expenses The Company ensures a competitive, comprehensive benefits package for its employees, covering their meal costs and health insurance and providing addi- tional payments Pension Pension contributions We do not pay any other pension contributions or retirement benefits, except for the mandatory contributions to the Pension Fund of the Russian Federation as required by Russian law, which entitles retiring employees to a fixed monthly pension for life from the state pension fund Annual bonus z The bonus is paid for meeting individual KPIs Not applicable No changes during the year Not applicable No changes during the year Examples: z Financial performance: adjusted EBITDA, No changes during the year Encourages focus on the Group’s strategic goals Additional payments and benefits Optional bonus payments for achieving targets other than KPIs for the relevant year Remuneration of other risk takers Attracts and retains high-calibre professionals z KPIs for the CEO are set by free cash flow the Remuneration Committee and approved by the Board z KPIs are set at the beginning of each financial (calendar) year z HSE and sustainability: lost time injury frequency rate (LTIFR), zero environmental incidents, accidents, or violations z KPIs are regularly reviewed and z Strategy: achievement of strategic updated to ensure that they align with the Group’s goals goals and successful implementation of development projects z Other objectives: in accordance with the manager’s area of responsibility Paid for achieving results that are important for the Company but not included in KPIs Task-specific No changes during the year z Top managers of En+ Group z Aligned with the Group’s executive subsidiaries are considered risk takers remuneration structure No changes during the year z The Group’s executive remuneration policy applies REMUNERATION OF BOARD MEMBERS In 2019, the Board considered and approved the base levels of compensation for Board members. z EUR 26,000 (about USD 28,000)1 gross per annum for chairing a committee or other structural unit of the Board All members of the Board, except for the Chairman, are entitled to a remuneration of EUR 215,000 (about USD 249,000)1 gross per annum, paid monthly. z EUR 18,000 (about USD 19,000)1 gross per annum for membership in each committee or other structural unit of the Board All members of the Board of Directors are entitled to additional remuneration for serving on a committee or other structural unit of the Board 2: The aggregate remuneration of Board members in 2023 amounted to USD 10.0 million, excluding social insurance contributions 3. Key changes during the year No changes during the year Remuneration of the Board of Directors Total remuneration of the Board of Directors, excluding social insurance contributions4 2021 USD mn 10.3 2022 USD mn 6.1 2023 USD mn 10.0 Remuneration structure for the Board of Directors Remuneration component Approach Links to metrics Compensation for Board membership Remuneration of Board members (excluding the Chairman of the Board) is determined so as to ensure competitive pay vs other listed peers Not applicable Key changes during the year No changes during the year Additional remuneration of Board members (excluding the Chairman of the Board) For serving on / chairing Board committees in addition to remuneration paid to Board members Pension Pension contributions Members of the Board receive fixed pay for serving on / chairing a Board committee Not applicable No changes during the year We do not pay any other pension contributions or retirement benefits, except for the mandatory contributions to the Pension Fund of the Russian Federation as required by Russian law, which entitles retiring employees to a fixed monthly pension for life from the state pension fund Not applicable No changes during the year 194 195 1 Calculated based on the EUR/USD exchange rate of 1.09 as at 30 December 2023. 2 Members of the Corporate Governance Committee (including the Chairman) are not remunerated for membership (chairmanship) in the Committee if they sit on the Nominations Committee of the Board and receive relevant remuneration for serving on (chairing) the Nominations Committee of the Board at the same time. 3 Mandatory payments (pension contributions, compulsory health insurance, etc.) as required by Russian law. 4 Calculated based on the EUR/USD exchange rates of 1.16 in 2021, and 1.06 in 2022, 1.09 in 2023.. 5 Mandatory payments (pension contributions, compulsory health insurance, etc.) as required by Russian law. STRATEGIC REPORTSUSTAINABLE DEVELOPMENTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023 Information for shareholders and investors Ordinary shares and global depositary receipts As at 31 December 2023, En+ Group’s share capital was divided into 638,848,896 ordinary shares with a par value of USD 0.00007 each. The Company’s ordinary shares are traded on the Moscow Exchange’s Level One Quotation List under the ticker ENPG. En+ Group’s GDRs, each representing one ordinary share, are listed on the London Stock Exchange (LSE) under the ticker ENPL. Since 3 March 2022, the London Stock Exchange has suspended trading in securities of most Russian companies, including En+ Group. On 16 April 2022, Federal Law No. 114-FZ On Amendments to the Federal Law On Joint Stock Companies and Certain Legislative Acts of the Russian Federation came into force, requiring Russian companies to initiate the termination of deposit agreements for their GDR programmes. In May 2022, En+ Group applied to the Government of the Russian Federation for permission to continue trading its GDRs outside Russia. On 19 May 2022, the Company received such permission, which is effective until 7 November 2024, inclusive. On 14 July 2022, Federal Law No. 319-FZ On Amendments to Certain Legislative Acts of the Russian Federation came into effect. The law provides for two mechanisms for converting Russian companies’ GDRs into shares: automatic conversion upon the issuer’s request and forced conversion upon the GDR holder’s request. On 18 August 2022, En+ Group initiated the automatic conversion process by notifying its depositary, AO Citibank. The automatic conversion covered only the GDRs recorded with Russian depositaries. With respect to the GDRs recorded with foreign depositaries, the law provided for forced conversion at requests submitted by GDR holders to the depositary. GRI 2-1 The Company’s management is not aware of any shareholders owning more than 5% of the Company’s share capital, apart from those listed below. RUB 281 Market capitalisation of En+ at the end of 2023 bn Depositary bank Registrar The Company’s depositary bank is Citibank N.A., with the registered office at 388 Greenwich Street, New York, New York 10013, United States of America. The Company’s registrar is Joint Stock Company Interregional Registration Center (the “IRC”). Citibank N.A. contact details: Citibank, N.A. +1 (212) 723-54-35 CitiADR@Citi.com IRC contact details: JSC IRCs +7 (495) 234-44-70 info@mrz.ru www.mrz.ru En+ Group’s international securities identification numbers London Stock Exchange Moscow Exchange Rule 144A GDRs Regulation S GDRs Ordinary shares Ticker ISIN 4 ENPL ENPL US29355E1091 US29355E2081 Ticker ISIN 4 ENPL RU000A100K72 Common Code5 171560667 170465199 CUSIP6 29355E109 29355E208 Instrument Trading platform Bloomberg code GDRs London Stock Exchange ENPL LI Ordinary shares Moscow Exchange ENPG RM En+ Group shareholding structure and voting rights, as at 31 December 2023 21.37 % 44.95 % 9.95 % 7.04 % 14.33 % 35.00 % 1 196 2 13.95 % 13.95 % 10.55 % 3.42 % 3.22 % 2.53 % 10.55 % 6.64 % 2.53 % 1 2 SHAREHOLDINGS VOTING RIGHTS Mr Deripaska3 SFO 2 Public float Glencore Other shareholders Volnoye Delo Mr Deripaska3 Independent trustees1 Chairman of the Board Independent trustee1 Public float Glencore Former family members Independent trustee1 Former family members Note: Percentages may not total 100 due to rounding. 1 Independent trustees exercising voting rights over certain Company shares. 2 Shares initially purchased from VTB by an En+ Group subsidiary, as reported by the Company on 6 February and 12 February 2020, and later (on 26 October 2023) acquired from the En+ Group subsidiary by a Special Financial Organisation (SFO), an orphan entity registered in Russia and not affiliated with En+ Group. Voting rights in respect of the 14.33% shareholding 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. 3 Directly or indirectly. According to the agreement between the Company and OFAC, the major shareholder’s equity cannot exceed 44.95%, and its voting rights cannot exceed 35%. 4 An International Securities Identification Number (ISIN) is a code that uniquely identifies a specific security. 5 A Common Code is a nine-digit identification code issued jointly by CEDEL and Euroclear. 6 A Committee on Uniform Security Identification Procedures (CUSIP) number is an identification number assigned to the issue of shares to facilitate clearing. 197 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGovernance Governance En+ Group share performance and trading volumes Dividend payments Moscow Exchange Trading volume, ths shares (RHS) Share price, RUB per share (LHS) RUB per share 600 500 400 300 200 100 0 In 2023, the Company’s GSM did not approve any dividend distributions. The Company anticipates that dividend payments will resume once market conditions permit. Ths shares 3000 Disclosure 2500 2000 1500 1000 500 0 The Company places a particular emphasis on making relevant information readily available to both shareholders and analysts simultaneously, in accordance with applicable provisions of Russian law and disclosure requirements of the Moscow Exchange, UK Market Abuse Regulation (UK MAR)3, and the FCA’s Disclosure Guidance and Transparency Rules (DTRs). Information is distributed through the following channels: z The Moscow Exchange and LSE Regulatory News Service (RNS): the Company’s price-sensitive information is disclosed through disclosure systems Diversity The Board of Directors Diversity Policy can be downloaded from our website z The Company’s website: the Company publishes releases on key events as well as operating and financial results z The Company’s webpage on the Russian regulatory newsfeed (Interfax Corporate Information Disclosure Centre). https://enplusgroup.com/en/ sustainability/esg-policies/ The Company is strongly 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. In 2020, En+ Group approved the Board of Directors Diversity Policy, which aims to set out the Company’s approach to promoting and maintaining Board diversity. January 2023 February 2023 March 2023 April 2023 May 2023 June 2023 July 2023 August 2023 September 2023 October 2023 November 2023 December 2023 Source: Moscow Exchange The Board recognises the desire of stakeholders to have greater diversity in senior management and on boards across the Group. In 2023, En+ Group’s ordinary share price on the Moscow Exchange increased from RUB 380.5 as at 3 January 2023 to RUB 440.2 as at 29 December 2023. En+ Group’s market capitalisation rose from RUB 243 billion at the beginning of the year to RUB 281 billion at the end of 2023. The average daily trading volume during the year was 312,000 ordinary shares. Share repurchases During the reporting period, the Company did not, either itself or through a person acting in their own name but on the Company’s behalf, repurchase any of the Company’s own shares, and did not, either itself or through a person acting in their own name but on the Company’s behalf, hold any shares in treasury. Inclusion En+ Group 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. Dividend policy The Regulations on Dividend Policy can be downloaded from our website https://enplusgroup.com/en/ investors/corporate-documents/ The Investor Relations Department can be contacted with any queries at ir@enplus.ru. Email On 14 November 2019, the Board of Directors approved the Regulations on Dividend Policy, providing that when determining the amount of dividend recommended to the GSM, the Board of Directors should calculate the dividend amount as follows: z one hundred per cent (100%) of dividends received from RUSAL (as long as the Company remains a RUSAL shareholder), and z seventy-five per cent (75%) of free cash flow 1 in the En+ Group Power segment 3, but in any event, at least USD 250 million per year. 1 Free cash flow, for any period, means the cash flows generated from operating activities less net interest paid, capital expenditures, restructuring fees, and other costs related to share issuance, adjusted for settlement payments under derivative financial instruments, plus dividends from associates and joint ventures. The En+ Group Power Segment is a segment defined in the Group’s IFRS consolidated statements. 2 3 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 198 199 of the European Union (Withdrawal) Act 2018. STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGovernance Internal control and risk management structure The Board of Directors has responsibility for overseeing the efficiency of the Group’s financial and business operations, including reviewing and maintaining effective and adequate internal control and risk management systems. GRI 2-13 The Board of Directors has established the Audit and Risk Committee, which is tasked with aiding the Board in reviewing the Group’s financial statements, ensuring the adequacy and efficiency of internal control and risk management systems, supervising both internal and external audit processes, and discharging other functions as mandated by the Board of Directors. The Internal Audit Directorate (IAD), operating independently from management and reporting directly to the Audit and Risk Committee of the Board of Directors, assists in supervising the Group’s financial and business operations and its internal control and risk management systems. The Internal Audit Directorate consistently updates the Audit and Risk Committee on the outcomes of both planned and ad-hoc audits, highlighting any gaps identified in the internal control system, recommending corrective actions to management, specifying identified risks and their financial impacts, and presenting developed mitigation measures. Internal control system The Group has established a comprehensive internal control system (ICS) to safeguard its assets, improve business processes, and ensure compliance with applicable laws and local regulations throughout its operations. The IAD seeks to ensure that a robust system of internal controls is in place in the Group through: z operational and financial control z compliance control z business process institutionalisation z implementation of ICS enhancement projects. The IAD conducts comprehensive audits and verifications in accordance with the annual audit plan approved by the Audit and Risk Committee. Furthermore, acting on management’s instructions, the IAD arranges unscheduled inspections employing a risk-based approach, including providing an independent opinion. During compliance control procedures, the IAD assesses the Group’s adherence to the requirements of state supervisory bodies and the Company’s internal regulations. To mitigate the risks of losses and violations of standardised processes and ensure unified control over business processes, the IAD actively monitors the existing internal control system regulating the development of regulatory documents and initiates updates to uniform standards for commercial operations. Refining the negotiation process and broadening the competitive landscape have fostered a more robust commercial environment as part of the procurement oversight exercised by the IAD. Internal control and risk management INTERNAL REGULATIONS z Corporate Code of Ethics z Anti-bribery and Corruption Policy z Regulations on Risk Management z Policy on Conflict of Interest z Sanctions Policy MATERIAL TOPICS z Corporate governance In a bid to improve the Group-wide risk management system, heads of companies / business units have been tasked with ensuring comprehensive risk reporting and maintaining timely oversight over the development and implementation of risk mitigation measures. GOALS STATUS PROGRESS made in 2023 z Deploy an automated risk z Achieved z ARMS implemented management system (ARMS) across En+ Group companies z Implement commercial z Achieved efficiency measures to drive out the risk of overcharging as part of procurement risk management z Assess the risk identification z Ongoing completeness z Assess procedures for monitoring the execution of risk mitigation measures z Ongoing z Cost reduction for procuring services, construction and installation works, and essential goods and materials was achieved by refining the negotiation process and broadening the competitive landscape as part of the procurement function oversight z Identifying risks omitted from the Risk Map during the audit of Group companies and ensuring the development of relevant mitigation measures z Assessing the effectiveness of controls in place to execute measures for minimising or eliminating risks (as part of Group companies’ audit) 200 201 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTTRAINING IN RISK MANAGEMENT To foster a robust risk management culture, employees and managers take training and courses that equip them with the requisite knowledge and practical skills to analyse, assess, and manage various types of risks. EN+ GROUP’S KEY BUSINESS RISKS The Group’s primary risks encompass those that could hinder the Company’s objectives and shareholder value creation or potentially lead to significant reputational harm. To prevent or minimise potential damage, the Company is enhancing response measures tailored to the nature and magnitude of each identified risk. The impact of a risk is determined by evaluating both its likelihood and the financial damage from its realisation. A higher probability corresponds to a more significant potential impact. The most critical risks are those with a high likelihood and significant potential financial damage. The Company takes risk management very seriously, including for sustainability risks, and continuously analyses market trends, economic developments, and regulatory requirements to promptly identify and effectively manage potential risks. In managing risks, the Company endeavours to consider stakeholder needs and concerns when evaluating the Group’s economic, environmental, and social impacts. Sustainability risks significantly impact the Company’s business model, operations, and key financial metrics. The Company acknowledges these risks and implements corrective measures, demonstrating a responsible approach to the environment, people, and the economy. This approach enables the Company to enhance its competitiveness in the market and foster a favourable perception of the Group among stakeholders. Governance Approach to risk management The Company maintains a risk management system (RMS) integrated into its internal control system (ICS) and corporate governance framework. This system helps reduce the likelihood of non-compliance with corporate governance standards and drives the steady and sustainable growth of the Group’s business. GRI 3-3 The Company’s risk management processes are driven by the precautionary principle applied across all facets of the Group’s operations. The risk management system provides for the identification, assessment, and ongoing monitoring of risks and their status. It also includes the analysis of internal and external risk drivers. The Company’s risk management process is governed by the Regulations on Risk Management. This document sets forth uniform standards and fosters effective collaboration among all stakeholders involved, including to reduce the Group’s impacts on the environment, people, and the economy. RISK MANAGEMENT PROCESS GRI 2-12, 2-13, 2-16 The Audit and Risk Committee reports to the Board of Directors and ensures the effective operation of the RMS. It monitors the integration of risk management objectives into the Group’s overall goals, evaluates progress against them, and participates in reviewing and approving the risk map and risk mitigation measures. The Audit and Risk Committee conducts quarterly reviews of materials detailing the status of risk management, provides general oversight of the RMS operation, and supervises both external and internal audits. The IAD continuously consolidates the Group’s risks and evaluates the effectiveness of the RMS as part of its audit efforts. Risk owners are responsible for identifying risks, overseeing the development and execution of risk mitigation measures, and monitoring their implementation. Risk supervisors compile information from individual business units and furnish a consolidated risk map to the IAD. GRI 2-12, 2-13 The Group adheres to a practice of routinely reporting on risk monitoring measures. To enhance risk management’s effectiveness, objectives in this area are integrated into the key performance indicators (KPIs) of both management and relevant employees. 1 2 3 4 RISK IDENTIFICATION RISK ASSESSMENT Defining and describing a risk Analysing a risk, its impacts, and how it may affect the Group’s operations DEVELOPING, IMPLEMENTING, AND OVERSEEING RISK MANAGEMENT MEASURES Developing, implementing, and overseeing risk management measures to mitigate their impacts on the environment, people, and the economy MONITORING Supervising the process of identifying, assessing, and monitoring risk management measures The risk management process commences with setting the Company’s business objectives. The Company manages risks vertically, with risks to business processes identified at the individual facility level and subsequently aggregated at the Company level. The procedures and responsibilities of the process stakeholders are outlined in the Regulations on Risk Management and other internal documents. GRI 2-25 Through continuous risk identification, the Company can proactively identify potential threats to its operations and promptly develop measures to mitigate the negative impacts of risk realisation. The Company routinely analyses significant factors and monitors regulatory changes at both international and national levels. During strategic planning, business planning, and risk management, the Company evaluates how external and internal factors impact its key risks. The IAD conducts quarterly monitoring of risk status, including analysing changes during the reporting period, reviewing the ongoing relevance of financial risk assessments, the likelihood of their materialisation, and the progress of mitigation measures, as well as assessing whether the new risks that emerged during the quarter were promptly identified. 202 203 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT203Governance Key risks of the Company HIGH 1 2 3 Environment risks ↗ Laws and regulations risks ↗ Market risks ↗ MEDIUM 4 6 Geopolitical risks ↗ Maintance risks ~ Force-majeure risks ~ 10 IT security& resilience risks ~ Legal risks ~ 11 Financial risks ↗ Commercial and project risks ↗ 5 7 8 LOW 9 Health and safety risks ~ 12 Climate-related risks ~ Description Change in 2023 Mitigation measures EXTERNAL AND MARKET RISKS 1 Environment Risk of negative impacts stemming from legislative initiatives and law enforcement practices on the Company’s day-to-day operations. Extension of new legal requirements to existing facilities. Tougher sanctions for regulatory non-compliance and delayed acquisition of permits Risk of sanctions or fines resulting from soil, water, or air pollution due to equipment failure or human error ↗ Robust operation of the environmental management system Consistent application of Environmental Policy provisions Environmental auditing and monitoring of operating processes Engagement with national and local governments on developments in environmental laws Board approval of the updated Climate Strategy to 2035 with a Vision until 2050 Continued implementation of the strategy to achieve net-zero GHG emissions Risk impact on the Company’s operations High Medium Low Change in 2023 ↗ Higher impact ~ No change Description Change in 2023 Mitigation measures 2 Laws and regulations Impact of legislative changes or their enforcement, both domestically in Russia and internationally, encompassing antimonopoly and tariff regulations, licensing and permits, and environmental and HSE regulation ↗ Monitoring changes in the regulatory frameworks Engagement with the regulatory authorities Monitoring risks and conducting market research, business planning, and scenario analysis Using derivative financial instruments for partial hedging of market risks Expanding customer portfolio, expanding product range to diversify sales, and boosting sales in alternative markets Promoting highly competitive low-carbon metal and electricity Monitoring geopolitical situation and relevant risks Developing and implementing risk mitigation measures, which include elaborating various scenarios, implementing counterparty KYC procedures, identifying alternative suppliers, buyers, and carriers, exploring possible replacements for imported equipment, seeking alternative sources of financing, etc. Protecting the Company’s interests through legal means 3 Market: supply, demand, and commodity price volatility Business impact of fluctuations in supply, demand, and/or commodity prices critical to the Group’s operations: METALS SEGMENT aluminium, alumina, bauxite, energy (primarily natural gas) POWER SEGMENT electricity prices (long-term contracts, day-ahead market) USA/EU and global recession risk ↗ 4 Geopolitical Risks of an adverse business impact in the event of new economic restrictions imposed by foreign governments, affecting: ↗ z сompany share price z equipment deliveries, leading to the postponement of investment projects and/or increased capital expenditures z capital flows and the Group’s ability to secure currency-denominated credit facilities z sales mix and volumes, leading to delayed customer payments z tougher export controls for certain types of goods, works and services, including high-tech z ability to have unlimited access to software and hardware Risks of negative impacts on the operations of the Metals segment across multiple countries (such as Guinea, Australia, Sweden, Germany, and others), including raw material security and supply chain risks 5 Force-majeure: natural disasters, large-scale accidents, epidemics, etc. Risks of substantial damage to operating facilities and suspension or shutdown of operations at the Company’s enterprises due to natural disasters, epidemics, and terrorist attacks ~ Scenario planning and developing early-response measures encompassing a range of organisational and practical actions to ensure asset safety 204 205 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTTimely maintenance and repairs/overhauls of equipment; upgrades to operating facilities Financial implications resulting from market volatility in foreign exchange rates and interest rates Searching for alternative suppliers of imported equipment Tax risks Governance Key risks of the Company Description Change in 2023 Mitigation measures BUSINESS AND OPERATIONAL RISKS 6 Maintenance Equipment operation risks involve potential equipment failures leading to financial losses, lower productivity, or the halt of operating facilities, including situations where repair plans are not fulfilled due to failures or longer lead times for imported equipment and materials 7 Legal Risks of potential losses arising from the enforcement of judgments on claims 8 Commercial and project Risks of disruptions in supply chains for goods and raw materials: sale of products from metallurgical and coal businesses relies on railway infrastructure with its uncertain availability pattern Pricing risks: monopolistic pricing in the transportation market and regulatory pricing in the electricity market Risks of time or budget overruns for projects ~ ~ ↗ Legal defence against claims Negotiating with claimants Negotiating with suppliers and broadening the pool of potential suppliers Monitoring lead time and investment contract performance Entering into long-term contracts with formula pricing mechanisms Making spot purchases subject to economic viability Continuous monitoring of alternative markets 9 Health and safety Workforce or contractor injury due to human error, equipment failure, or workplace configuration, given the endemic risks within the Power and Metals segments relating to major accident hazards and asset integrity ~ Managing dedicated units tasked with developing regulatory documentation, conducting staff training, and overseeing compliance with requirements for complex and hazardous works OHS compliance checks by regulatory authorities such as Rostechnadzor, Rospotrebnadzor, etc. during both scheduled and unscheduled inspections Risk impact on the Company’s operations High Medium Low Change in 2023 ↗ Higher impact ~ No change Description FINANCIAL RISKS 11 Financial Change in 2023 Mitigation measures ↗ Ongoing monitoring of the Company’s financial position Ensuring compliance with the terms of loan agreements with banks, including regular monitoring of financial covenant compliance Coordination of tax planning and oversight of tax assessments and payments Implementing partial hedging of currency risks, continuously monitoring and adjusting cash flow, and diversifying the debt portfolio and foreign-currency deposits CLIMATE-RELATED RISKS 12 Transition risks Financial or reputational impact due to policy, legal, technology, and market changes 12 Physical risks Negative impacts on operations stemming from climate change, including fluctuations in water supply and temperature variations ~ ~ Constant monitoring of policy, legal, technology, and market changes Business and scenario planning; climate research and analysis Incorporating climate-related risks and regional considerations into R&D and investment projects For more details on climate-related risks, see the Climate Change and Energy management section on page 94-95. 10 IT security and resilience Risks of data loss or IT infrastructure damage stemming from hacker attacks or malware intrusion Risks of malfunctions in automated information control and management systems at major industrial facilities (HPPs, CHPs, etc.) 206 ~ Testing the IT infrastructure for security vulnerabilities Using uniform policies and procedures to ensure safety PLANS FOR 2024 AND BEYOND The Company continues to evaluate potential risks and analyse the impact of various micro- and macroeconomic conditions on its future financial position and operating results in 2024 and beyond. 2024 207207 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGRI 2-23 En+ Group fosters a cohesive corporate culture embraced by all employees and creating an environment of mutual respect, trust, and transparency. At the heart of our business lies a strong commitment to the highest legal and ethical standards, as formalised in our Code of Corporate Ethics. The Company upholds a zero-tolerance policy for any form of harassment or discrimination in the workplace. We expect all Company representatives to uphold our values and ethical standards in everything they do. The Code of Corporate Ethics outlines the fundamental values, principles, and standards of business conduct expected from both employees and members of the Board of Directors. It addresses various issues arising in relationships with employees, third parties, customers, and government authorities. Additionally, it encompasses principles related to occupational health, safety, environmental protection, effective ways of working, confidentiality, control and reporting procedures, and conflict of interest management. The Code of Corporate Ethics is available in both Russian and English on the Company’s corporate website. Governance Corporate ethics and compliance INTERNAL REGULATIONS z Corporate Code of Ethics z Anti-bribery and Corruption Policy z Policy on Human Rights z Diversity and Equal Opportunities Policy z Sanctions Policy MATERIAL TOPICS z Business ethics > 80 % of employees trained on anti-corruption 374 оmployee reports received by the Signal hotline in 2023 GOALS STATUS PROGRESS made in 2023 z Have the Company listed z Achieved in the consolidated register of signatories to the Anti-Corruption Charter of Russian Business and conduct an independent assessment of the anti-corruption management system to verify compliance with the ISO 37001:2016 criteria z The Company has been included in the register of signatories to the Anti-Corruption Charter of Russian Business. The assessment yielded an AA+ class rating, indicating a robust level of anti-corruption z Ensure that at least 80% of Group employees take remote learning courses on corporate ethics and anti-corruption z Achieved z At the end of 2023, over 90% of Group employees have completed corporate ethics and anti-corruption training z Develop a training course tailored z Achieved for ethics officers across the Group’s subsidiaries z The course has been developed and uploaded onto a unified learning platform, ready for future launch 208 209 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGovernance Corporate compliance system GRI 2-13, 2-24 En+ Group remains committed to enhancing its corporate compliance system by incorporating current legal requirements, recommendations from regulatory bodies, specific industry requirements, and best practices. The Group is focused on driving the continuous improvement of existing processes and implementing new ones. The Compliance Committee of the Board of Directors ensures control and continuous improvement of the Group’s compliance management system. Anti-corruption and corporate ethics compliance STATEMENT FROM CHRISTOPHER BURNHAM, CHAIRMAN OF THE BOARD OF DIRECTORS SASB EM-MM-510a.1 The Company maintains a zero tolerance policy for any form of corruption. The Company continuously strives to foster a culture of zero tolerance for corruption based on high ethical standards and implements measures to maintain an environment of trust, mutual respect, and integrity. The Board of Directors is responsible for ensuring compliance with the Policy on Human Rights. Twice a year, the Compliance Committee of the Board of Directors meets in person to review the report on implemented and planned measures, analyse the effectiveness of compliance system management in general and the anti-corruption programme in particular, thus ensuring the alignment between the Company’s strategy, risk management principles, and anti-corruption policy. SASB EM-MM-510a.1 En+ Group implements all necessary measures to adopt best practices in combating corruption and consistently upholds high standards of responsible and ethical conduct. We strictly comply with the legal requirements of the countries where we operate, including Federal Law of the Russian Federation No. 273-FZ dated 25 December 2008 On Combating Corruption, the UK Bribery Act of 2010, and the US Foreign Corrupt Practices Act (FCPA). GRI 205-1 As part of its comprehensive risk management system, the Company assesses and manages corruption risks. The Group seeks to eliminate any compliance risks within the Company and in its dealings with counterparties. GRI 2-24 The Company has approved the Anti-bribery and Corruption Policy and the Policy on Conflict of Interest both at the Group and subsidiary levels and implemented regulations outlining the tasks, roles, responsibilities, and authority of ethics officers across the Group’s entities. In 2023, the Company became a signatory to the Anti-Corruption Charter of Russian Business and was included in the annual Anti-Corruption Ranking of Russian Business, confirming its compliance with the Charter’s rigorous standards and principles. Independent experts assessed our anti-corruption management system for compliance with ISO 37001:2016 and the principles outlined in the Anti-Corruption Charter. The assessment yielded an AA+ class rating, indicating a robust level of anti-corruption. En+ Group consistently improves current and introduces new measures to combat corruption. Particular focus is directed towards conflicts of interest, as they can increasingly become a catalyst for corruption offences. En+ Group employs an electronic system for the annual collection of conflict-of- interest declarations. This solution assists ethics officers in identifying potential conflicts of interest within the Group’s subsidiaries and generating reports based on the declarations received. As an additional precaution, we conduct quarterly public-source reviews of all new hires to identify potential conflicts of interest. The Company has established protocols for identifying and investigating business ethics violations, with the findings used to inform corrective measures. Compliance with insider trading laws As a company whose financial instruments are traded on securities markets in Russia and the UK, En+ Group is subject to regulations on the unlawful use of insider information and market manipulation. The Board of Directors has approved the Regulation on the Information Policy and the Regulation on Insider Information. These Regulations, as well as a number of additional internal documents, define the procedure for using insider information, rules for protecting its confidentiality, and control over compliance with the requirements of applicable laws. They aim to ensure fair pricing of financial instruments and protect the rights and property interests of all En+ Group stakeholders. The Group has approved the list of insider information and maintains the insiders’ roster. It has also configured timely disclosure procedures and established appropriate internal controls. Sanctions compliance En+ Group seeks to minimise the risk of international sanctions as far as possible by putting in place and continuously enhancing an appropriate compliance programme. The Board of Directors has approved the Sanctions Policy to ensure compliance with relevant provisions and minimise sanctions risks for En+ Group, its officers, directors, and employees. Employee education and training GRI 2-24 In 2023, we continued to use all available communication channels to educate employees on the Company’s ethical standards and strategies for combating corruption and conflicts of interest. Upon employment, the Company educates employees on its internal documents relating to business ethics. In addition to educating employees on its policies and Code of Corporate Ethics, En+ Group offers training sessions covering various aspects of business ethics. LIST OF DOCUMENTS FOR REVIEW Corporate Code of Ethics 1 Anti-bribery and Corruption Policy Policy on Conflict of Interest 2 3 MANDATORY COURSES Corporate ethics course 673 instances of potential conflicts of interest were examined by The Ethics Committee Anti-corruption and prevention of conflict of interest course 1 2 27 of which, based on the results of risk assessment, were resolved >80 % of employees trained on anti-corruption 210 211 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT Governance Counterparty engagement GRI 2-23 GRI 415-1 Maintaining business reputation is integral to our sustainability agenda. Therefore, in addition to fostering responsible business practices, we seek to partner with companies committed to a high level of transparency and possessing a solid business reputation. As part of its commitment to ethical business conduct, En+ Group has established Supplier Standards, which formalise the Group’s expectations for responsible business conduct, quality assurance, and sustainability. The Company has in place a KYC procedure whereby data for each counterparty are assessed for compliance risks, leading to the assignment of a risk label to counterparties. Following the assessment, En+ Group develops and implements measures to mitigate the identified risks. The Company abstains from providing financial support to political parties, their candidates, or representatives both in Russia and abroad and avoids exerting direct or indirect influence on political figures. GRI 206-1 In the reporting period, no lawsuits were filed or pending against the Company for obstruction of competition or violation of antitrust laws. In the reporting period, no violations of the Code of Corporate Ethics by Board members were recorded. En+ Group includes an anti-corruption clause and details about the Signal hotline into all its contracts with counterparties. GRI 205-3 100 % of security staff were briefed on the Policy on Human Rights. In the reporting period, no contracts with business partners were terminated following the identification of corruption violations. No violations of the rights of Russia’s indigenous minorities were recorded during the reporting period. The Signal hotline GRI 2-25, 2-26 En+ Group operates the 24/7 Signal hotline for employees and other stakeholders to report incidents related to ethics violations, corruption, and other unfair practices. Any stakeholder may contact the hotline confidentially and anonymously. The Company has approved the Hotline Regulation governing the procedures for recording, processing, and storing report-related data. For each report received, steps are taken to ascertain facts. This involves conducting interviews with employees or witnesses, analysing internal documents, and reviewing procurement documents with the assistance of the security and internal audit teams. The Group’s ongoing awareness campaign aims to promote this communication channel and engage all stakeholders in the continuous improvement process to build a uniform culture. The decline in reports to the Signal hotline is attributed to our ongoing awareness drive to communicate its purpose and promote the hotline as a complementary tool within a wider strategy of raising awareness of issues. The decrease can also be explained by a larger number of communication channels now available to employees. Actions taken by the Company in response to reports include: z analysing verification findings and developing recommendations to correct malfunctioning processes/ regulations, followed by monitoring implementation z organising a refresher training course on corporate ethics and conducting face-to-face meetings with ethics officers to clarify the Company’s stance on corporate ethics in interactions with colleagues/counterparties z disciplinary sanctions z other measures consistent with applicable laws. Employee reports received via Signal, quantity Specific reports. Metals Non-specific reports. Metals Specific reports. Power Non-specific reports. Power Subjects of specific reports received via Signal, 2023, % Labour relations Asset safety Counterparty engagement HSE issues Other 2023 2022 2021 21% 8% 273 96 5 303 92 3 420 192 127 52 374 398 791 9% 14% 47% 212 213 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGRI 2-29 En+ Group is committed to transparent engagement with its stakeholders. To achieve this, the Company employs a mix of communication channels to take into account stakeholder interests and expectations, placing a particular emphasis on feedback. We also monitor actual and potential negative impacts of our operations, striving to minimise them. En+ Group’s stakeholder engagement is governed by its Stakeholder Engagement Policy, designed to achieve three main objectives: pursuing every opportunity to build mutually beneficial partnerships, maintaining respect for all stakeholders, and proactively preventing or resolving conflicts through a collaborative effort. The Policy sets forth procedures and mechanisms for engaging with stakeholders, and the Company’s responsibilities in this area. En+ Group’s methodology for identifying stakeholder groups includes the following criteria: z En+ Group’s significance for stakeholders z stakeholders’ significance for En+ Group z engagement frequency z the impact of the Company’s operations on stakeholders z the stakeholders’ impact on the Company’s operations. Governance Stakeholder engagement INTERNAL REGULATIONS z Stakeholder Engagement Policy MATERIAL TOPICS z Corporate governance 18 facilities within the Company’s Metals segment have successfully obtained certification to ASI standards GRI 3-3 GOAL STATUS PROGRESS made in 2023 z Ensuring an adequate level z Achieved of disclosure z The Company has delivered an adequate level of disclosure En+ Group publishes the annual Communication on Progress report under the UNGCP initiative ESG II-b (or ESG-A on the Bank of Russia’s scale) ESG rating was assigned to En+ Group by the Expert RA rating agency 214214 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT215215215Governance GRI 2-13, 2-25, 2-26, 2-29, 3-3 Stakeholder engagement On a regular basis Scheduled calendar meetings Upon request Stakeholder interests and expectations Engagement methods Responsible unit and engagement frequency Value created for stakeholders in 2023 Stakeholder interests and expectations Engagement methods Responsible unit and engagement frequency Value created for stakeholders in 2023 Associations and initiatives z Improving the transparency of aluminium production processes z Transitioning to the production of low-carbon aluminium z Raising demand for low-carbon aluminium z Developing and rolling out standards to mitigate negative environmental impact, and foster responsible and transparent business practices Customers and suppliers z Participation in meetings z Facilitating discussions and collaborative decision-making process within En+ Group through various communication channels z Preparation of annual reports z Participation in working groups and committees z Information events z Joint events Directorate for International Cooperation Sustainable Development Directorate A separate category, Baikal Without Plastic, has been approved as part of En+ Group’s grant competition For more details, see page 219. z Transparency and openness in reporting and strategy, environmental and social responsibility z Regular meetings z En+ Group’s participation in dedicated forums and conferences Customers Sales and Marketing Office 62% share of purchases from local suppliers z Distributing information about z Verifying the financial, tax, and the Company’s product range, pricing, and product markets z Contract support and prompt decisions reputational status of suppliers, accompanied by mandatory technical audits Suppliers Commercial Department 1.3 million tonnes of ALLOW low-carbon aluminium sold For more details, see page 224. on new contracts En+ Group employees z Safe working conditions and fair remuneration z Compliance with labour laws z Achieving equality and diversity z Supporting labour rights z Voluntary ESG accreditation z Providing information as and when required z Joint events z Intranet portal for employees z Employee satisfaction surveys z Signal corporate hotline z Liaising with work councils and ethics officers z Regular open discussions involving the Company’s management z Provision of social benefits and medical care z Housing support (private housing projects, mortgage) HR Administration Corporate Communications Department 85% employees covered by collective bargaining agreements 79.8% employee satisfaction For more details, see page 151. Government authorities z Strong operational, environmental and z Facilitating access and providing social performance z Regulatory compliance necessary information to supervisory bodies as outlined in the Barker Plan z Email communication, official correspondence z Participation in workshops, round tables and ministerial, interagency, and regional meetings Government Relations Department; heads of regional units 42 RUB bn (491 USD mn) of mandatory payments made For more details, see page 330. Non-profit organisations (NPOs) and local communities z Effective sustainable development z Participation in dedicated forums and programmes conferences z Increasing the number and transparency of environmental projects by providing detailed information, including quantitative data, for all project stages z Increasing the number of jobs available to local communities z Providing information as and when required z Mandatory disclosures through the Company’s reports z Annual community surveys z Holding public events z Grant competitions to support local NPO initiatives z Annual public consultation to discuss the reports related sustainable development topics z Consideration of applications through public receptions 5.3 RUB bn (USD 62.3 mn) invested in social development 21 projects approved for support in Environmental project grant competition For more details, see page 153. NPO Corporate Communications Department Sustainable Development Department Local communities Corporate Communications Department Committees on Social Investments Metal and stock exchanges z Raising demand for low-carbon z Participation in meetings and joint aluminium discussions z Preparing financial statements and z Participation in conferences and Strategy and Capital Markets Department corporate governance information in line with stock exchange requirements z Transparency and openness in ESG reporting, strategy, and information forums z Providing information as and when required z Submitting regular reports detailing the Company’s performance Financial and non-financial disclosures to increase transparency and ensure compliance with stock exchange requirements For more details, see page 214. Rating agencies (including ESG rating agencies) z Increasing the transparency z Providing information as and when of environmental, social and governance disclosures required z Mandatory disclosures through z Development of corporate policy and the Company’s reports procedures z Publishing official press releases on the Company’s website Shareholders, investors, and financial analysts z Strong and sustainable financial performance z Share price performance z Short-term and long-term Company z Regular electronic communications z Publication of mandatory periodic reports z Official press releases on various development strategy events z Compliance with disclosure and z Mandatory issuer disclosures corporate governance requirements Strategy and Capital Markets Department ESG II-b or ESG-A— ESG rating assigned by the Expert RA rating agency Strategy and Capital Markets Department 14.7% adjusted EBITDA margin 216 217 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT Governance GRI: 2-28 Promoting the sustainability agenda Partnerships and collaborations En+ Group strives to set an example for other market participants and promote diverse sustainability aspects both domestically and internationally. The Company believes that by fostering collaboration and partnerships, even the most ambitious global challenges can be successfully solved. ORGANISATION EN+ GROUP ROLE Promoting the sustainability agenda En+ Group actively contributes to the advancement of both national and international sustainability agendas. ORGANISATION EN+ GROUP ROLE National ESG Alliance United Nations Global Compact (UNGC) Business 20, B20 En+ Group is one of the founding members of the National ESG Alliance, a business association dedicated to driving ESG transformation. En+ Group Director for Sustainable Development serves as the head of the ESG-Alliance Climate Working Group. At En+ Group’s initiative, the ESG-Alliance organised a Business Contribution to Climate Projects session on the sidelines of the 28th Climate Conference of the Parties to the UNFCCC (COP-28). Climate verifiers from India and Qatar took part in the panel discussion. The United Nations Global Compact (UNGC) is the largest international initiative for businesses committed to sustainable development. Starting from 2019, En+ Group has been publishing an annual Communication on Progress report detailing its efforts within the United Nations Global Compact Principles (UNGC). Additionally, En+ Group specialists actively participate in events hosted by the UNGC. En+ Group is also involved in the activities of the UNGC Network Russia, with the Company’s Director for Sustainable Development serving on its governing council. En+ Group 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, the European Union and starting from 2023, the African Union. In 2023, En+ Group actively contributed to the work of the Task Force on Energy, Climate Change, and Resource Efficiency, and the Action Council on ESG in Business. Among the B20 recommendations was En+ Group’s proposal to harmonise standards for monitoring and reporting emissions, driving cross-border recognition of national disclosures at the international markets. This includes tracking the production and consumption of renewable energy through appropriate market-based instruments such as energy attribute certificates (e.g. green certificates). Since 2020, En+ Group has consistently advocated for cross-border recognition of green certificates within the B20 framework. En+ Group supported the concept of linking carbon markets. Thus, linking carbon markets can increase the cost-effectiveness of emissions reductions, support investment into lower income countries and support international cooperation. BRICS Business Council En+ Group chairs the Russian Chapter of the Energy and Green Economy Working Group at BRICS Business Council.In 2023, the key recommendations of the Working Group, developed in cooperation with international partners, included the creation of BRICS Energy Skills Roadmap, the establishment of BRICS Clean Energy Fund, and the advancement of the BRICS Energy Cooperation Forum, established in 2022 under the Chinese presidency with support from En+ Group. En+ Group presented “New Energy” modernization programme at the second BRICS Energy Cooperation Forum. Baikal Plastic Free Alliance In 2023, En+ Group provided financial support to the Baikal Plastic Free Alliance, facilitating various initiatives aimed at curbing microplastic pollution in Lake Baikal. Among these efforts was an expedition that successfully retrieved more than 2 tonnes of sunken fishing nets from the lake’s depths. More information about the activities of the Association on page 121. International Chamber of Commerce (ICC) In the reporting period, the International Chamber of Commerce (ICC), an organisation bringing together global companies to foster business dynamism, hosted a roundtable discussion dedicated to Climate Projects, with En+ Group’s Metals segment acting as the moderator for this event. Transparency and certification En+ Group demonstrates its commitment to sustainability principles and responsible practices through extensive disclosure and certification processes, fostering industry-wide transparency. ORGANISATION EN+ GROUP ROLE Aluminium Stewardship Initiative (ASI) ASI is an international standards development and certification body focused on advancing responsible practices across the aluminium value chain. The En+ Group’s Metals segment assists ASI in developing certification systems and promoting the widespread adoption of standards. By the end of 2023, 18 entities were certified under ASI standards. International Aluminium Institute (IAI) The International Aluminium Institute brings together the global aluminium community to advocate for responsible production, sustainable use, and recycling of aluminium. Since 2002, representatives from the En+ Group’s Metals segment have been actively involved in the Environment and Energy Committee, the Health Committee, and various other initiatives within the Institute. Carbon Disclosure Project (CDP) CDP is a non-profit charity that runs the global disclosure system for investors, companies, and regions. In 2023, En+ Group and RUSAL submitted their respective climate change reports to the CDP. International Organization for Standardisation (ISO) The International Organization for Standardization (ISO) brings together global experts to establish standards for responsible business practices. En+ Group’s enterprises periodically obtain certification for management systems across various domains. 218 218 219 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGovernance Energy transition En+ Group actively promotes the standardisation of both new and existing hydropower facilities to facilitate the energy transition. It also maintains a portfolio of projects focused on boosting renewable generation. Governance Supply chain management ORGANISATION EN+ GROUP ROLE UN Energy Compact Hydropower of Russia Association En+ Group was the first Russian company to join the UN Energy Compact, a United Nations initiative in sustainable energy to advance the achievement of SDG 7 (Affordable and Clean Energy). Since 2021, the Company has consistently provided updates to the UN Energy Compact Secretariat regarding the progress made in implementing the New Energy modernization programme and the En+ Group’s Renewable Energy Certificates project. The Hydropower of Russia Association brings together Russian companies with the aim of advancing the hydropower sector and enhancing its performance and reliability through collaboration and joint problem-solving efforts. In 2023, Rosstandart approved GOST R, a standard developed by the Association that outlines methodologies for evaluating the technical condition of generators and hydraulic turbines. En+ Group has been an active participant in the working groups developing these methodologies. Climate and biodiversity En+ Group acknowledges the climate impact of its operations and is actively pursuing measures to mitigate GHG emissions, with the goal of achieving net zero by 2050. Moreover, En+ Group is actively involved in global efforts to mitigate climate change. ORGANISATION EN+ GROUP ROLE Carbon Pricing Leadership Coalition (CPLC) En+ Group and RUSAL are the only Russian members of CPLC a voluntary partnership under the auspices of the World Bank to advance global carbon pricing. En+ Group and RUSAL regularly contribute language to CPLC annual reports. In the latest CPLC Carbon Pricing Leadership Report 2022/23 En+ Group highlighted its commitment to achieve net-zero GHG emissions by 2050, as well as its initiative to measure GHG emissions from HPPs reservoirs instrumentally. Climate Partnership of Russia Climate Partnership of Russia is a coalition of Russian companies dedicated to advancing the climate agenda in Russia by facilitating dialogue among businesses, government bodies, the scientific community, and the general public. In 2023, the partnership organised events focusing on carbon regulation, Russia’s climate agenda trends, and various events in the run-up to and following the COP-28. Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) En+ Group and RUSAL regularly participate in the UNFCCC COP meetings. In 2023, under the auspices of the UN Global Compact Network Russia, En+ Group hosted two sessions focused on market-based mechanisms for achieving net zero and the significance of waste management in mitigating climate change. Representatives of various business associations and research institutes from India, China, South Africa, and Brazil presented their projects and case studies at the sessions. Race to Zero Race to Zero is a global initiative launched by the Climate Champions dedicated to achieving net zero. En+ Group is a member of the initiative as a signatory to the Business Ambition for 1.5 °C initiative. INTERNAL REGULATIONS z Supplier Standards z Procurement Regulations z Customer Liaison Regulations MATERIAL TOPICS z Sustainable supply chain 62 % share of purchases from local suppliers 100 % of suppliers operate with no actual or potential negative social impact GOALS STATUS PROGRESS made in 2023 z On track z First stage completed z Streamlining supplier assessment and supplier claims processes in the Power segment through automation z Expanding the Advanced Product Quality Planning (APQP) process to include other Company business units in order to enhance the certification process z On track z Developing and testing a pilot module z On track for the counterparty assessment system based on quality and expanding the scope of system application to cover supplier audit planning and monitoring schemes within the Metals segment z The Regulations on Qualification of Raw Materials and Supplies Producers were revised. An extension of the APQP process to the Directorate for New Projects of the Metallurgical Industry has been prepared z The automation of modules involved in rating assessment and data collection used in calculations has been completed, including Raw- Material Suppliers Database, Supplier Audits, Raw-Material Producers Certification, and Raw and Other Materials Non-Conformity Register 220 221 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGovernance Management approach GRI 3-3 Supply chain sustainability is crucial to the Company’s stability, which is why En+ Group places a strong emphasis on supplier selection. GRI 2-13 Inventory procurement and coordination of the procurement process for works and services for the Power segment internal customers are centralised within the EuroSibEnergo Trading House, the commercial expertise hub of the Group. The Metals segment uses purchasing centres that supply products and services to divisions and facilities. The Company consistently monitors developments in Russian and international laws. This enables the timely updating or development of new internal documents aimed at regulating and streamlining supply chain management and engaging with suppliers of goods, works, and services. For more details on key operating processes, see pages 334-335. En+ Group has adopted a systematic approach to identify and evaluate supply chain risks. Identified risks include: z risks of disruptions in supply chains for goods and raw materials z risks of monopolistic pricing in the transportation market z risks of time or budget overruns for projects. In 2023, there were no changes to the supply chain arrangements or structure. The Power segment maintains partnerships with equipment suppliers from Russia, Kazakhstan, and China as part of its import substitution efforts for critical goods and to ensure stable supplies from overseas. The Metals segment is predominantly sourcing from Russia, China, as well as Kazakhstan, the Caribbean, Europe, and Africa. In 2023, the Power segment expanded the Supplier Online Account’s functionality; it now helps interact with suppliers, enhancing communication efficiency through process automation. 222 Key products procured by entities: METALS SEGMENT Energy supply services Alumina Raw materials used in the production of primary aluminium and alloys Fuel Production plant maintenance and repair services POWER SEGMENT Goods Electrical primary and auxiliary equipment and spare parts Heating primary and auxiliary equipment and spare parts, chemical water treatment equipment Petroleum products, fuels, and lubricants including fuel oil, diesel fuel, and petrol Cable products Requirements for suppliers and contractors When selecting suppliers and contractors, En+ Group assesses their operations for compliance with sustainability principles. In accordance with the Supplier Standards approved in 2021, the Company requires suppliers to comply with laws, maintain product or service quality control, conduct business ethically, and ensure human rights observance. GRI 2-24, 407-1, 408-1, 409-1 Running a responsible supply chain helps the Company avoid human rights risks throughout the value creation process. En+ Group does not engage suppliers whose operations: z violate the rights to freedom of association and collective bargaining z involve a high risk of child or forced labour. For more details on human rights, see pages 142-143. Supplier Standards are available on the Company’s website GRI 308-1, 308-2, 414-1, 414-2 By conducting internal and independent external supplier audits and assessments at various stages of engagement, En+ Group endeavours to prevent negative impacts on people and the environment within its supply chain. Should the Company identify any negative impact during its audits, it retains the right to terminate its business relationship with such suppliers. 100% of contractors have been screened for social compliance. The Metals segment has screened 30 new suppliers for environmental compliance. Moreover, En+ Group routinely monitors the conformity of suppliers’ and contractors’ certifications to international standards such as ISO 14001, ISO 45001, and others. The Company also certifies its suppliers against the requirements of IATF 16949 и GOST R 58139 and applies the advanced product quality planning approach (component manufacturing approval process). METHODS TO VERIFY SUPPLIERS WITHIN THE METALS AND POWER SEGMENTS METALS SEGMENT POWER SEGMENT Personal protective equipment and workwear Potential and new suppliers z Certification assessment Rolled metal and pipes Computer equipment and associated spare parts Works and services Electrical primary and auxiliary equipment repair and maintenance services Development of project and design engineering documents Conducting engineering surveys and land surveying works Conducting construction and installation and pre- commissioning operations Overhead line repairs Hydraulic structure repairs z Reviewing documentation, transactions, and publicly available materials on potential counterparties z Voluntary ESG accreditation z Vendor and contractor audits, incorporating economic security measures and due diligence reviews z Participation in industry exhibitions showcasing manufacturers and developers z Assessment of compliance with the requirements of Federal Law 223-FZ On Procurement of Goods, Works and Services by Certain Types of Legal Entities z Assessment of compliance with the experience and qualification requirements set forth in the Power segment’s internal regulations z Assessment of business ethics and reputation of suppliers and contractors z Technical audits z "Know Your Customer" procedure to assess compliance risks Current suppliers z Routine inspections and audits to check compliance with relevant requirements, including occupational health and safety standards (included in contracts). z Supplier rating assessment z Vendor and contractor audits, incorporating economic security measures and due diligence reviews z Analysis of performance indicators z Audits to check compliance with z Use of penalties for non-compliance occupational health and safety standards z Verification of compliance with waste disposal requirements 223 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT Governance The Metals segment is actively pursuing initiatives to establish a sustainable supply chain as part of its Sustainable Development Strategy until 2030. The Strategy seeks to include 80% of suppliers in a sustainable and ethical supply chain for raw materials, finished products, goods, and services by 2025 (and achieve full coverage by 2035). This will be achieved by implementing an in-house accreditation, assessment, and verification system for ESG compliance. In 2023, the Metals Segment developed and launched Supplier Online Account, an information and analytical system enabling suppliers to undergo ESG accreditation. The Metals segment’s procurement service uses the Online Account feature to collect supplier data and review accreditation results. Along with launching the Online Account feature, the Metals segment published the user training course for procurement services and prospective suppliers planning to undergo ESG accreditation. Based on the results of the certification assessment and ESG accreditation, the Metals segment offers guidance to suppliers and rolls out development programmes to ensure suppliers’ compliance with the segment’s requirements. Local supplier support GRI 2-6, 203-2, 204-1 Hotline for reporting violations En+ Group continues to maintain the Signal hotline, a single dedicated speak-up hotline that receives reports from suppliers and other stakeholders. The hotline serves as a confidential platform for reporting violations, including the option for anonymous reporting, and for seeking guidance on standards application. Two communication channels are available to report violations: z Call 8 800 234-56-40 (toll free) z Write an e-mail to: signal@enplus.ru In an effort to bolster economic development within its regions of operation, En+ Group actively procures from local suppliers. In 2023, En+ Group’s procurement from local suppliers accounted for 62% of its total purchases, up by 23 p.p. from the previous year due to the change in Metals segment's approach to identifying local suppliers. In 2023, the Company maintained its support for small- and medium-sized enterprises by offering various benefits, such as extending the grace period (up to seven days) for payments and simplifying the bidding process for tenders and auctions. Small- and medium-sized enterprises accounted for 40.7% of the total procurement spend in Power segment. PLANS FOR 2024 AND BEYOND Extend the supplier certification procedure to the Directorate for New Projects of the Metals segment Proportion of spending on local suppliers in 2023, % Power segment Metals segment En+ Group 76 57 68 62 50 34 32 39 35 Local supplier definition Metals segment Local suppliers are companies that are registered in the country of operation of the Metals segment enterprise, that makes the purchase Power segment Local suppliers are companies registered within the regions where the segment operates, including the Irkutsk Region, Krasnoyarsk Territory, Nizhny Novgorod Region, Republic of Tyva, and Republic of Khakassia Automate specific business processes and streamline and enhance the transparency of procurement procedures Expand the roster of potential contractors and suppliers to drive competition using SEO promotion tools 4 2 5 Complete the revision of the Business Partner Code and have it approved 1 Implement a number of pilot projects such as: z umbrella purchases, category-based procurement, long-term contracts featuring formula-based pricing, etc. z consolidating procurements with an extended planning horizon, facilitating joint procurement among customers, ESG surveys of contractors, and automating feedback collection 3 Ensure effective engagement with customers by enhancing procurement literacy and establishing local competency centres, contributing to customer projects, particularly those focused on digitisation and sustainability 6 2021 2022 2023 224 225 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT2024Governance Responsible business practices QUALITY MANAGEMENT INTERNAL REGULATIONS z Quality Policy MATERIAL TOPICS z Economic performance 96 % share of responding customers who gave RUSAL the highest rate GOAL STATUS PROGRESS made in 2023 z Develop online services for customers z On track z Add new functionality to the Company’s online services Management Approach GRI 3-3 En+ Group constantly improves the quality of its services and products throughout the life cycle. This commitment is demonstrated through compliance with the relevant standards, fostering trust-based relationships with customers, providing regular training for employees, and actively engaging them in quality management procedures. The Group strives to prioritise customer satisfaction and deliver top-notch products by adopting innovative solutions and continuously improving operating processes. En+ Group actively collaborates with stakeholders to address quality concerns. The Company receives feedback from customers through various channels, including webinars, trade shows, conferences, and seminars. Furthermore, consumers have the opportunity to review product specifications and address quality-related inquiries through the Customer Online Account on the Group’s information portal. Consumers may also conduct their own audits by visiting the Metals segment’s facilities. No concerns were identified as part of the 2023 audit. The Company believes that employee engagement and ownership of these issues are key to enhancing product quality. To boost engagement, En+ Group is building the required employee competencies and rolls out an effective incentive system and various tools to elevate its specialists’ professional level. Specifically, the Company has established the Quality Academy, providing employees with the essential skills for the efficient operation of the quality management system (QMS). Training is structured in a hybrid format, encompassing self-training, in-person theoretical and practical sessions, video and audio consultations, and participants’ presentations of personal projects. The course involves two weeks of on-site training at one of the Company’s facilities, followed by six weeks dedicated to project implementation at the employee’s home facility. In the reporting year, the Company focused its QMS improvement efforts on the Power Segment. This involved proactive upgrades of essential equipment for uninterrupted power supply and the integration of supplementary features into En+ Group’s customer applications. Key principles guiding the operation and enhancement of the quality management system Consumer focus Adopting a customer-centric approach when dealing with consumers Best and reliable suppliers Cultivating long-term relationships with partners that support a culture of continuous improvement Cultural values Creating an environment conducive to developing employee competencies Business excellence model Following sustainability principles Continuous improvement and value creation Incorporating cutting-edge innovations and state-of-the-art technical solutions into the production process Accountability Accountability for compliance with the Quality Policy expected from both management and every employee Built-in quality Quality control throughout the entire manufacturing process 226226 227 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTGovernance ENHANCEMENT OF CUSTOMER MOBILE SERVICES IMPROVING QUALITY THROUGH THE DEPLOYMENT OF MODERN TECHNOLOGIES IMPROVING THE QUALITY AND RELIABILITY OF ELECTRICITY SUPPLY GRI 3-3 En+ Group is continuously enhancing its products, ensuring they meet the highest global standards. To achieve this objective, all finished products within the Metals segment undergo mandatory labelling in accordance with product data sheets, specifications, and state standards. The facilities also undergo independent annual assessments to ensure compliance with quality standards. Facility certification Thus, in 2023, certification was carried out to validate compliance with international standards ISO 9001 and IATF 16949 as well as the national standard GOST R 58139. In 2023, participants of the Energy Lab accelerator programme incorporated a Report an Outage feature into customer information services. Local consumers will have access to this feature through their online accounts, the app, and the Company’s website. In the reporting year, the Group increased its contact centre capacity by hiring more operators and redistributing daily workload. Additional communication channels are readily accessible to customers: they can submit requests through an application, the Company’s social media accounts, or request a callback. The OOO Irkutskenergosbyt call centre has introduced a voice assistant capable of receiving meter readings from retail customers and entering them into the database. The Company is also exploring the possibility of directing calls and inquiries from legal entities to a voice assistant. Furthermore, specialists are also considering entrusting artificial intelligence with the task of notifying customers about emergency outages. Customers will be invited to submit requests detailing incident locations, with robotic assistants handling and then forwarding them to human operators for response. Customers, particularly the elderly, having difficulties installing and using En+ Group’s applications can seek assistance from employee volunteers. With the aid of digital services and volunteer support, more customers will now have the option to send documents to the Company, submit their meter readings, or pay utility bills from the comfort of their homes. 228 En+ Group started to roll out remote control systems for heat pumping stations at its facilities in Irkutsk. The innovation enables the dispatcher to not only monitor parameters and equipment at the pumping station but also remotely control them from the central control room. This reduces the response time to emergency situations and facilitates rapid switching to backup equipment when necessary. The adoption of this new control format markedly improves the quality of En+ Group’s heat supply services. In the future, the Group intends to roll out remote control systems across all pumping stations within the city. 5 new substations launched by the Company in Irkutsk, Irkutsk and Shelekhovsky districts within the framework of the Teplovoy Luch project in the reporting year The En+ Group’s Teplovoy Luch project in these regions encompasses the construction of the largest heat pipeline in the past 50 years. Introducing the new heat pipeline will enable the disconnection of coal and fuel oil-fired boilers while connecting residential buildings and social facilities to the network. In doing so, the Company actively contributes to the improvement of environmental conditions in the region. > 5.5 km of the heat pipeline expected to span by 2026 Energized for action IS0 9001 QMS principal standard GOST R 58139 Standard for the automotive industry IATF 16949 Standard for the automotive industry 25 facilities (Alumina Division, Aluminium Division, Downstream Division, and New Projects Directorate) 7 aluminium smelters 2 aluminium smelters GRI 3-3 The Group also gauges customer satisfaction levels and the Company’s ratings as a supplier and runs focus programmes seeking to enhance the quality of manufactured products. The Company’s Zero Defects strategy applies to all procurements impacting product quality: every shipment of raw and other materials must meet contractual and regulatory requirements. In the reporting period, the Company received 95 consumer complaints about substandard product quality. Investigations have been conducted into each report, leading to necessary and appropriate actions in response to each specific case. Number of customers’ quality-related reports 2023 2022 2021 95 46 55 PLANS FOR 2024 AND BEYOND Continue to develop online customer services. 2024 229 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTGovernance DIGITAL TRANSFORMATION INTERNAL REGULATIONS z Digital transformation strategy MATERIAL TOPICS z Economic performance A new automated predictive diagnostic system was launched at Bratsk HPP GOALS STATUS PROGRESS made in 2023 z Execute end-to-end automation z On track projects in accordance with the established plans z Develop and implement z On track a comprehensive Power Segment Digital Transformation project z Launch the Digital Project Office z On track project and open Artificial Intelligence and Big Data, Industry 4.0, and Digital Logistics laboratories z On track z To establish a consolidated digital ESG data loop within the Metals Segment by 2025, followed by the integration of 100% of ESG metrics into a single information platform. This platform will enable big data-driven decision making on environmental, social, and corporate governance aspects z Measures are being taken in accordance with the schedule z Measures are being taken in accordance with the schedule. z The Artificial Intelligence and Big Data and Industry 4.0 laboratories were opened, with the remaining projects thoroughly developed and primed for competitive procedures z An ESG data collection and calculation system has been developed, commissioned, and seamlessly integrated with various data sources z ESG data sources are being analysed to assess their viability for generating ESG metrics Management Approach GRI 2-13, 3-3 En+ Group consistently enhances operating processes, ensuring effective management and timely oversight. This is primarily facilitated by the Group’s implementation of digital products, services, and solutions for business units and employees, alongside the automation of business processes. Furthermore, the Group systematically gathers and analyses big data sets, leveraging them to train artificial intelligence models to perform operational tasks. The Group has a Digital Transformation Directorate whose main task is to implement the digital transformation strategy, introduce innovative digital solutions to achieve maximum operational efficiency. In 2023, En+ Group revamped the digitisation and automation management structure by consolidating the automation and digitisation management entities into a unified automation and digitisation management company. Moreover, in Power segment it was established Industry 4.0 laboratory, which accumulates the world’s best practices for implementing digital solutions in production, and also launches the “Digital Project Office” project with the functions of business analysis, generation of digital initiatives and life cycle management of digital solutions for production. Within the Metals segment, the Information Technology Directorate (ITD) oversees automation and digitisation aspects. Moreover, cross-functional teams with specialised expertise are being established within the segment to drive the development and rollout of new digital products. The Digital Transformation Strategy is the core document formalising En+ Group’s objectives for digitisation and automation, along with the necessary tools and actions to achieve them. In the reporting year, the Metals segment adopted its own strategy for 2023–2030 named Digital Company. To attain the objectives outlined in the strategy, the segment is presently executing an end-to-end automation programme, with plans to commence a digitisation programme upon its completion. The strategy incorporates a wide range of digitisation and automation initiatives, ranging from upgrading digital infrastructure and refining automated process control systems (APCS) to deploying MES and corporate systems. Furthermore, it involves piloting digital projects such as computer vision, machine learning, and process robotisation across existing, upgraded, and newly commissioned facilities. For more details on the Digital Transformation Strategy and the Company’s approach to managing automation and digitisation, see the En+ Group Сonsolidated Report 2022, pages 184–185 Automation z Routine task automation for all Company services z Development of analytical tools and automated reporting systems z Creation of a single enterprise-wide data warehouse z Deployment of disruptive digital technologies z Deployment of management enterprise systems (MES) to streamline operations automation z Standardisation and centralisation of processes, expertise, competencies, and automation tools z Protection of IT data and supporting infrastructure against accidental or intentional interference z Incorporation of ESG considerations into automation and digitisation projects Digitisation z Introduction of a product-based approach to digital solution development Elements of the product-based approach have been implemented: digitisation initiatives and requests are now aligned with a regularly updated catalogue of digital industrial solutions. This enables the selection of off-the-shelf solutions or the commencement of software development with a scope for subsequent scalability across the Group z Development of a digital skills training and advancement system for all Company employees Within the En+ Group Leaders programme, employees from the Company’s laboratories devised and held training courses on Modern Digital Products in the Energy Sector. The content generated will serve as the foundation for subsequent training targeting broader audiences z Implementation of business-specific digital solutions 230 231 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTGovernance Automation and Digitisation Projects Automation and Digitisation Training and Partnerships En+ Group is implementing automation and digitisation projects across various domains. The digital solutions we develop and implement serve a dual purpose: they enhance the efficiency and reliability of operating processes while ensuring the Company’s sustainable development. They encompass reducing environmental impact, securing occupational health and safety controls, developing educational platforms, simplifying supplier management, streamlining supply chains, and other aspects. For more details on the Company’s key automation and digitisation projects and their feed into sustainability, see En+ Group Consolidated Report 2022, pages 186–187 DEVELOPMENT OF PREDICTIVE ANALYTICS SYSTEMS FOR GENERATING FACILITIES (CHPS AND HPPS) A new automated predictive analytics system (APAS) was launched at Bratsk HPP. MOBILE WALKAROUND INSPECTOR Ust-Ilimsk HPP has held a trial run of the Mobile Walkaround Inspector. Through machine learning algorithms, APAS systematically gathers and analyses comprehensive data on the parameters and operational conditions of hydraulic units. It predicts equipment malfunctions in advance and promptly alerts plant staff. The technology helps determine the most suitable timing for maintenance, thereby enhancing operational safety and efficiency. The APAS is based on a Russian-built platform equipped with a specialised module for creating mathematical models, which makes it unique in Russia. Ust-Ilimsk HPP has held a trial run of the Mobile Walkaround Inspector, a dedicated application that enables plant staff to livestream data and supporting photo and video materials of identified defects. The application facilitates improved coordination of walkaround inspections, leading to expedited elimination of identified defects. En+ Group routinely holds educational events on automation and digitisation, providing a platform for employees to share their experience and insights within the Group. The Group is also interested in recruiting skilled young talent to bolster its specialist teams. The Company has been conducting an extensive outreach programme among school and university students interested in the field: z Holds competitions and festivals devoted to robotics and information technology z Opens and maintains the operation of En+ Group Multilab competency building centres z Implements partnership programmes with Russia’s leading universities, offers in-house training programmes for niche specialists (such as IT Academy and Energy Lab, etc.) and rewards top-performing students The training programmes for young talent are centred around En+ Group’s real-world research tasks and case studies, which are particularly valuable for nurturing future IT talent for the national power and metals industries. 2023 saw the IT Academy project’s first graduate stream to commence employment at En+ Group. Digital Aluminium Platform Employees within the Metals Segment have the opportunity to acquire digital skills through the in-house platform as part of the Digital Aluminium course, which has accumulated a wealth of training materials. The course is open to all employees and may be accessed online via mobile devices and desktop computers. The course comprises four thematic modules encompassing the following topics: z Artificial intelligence technologies, including machine vision and machine learning z Robotised systems z Cybersecurity at work and at home z Internal corporate systems and rules of operation Participants may submit ideas for addressing workplace challenges using Industry 4.0 technologies as part of the course. These ideas will be further developed by dedicated units. PLANS FOR 2024 AND BEYOND Establish a digital project committee and a number of new offices within the Digital Transformation Directorate 1 Develop the Digital Project Office project, establish the Digital Logistics laboratory, build Data Platform and organize the “Data Management Center” 2 CONTINUOUS THERMAL MONITORING SYSTEM A unique continuous thermal monitoring system was installed at the outdoor switchgear of Irkutsk HPP. The development was based on a Russian-built platform and is unmatched in the country. The system enables sending timely alerts to plant staff regarding temperature anomalies at the switchgear and equipment switching to critical temperature modes, which, among other things, may result in an emergency (such as a fire). Now, HPP employees no longer need to conduct regular inspections of switchgear contact connections with thermal imaging cameras; the system performs this task independently online. Continue the implementation of end-to-end automation initiatives Continue the implementation of initiatives within the Power Segment Digital Transformation project Finalise key tasks within the Metals segment under the End-to-End Automation programme 3 4 5 Energized for action 232 232 Moreover, the system offers self-learning capabilities and continually aggregates datasets, leading to gradual enhancements in the accuracy of its forecast models. The project is scheduled for incremental expansion starting in 2024 to encompass all outdoor switchgears across the Company’s HPPs. Assess the effectiveness and, in case of success, kick off the rollout of the following technologies and projects in the Metals segment: z Industry 4.0 technologies for detecting deviations and serving as decision advisors z 3D1 projects to replace human labour with robotised intelligent systems z Augmented reality solutions 6 2024 1 Dust, Dull, Dangerous, a term for dirty, dangerous, and heavy work at operating facilities. 233 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTGovernance CYBERSECURITY INTERNAL REGULATIONS z Information Security Policy MATERIAL TOPICS z Business ethics 300 cybersecurity vulnerabilities identified and eliminated Cybersecurity measures GRI 418-1 A notable achievement of En+ Group’s cybersecurity efforts in the reporting year was the absence of any instances of confidentiality breaches, unauthorised transfer of personal data, or complaints from customers and partners regarding data leakage or breaches of confidentiality and privacy. Given the increasing frequency of cyberattacks targeting corporate IT infrastructure, continuous enhancement and refinement of the Company’s cybersecurity management system are imperative. GOAL STATUS PROGRESS made in 2023 Web application firewall (WAF) A web application firewall designed to detect and block network attacks z Implementation of the Sandbox z Achieved z System implemented secure testing environment Cybersecurity operations centre (SOC) Cybersecurity command centre tasked with monitoring, detecting, analysing, and responding to cyber incidents in information systems Cybersecurity tools/methods Brief description and key features Implementation status at En+ Group Pilots have been run to test protection tools and methods, with plans to procure and roll out them across the entire Group In 2023, the following projects were implemented to assess and deploy novel approaches and tactics for defending against cyberattacks: Management Approach Deception, a network decoy management system A system designed to mimic IT infrastructure and protect it from cyberattacks. The system operates by generating deceptive elements within the IT infrastructure (commonly known as network traps), altering hackers’ perceptions of the corporate information networks. Upon engaging with the network traps, intruders infiltrating the information network promptly reveal themselves, with cybersecurity specialists alerted accordingly. Thus, the system enables the early detection and prevention of cyberattacks on information systems while also redirecting hackers’ focus away from the genuine critical components of the IT infrastructure Sandbox secure testing environment A zero-day attack protection system1 capable of simulating the execution of suspicious files within an isolated environment to identify and analyse malicious files and code The system was rolled out across the Group GRI 2-13, 3-3 Cybersecurity is crucial for maintaining the seamless operation of all Company business processes. The Group’s efforts aim to enhance IT infrastructure security across all enterprises and ensure prompt detection and responses to threats and incidents in this area. All Company’s efforts in this area are aligned with its Information Security Policy and internal regulations. En+ Group consistently updates documents and brings its business processes in line with the requirements of applicable laws. En+ Group successfully applies its current cybersecurity management system to ensure the confidentiality, safety, and availability of data. The cybersecurity incident response team is tasked with managing all aspects of the system’s operation and driving its continuous improvement. Team members promptly detect and address threats and risks, including external scanning attempts, exploitation of perimeter vulnerabilities, malicious software intrusion attempts, and unauthorised user activities. They also oversee the prompt identification and elimination of vulnerabilities on the Company’s external perimeter. The response team additionally compiles monthly reports detailing the results of its operations, which are subsequently submitted to the Company’s management for review. The reports include data on the Company’s current IT infrastructure security status and the trends in the number of identified and resolved threats and cybersecurity incidents over recent periods. Annually, auditors conduct reviews of En+ Group’s cybersecurity management processes. Following these audits, detailed reports are prepared as needed, highlighting identified vulnerabilities and threats, along with recommendations and corrective action plans. In 2023, several Group entities underwent scheduled audits in this area. Furthermore, tests were conducted on various information systems and services within the Company. Based on the outcomes of their efforts, the Group’s experts identified and systematically addressed over 300 vulnerabilities during the reporting period, marking a 2.2-fold increase compared to 2021. 234 1 Zero-day attacks are cyberattacks resulting from attackers exploiting vulnerabilities before they are identified and addressed by information system developers. These attacks become public knowledge before information system developers release vulnerability patches. 235 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTGovernance Employee Involvement En+ Group acknowledges that preventing cybersecurity incidents largely depends on employees’ willingness to comply with established rules and regulations. The Company conducts regular internal training sessions for employees, using En+ Group’s Corporate University internet portal, to educate them on the rules of operating electronic computing tools. Additionally, throughout the year, all employees receive training materials via corporate email, which contain informative fact sheets and examples of phishing emails. SASB IF-EU-550a.1 The Group promptly addresses and mitigates the effect of employee breaches of cybersecurity standards. En+ Group investigates all detected violations in accordance with the procedure for planning and implementing appropriate measures. During these investigations, designated individuals document the facts and causes of the violations and enforce technical and disciplinary measures to prevent similar situations in the future. In 2023, the Company implemented several initiatives to enhance employee awareness of cybersecurity issues, including: Internships for employees of the Group’s regional cybersecurity services. The most common types of breaches were as follows: Sending work-related information to personal e-mail addresses Unauthorised copying of information to removable media or cloud services A practical conference organised jointly with a major IT and cybersecurity integrator to facilitate discussions among Group employees on current hot topics, challenges, and practical strategies for addressing them. The conference was attended by representatives from top developers in the cybersecurity solutions market. Using the Internet for personal purposes Unauthorised installation of unapproved software Violations of personal computer operation policies (such as failing to lock the device promptly, or storing personal information) PLANS FOR 2024 AND BEYOND Deploy and operationalise several additional cybersecurity systems Conduct a pilot project to test a master data management system Finalise employee training courses to align them with the current cybersecurity standards and requirements 1 2 3 236 2024 INNOVATION MANAGEMENT GRI 3-3 By continuously developing and sourcing new technologies, En+ Group maintains its leadership position in the global market while constantly improving its environmental, social, and economic performance. R&D management INTERNAL REGULATIONS z R&D Policy z Patent Policy MATERIAL TOPICS z Innovation management z Economic performance z Air quality z Climate change z Energy management z Just energy transition and low-carbon products 1.9 RUB allocated to R&D projects 22.5 USD mn1 bn R&D management prioritises the advancement of clean energy and other strategic areas for En+ Group, while the business system fosters employee engagement in improving the Company’s operational efficiency. GOALS STATUS PROGRESS made in 2023 z Broaden the scope of partnerships z On track and engage new scientific collaborators in R&D projects of particular interest to the Company z Continue to explore new areas for the Company, including CO2 capture and storage (CCS), energy storage, hydrogen economy, and the development and production of cathode materials for batteries z On track z The Company has gathered data regarding cutting-edge scientific and technical advances by leading scientific and educational organisations and major manufacturers z The company builds partnerships with major National Research Universities, research institutes of the Russian Academy of Sciences, and the Novosibirsk Ыcientific Сluster. z The Group is exploring the industrial methodologies employed by Chinese companies for CO2 capture and storage alongside innovation-driven developments from researchers at Novosibirsk State University (NSU) and St Petersburg State University (SPbSU) z En+ Group is expanding partnerships in hydrogen economy and energy storage, working closely with the Competence Centre of the National Technology Initiative (NTI), Hydrogen as the Cornerstone of a Low-Carbon Economy 1 Based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. 237 CONSOLIDATED REPORT 2023STRATEGIC REPORTSUSTAINABLE DEVELOPMENTGovernance GRI 3-3 The Science and Technical Council and the Innovation Committee oversee R&D projects in the Power segment. In 2023, En+ Group started finalising the R&D Procedures to accelerate and better manage scientific projects. GRI 2-13 The Technical Directorate is responsible for overseeing innovative projects within the Metals segment. Operations within this segment are governed by the Technical Policy, which is annually revisited by the Scientific and Technical Council. This council, a collective body, is also responsible for decisions around innovation development and deployment. In addition, the Metals segment boasts its own R&D expertise, with the following research centres and institutes handling most developments: Institute of Light Materials and Technologies (ILM&T), Russian Aluminium and Magnesium Institute (VAMI), the Siberian Scientific Research and Design Institute of Aluminium and Electrode Industry (SibVAMI), and the Engineering and Technology Centre (RUSAL ETC). In the reporting year, En+ Group’s R&D expenditures totalled RUB 1.9 billion (USD 22.5 million1). Out of these, RUB 1.8 billion was allocated to the Metals segment and RUB 90 million to the Power segment. R&D expenses within the Power Segment decreased by 41% year-on-year in the 2023, primarily due to the extension of deadlines for most ongoing projects. In 2023, 49% of the Power Segment’s R&D investments were directed towards renewable initiatives. GRI 3-3 In research and development, En+ Group leverages its internal expertise while also partnering with leading scientific and educational organisations and major manufacturers. 1 Based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. Software development The Digital Transformation Directorate and the Development Department are collaborating to explore the scope for developing proprietary software for monitoring, diagnosing, and streamlining the operation of process equipment. Experts are exploring various options for implementing different classes of artificial intelligence algorithms. Perovskite solar cells This project is being implemented through joint efforts with Lomonosov Moscow State University (MSU). Current challenges include enhancing the stability of laboratory samples, advancing EuroSibEnergo’s patented vacuum layer deposition technology, and scaling up cell manufacturing methods. 18 % The current efficiency of perovskite-silicon tandem prototypes 238 Collaboration between En+ Group and top Russian R&D universities Development of heavy-duty resource-saving electrolysers Heavy-duty electrolysers have been developed and are currently in operation at the pilot facility of the Sayanogorsk Aluminium Smelter. The innovative electrolysers offer high performance and energy efficiency and contribute to reducing environmental impact. In 2023, the Metals segment team focused on designing solutions aimed at reducing construction costs. Energized for action In 2023, En+ Group expanded its collaboration with leading research universities and other organisations focused on R&D. Thus, in the reporting year, the National Research University Moscow Power Engineering Institute (NRU MPEI) and En+ Group signed a partnership agreement to pursue major projects under the comprehensive full innovation cycle scientific and technical programme Next-Generation High-Capacity Energy Sector. This collaboration aims to establish the technological foundation for the future energy sector. Furthermore, in 2023, En+ Group experts held meetings with representatives from top scientific and educational institutions in Novosibirsk, including NSU (Novosibirsk State University) and NSTU (Novosibirsk State Technical University), as well as several research institutes affiliated with the Siberian Branch of the Russian Academy of Sciences (SB RAS). These meetings resulted in a collaboration plan for implementing scientific and technical projects. PLANS FOR 2024 AND BEYOND Continue to advance research projects in clean energy, including hydrogen and solar energy, energy storage and other Foster ties with existing partners and engage new ones on collaborative R&D initiatives Draft a new R&D Process Regulation to drive R&D excellence Approve the Company’s updated Science and Technical Policy aligned with the emerging trends in strategic development 3 1 4 2024 2 239 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENTGovernance Business system INTERNAL REGULATIONS z Regulation on Operational Development Project Management z Regulation on Kaizen Suggestion Submission and Implementation MATERIAL TOPICS z Innovation management z Economic performance z Employee management and engagement MANAGEMENT APPROACH GRI 3-3 En+ Group strives to involve its employees in driving the Company’s continued growth. Any En+ employee can submit proposals to improve processes. The most useful and effective of them are introduced into production. In 2023, the overall economic impact from business system projects reached RUB 7.3 billion(USD 86.2 mn), RUB 6.5 bn (USD 76.38 mn) in Metals segment and RUB 843 mn (USD 9.8 mn)1 in the Power segment. 7.3 RUB bn Total economic benefit from the implementation of the business system projects and suggestions 86.2 USD mn1 Total number of suggestions received from employees 17,596 Kaizen suggestions were submitted in 2023 Power segment Metals segment 2023 2022 2021 13,035 12,596 4,561 3,978 12,396 3,579 17,596 16,574 15,975 Employee suggestions implemented Power segment Metals segment 2023 2022 2021 11,855 4,126 11,430 3,677 11,607 3,108 15,981 15,107 14,715 GOALS STATUS PROGRESS made in 2023 z Roll out a mobile application z Achieved for submitting Kaizen suggestions z Prepare and hold the Kaizen of the Year 2023 and Project of the Year 2023 competitions z Achieved z The app was tested and launched in October 2023 z By the year-end, over 2,700 Kaizen suggestions had been submitted through the system z Both competitions were held, and the best projects were selected z Continue with the business system z Achieved z 739 people trained (100%) training programme for new employees with the aim of achieving 100% of trained workforce z Introduce a mandatory business system training programme at the operational site tailored for engineers and technical staff of various proficiency levels z On track 1 Based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar. 240 z A training programme for engineers and technical staff consisting of six modules was developed In 2023, En+ Group developed a new Regulation on Kaizen Suggestion Submission and Implementation, containing guidelines for making submissions via a mobile application. To better motivate employees submitting Kaizen suggestions, En+ Group has rolled out an incentive scheme. En+ Group launched the Kaizen Digital mobile app and website In collaboration with the Business System Development Directorate, En+ Digital experts created the Kaizen Digital website and mobile application, which were integrated into operating processes during 2023. A mobile app is a convenient and straightforward way to submit ideas. Through new the app, employees can now monitor review and implementation timelines for their ideas. Furthermore, employees can rate their colleagues’ suggestions and provide feedback. These initiatives enable En+ Group to involve as many employees as possible in the continuous improvement engine for the Company’s processes. After the application was implemented, the number of kaizens increased by 11%. En+ Group has taken the following steps to enhance the availability of both the website and mobile app: z Developed user instructions for the mobile app and website, which were published on the self- service portal z Delivered training sessions for all business system experts to proficiently use the Kaizen Digital solutions z Designed a course titled Kaizen Digital Mobile App to brief employees on the app’s key features and increase their involvement in Kaizen activities In October 2023, the app was made available to all Company employees. By the end of the year, over 6,000 employees were registered in the app, with over 2,700 Kaizen suggestions submitted. In the reporting year, En+ Group continued to implement the 5S principles: sort, set in order, shine, standardise, and sustain. These principles serve as guidelines for En+ Group employees in their workplace practices. 241 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT Governance Project of the Year Competition IN 2023, EN+ GROUP HELD ITS SECOND PROJECT OF THE YEAR COMPETITION. Project of the Year winning projects 1 2 3 4.92 out of 5 Satisfaction score achieved through a project to enhance the efficiency of HR administration business processes ↓ 73 % Decrease in the overall operation time achieved through a project to install a new transformer ↓ 1.14 % Reduction of coal ash content achieved through a project to introduce coal sampling control and prompt adjustment of the shipment route 270 participants from the Power Segment participated in competition 63 projects were assessed RUB 79.6 mn total economic benefit from projects of the competition USD 933.72 thsd 1 242 242 BUSINESS SYSTEM TRAINING To maximise employee awareness of the business system’s capabilities and tools, the Business System Development Directorate provides regular training to our staff. The Company is in need of business system couches to facilitate training sessions. In 2023, a ten-month training programme was specifically designed for them, intended to help specialists from the Business System Development Directorate train 32 couches. These trainers will possess in-depth knowledge of individual tools within the business system as well as practical skills to organise and conduct training sessions independently. A dedicated business system development training programme was crafted for engineers and technical staff In 2023, specialists within the directorate put together a training programme on business system development tailored for engineers and technical staff of various proficiency levels. The programme consists of six modules, each focusing on a distinct business system tool. After completing each module, trainees are given homework assignments and assessed at the end of training. En+ Group expects this approach to improve the quality of training for this employee category and encourage adoption of relevant business system tools. For more details on business system training structure, see the 2022 Consolidated Report, page 195 PLANS FOR 2024 AND BEYOND Continue staff training on the Transformation programme Continue the implementation of training programmes for newly hired employees and provide training for coaches on business system development 1 Implement a training programme tailored for engineers and technical staff across different proficiency levels Transition to fully electronic document management within the business system facilitated by the Kaizen Digital application Implement key efficiency projects 3 4 2024 2 5 243 STRATEGIC REPORTЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023SUSTAINABLE DEVELOPMENT1 Based on the 2023 average USD/RUB exchange rate of RUB 85.25 per dollar.03 04 Financial Statement 248 Consolidated Financial Statement FINANCIAL STATEMENTCONSOLIDATED REPORT 2023245245244245Consolidated Financial Statement EN+ GROUP IPJSC Consolidated Financial Statements for the year ended 31 December 2023 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 247 3 248 4 253 9 255 11 256 12 258 14 259 15 246 247 247 2 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT 248 249 249 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT250 251 251 CONSOLIDATED REPORT 2023FINANCIAL STATEMENTEN+ GROUP IPJSC Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2023 Year ended 31 December 2023 USD million 2022 USD million Revenues Cost of sales Gross profit Distribution expenses General and administrative expenses Impairment of non-current assets Other operating expenses, net Results from operating activities Share of profits of associates and joint ventures Finance income Finance costs Profit before tax Income tax expense Profit for the year Attributable to: Shareholders of the Parent Company Non-controlling interests Profit for the year Note 5 6 13 8 8 10 16(f) 14,648 (11,366) 3,282 (844) (874) (366) (168) 1,030 752 120 (1,026) 876 (160) 716 596 120 716 Earnings per share Basic and diluted earnings per share (USD) 9 1.186 16,549 (12,056) 4,493 (793) (1,071) (370) (253) 2,006 1,553 184 (1,290) 2,453 (607) 1,846 1,083 763 1,846 2.156 252 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 259 to 326. 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 15 to 83. 9 253 253 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2023 (continued) Year ended 31 December Note 2023 USD million 2022 USD million Profit for the year 716 1,846 Other comprehensive (loss)/income Items that will never be reclassified subsequently to profit or loss Actuarial gain on post-retirement benefit plans Revaluation of hydro assets Тахation Items that are or may be reclassified subsequently to profit or loss Foreign currency translation differences on foreign subsidiaries Foreign currency translation differences for equity-accounted investees Change in fair value of cash flow hedge Other comprehensive (loss)/income for the year, net of tax Total comprehensive (loss)/income for the year Attributable to: Shareholders of the Parent Company Non-controlling interests Total comprehensive (loss)/income for the year 18(b) 11(e) 10(c) 13 19 16(f) 8 − − 8 (861) (1,011) − (1,872) (1,864) (1,148) (555) (593) (1,148) 11 650 (132) 529 (47) 369 (131) 191 720 2,566 1,669 897 2,566 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 Additional paid-in capital Revaluation reserve Other reserves Foreign currency translation reserve Retained earnings 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 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 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(f) 17 10(b) 18 17 18 15(d) 15(e) EN+ GROUP IPJSC Consolidated Statement of Financial Position as at 31 December 2023 31 December 2023 USD million 2022 USD million 10,472 2,086 4,542 264 340 13 303 18,020 3,575 1,696 620 14 97 19 2,347 8,368 26,388 − 1,516 9,193 3,480 (1,492) (6,578) 802 6,921 4,660 11,581 8,477 991 351 196 10,015 2,587 124 1,369 339 373 4,792 26,388 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 9,193 3,480 (1,497) (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 The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the to, and forming part of, the consolidated financial statements set out on pages 15 to 83. notes to, and forming part of, the consolidated financial statements set out on pages 259 to 326. 10 254 The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of, 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 15 to 83. the consolidated financial statements set out on pages 259 to 326. 11 255 255 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Consolidated Statement of Cash Flows for the year ended 31 December 2023 Year ended 31 December Note 2023 USD million 2022 USD million Operating activities Profit for the year Adjustments for: Depreciation and amortisation Impairment of non-current assets Net foreign exchange loss (Gain)/loss on disposal of property, plant and equipment Share of profits of associates and joint ventures Interest expense Interest income Dividend income Income tax expense (Partial reversal of provision) / write-down of inventories to net realisable value Impairment of trade and other receivables Provision for legal claims Change in fair value of derivative financial instruments Change in fair value of financial assets and liabilities Operating profit before changes in working capital Decrease/(increase) in inventories Decrease/(increase) in trade and other receivables and advances paid Decrease in trade and other payables and advances received Cash flows from operations before income tax Income taxes paid Cash flows from operating activities 11,12 8 6 13 8 8 8 10 6 8 8 10(e) 716 765 366 85 (4) (752) 748 (93) (27) 160 (14) 16 3 99 94 2,162 843 340 (259) 3,086 (365) 2,721 1,846 720 370 111 23 (1,553) 988 (115) (38) 607 172 169 10 191 (31) 3,470 (1,098) (418) (783) 1,171 (599) 572 EN+ GROUP IPJSC Consolidated Statement of Cash Flows for the year ended 31 December 2023 (continued) Year ended 31 December Note 2023 USD million 2022 USD million Investing activities Proceeds from disposal of property, plant and equipment Acquisition of property, plant and equipment Acquisition of intangible assets Cash paid for investment in equity securities measured at fair value through profit and loss Cash (paid for) / received from other investments Interest received Dividends from associates and joint ventures Dividends from financial assets Prepayment for acquisition of associate Contribution to associates and joint ventures Cash outflow from disposal of subsidiary Change in restricted cash Cash flows (used in) / from investing activities Financing activities Proceeds from borrowings Repayment of borrowings Acquisition of non-controlling interest Interest paid Restructuring fees Settlement of derivative financial instruments Dividends to non-controlling shareholders Cash flows (used in) / from financing activities 15(h) 13 16(a) Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year, excluding restricted cash Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the year, excluding restricted cash 15(f) 13 (1,413) (35) (5) (69) 84 − 23 (13) (5) − 1 (1,419) 6,103 (7,662) (3) (682) (31) (2) − (2,277) (975) 3,474 (154) 2,345 8 (1,674) (37) (113) 111 104 1,639 34 − (8) (16) (1) 47 9,129 (7,007) (14) (987) (21) (229) (129) 742 1,361 2,328 (215) 3,474 Restricted cash amounted to USD 2 million and USD 3 million at 31 December 2023 and 31 December 2022, respectively. The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of, The consolidated statement of cash flows is be read in conjunction with the notes to, and forming part of, the the consolidated financial statements set out on pages 15 to 83. consolidated financial statements set out on pages 259 to 326. 12 256 The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of, The consolidated statement of cash flows is be read in conjunction with the notes to, and forming part of, the the consolidated financial statements set out on pages 15 to 83. consolidated financial statements set out on pages 259 to 326. 13 257 257 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT Attributable to shareholders of the Parent Company EN+ GROUP IPJSC EN+ GROUP IPJSC Consolidated Statement of Changes in Equity Consolidated Statement of Changes in Equity for the year ended 31 December 2023 for the year ended 31 December 2023 Attributable to shareholders of the Parent Company Share premium Additional paid-in capital 1,516 9,193 Other reserves − (1,426) − (71) − − (71) − − − − − − − − − − − − − − − − − Reva- Foreign luation reserve currency 2,945 translation reserve − (5,561) 518 650 (132) − − 518 139 17 − − − 139 17 − (71) − − (71) (71) − − − Foreign currency translation reserve (5,561) Other reserves Retained earnings/ (accumula- ted losses) (1,426) (892) 1,083 − 139 − − 139 Retained earnings/ (accumula- ted losses) (892) Total 1,083 5,775 − − − 1,083 − Non- controlling interests Total Non- 5,775 controlling interests 1,083 4,536 586 650 (132) 68 763 4,536 763 134 − − 134 897 − 139 1,083 586 1,669 134 − − − − − − 650 19 (132) − 68 19 210 1,669 210 36 − 36 7,480 7,480 − − 134 897 (50) (131) (181) 5,252 5,252 3,480 139 3,480 (1,497) (5,422) 1,083 (1,497) (5,422) − − − − 5 − (1,156) 19 596 36 − 596 (1,151) 120 (713) (50) Total equity 10,311 Total equity 1,846 10,311 720 650 (132) 1,846 202 2,566 720 650 (14) (132) (131) 202 (145) 12,732 2,566 12,732 716 (14) (1,864) Share premium USD million Additional Balance at 1 January 2022 paid-in capital Comprehensive income Profit for the year Reva- luation reserve 1,516 9,193 Other comprehensive income/(loss) 2,945 Revaluation of hydro assets Taxation Other comprehensive (loss)/income Total comprehensive income/(loss) − for the year − − 518 (note 16(a)) Transactions with owners Change in effective interest in subsidiaries − − Dividends to non-controlling shareholders − (note 16(d)) Total transactions with owners 650 (132) − Balance 31 December 2022 − Balance at 1 January 2023 Comprehensive income Profit for the year Other comprehensive income/(loss) Total comprehensive income/(loss) − 518 17 1,516 1,516 − − 9,193 (71) 9,193 − − − − − (note 16(a)) for the year − 17 Total transactions with owners − Transactions with owners − Change in effective interest in subsidiaries (1,148) (131) (145) (3) (3) 12,732 11,581 12,732 The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements set out on pages 15 to 83. − 36 (4) (4) 7,480 802 7,480 − − (5,422) 3,480 (5,422) (1,156) − 19 Balance 31 December 2023 (131) (181) (1,497) (1,497) 5,252 5,252 9,193 9,193 3,480 3,480 − − − − 210 210 (6,578) (1,492) (4) (4) 1,516 9,193 6,921 4,660 (555) (593) − − − − − − − − 596 1 1 − 5 − − − − − − − − − − − 5 5 − − − (1,156) (1,156) − − 596 − 596 (4) (4) 802 596 (1,151) (555) (4) (4) 120 (713) (593) 1 1 14 716 (1,864) (1,148) (3) (3) 6,921 4,660 11,581 − − − − − − − − − 1,516 1,516 − − − − − Balance 31 December 2023 1,516 9,193 3,480 (1,492) (6,578) USD million Balance at 1 January 2022 Comprehensive income Profit for the year Other comprehensive income/(loss) Revaluation of hydro assets Taxation Other comprehensive (loss)/income Total comprehensive income/(loss) for the year Transactions with owners Change in effective interest in subsidiaries Dividends to non-controlling shareholders (note 16(a)) (note 16(d)) Total transactions with owners Balance 31 December 2022 Balance at 1 January 2023 Comprehensive income Profit for the year Other comprehensive income/(loss) Total comprehensive income/(loss) for the year Transactions with owners Change in effective interest in subsidiaries (note 16(a)) Total transactions with owners The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements set out on pages 15 to 83. 14 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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. On 8 November 2017, the Parent Company successfully completed an initial public offering of global depositary receipts on the London Stock Exchange. On 17 February 2020, the Parent Company’s ordinary shares were included into the “Level 1” part of the list of securities admitted to trading on Moscow Exchange. EN+ GROUP IPJSC is the parent company for the vertically integrated aluminium and power group, engaged in aluminium production and energy generation (together with the Parent Company referred to as “the Group”). As at 31 December 2023 and 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. The other significant holders as at 31 December 2023 and 31 December 2022 were as follows: Special financial organisation Parent Company’s subsidiary Glencore Group Funding Limited Other shareholders 31 December 2023 31 December 2022 21.37% – 10.55% 23.13% – 21.37% 10.55% 23.13% Glencore Group Funding Limited is a subsidiary of Glencore Plc. In 2023 21.37% of Parent Company’s shares held by its indirect subsidiary were sold to the special financial organisation, orphan special purpose vehicle (refer to note 16(b)). Based on the information at the Group’s disposal at the reporting date, there is no individual that has an indirect prevailing ownership interest in the Parent Company exceeding 50%, who could exercise voting rights in respect of more than 35% of the Parent Company’s issued share capital or has an opportunity to exercise control over the Parent Company. Related party transactions are detailed in note 23. (b) Operations The Group is a leading vertically integrated aluminium and power producer, which combines the assets and results of its Metals and Power segments. The Metals segment operates in the aluminium industry primarily in the Russian Federation, Guinea, Jamaica, Ireland, Italy and Sweden and is principally engaged in the mining and refining of bauxite and nepheline ore into alumina, the smelting of primary aluminium from alumina and the fabrication of aluminium and aluminium alloys into semi-fabricated and finished products. The Power segment engages in all major areas of the power industry, including electric power generation, power trading and supply. It also includes supporting operations engaged in the supply of coal resources to the Group. The Group’s principal power plants are located in East Siberia and Volga Region, the Russian Federation. The consolidated statement of changes in equity is be read in conjunction with the notes to, and forming part of, the consolidated financial statements set out on pages 259 to 326. 258 15 259 259 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (c) Business environment in emerging economies The Russian Federation, 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, 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 financial 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. 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. 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 2023.      IFRS 17 Insurance Contracts; 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; International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12. These amendments had no material 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.      Classification of Liabilities as Current or Non-current – Amendments to IAS 1; Non-current Liabilities with Covenants – Amendments to IAS 1; Lease Liability in a Sale and Leaseback – Amendments to IFRS 16; Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7; Lack of exchangeability – Amendments to IAS 21. The Group is currently assessing the impact the amendments will have on current practice, when they become effective. (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. 260 16 17 261 261 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (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 United States Dollar (“USD”), Russian Rouble (“RUB”), Chinese Yuan (“CNY”) and Euro (“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 consistent with those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2022, except for the adoption of new standards effective from 1 January 2023. (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 financial information of subsidiaries is 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 equity shareholders of the Parent Company, whether directly or indirectly through subsidiaries. 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. 262 18 19 263 263 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT (ii) Foreign operations (b) Segment results, assets and liabilities EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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. 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. 264 20 21 265 265 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC EN+ GROUP IPJSC Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements for the year ended 31 December 2023 for the year ended 31 December 2023 EN+ GROUP IPJSC EN+ GROUP IPJSC Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements for the year ended 31 December 2023 for the year ended 31 December 2023 USD million Metals Power Adjustments Total Year ended 31 December 2023 (ii) Foreign operations Total Power USD million Adjustments property, plant and equipment) Inter-segment revenue Total segment revenue Operating expenses (excluding depreciation and gain/loss on disposal of 12,008 9,933 513 550 128 55 829 205 12,213 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 Metals The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on 14,648 acquisition, are translated from their functional currencies to USD at the exchange rates ruling at the reporting 9,933 date. The income and expenses of foreign operations are translated to USD at exchange rates approximating 513 864 exchange rates at the dates of the transactions. 1,646 476 Foreign currency differences arising on translation are recognised in other comprehensive income and 1,216 presented in the currency translation reserve in equity. For the purposes of foreign currency translation, the − 14,648 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 (12,491) monetary item are recognised as part of other comprehensive income in the statement of profit or loss and 2,157 other comprehensive income. (765) 4 When a foreign operation is disposed of, such that control, significant influence or joint control is lost, the (366) 1,030 cumulative amount of the currency translation reserve is transferred to profit or loss as part of the gain or loss 752 on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign (655) operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non- (251) 876 controlling interests. When the Group disposes of only part of its investment in an associate or joint venture (160) that includes a foreign operation while retaining significant influence or joint control, the relevant proportion 716 of the cumulative amount is reclassified to profit or loss. Share of profits and impairment of associates and joint ventures Interest expense, net Other finance costs, net Profit before tax Depreciation and amortisation (Loss)/gain on disposal of property, plant and equipment Impairment of non-current assets Results from operating activities − − − − − − − (1,152) (1,152) 2,640 − − 314 1,518 421 387 947 3,587 (228) 8 (45) 1,027 − (343) (134) 550 (540) (4) (321) (79) 752 (312) (117) 244 (11,427) 786 Income tax expense Adjusted EBITDA Profit for the year (2,295) 1,292 − − − 82 3 − − 82 1,231 79 (195) 282 355 (3) 38 79 Additions to non-current segment assets during the year (note 11(b)) (1,121) (443) 7 (1,557) 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 22 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. (b) Segment results, assets and liabilities 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 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. Segment liabilities, excluding loans, borrowings and bonds payable Loans, borrowings and bonds payable  Total segment liabilities Total segment liabilities include all current and non-current liabilities. (908) (4,595) − − (5,503) (244) − (244) 5,551 4,595 260 21 10,427 1,405 3,198 4,603 14,856 − 2,087 4,521 21,464 2,582 7,866 10,448 19,499 − 2,347 4,542 26,388 3,743 11,064 14,807 Total segment equity Total segment equity and liabilities Consolidated statement of cash flows Cash flows from / (used in) operating activities Cash flows (used in) / from investing activities 5,824 11,016 Revenue and expenses are allocated to the reportable segments with reference to sales generated by 21,464 those segments and the expenses incurred by those segments or which otherwise arise from the depreciation or amortisation of assets attributable to those segments. 963 1,760 The measures used for reporting segment results are the net profit and Adjusted EBITDA (key (1,030) (1,056) 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 (5) (49) believes that such information is the most relevant in evaluating the results of certain segments relative 61 to other entities that operate within these industries. 19 − (20) 23 − (5) (69) 84 19 − − − − (5,503) (1,419) (1,448) (5,259) 26,388 11,581 10,427 2,721 (391) (394) (2) 2 2 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 other investments Interest received Other investing activities    Cash flows used in financing activities  Interest paid Restructuring fees Settlements of derivative financial instruments Other financing activities (1,747) Adjusted EBITDA represents the results from operating activities adjusted for amortisation and (422) depreciation, impairment charges and gain/(losses) on disposal of property, plant and equipment for (30) the relevant period. (2) (1,293) (682) (31) (2) (1,562) (260) (1) − (269) − − − − (2,277) (530) − Net change in cash and cash equivalents 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 23 EN+ GROUP IPJSC the segments in their operations. Inter-segment pricing is determined primarily on a consistent basis using EN+ GROUP IPJSC Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements market benchmarks. for the year ended 31 December 2023 for the year ended 31 December 2023 (1,017) (975) 42 − Year ended 31 December 2022 (b) Segment results, assets and liabilities USD million  Total Power Adjustments Adjusted EBITDA property, plant and equipment) 2,794 − − 340 1,611 463 380 1,091 3,885 Operating expenses (excluding depreciation and loss on disposal of  Inter-segment revenue Total segment revenue  Total segment liabilities include all current and non-current liabilities. Total segment assets include all non-current tangible, intangible assets and current assets. 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 Metals 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: 13,755 11,384 557 581 233 62 938 219 13,974 Revenue and expenses are allocated to the reportable segments with reference to sales generated by (11,946) (2,631) those segments and the expenses incurred by those segments or which otherwise arise from the 2,028 1,254 depreciation or amortisation of assets attributable to those segments. (221) (10) (174) 849 (503) (13) The measures used for reporting segment results are the net profit and Adjusted EBITDA (key (196) 1,316 non-IFRS financial measure used by the Group as reference for assessing operating effectiveness). 1,555 Segment profit or loss and Adjusted EBITDA are used to measure performance as management (349) believes that such information is the most relevant in evaluating the results of certain segments relative (356) 2,166 to other entities that operate within these industries. (373) Adjusted EBITDA represents the results from operating activities adjusted for amortisation and 1,793 depreciation, impairment charges and gain/(losses) on disposal of property, plant and equipment for (1,242) the relevant period. Depreciation and amortisation Loss on disposal of property, plant and equipment Impairment of non-current assets Results from operating activities Share of profits of associates and joint ventures Interest expense, net Other finance costs, net Profit before tax − − − − − − − (1,310) (1,310) 16,549 11,384 557 921 1,844 525 1,318 − 16,549 Additions to non-current segment assets during the year (note 11(b)) Income tax expense Profit for the year  1,553 (873) (233) 2,453 (720) (23) (370) 2,006 − − (173) (332) (2) (524) 296 619 4 − − (159) (13,430) 3,119 1,147 (163) (1,765) 1,846 (331) (235) (523) (607)  384 − 1 266 20 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 24 the segments in their operations. Inter-segment pricing is determined primarily on a consistent basis using 21 market benchmarks. 267 267 21 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC EN+ GROUP IPJSC Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements for the year ended 31 December 2023 for the year ended 31 December 2023 Metals Power Adjustments Total USD million (ii) Foreign operations 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 The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on 22,007 − acquisition, are translated from their functional currencies to USD at the exchange rates ruling at the reporting 3,477 date. The income and expenses of foreign operations are translated to USD at exchange rates approximating 5,194 30,678 exchange rates at the dates of the transactions. Segment liabilities, excluding loans and borrowings and bonds payable Loans, borrowings and bonds payable Total segment liabilities 4,346 13,600 Foreign currency differences arising on translation are recognised in other comprehensive income and 17,946 presented in the currency translation reserve in equity. For the purposes of foreign currency translation, the 12,732 net investment in a foreign operation includes foreign currency intra-group balances for which settlement is 30,678 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 572 47 other comprehensive income. Consolidated statement of cash flows Cash flows (used in) / from operating activities Cash flows from / (used in) investing activities (944) (4,595) − − (5,539) 16,261 − 3,196 5,174 24,631 6,690 4,595 281 20 11,586 Total segment equity and liabilities 2,867 9,457 12,324 Total segment equity 1,680 4,143 5,823 (201) − (201) (5,539) (5,338) 24,631 12,307 11,586 5,763 (171) (412) (254) 986 472 (2) (474) (1,239) through profit and loss Acquisition of property, plant and equipment, intangible assets Cash paid for investment in equity securities measured at fair value Cash received from other investments Dividends from associates and joint ventures Dividends from Metals segment Interest received Other investing activities (1,711) When a foreign operation is disposed of, such that control, significant influence or joint control is lost, the (113) cumulative amount of the currency translation reserve is transferred to profit or loss as part of the gain or loss 111 on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign 1,639 − operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non- 104 17 controlling interests. When the Group disposes of only part of its investment in an associate or joint venture 742 that includes a foreign operation while retaining significant influence or joint control, the relevant proportion (987) of the cumulative amount is reclassified to profit or loss. (21) (229) − (129) 2,108 Cash flows from / (used in) financing activities (428) (17) (229) (173) (129) 2,391 (113) 97 1,639 − 70 18 (559) (4) − − − (283) − − − (173) − − − − − 173 − − − 14 − 173 34 (1) Interest paid Restructuring fees Settlements of derivative financial instruments Dividends to Power segment Segment reporting 4. Dividends to non-controlling shareholders Other financing activities (a) Reportable segments Net change in cash and cash equivalents 1,475 (114) − 1,361 1,415 (846) 173 2 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 25 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. EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (i) Geographic information The Group’s operating segments are managed on a worldwide basis, but operate in four principal geographical areas: the CIS, Europe, Africa and the Americas. In the CIS, production facilities operate in Russia. 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 and interests in associates and joint ventures (“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 2023 USD million 2022 USD million Russia China South Korea Turkey Greece Germany Netherlands Spain Japan Poland Byelorussia Italy India France Uzbekistan Ireland Other countries Specified non-current assets Russia Ireland Guinea Sweden Unallocated 5,897 2,855 1,191 1,182 341 268 256 237 229 222 211 198 133 129 128 115 1,056 6,267 1,122 1,184 1,011 339 441 884 104 963 385 133 303 54 223 94 221 2,821 14,648 16,549 31 December 2023 USD million 2022 USD million 14,198 89 234 − 3,499 18,020 16,006 94 237 53 3,786 20,176 268 20 26 269 269 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT 5. Revenues 6. Other operating expenses, net EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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 2023 USD million 2022 USD million Sales of primary aluminium and alloys Third parties Related parties – companies capable of exerting significant influence Related parties – associates and joint ventures Related parties – other 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 – associates and joint ventures Related parties – other 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 – associates and joint ventures Related parties – other 9,933 9,689 241 3 − 513 248 265 864 864 1,646 1,607 39 − 476 474 2 − 1,216 977 35 204 − 14,648 All revenue of the Group relates to revenue from contracts with customers. 270 11,384 11,164 211 3 6 557 251 306 921 921 1,844 1,803 39 2 525 513 3 9 1,318 1,055 21 238 4 16,549 27 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Year ended 31 December 2022 USD million 2023 USD million (38) (16) 4 (118) (168) (53) (169) (23) (8) (253) Charity Impairment of trade and other receivables Gain/(loss) on disposal of property, plant and equipment Other operating expenses, net 7. Personnel costs 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 2023 USD million 2022 USD million (288) (1) (289) (1,277) (1,566) (348) (3) (351) (1,547) (1,898) 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 loans and bonds, 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. 28 271 271 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Foreign currency gains and losses are reported on a net basis. Foreign exchange loss on loans and borrowing for the year ended 31 December 2023 amounted to USD 162 million (2022: loss of USD 164 million). Finance income Interest income Dividend income Change in fair value of financial assets and liabilities Finance costs Interest expense Change in fair value of derivative financial instruments (note 19) Net foreign exchange loss Change in fair value of financial assets and liabilities Year ended 31 December 2023 USD million 2022 USD million 93 27 − 120 (748) (99) (85) (94) (1,026) 115 38 31 184 (988) (191) (111) − (1,290) 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 2023 and 31 December 2022. 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 2023 2022 502,337,774 502,337,774 596 1.186 1,083 2.156 There were no outstanding dilutive instruments during the years ended 31 December 2023 and 31 December 2022. 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 a) is not a business combination, b) affects neither accounting nor taxable profit, c) at the time of the transaction, does not give rise to equal taxable and deductible temporary differences; and for taxable differences relating to investments in subsidiaries, branches and associates, and interests in joint arrangements to the extent that they are controllable by the Group and probably will not reverse in the foreseeable future. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax 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. 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 does not give rise to equal taxable and deductible temporary differences, and for deductible differences relating to investments in subsidiaries, branches and associates, and interests in joint arrangements 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. Withholding 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 2023 USD million 2022 USD million (370) 210 (160) (553) (54) (607) 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%; Guinea is 0%; China is 25%; Kazakhstan is 20%; Australia is 30%; Jamaica is 25%; Ireland is 12.5%; Sweden is 20.6%, Italy is 27.9%, Switzerland of 9.07% and 11.82%, United Arab Emirates is 0% and 9%. For the UC RUSAL’s significant trading companies, the applicable tax rate range from 0% to 25%. The applicable tax rates for the year ended 31 December 2023 were the same as for the year ended 31 December 2022 except for tax rates for subsidiaries domiciled in Switzerland which amounted to 9.06% and 11.8%. Reconciliation of effective tax rate 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 windfall tax Effect of different income tax rates Income tax Year ended 31 December 2023 2022 USD million % USD million % 876 (175) (5) 126 (213) (43) (58) 208 (160) (100) 20 – (14) 24 5 7 (24) 18 2,453 (491) 54 288 (269) (18) – (171) (607) (100) 20 (2) (12) 11 1 – 7 25 272 29 30 273 273 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (b) Recognised deferred tax assets and liabilities (ii) Foreign operations Deferred tax assets and liabilities are attributable to the following items: USD million 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 (1,305) 21 exchange rates at the dates of the transactions. 28 (1,123) 25 26 (1,423) (29) (55) (1,243) (44) (62) 120 69 88 118 50 83 2022 2022 2023 2022 2023 2023 Liabilities 31 December Net 31 December Assets 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) Foreign currency differences arising on translation are recognised in other comprehensive income and 26 143 presented in the currency translation reserve in equity. For the purposes of foreign currency translation, the (37) net investment in a foreign operation includes foreign currency intra-group balances for which settlement is (1,124) neither planned nor likely in the foreseeable future and foreign currency differences arising from such a − (1,124) monetary item are recognised as part of other comprehensive income in the statement of profit or loss and other comprehensive income. − − (157) (1,664) – – (123) (1,472) 33 72 240 (727) Net deferred tax assets/(liabilities) 33 72 363 745 26 143 120 540 Set off of tax (1,222) (727) (991) (442) (481) 264 442 481 98 – 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. 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. 31 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. 274 20 (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 2023 (1,305) 21 28 26 143 (37) (1,124) Recognised in profit or loss Recognised in other comprehen- sive income Currency translation 31 December 2023 (17) 5 (1) 9 (68) 282 210 − − − − − − − 199 (1) (1) (2) (3) (5) 187 (1,123) 25 26 33 72 240 (727) Others comprise mostly deferred tax assets/(liabilities) arising on foreign exchange differences attributable to various financial instruments. Recognised in profit or loss Recognised in other comprehen- sive income 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 (1,153) 58 29 23 90 39 (914) 14 (37) (1) 3 48 (81) (54) Recognised tax losses expire in the following years: Year of expiry Without expiry (d) Unrecognised deferred taxes Currency translation 31 December 2022 (34) − − − 5 5 (1,305) 21 28 26 143 (37) (132) − − − − − (132) (24) (1,124) 31 December 2023 USD million 31 December 2022 USD million 72 72 143 143 At 31 December 2023 and 2022 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 2023 and 2022 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 31 December 2023 USD million 31 December 2022 USD million 1,086 841 1,927 1,040 748 1,788 275 275 32 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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 2023 USD million 31 December 2022 USD million 841 − 841 745 3 748 (e) Current taxation in the consolidated statement of financial position represents Net income tax (receivable)/payable at the beginning of the year Income tax for the year (including windfall tax) Income tax paid (including windfall tax) Translation difference Represented by: Income tax payable (note 15(d)) Income tax receivable Net income tax payable/(receivable) (f) Windfall tax 31 December 2023 USD million 31 December 2022 USD million (18) 370 (365) 47 34 48 (14) 34 44 553 (599) (16) (18) 199 (217) (18) On 4 August 2023, Federal Law No. 414-FZ On Windfall Tax was adopted. The Law establishes the procedure for determining and paying a one-off tax on excess (windfall) profits. The tax base for windfall tax is determined as the amount by which the arithmetic mean of profits for 2021-2022 exceeds that for 2018-2019. The tax rate is 10%. The tax is payable before 28 January 2024. The Law also provides for the option of an early security payment to be made between 1 October and 30 November 2023. The security payment will form a tax credit that the taxpayer can use to reduce the tax. The amount of such tax credit cannot exceed ½ of the amount of tax payable. The tax credit is assumed to be zero if the advance payment is refunded (in full or in part) upon the taxpayer’s claim. This effectively allows reducing the tax rate to 5%. The Group has applied the option of reducing the tax amount by making an early security payment. Therefore, in these consolidated financial statements, the Group recognized a windfall tax liability in the amount of USD 58 million within both current income tax expense and current tax liability, which has been settled with the security payment advance at the reporting date. 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. Since 1 January 2016 the Group’s hydro assets are measured at a revalued amount. 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. Hydro assets are a class of property, plant and equipment with unique nature and use in their hydropower plants. The Group’s 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. 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. 276 33 34 277 277 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (b) Disclosure EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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 278 predominantly 38 to 100 years; 10 to 50 years; 5 to 40 years; 4 to 15 years; Units of production on proved and probable reserves; 1 to 30 years. 35 Disposals Transfers Revaluation of hydro assets as at 31 December 2022 USD million 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 Total 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 24,087 1,765 integral to the functionality of the related equipment is capitalised as part of that equipment. Cost 1 January 2022 Additions Acquired through business Machinery and equipment Construction in progress Land and buildings Mining assets Hydro assets Electrolysers 5,151 32 8,227 61 3,032 − 3,460 − 3,206 1,650 672 22 339 − Other combinations 33 When parts of an item of property, plant and equipment have different useful lives, they are accounted for as (325) − separate items (major components) of property, plant and equipment. 19 (109) 400 − (132) 9 − (26) (978) 9 (10) 27 5 (32) 202 − (16) 295 − − 45 25 combinations Translation difference At 31 December 2022 Additions Acquired through business − (13) 3,298 464 197 4,166 − 90 8,688 − 83 5,441 464 The cost of periodic relining of electrolysers is capitalised and depreciated over the expected production period. 418 26,442 Gains or losses on disposal of an item of property, plant and equipment are determined by comparing the 1,557 proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net 5 5 within gain/(loss) on disposal of property, plant and equipment in profit or loss. (374) (2,679) 496 − Hydro assets are a class of property, plant and equipment with unique nature and use in their hydropower (448) (2,324) 23,001 8,435 plants. The Group’s 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. − (88) (1,156) (347) 3,702 − (1,938) 179 (31) 1,508 − (231) 416 (458) 5,193 − − 15 (900) 3,281 − (6) 31 (42) 372 − (42) 19 (98) 510 − 38 3,890 − 11 582 − 12 377 Disposals Transfers Translation difference At 31 December 2023 1,403 49 12 68 − − 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. 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. 36 (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. 34 279 279 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (764) (c) Impairment 10,117 11,607 10,472 37 Machinery and equipment Mining assets Land and buildings Construction in progress Other (42) 16 USD million Hydro assets (2,672) (169) (2,965) (157) (6,536) (297) Electrolysers Depreciation and impairment 1 January 2022 Depreciation charge (Impairment losses) / reversal of 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 losses 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 4 impairment available for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for Disposals 12 indications of impairment. Where there are indicators of potential impairment, an assessment is performed for Revaluation of hydro assets − as at 31 December 2022 each area of interest in conjunction with the group of operating assets (representing a cash-generating unit, 11 CGU) to which the exploration is attributed. Exploration areas at which reserves have been discovered but (2,814) 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. impairment To the extent that capitalised expenditure is not expected to be recovered it is charged to profit or loss. (22) 1,938 − 26 Exploration and evaluation assets are transferred to mining property, plant and equipment or intangible assets (1,047) when development is sanctioned. Disposals Transfers and reclassifications Translation difference At 31 December 2023 Depreciation charge (Impairment losses) / reversal of Translation difference At 31 December 2022 (74) 350 − 300 (6,682) (2) 221 (91) 234 (2,977) (4) 4 (1) 28 (286) (25) 6 − 91 (476) (177) 46 92 125 (975) − − − 5 (86) − (34) (3,182) − (47) (6,944) − (16) (1,061) − (8) (296) − (8) (538) 186 (3) − (150) 86 (240) − (280) (10) (619) (8) (805) − (93) (90) (6) 8 87 10 (314) (157) (175) (91) (10) (17) − − − Total (13,970) (731) (347) 132 186 (105) (14,835) (304) 2,565 − 809 (12,529) 2,186 2,259 1,691 1,744 360 484 3,367 4,166 53 44 2,401 2,829 59 81 Net book value At 1 January 2022 (iv) Stripping costs At 31 December 2022 At 31 December 2023 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. 2,216 1,753 461 3,195 34 2,727 86 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 280 predominantly 38 to 100 years; 10 to 50 years; 5 to 40 years; 4 to 15 years; Units of production on proved and probable reserves; 1 to 30 years. 35 Depreciation expense of USD 707 million (2022: USD 670 million) has been charged to cost of goods sold, USD 6 million (2022: USD 7 million) to distribution expenses and USD 30 million (2022: USD 23 million) to administrative expenses. Interest capitalised for the years ended 31 December 2023 and 31 December 2022 was USD 60 million and USD 39 million, respectively. The average capitalisation rate was 7.49% (2022: 6.67%). Included in construction in progress at 31 December 2023 and 31 December 2022 are advances to suppliers of property, plant and equipment of USD 249 million and USD 164 million, respectively. 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 due to fluctuations of aluminium prices, 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 as well as previously recognised impairment loss may require reversal. 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 2023 and 31 December 2022 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 2023, management has 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 RUSAL Sayanal, Kremny and Rusal Silicon Ural in the amount of USD 117 million. Additionally management concluded that at the same date an impairment loss relating to property, plant and equipment of Kubikenborg Aluminium (Kubal) and Taishet aluminium smelter in the amount of USD 270 million should be recognised in these consolidated financial statements. 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 RUSAL Sayanal and PGLZ in the amount of USD 85 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 Kremny RUSAL Silicon Ural Kubal Year ended 31 December 2023 2022 18.7% 21.9% 16.6% 19.7% 19.8% 14.5% 16.0% 14.3% 14.3% 14.3% 14.3% 13.1% 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. 38 281 281 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT The results of impairment testing of Taishet aluminium smelter are particularly sensitive to the following key assumptions: 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. EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023   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 566 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 327 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 111 million at 31 December 2023 (2022: USD 99 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 2023 and 2022 management identified several indicators that property, plant and equipment of the Coal CHPs and Irkutsk GridCo CGUs may be impaired. Based on results of impairment testing as at 31 December 2023, management concluded that no impairment losses should be recognised. 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. The following key assumptions were used to determine the recoverable amount of the Irkutsk GridCo CGU: Sales volumes of electricity transmission in 2024/2023 Expected growth of sales volumes till 2033/2032 Tariffs for electricity transmission in 2024/2023 Tariffs growth till 2033/2032 Pre-tax discount rate Year ended 31 December 2023 55 mln MWh 19% USD 5-8 (RUB 471-748) 49% 15%-19.8% 2022 54 mln MWh 11% USD 6-10 (RUB 442-726) 50% 15%-15.6% The anticipated price/tariffs growth included in the cash flow projections for the years from 2024 to 2033 have been based on the publicly available forecasts of Ministry of Economic Development of the Russian Federation. The recoverable amounts estimated at 31 December 2023 and 31 December 2022 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 2024/2023 Electricity sales volumes growth till 2033/2032 Electricity sales prices in 2024/2023 Electricity sales prices growth till 2033/2032 Sales volumes of heat in 2024-2033/2023-2032 Heat tariffs in 2024/2023 Tariffs growth till 2033/2032 Sales volumes of coal in 2024/2023 Expected growth of sales volumes of coal till 2033/2032 Weighted average price for coal in 2024/2023 Weighted average price growth after 2024/2023 Pre-tax discount rate 282 Year ended 31 December 2023 2022 36 mln MWh 15% USD 8-27 (RUB 690-2,420) 42%-50% 20 mln Gcal USD 16 (RUB 1,453) 48% 15,907 ths tonnes 8% USD 14 (RUB 1,225) 3%-8% 15.6%-20.4% 34 mln MWh 6% 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% 39 Additionally, management identified specific items of property, plant and equipment that are not considered to be recoverable amounting to USD 41 million (2022: USD 122 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 125 million at 31 December 2023 (31 December 2022: USD 53 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 2023 the valuation by external independent appraiser was not performed because based on management’s analysis, the fair value of hydro assets approximated their carrying amount at that date. As at 31 December 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. The valuation analysis as at 31 December 2022 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 2023 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. If the cost model is applied, net book value of hydro assets as at 31 December 2023 would be USD 328 million (31 December 2022: USD 409 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. 40 283 283 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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 28 million during the year ended 31 December 2023 (31 December 2022: USD 45 million). The carrying amounts of right-of-use assets are presented below. USD million Balance at 1 January 2023 Balance at 31 December 2023 Land and buildings Property, plant and equipment Machinery and equipment Total 42 43 23 13 65 56 Total depreciation charges related to the right-of-use assets for the year ended 31 December 2023 amount to USD 19 million (31 December 2022: USD 17 million). USD 3 million of right-of-use assets has been impaired during the year ended 31 December 2023 (31 December 2022: USD 2 million reversed). The Group’s total cash outflow for leases was in the amount of USD 24 million for the year ended 31 December 2023 (31 December 2022: USD 25 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 136 million as at 31 December 2023 (31 December 2022: USD 218 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. 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 2023 amounted to USD 49 million (31 December 2022: USD 49 million). Total interest costs on leases recognised for the year ended 31 December 2023 amount to USD 6 million (31 December 2022: 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 21 million is included in cost of sales or administrative expenses depending on type of underlying asset for the year ended 31 December 2023 (31 December 2022: USD 28 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. 284 41 42 285 285 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT (ii) Research and development (b) Disclosure EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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. The amortisation method, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate. USD million Cost Balance at 1 January 2022 Additions Disposals Foreign currency translation Balance at 31 December 2022 Additions Disposals Foreign currency translation Balance at 31 December 2023 Amortisation and impairment losses Balance at 1 January 2022 Amortisation charge Disposals Foreign currency translation Balance at 31 December 2022 Amortisation charge Impairment Disposals Foreign currency translation Balance at 31 December 2023 Net book value At 1 January 2022 At 31 December 2022 At 31 December 2023 (c) Amortisation charge Goodwill Other intangible assets Total 2,490 135 − 44 2,669 6 − (292) 2,383 (449) − − − (449) − (48) − − (497) 2,041 2,220 1,886 645 51 (56) 13 653 37 (8) (33) 649 (487) (20) 54 (3) (456) (22) 3 7 19 (449) 158 197 200 3,135 186 (56) 57 3,322 43 (8) (325) 3,032 (936) (20) 54 (3) (905) (22) (45) 7 19 (946) 2,199 2,417 2,086 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 Aluminium Group of CGUs (Metals) Angara HPPs (Power) Allocated goodwill 2023 2,156 227 2,383 Accumulated impairment loss 2023 (497) − (497) Allocated goodwill 2022 2,434 235 2,669 Accumulated impairment loss 2022 (449) − (449) 286 43 44 287 287 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Metals The Aluminium Group of CGUs represents the lowest level within Metals segment 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 2023, management analysed changes in the economic environment and developments in the aluminium industry and the Group’s operations since 31 December 2022 and performed an impairment test for goodwill at 31 December 2023 using the following assumptions to determine the recoverable amount of the Aluminium Group of CGUs :      Total production was estimated based on average sustainable production levels of 4.0 million metric tonnes of primary aluminium, of 5.6 million metric tonnes of alumina and of 16.2 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 2024 2025 2026 2027 2028 2,283 2,434 2,538 2,575 2,529 343 345 353 364 370 91.12 7.0% 2.8% 92.36 5.3% 2.3% 93.98 4.7% 2.3% 94.56 4.2% 2.0% 95.14 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 20.28%; 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 18% but would not lead to an impairment;    A 5% increase in the projected level of electricity costs in the aluminium production would have resulted in a 8% decrease in the recoverable amount but would not lead to an impairment; Power 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 regarding Aluminium Group of CGUs should be recorded in the consolidated financial statements as at 31 December 2023. 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 Aluminium Group of CGUs:      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 regarding Aluminium Group of CGUs should be recorded in the consolidated financial statements as at 31 December 2022. At Power segment 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 2023 and 2022 was determined by reference to its value in use derived by discounting of the future cash flows generated from continuing use of production facilities. 288 45 46 289 289 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 The following key assumptions were used to determine the recoverable amount of the Angara HPPs cash-generating unit at 31 December 2023:     The sales volumes were projected based on the approved budgets for 2024. In particular, the sales volumes of electricity in 2024 were planned at the level of 58 million MWh with a decline by 15% till 2033; 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 0.6-12.0 (RUB 57-1,078) per MWh depending on market segment in 2024 and increased by 43-56% respectively till 2033. 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%-20.4%; 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 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. Reasonable possible changes in key assumptions did not lead to an impairment in either 2023 or 2022. 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. 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 Contribution Dividends Foreign currency translation Balance at the end of the year Goodwill included in interests in associates 31 December 2023 USD million 2022 USD million 5,194 752 5 (398) (1,011) 4,542 1,982 4,028 1,553 8 (764) 369 5,194 2,404 The following list contains only the particulars of associates and joint ventures, all of which are corporate entities, which principally affected the results or assets of the Group. Name of associate / joint venture PJSC MMC Norilsk Nickel Queensland Alumina Limited BEMO project Place of incorporation and operation Particulars of issued and paid up capital Russian Federation Australia Cyprus, Russian Federation 152,863,397 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 290 47 48 291 291 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 The summary of the consolidated financial statements of associates and joint ventures for the year ended 31 December 2023 is presented below: PJSC MMC Norilsk Nickel Queensland Alumina Limited BEMO project Group share USD million Non-current assets Current assets Non-current liabilities Current liabilities 5,952 1,938 (1,888) (2,331) 100% USD million 16,238 7,342 (7,154) (8,831) Net assets 3,671 7,595 Group share USD million 189 29 (80) (138) − 100% USD million 971 146 (388) (693) 36 Group share USD million 1,228 158 (676) (50) 100% USD million 2,287 304 (1,352) (101) 660 1,138 PJSC MMC Norilsk Nickel Queensland Alumina Limited BEMO project Group share USD million 100% USD million Group share USD million 3,803 14,409 118 629 2,870 Revenue Profit/(loss) from continuing operations Other comprehensive (loss)/income (846) (1,856) Total comprehensive (loss)/income (217) 1,014 100% USD million 592 (20) Group share USD million 516 93 100% USD million 193 − (162) (324) (20) (69) (131) − − − Other associates and joint ventures Group share USD million 100% USD million 256 141 (100) (86) 211 597 328 (202) (175) 548 Other associates and joint ventures Group share USD million 100% USD million 30 (3) 27 82 (3) 79 1,031 292 836 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 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 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 244 121 (110) (74) 181 593 265 (220) (133) 505 Other associates and joint ventures Group share USD million 100% USD million (a) PJSC MMC Norilsk Nickel The Group’s investment in Norilsk Nickel is accounted for using equity method and the carrying value as at 31 December 2023 and 31 December 2022 amounted USD 3,671 million and USD 4,286 million, respectively. The Group’s share of profit of Norilsk Nickel was USD 629 million, the foreign currency translation loss was USD 846 million for the year ended 31 December 2023. 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. The fair value of the investment amounted USD 7,273 million and USD 8,775 million as at 31 December 2023 and 31 December 2022, respectively, and is determined by multiplying the quoted bid price per share on the Moscow Exchange on the year-end date by the number of shares held by the Group. (b) Queensland Alumina Limited The carrying value of the Group’s investment in Queensland Alumina Limited as at both 31 December 2023 and 31 December 2022 amounted to USD nil million. At 31 December 2023 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 2023 and 31 December 2022 amounted USD 660 million and USD 727 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 2023 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 2023, accumulated losses of USD 57 million (2022: USD 73 million) related to BoAZ have not been recognised because the Group’s investment has already been fully written down to USD nil million. Additional financial information of the Group’s effective interest in BEMO project for the year ended 31 December 2023 and 31 December 2022 is presented below: Cash and cash equivalents Current financial liabilities Non-current financial liabilities Depreciation and amortisation Interest income Interest expense Income tax expense 31 December 2023 USD million 31 December 2022 USD million 43 (1) (548) (54) 3 − (29) 78 (1) (633) (66) 3 (6) (25) Revenue Profit/(loss) from continuing operations Other comprehensive income/(loss) Total comprehensive income/(loss) 4,454 16,876 110 1,440 5,854 336 920 1,776 6,774 − − − 550 (20) (25) (45) 678 102 29 131 1,356 285 821 14. Inventories 210 56 266 11 4 15 51 11 62 49 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. 50 293 293 292 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT Production costs include mining and concentrating costs, smelting, treatment and refining costs, other cash costs and depreciation and amortisation of operating assets. increased significantly since initial recognition. The Group measures loss allowances for trade receivables at an amount equal to lifetime ECLs. EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Raw materials and consumables Work in progress Finished goods and goods for resale 31 December 2023 USD million 2022 USD million 1,404 779 1,392 3,575 1,634 887 1,862 4,383 Inventories at 31 December 2023 and 31 December 2022 are stated at the lower of cost and net realizable value. There were no inventory pledges as at 31 December 2023 and 31 December 2022. 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. 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(h)). 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 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 for Metals segment and more than 90 days past due for Power segment. 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 for Metals segment and more than 180 days past due for Power segment, 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. 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 2023 and 31 December 2023. 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 Weighted-average loss rate 31 December 2023 1 January 2023 1% 21% 73% 93% 47% 1% 10% 50% 48% 38% Credit- impaired No No No No Yes 294 51 52 295 295 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Power The following table provides information about determined ECLs rates for trade receivables both as at 1 January 2023 and 31 December 2023. 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 2023 1 January 2023 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. 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 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 31 December 2023 USD million 2022 USD million 175 12 5 2 5 1 25 200 197 12 6 4 8 1 31 228 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). (b) Trade and other receivables (c) Prepayments and VAT recoverable Trade receivables from third parties Trade receivables from related parties, including Related parties – companies capable of exerting significant influence 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 (i) Ageing analysis 31 December 2023 USD million 2022 USD million 1,127 45 33 12 192 412 412 1,776 (80) 1,696 1,295 50 45 5 235 − − 1,580 (103) 1,477 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 296 31 December 2023 USD million 2022 USD million 804 29 1 − 65 95 899 842 122 42 1 31 196 1,038 53 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 Dividends payable Income tax payable 31 December 2023 USD million 2022 USD million 397 214 87 87 30 27 755 (135) 620 552 311 88 88 18 7 976 (156) 820 31 December 2023 USD million 2022 USD million 867 161 7 154 288 5 48 1,369 1,047 115 6 109 326 − 199 1,687 All of the trade and other payables are expected to be settled within one year or are repayable on demand. 54 297 297 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT (e) Advances received (h) Investments in equity securities measured at fair value through profit and loss EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Advances received from third parties Advances received from related parties, including Related parties – associates and joint ventures 31 December 2023 USD million 2022 USD million 339 − − 339 296 13 13 309 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. (f) Cash and cash equivalents Bank balances, USD Bank balances, RUB Bank balances, EUR Bank balances, CNY Bank balances, other currencies Cash in transit Short-term bank deposits, USD Short-term bank deposits, RUB Short-term bank deposits, EUR Short-term bank deposits, CNY 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 (g) Other non-current assets Long-term deposits Prepayment for associate acquisition Other non-current assets 31 December 2023 USD million 2022 USD million 166 617 163 792 30 − 349 106 103 13 6 2,345 2 2,347 120 1,544 81 112 22 17 700 133 89 626 30 3,474 3 3,477 31 December 2023 USD million 31 December 2022 USD million 124 13 166 303 125 − 186 311 Prepayment for acquisition of associate relates to the UC RUSAL’s arrangement to acquire 30% of share capital of the alumina plant, located in China. In October 2023 UC RUSAL entered into a share-purchase agreement to acquire the share in equity of Hebei Wenfeng New Materials Co., Ltd. All rights attached to the interest acquired will be transferred to UC RUSAL subject to fulfilment of certain conditions, which are expected to occur in 2024. The amount of prepayment comprises 5% of the estimated total consideration for 30% share in equity of Hebei Wenfeng New Materials Co., Ltd. During the year 2023 Metals segment continued to acquire equity securities of RusHydro, 434,666,000 shares were bought for a total consideration of USD 5 million. As at 31 December 2023 the Group’s nominal interest in RusHydro shares was 9.73%. 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 2023 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 2023 and 31 December 2022 all issued ordinary shares were fully paid. Change in effective interest in subsidiaries In 2023 the Group acquired part of the non-controlling interest in certain Group subsidiaries for the total consideration of USD 3 million. In 2022, following consolidation of more than 95% of Irkutskenergo shares, 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 2022 amounted to USD 14 million. (b) Other reserves Other reserves represents the cost of Parent Company’s shares transferred by the Group to special financial organisation, 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 and the Group’s share of other comprehensive income of associates. As at 31 December 2022 the Group held 21.37% of its own shares. In 2023, these shares were sold from the Parent Company’s indirect subsidiary to special financial organisation. Under IFRS due to specific provisions of the contracts disposed shares were not derecognised by the Group. (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) Dividends During the years ended 31 December 2023 and 31 December 2022 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. (e) 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). 298 55 56 299 299 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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. (f) Non-controlling interests USD million UC RUSAL 2023 Other subsidiaries 2023 Total 2023 UC RUSAL 2022 Other subsidiaries 2022 Total 2022 Carrying amount of NCI Profit/(loss) attributable to NCI Other comprehensive (loss)/income attributable to NCI Total comprehensive (loss)/income 4,541 122 (679) (557) 119 (2) (34) (36) 4,660 120 (713) (593) 5,098 777 127 904 154 (14) 7 (7) 5,252 763 134 897 Current liabilities Current portion of secured bank loans Current portion of unsecured bank loans Secured bank loans Unsecured bank loans Accrued interest Bonds The following table summarises the information relating to the UC RUSAL which has material non- controlling interest: (a) Loans and borrowings USD million NCI percentage Assets Liabilities Net assets Carrying amount of NCI Revenue Profit Other comprehensive (loss)/income Total comprehensive (loss)/income Profit attributable to NCI Other comprehensive (loss)/income attributable to NCI Cash flows from/(used in) operating activities Cash flows (used in)/from investing activities Cash flows (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents 17. Loans and borrowings UC RUSAL 2023 UC RUSAL 2022 43.1% 20,980 (10,448) 10,532 4,541 12,213 282 (1,575) (1,293) 122 (679) 1,760 (1,030) (1,747) (1,017) 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 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 300 31 December 2023 USD million 2022 USD million 3,366 1,499 3,612 8,477 5,333 858 3,511 9,702 57 Non-current liabilities Secured bank loans Variable RUB – CBR + 1.50% RUB – CBR + 1.90% RUB – CBR + 2.00% RUB – CBR + 3.15% USD – 3M Libor + 1.70% USD – 3M Libor + 2.10% USD – 3M Libor + 3.00% Fixed CNY – fixed at 4.75% RUB – fixed at 3.00% Unsecured bank loans Variable RUB – CBR + 1.80-1.85%% RUB – CBR + 1.95%-2.25% RUB – CBR + 3.00% CNY – LPR1Y +1.60% EUR – 6M Euribor + 0.45%-0.67% Fixed RUB – fixed at 3.00% CNY – fixed at 3.75% CNY – fixed at 4.70% Bonds Current liabilities Current portion of secured bank loans Variable RUB – CBR + 1.50% RUB – CBR + 2.00% RUB – CBR + 3.15% USD – 3M Libor + 2.10% USD – 3M Libor + 1.70% Fixed CNY – fixed at 4.75% RUB – fixed at 3.00% EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 31 December 2023 USD million 2022 USD million 957 8 965 367 500 140 615 1,622 2,587 928 9 937 284 1,251 78 1,348 2,961 3,898 31 December 2023 USD million 2022 USD million 1,235 − 280 148 − − − 1,662 41 3,366 155 79 48 354 28 11 774 50 1,499 3,612 8,477 381 − 16 − − 553 7 957 2,105 254 331 137 25 359 2,100 − 22 5,333 13 24 − − 34 10 777 − 858 3,511 9,702 297 168 3 359 100 − 1 928 58 301 301 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT Current portion of unsecured bank loans Variable EUR – 6M Euribor + 0.45-0.67% Fixed RUB – other Secured bank loans Variable USD – Term SOFR + Spread + 2.10% USD – Term SOFR + Spread + 1.70% Fixed RUB – fixed at 3.00% RUB – fixed at 11.00% Unsecured bank loans Variable RUB – CBR + 1.10%-1.35% RUB – CBR + 1.50%-1.98% RUB – CBR + 2.00%-2.50% CNY – LPR1Y +2.75% Fixed RUB – fixed at 18.75% CNY – fixed at 4.20% Accrued interest Bonds EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 31 December 2023 USD million 2022 USD million 7 1 8 339 25 3 − 367 − 69 53 374 4 − 500 140 615 1,622 2,587 6 3 9 − − − 284 284 752 62 62 − − 375 1,251 78 1,348 2,961 3,898 The bank loans are secured as at 31 December 2023 and 31 December 2022 by the following:     Rights, including all monies and claims, arising out of certain sales contracts between the Group’s trading subsidiaries and its ultimate customers, were assigned to secure the syndicated Pre-Export Finance Term Facility 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 The nominal value of UC RUSAL’s loans and borrowings was USD 4,447 million at 31 December 2023 (31 December 2022: USD 4,883 million). As at 31 December 2023 and 31 December 2022 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 2,371 million at 31 December 2023 (31 December 2022: USD 3,881 million). As at 31 December 2023 and 31 December 2022 the secured bank loans are secured by certain pledges of shares of a number of Parent Company’s subsidiaries, including LLC ESE–Hydrogeneration – 100% (2022: 100%), JSC Irkutskenergo – 77.42% (2022: 77.42%) and JSC EuroSibEnergo – 50% + 1 share (2022: 50% + 1 share). Additionally as at 31 December 2022 21.37% shares of the Parent Company and 100% shares of JSC Krasnoyarsk Hydro-Power Plant were pledged. 59 302 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (b) Bonds As at 31 December 2023, the Group had outstanding (traded in the market) bonds denominated in RUB, CNY, United Arab Emirates Dirhams and eurobonds denominated in USD: Metals Type Series Bond Bond Eurobond Eurobond Bond Bond Bond Bond Bond Bond Bond Bond Bond Bond BО-01 BО-001P-04 – – BО-05 BО-06 BО-001P-01 BО-001P-02 BО-001P-03 001PC-01 001PC-02 001PC-03 001PC-04 BО-001P-05 The number of bonds traded in the market Nominal value, USD million Nominal interest rate Put-option date Maturity date 30,263 370,000 27,400 26,869 2,000,000 2,000,000 6,000,000 1,000,000 3,000,000 2,379,660 2,352,869 2,367,763 1,778,060 600,000 0.01% – 5.95% 101 5.30% 28 4.85% 27 3.90% 280 3.90% 280 3.75% 841 140 3.95% 421 LPR1Y + 0.20% 3.75% 334 3.75% 330 3.75% 332 3.75% 249 6.70% 84 – – – – 05.08.2024 05.08.2024 – – – – – – – – 07.04.2026 05.09.2025 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 08.05.2026 On 23 January 2023 the exchange-traded non-convertible interest-bearing RUB denominated bonds of RUSAL Bratsk series BO-001P-02 were fully repaid. 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 National Settlement Depository (“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. On 16 May 2023 pursuant to the Extraordinary resolution of the noteholders UC RUSAL redeemed the Eurobond with a coupon 5.3% to noteholders who hold Eurobond through NSD and other Russian custodians being the NSD direct participants in the amount of USD 419 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. On 6 June 2023 the exchange-traded non-convertible interest-bearing RUB denominated bonds of RUSAL Bratsk series BO-002P-01 were fully repaid. On 8 September 2023 UC RUSAL placed on the Moscow Stock Exchange exchange-traded non-documentary interest-bearing non-convertible bonds series BO-001P-04 in the total amount of AED 370 million with a coupon – 5.95%. The maturity of the bonds is 2 years. On 23 October 2023 the exchange-traded non-convertible interest-bearing RUB denominated bonds of RUSAL Bratsk series BO-001P-01 were fully repaid. On 10 November 2023 the Company placed on the Moscow Stock Exchange exchange-traded non-documentary interest-bearing non-convertible bonds series BO-001P-05 in the total amount of CNY 600 million with a coupon – 6.70%. The maturity of the bonds is 2.5 years. 60 303 303 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Power Type Bond Bond Bond Bond The number of bonds traded in the market Nominal value, USD million 2,075,377 1,792,146 1,026,910 670,000 291 251 144 94 Nominal interest rate 4.45% 5.45% 5.45% 5.40% Put-option date Maturity date − − − − 22.12.2025 27.03.2026 22.05.2025 06.05.2026 Series 001PC-01 001PC-02 001PC-03 001PC-01 On 31 March 2023 the Power segment placed its second commercial non-convertible interest-bearing yuan bonds series 001PC-02 in the total amount CNY 1,792,146,000 with a coupon rate fixed at 5.45% p.a. Maturity of the bonds is March 2026. On 10 May 2023 the Power segment placed the exchange-traded non-convertible interest-bearing yuan bonds series 001PC-01 in the total amount CNY 670,000,000 with a coupon rate fixed at 5.40% p.a. Maturity of the bonds is May 2026. On 25 May 2023 the Power segment placed its third commercial non-convertible interest-bearing yuan bonds series 001PC-03 in the total amount CNY 1,026,910,000 with a coupon rate fixed at 5.45% p.a. Maturity of the bonds is May 2025. As at 31 December 2023, the amount of accrued interest on bonds was USD 25 million (31 December 2022: USD 48 million). Total foreign exchange gain on bonds for the year ended 31 December 2022 accounted in other comprehensive income as part of cash flow hedge result amounted to USD 96 million. In 2022 all existing cash-flow relationships were ended and none were started in 2023. 18. Provisions (a) Accounting policy A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance costs. (i) Site restoration The mining, refining and smelting activities of the Group can give rise to obligations for site restoration and rehabilitation. Restoration and rehabilitation works can include facility decommissioning and dismantling, removal or treatment of waste materials, land rehabilitation, and site restoration. The extent of work required and the associated costs are dependent on the requirements of law and the interpretations of the relevant authorities. Provisions for the cost of each restoration and rehabilitation program are recognised at the time that environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Costs included in the provision encompass obligated and reasonably estimable restoration and rehabilitation activities expected to occur progressively over the life of the operation and at the time of closure in connection with disturbances at the reporting date. Routine operating costs that may impact the ultimate restoration and rehabilitation activities, such as waste material handling conducted as an integral part of a mining or production process, are not included in the provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognised as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation. Restoration and rehabilitation provisions are measured at the expected value of future cash flows, discounted to their present value and determined according to the probability of alternative estimates of cash flows occurring for each operation. Discount rates used are specific to the country in which the operation is located. Significant judgements and estimates are involved in forming expectations of future activities and the amount and timing of the associated cash flows. Those expectations are formed based on existing environmental and regulatory requirements. When provisions for restoration and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of restoration and rehabilitation activities is amortised over the estimated economic life of the operation on a units of production or straight-line basis. The value of the provision is progressively increased over time as the effect of discounting unwinds, creating an expense recognised as part of finance expenses. Restoration and rehabilitation provisions are also adjusted for changes in estimates. Those adjustments are accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the unamortised capitalised cost, in which case the capitalised cost is reduced to nil and the remaining adjustment is recognised in profit or loss. Changes to the capitalised cost result in an adjustment to future amortisation charges. Adjustments to the estimated amount and timing of future restoration and rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates involved. Factors influencing those changes include revisions to estimated reserves, resources and lives of operations; developments in technology; regulatory requirements and environmental management strategies; changes in the estimated costs of anticipated activities, including the effects of inflation and movements in foreign exchange rates; and movements in general interest rates affecting the discount rate applied. (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. 304 61 62 305 305 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT (b) Disclosure USD million Pension liabilities Site restoration Provisions for legal claims Total Actuarial valuation of pension liabilities Metals EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Balance at 1 January 2022 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 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 2023 Non-current Current (c) Pension liabilities 106 15 − (11) (8) − − (1) 101 93 8 11 (5) (8) (6) − − (17) 76 69 7 76 518 − − − − (1) (112) (6) 399 287 112 − − − − 14 (3) (26) 384 282 102 384 22 14 (4) − (6) − − − 26 – 26 3 − − (11) − − (3) 15 − 15 15 646 29 (4) (11) (14) (1) (112) (7) 526 380 146 14 (5) (8) (17) 14 (3) (46) 475 351 124 475 As at 31 December 2023, the pension liability is represented by UC RUSAL of USD 47 million (31 December 2022: USD 60 million) and Power of USD 29 million (31 December 2022: USD 41 million). The provision for pensions mainly comprises lump sum payments at retirement by aluminium plants located in Russia, and by electricity generating companies. The Group also provides pension benefits to eligible participants at facilities located outside of the Russian Federation. 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 outside the Russian Federation 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. 63 306 The key actuarial assumptions (weighted average, weighted by DBO) are as follows: Discount rate Future salary increases Future pension increases Staff turnover Mortality Disability Power 31 December 2023 % per annum 11.4 8.5 1.7 4.9 USSR population table for 1985 70% Munich Re for Russia 31 December 2022 % 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 The principal assumptions used in determining pension obligations for the pension plans are shown below: 31 December 2023 % per annum 31 December 2022 % per annum Discount rate Future salary increases Pension and inflation rate increases 11.8 7.0 5.5 10.1 6.2 4.7 As at 31 December 2023 and 31 December 2022 the Group’s obligations were fully uncovered as the Group has only wholly unfunded plans. (d) Site restoration and environmental provisions 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 31 December 2023 31 December 2022 2024: USD 102 million 2025-2029: USD 81 million 2030-2039: USD 116 million after 2039: USD 418 million 2023: USD 111 million 2024-2028: USD 46 million 2029-2038: USD 156 million after 2038: USD 456 million 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 23.8 7.42% 3.55% 26.8 6.71% 3.63% 64 307 307 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT The risk free rate for the year 2022-2023 represents an effective rate, which comprises rates differentiated by years of obligation settlement and by currencies in which the provisions were calculated. 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. EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 At each reporting date management have assessed the provisions for site restoration and concluded that the provisions and disclosures are adequate. Disclosures (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 2023, 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 15 million (31 December 2022: USD 26 million). At each reporting date management has assessed the provisions for litigation and claims and concluded that the provisions and disclosures are adequate. 19. Derivative financial assets and liabilities Accounting policies The Group enters, from time to time, into various derivative financial instruments to manage its exposure to commodity price risk, foreign currency risk and interest rate risk. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative and the combined instrument is not measured at fair value through profit or loss. On initial designation of the derivative as a hedging instrument, the Group formally documents the relationship between the hedging instrument and hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80%-125%. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variation in cash flows that ultimately could affect reported profit or loss. Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value. The measurement of fair value of derivative financial instruments, including embedded derivatives, is based on quoted market prices. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, fair value is estimated based on the Group’s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling and other risks implicit in such estimates. Changes in the fair value therein are accounted for as described below. When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of a derivative is recognised in profit or loss. When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the asset when the asset is recognised. In other cases, the amount accumulated in equity is reclassified to profit or loss in the same period that the hedged item affects profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the balance in equity is reclassified to profit or loss. Forward contracts for aluminium and other instruments Non-current Current 31 December 2023 USD million 31 December 2022 USD million 32 32 13 19 168 168 90 78 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: 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 31 December 2023 USD million 2022 USD million 168 (99) − (37) 32 (64) (191) (131) 554 168 During the year 2023 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 sells products to various third parties at prices that are influenced by changes in London Metal Exchange aluminium prices and Shanghai Futures Exchange (SHFE) 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 prices fluctuations on these sales and purchases. The results are accounted for as profit or loss from derivative financial instruments, and do not adjust with revenue or purchases. During the year ended 31 December 2023 the Group recognised a total net loss of USD 99 million in relation to the above contracts (31 December 2022: USD 191 million). Unrealised changes in fair value recognised in other comprehensive income (cash flow hedge) during 2022 were fully attributable to cross currency swaps (note 17(b)). 308 65 66 309 309 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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 Eurobonds, RUSAL Bratsk bonds, UC RUSAL bonds and Power bonds issued are approximate their carrying value. The fair value of the loans and borrowings with fixed and floating interest rate as at 31 December 2023 and 31 December 2022 was calculated based on the present value of future principal and interest cash flows, using discount interest rate that take into account the currency of the debt, expected maturity dates and credit risks associated with the Group that existed at the reporting date. Derivatives: the fair value of derivative financial instruments, including embedded derivatives, is based on quoted market prices. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, fair value is estimated based on the Group’s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling and other risks implicit in such estimates. 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. As at 31 December 2023 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. Carrying amount Fair value Disclosures Financial assets measured at fair value Forward contracts for aluminium Derivatives Note USD million Loans and receivables USD million Forward contracts for aluminium and other instruments 32 − Other financial assets/ (liabilities) USD million − 32 − − 340 340 and other instruments Investments in equity securities measured at fair value through profit and loss at fair value* Non-current Financial assets not measured Current Trade and other receivables Short-term investments Cash and cash equivalents 19 15 15 Total USD million 32 340 372 1,732 97 2,347 4,176 − − − − − Level 2 USD million Level 1 31 December USD million 2023 USD million − Level 3 31 December USD million 2022 USD million 32 Total USD million 32 32 13 19 − − − 1,732 97 2,347 4,176 340 340 − − − − 168 168 90 78 32 340 372 1,732 97 2,347 4,176 − 32 − − − − 15 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: (6,697) (2,450) (1,321) (6,812) (4,252) (1,321) (6,812) (4,252) (1,321) − (1,698) − 17 17 15 − − − − − − − − − Financial liabilities not measured at fair value* Loans and borrowings Unsecured bond issue Trade and other payables (6,697) (4,148) (1,321) − (12,385) (12,385) (1,698) (10,468) − (12,166) 1,732 97 2,347 4,176 − − − − − * The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values. 2023 USD million 31 December 2022 USD million (64) (191) (131) 554 168 68 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 168 (99) − (37) 32 During the year 2023 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 sells products to various third parties at prices that are influenced by changes in London Metal Exchange aluminium prices and Shanghai Futures Exchange (SHFE) 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 prices fluctuations on these sales and purchases. The results are accounted for as profit or loss from derivative financial instruments, and do not adjust with revenue or purchases. During the year ended 31 December 2023 the Group recognised a total net loss of USD 99 million in relation to the above contracts (31 December 2022: USD 191 million). Unrealised changes in fair value recognised in other comprehensive income (cash flow hedge) during 2022 were fully attributable to cross currency swaps (note 17(b)). 310 67 66 311 311 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT As at 31 December 2022 20. Financial risk management and fair values Carrying amount Fair value (b) Financial risk management objectives and policies EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Loans and receivables USD million Other financial assets/ (liabilities) USD million (a) Fair values 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 Level 2 The methods used to estimate the fair values of the financial instruments are as follows: USD million Derivatives Note USD million Level 1 USD million Total USD million Level 3 USD million Total USD million 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 − 168 short maturity period of the instruments. 168 168 168 19 − − − 459 Investments in equity securities: measured at fair value through profit and loss, so, its carrying amount is 627 equal its fair value. 459 627 − 168 459 459 459 459 − 168 − − 15 − Financial assets not measured at fair value* Trade and other receivables Short-term investments Cash and cash equivalents 15 15(b) Long-term loans and borrowings, other non-current liabilities: the fair values of Eurobonds, RUSAL 1,492 50 Bratsk bonds, UC RUSAL bonds and Power bonds issued are approximate their carrying value. The fair 3,477 value of the loans and borrowings with fixed and floating interest rate as at 31 December 2023 and 5,019 31 December 2022 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 (8,809) (4,842) risks associated with the Group that existed at the reporting date. (1,488) 1,492 50 3,477 5,019 1,492 50 3,477 5,019 1,492 50 3,477 5,019 − (1,935) − (8,696) (4,904) (1,488) (8,696) (4,904) (1,488) (8,809) (2,907) (1,488) 17 17 15 − − − − − − − − − − − − − − − − − − − − − − − − − Financial liabilities not measured at fair value* Loans and borrowings Unsecured bond issue Trade and other payables − − * The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values. (15,088) (15,139) 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. The derivative financial instruments are recorded at their fair value at each reporting date. (15,088) (13,204) (1,935) − 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: 69    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. The Group’s principal financial instruments comprise bank loans, bonds 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 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. During the years ended 31 December 2023 and 31 December 2022, UC RUSAL has entered into certain commodity derivatives contracts in order to manage its exposure of commodity price risks. (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 2023 31 December 2022 Effective interest rate % USD million Fixed rate loans and borrowings Loans and bonds (note 17(a)) 0.01%-18.75% Variable rate loans and borrowings Loans and bonds (note 17(a)) 3.65%-18.40% 6,909 6,909 4,015 4,015 10,924 Effective interest rate % 0.01%-11.0% 2.86%-10.0% USD million 5,904 5,904 7,618 7,618 13,522 312 67 70 313 313 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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 2023 Basis percentage points Basis percentage points As at 31 December 2022 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 (40) 40 (76) 76 (32) 32 (61) 61 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 RUB and EUR. 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 CNY. 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. Denominated in Changes in the fair value of separated embedded derivatives and derivative financial instruments not other currencies vs. USD functional designated for hedge accounting are recognised immediately in profit or loss. currency 31 December USD-denominated vs. RUB functional currency 31 December EUR-denominated vs. USD functional currency 31 December RUB-denominated vs. USD functional currency 31 December CNY-denominated vs. RUR functional currency 31 December CNY-denominated vs. USD functional currency 31 December USD million 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 19 − 168 − 253 − (22) − (2) − − − Forward contracts for aluminium and other instruments (53) (1) 86 296 1,378 (684) (46) (405) (372) 57 296 465 (193) (51) (1) (364) − 50 1 − − − (1) 21 217 148 − (3) − (94) 13 4 712 (3,768) − (3,292) (36) − 31 December − 2023 666 (1,152) USD million − (3,218) − − 1 1 − − (780) 32 − − − 31 December − 20 2022 2 30 − − USD million − (1) (292) (101) − (62) 168 − 48 18 − (2) − (58) Disclosures Non-current assets Trade and other receivables Cash and cash equivalents Loans and borrowings Non-current liabilities Bonds Trade and other payables Net exposure arising from recognised assets and liabilities Non-current Current 50 (1) 209 253 363 289 (6,367) (3,704) 32 (778) 13 19 (290) (114) 168 90 78 6 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: 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 31 December 2023 USD million 2022 USD million 168 (99) − (37) 32 (64) (191) (131) 72 554 168 During the year 2023 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 sells products to various third parties at prices that are influenced by changes in London Metal Exchange aluminium prices and Shanghai Futures Exchange (SHFE) 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 prices fluctuations on these sales and purchases. The results are accounted for as profit or loss from derivative financial instruments, and do not adjust with revenue or purchases. During the year ended 31 December 2023 the Group recognised a total net loss of USD 99 million in relation to the above contracts (31 December 2022: USD 191 million). Unrealised changes in fair value recognised in other comprehensive income (cash flow hedge) during 2022 were fully attributable to cross currency swaps (note 17(b)). 314 71 66 315 315 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (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 2023 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. CNY Depreciation of USD vs. other currencies Depreciation of CNY vs. RUB 15% 10% 5% 5% 15% 24 36 (318) (6) (117) 24 36 (318) (6) (93) Depreciation of USD vs. RUB Depreciation of USD vs. EUR Depreciation of USD vs. CNY Depreciation of USD vs. other currencies Depreciation of CNY vs. RUB 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 15% 10% 5% 5% 15% 38 29 (185) − (44) 38 29 (185) − (35) 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 2023 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 Within 1 year or on demand USD million Total USD million Carrying amount USD million 1,156 161 768 2,424 36 4,545 4 − 3,280 2,962 58 6,304 − − 437 3,337 − 3,774 − − − 360 − 360 1,160 161 4,485 9,083 94 14,983 1,160 161 4,227 6,837 − 12,385 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 Within 1 year or on demand USD million Total USD million Carrying amount USD million 1,372 115 1,156 2,928 40 5,611 1 − 698 1,465 79 2,243 − − 3,014 5,942 − 8,956 − − − 271 − 271 1,373 115 4,868 10,606 119 17,081 1,373 115 4,859 8,741 − 15,088 Trade and other payables to third parties Trade and other payables to related parties Bonds Loans and borrowings, including interest payable Other contractual obligations Trade and other payables to third parties Trade and other payables to related parties Bonds Loans and borrowings, including interest payable Other contractual obligations At 31 December 2023 and 31 December 2022 the Group’s contractual undertaking to provide loans under the loan agreement between Metals segment, 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. 316 73 74 317 317 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 At 31 December 2023 and 31 December 2022, the Group has no concentration of credit risk within any single largest customer but 9.3% and 27.0% of the total trade receivables were due from the Group’s five largest customers. 21. Commitments (a) Capital commitments (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. (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. Year ended 31 December 2023 USD million Trade receivables USD million Trade payables 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 111 111 (37) 74 (107) (107) 37 (70) Year ended 31 December 2022 USD million Trade receivables USD million Trade payables 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 95 95 (47) 48 (112) (112) 47 (65) 75 318 The Group had outstanding capital commitments which had been contracted for at 31 December 2023 and 31 December 2022 in the amount of USD 944 million and USD 787 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 2024-2034 under supply agreements are estimated from USD 3,552 million to USD 4,480 million at 31 December 2023 (31 December 2022: USD 3,450 million to USD 5,169) depending on the actual purchase volumes and applicable prices. Commitments with related parties for purchases of primary aluminium, alloys and other purchases in 2024-2030 under supply agreements are estimated from USD 4,469 million to USD 6,029 million at 31 December 2023 (31 December 2022: USD 4,824 million to USD 7,283 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 2024-2034 are estimated to USD 691 million at 31 December 2023 (31 December 2022: from from USD 560 million USD 852 million to USD 1,275 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 2023 and 31 December 2022. Commitments with related parties for sales of primary aluminium and alloys in 2023 are estimated from USD 215 million to USD 262 million at 31 December 2023 (31 December 2022: from USD 149 million to USD 182 million). Commitments with third parties for sales of primary aluminium and alloys in 2024-2028 are estimated to range from USD 5,269 million to USD 5,901 million at 31 December 2023 (31 December 2022: from USD 5,505 million to USD 8,386 million). (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 2023 is USD 22 million (31 December 2022: USD 61 million). 76 319 319 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 (b) Environmental contingencies The Group and its predecessor entities have operated in the Russian Federation, 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 2023, the amount of claims, where management assesses outflow as possible approximates USD 25 million (31 December 2022: USD 33 million). (d) Other contingent liabilities 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 2023 and 31 December 2022: USD 188 million and USD 239 million, respectively) and is split between the Group and PJSC RusHydro in equal proportion. Based on management’s estimates, the arising financial guarantees related to this arrangement are not significant to the consolidated financial statements. 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 capable of exerting significant influence on the Metals segment, 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. Purchases of raw materials and services from related parties for the period were as follows: Purchase of raw materials Companies capable of exerting significant influence Associates and joint ventures Energy costs Companies capable of exerting significant influence Associates and joint ventures Other services Associates and joint ventures Year ended 31 December 2023 USD million 2022 USD million (711) (50) (661) (93) (45) (48) − − (804) (988) (30) (958) (104) (48) (56) (30) (30) (1,122) (c) Related parties balances At 31 December 2023, included in non-current liabilities are balances of related parties – associates and joint ventures of USD 17 million (31 December 2022: USD 16 million). (d) Remuneration to key management For the year ended 31 December 2023 remuneration to key management personnel comprised short-term benefits and amounted to USD 22 million from which Board members received USD 10 million (year ended 31 December 2022: USD 18 million from which Board members received USD 6 million). 24. Events subsequent to the reporting date On 7 February 2024 UC RUSAL placed on the Moscow Stock Exchange exchange-traded non-documentary interest-bearing non-convertible bonds series BO-001P-06 in the total amount of CNY 1.000 million with a coupon – 7.20%. The maturity of the bonds is 2.5 years. 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. 320 77 78 321 321 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Property, plant and equipment – recoverable amount In accordance with the Group’s accounting policy, each asset or cash generating unit is evaluated every reporting period to determine whether there are any indications of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss is recognised to the extent that carrying amount exceeds recoverable amount. The recoverable amount of an asset or cash generating group of assets is measured at the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties, and is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset, including any expansion prospects, and its eventual disposal. Value in use is also generally determined as the present value of the estimated future cash flows, but only those expected to arise from the continued use of the asset in its present form and its eventual disposal. Present values are determined using a risk-adjusted pre-tax discount rate appropriate to the risks inherent in the asset. Future cash flow estimates are based on expected production and sales volumes, commodity prices (considering current and historical prices, price trends and related factors), reserves (refer “Reserve estimates” below), operating costs, restoration and rehabilitation costs and future capital expenditure. This policy requires management to make these estimates and assumptions which are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the assets may be impaired and the impairment would be charged against the profit or loss. Property, plant and equipment – hydro assets – fair value In accordance with the Group’s accounting policy, hydro assets are carried at a revalued amount, being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. The valuation analysis is primarily based on the cost approach to determine depreciated replacement cost. This method considers the cost to reproduce or replace the property, plant and equipment, adjusted for physical depreciation, functional and economic obsolescence. This policy requires management to make estimates and assumptions regarding both costs, as there is no active market for used assets of that type, and macroeconomic indicators to assess economic obsolescence which are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these estimates, which may impact the fair value of hydro assets. In such circumstances, the fair value of hydro assets may be lower with any consequential decrease in revaluation reserve recognised through other comprehensive income. Inventories – net realisable value The Group recognises write-downs of inventories based on an assessment of the net realisable value of the inventories. A write-down is applied to the inventories where events or changes in circumstances indicate that the net realisable value is less than cost. The determination of net realisable value requires the use of judgement and estimates. Where the expectation is different from the original estimates, such a difference will impact the carrying value of the inventories and the write-down of inventories charged to the profit or loss in the periods in which such estimate has been changed. 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. 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. 322 79 80 323 323 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 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 impaired. 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. 324 81 82 325 325 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT 26. Significant subsidiaries The significant entities of the Group, included in these consolidated financial statements, are as follows: EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2023 Name UC RUSAL IPJSC United Company RUSAL Compagnie Des Bauxites De Kindia S.A. Friguia SA JSC RUSAL Achinsk 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 (merged with JSC EuroSibEnergo) LLC MAREM + JSC Irkutskenergo 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 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 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 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 Holding company Power generation / Management company Power generation Power trading Power generation Power generation Power generation Engineering services Coal production Coal production Ownership and equity interest 31 December 2023 2022 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% 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% 75.0% 99.9% 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% 75.0% 99.9% 100.0% 100.0% 100.0% 100.0% 0.0% 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% 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. 83 326 327 327 CONSOLIDATED REPORT 2023FINANCIAL STATEMENT 04 04 Appendices 330 Additional ESG data 383 Glossary 390 Contacts APPENDICESCONSOLIDATED REPORT 2023329328328329Additional ESG data Financial review GRI 201-1 Direct economic value generated and distributed, USD mn 1 Metals segment Power segment 2021 2022 2023 2021 2022 2023 2021 En+ 2022 2023 Direct economic value generated 13,844 15,608 13,033 Revenues 11,994 13,974 12,213 3,155 3,138 3,919 3,885 3,612 15,993 18,217 15,493 3,587 14,126 16,549 14,648 Share of profits of associates and joint ventures 1,807 1,555 Interest income on loans 43 79 752 68 (5) 22 (2) 36 - 1,802 1,553, 25 65 115 752 93 Economic value distributed (10,496) (13,626) (11,385) (2,444) (3,480) (2,616) (12,080) (15,645) (13,123) Operating costs (9,502) (12,251) (10,602) (1,705) (2,467) (1,846) (10,340) (13,427) (11,557) including employee wages Retirement costs Community investments Payments to providers of capital including dividends paid including financial expenses Payments to government including income tax 2 Economic value retained: ‘direct economic value generated’ less ‘economic value distributed’ (723) (196) (45) (364) - (364) (389) (339) (938) (248) (34) (727) (302) (425) (366) (310) (750) (206) (33) (447) (609) (527) (1,170) (1,547) (1,277) (80) (10) (103) (19) (83) (5) (276) (55) (351) (53) (289) (38) (367) (338) (560) (368) (709) (1,117) (748) - - - (367) (338) (560) (177) (132) (311) (230) (331) (243) - (368) (314) (238) - (709) (700) (569) (129) (988) (697) (553) - (748) (491) (370) 3,348 1,982 1,648 711 439 996 3,913 2,572 2,370 GRI 201-4 Financial assistance received from government, mn Metals segment Power segment En+ Economic indicators, RUB mn 2021 2022 2023 RUB USD RUB USD RUB USD 0 378 378 0 5 5 0 1,023 1,023 0 15 15 0 2,974 2,974 0 35 35 Metals segment Power segment 2021 2022 2023 2021 2022 2023 2021 En+ 2022 2023 Revenue Value added 883,407 957,909 1,041,117 231,127 266,314 305,780 1,040,438 1,134,424 1,248,692 361,715 306,142 251,307 138,938 148,872 177,079 494,319 443,086 434,353 Net value added 274,067 219,632 150,716 97,002 100,288 123,096 364,735 307,992 279,779 Labor productivity Amount of assessed payments Amount of mandatory pay- ments paid 5 4 3 3 3 4 4 4 4 81,925 106,136 86,955 14,952 17,069 18,499 96,877 123,205 105,464 81,925 106,136 86,955 15,627 15,848 19,622 97,552 121,984 106,577 Sustainable investments 13,241 17,176 19,504 7,131 9,028 6,953 20,372 26,204 26,457 Investments in projects related to achieving technological sovereignty and structural adaptation of the Russian economy 773 340 0 569 826 1,624 1,343 1,110 1,624 Sustainability management Management body Power segment Board of Directors of En+ Health, Safety, and Environment Com- mittee of En+ General Director of En+ Sustainable Devel- opment Direc- torate of En+ • • • • • • • • • • • • • • • Functions Approval of general corporate sustainability policies and general sustainability management principles and control over their implementation; Strategic management of sustainable development; Consideration of issues and identification of material topics related to the environmental impact, social policy, and corporate governance of the Company; Approval of the Company’s sustainability reporting. Participation in the formulation of sustainable development strategies and policies and identification of the relevant objectives; Preparation of recommendations related to sustainable development for the Board of Directors; Control over the Company’s compliance with international sustainability standards and leg- islation; Assessment of the Group’s sustainability performance. General management of sustainable development; Improvement of the business model based on sustainability principles; Identification and implementation of measures to improve the Company’s long-term com- petitiveness in line with global sustainable development trends. Development of strategic sustainability documents for the Company and the Group and plans to implement them; Development of constructive relationships with the Group’s stakeholders; Integration of the criterion of compliance with the UN sustainable development goals, inter- national best practices, and national development goals into the Group’s decision-making system; Improvement of the Company’s performance in accordance with generally accepted sus- tainability methodologies; Environment De- partment Climate Risk De- partment Department of Sustainable Devel- opment Projects Functional units and divisions of en- terprises Board of Directors of the Metals seg- ment • Identification of the most significant environmental and social risks, organisation of the de- velopment of measures and/or initiation of projects to prevent, eliminate, and minimise impacts; • Organisation of accession to leading associations and/or initiation of new ones to develop a joint SDG implementation plan; • • • • • • • Positioning of the Company as a leader in sustainable development among industry sectors. Arrangement of work to identify and assess environmental risks; Initiation and organisation of the Company’s environmental strategic initiatives and projects Control over their implementation and achieved results. Support for implementation of the Company’s climate strategy; Identification and assessment of climate risks; Development of climate risk management measures; Control over the implementation of measures to eliminate or minimise climate risks. • Management of biodiversity conservation and green office projects, including project initiation and monitoring; • • Participation in the development of sustainability training programmes for the Group’s em- ployees. Participation in the development and implementation of ESG initiatives as part of their primary production activities. Metals segment Control over the achievement of goals and objectives to solve sustainable development issues; Identification and assessment of climate-related risks and opportunities for the Company; Approval of the sustainability strategy and goals; • • • • Quarterly and annual analysis of the risk profile and achieved results; • Supervision over the implementation of corporate ESG policies and determination of the need for and feasibility of certain changes. 1 Hereinafter, calculated on the basis of the average exchange rate of the US dollar to the ruble for 2021 of 73.65 rubles for 1 US dollar, for 2022 of 86.55 rubles for 1 US dollar, for 2023 of 85.25 rubles for 1 US dollar. 2 Excluding deferred income tax and its effect on the reporting period. 330 330 Health, Safety, and Environment Com- mittee of the Met- als segment • • • • Control over compliance with the environmental policy, the occupational safety and envi- ronmental and climate risk management policy; Assessment of the implementation of occupational health and safety programmes, including across the supply chain; Control over the achievement of the Company’s environmental and occupational safety goals; Assessment of compliance with regulatory requirements and assumed obligations. 331 331 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATA Functions GRI 2-25 List of expectations expressed by stakeholders Management body Corporate Govern- ance and Nomina- tions Committee of the Metals seg- ment General Director of the Metals seg- ment Public Expert Council on Sustain- ability Sustainability Di- rectorate Functional units and divisions of en- terprises • • • • • • • • • Preparation of recommendations related to corporate governance, annual review of corporate governance principles, policies, and procedures of the Company and its subsidiaries; Regulation of corporate governance issues, control over training and continuous professional development of directors and senior management; Control over the Company’s compliance with the requirements of the Russian Corporate Governance Code and the Corporate Governance Code of the Hong Kong Stock Exchange; Preparation of recommendations about candidates for the Board of Directors. Implementation of the sustainability strategy; Control over the implementation of the climate policy formulated by the Board of Directors; Evaluation of the progress in achieving strategic goals, analysis of the achievement of goals; Initiation and monitoring of key projects to reduce greenhouse gas emissions; Preparation of recommendations to the Board of Directors concerning climate-related issues. • Organisation of effective interaction with a wide range of external stakeholders at the federal, regional, and local levels. • • Control over the implementation of the Sustainability Strategy across the Company’s divisions, including its provisions related to environmental responsibility. Participation in the development and implementation of ESG initiatives as part of their primary production activities. Materiality assessment and Stakeholder engagement GRI 2-25, 3-1 In 2023, En+ analysed its activities to identify the actual and potential impacts on the economy, environment and people, including impacts on their human rights. This information was used to compile a list of impacts for stakeholder assessment. This section provides detailed information about the stakeholder groups that participated in the materiality survey and their expressed expectations. Overview of stakeholder groups involved in the survey, % 2%1% 1% 1% 6% Employees and trade unions Shareholders, investors, banks, and rating agencies Customers and suppliers Non-profit organisations Local communities 89% Other Stakeholders expectations En+ response Allocation of responsibility for sustainable development management between En+ and Metals segment More detailed disclosure on product quality issues and quality assurance, including by segment More detailed information on energy consumption and en- ergy efficiency, information about the strategy and man- agement system in this area, key activities in each segment Disclosure of the results of surveys of residents of the re- gions of presence, conducted to determine their real needs and expectations, as well as information on the use of these results by the Company in the process of planning charitable activities Expanded analysis of the Company’s contribution to the implementation of national projects, more detailed coverage of activities within the framework of the Clean Air federal project, implemented projects and achieved results See the allocation of responsibility for sustainable develop- ment management between En+ and Metals segment structure on p. 76-77 Read about product quality management on p. 226-229 Read about energy management, including the strategy on p. 100-101 Read about the results of the Sustainable Cities Index research and their use in the social investments planning on p. 154-155 Read about the Company’s contribution to achieving the Russian national goals on p. 82-85 Disclosure of following indicators: See the labour productivity on p. 330 • • • • Labour productivity share of purchases from small and medium-sized businesses; costs of personnel training; breakdown of personnel by category See the share of purchases from small and medium-sized businesses in 2023 on p. 224 See the costs of personnel training on p. 358 See the breakdown of personnel by category on p. 353-354 Comparison of average wages at individual enterprises of the Company with wage levels in the corresponding regions See the information on the standard entry-level wage rate for employees and the established minimum wage in the regions of presence by segment on p. 357 Description of Company’s goals to increase consumption or production of low-carbon energy Read about increasing renewable energy production at HPPs and low-carbon energy use on p. 101 Disclosure of Company’s approach to verifying suppliers' compliance with established requirements to create a re- sponsible supply chain, including requirements for environ- mental protection, labour protection and industrial safety, social responsibility Read about supplier audit and verification on p. 223 Health and Safety KPIs for managers Read about Health and Safety KPIs for managers on p. 136 Activities based on feedback received on the hotline and their results Read about actions based on the results of checking griev- ances and requests made via Signal hotline on p. 212 Disclosure of information on Board or Directors and per- sonnel training Read about Board or Directors training on p. 182-183 Read about personnel training on p. 144 Employment of pensioners and people of pre-retirement age See the number of employed people of retirement age on p. 355 332 332 333 333 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Value creation model KEY PRODUCTION PROCESS GRI 2-6, 3-3, 203-2 BAUXITE MINING ALUMINA REFINING Key input z Bauxite reserves z Land surface z Water Key output z Bauxite z Rehabilitated land z Waste z Bauxite z Caustic Soda z Calcine z Water z Fuel z Alumina z Air emissions z GHG emissions z Waste ENERGY AND HEAT PRODUCTION Energy and heat production (CHP) z Land surface z Coal z Water Energy production (HPP) z Water z Land surface ALUMINIUM PRODUCTION FOR THE GROUP z Alumina z Energy z Aluminium scrap z Water z Fuel z Labour z Production and distribution infrastructure z Financial resources z Governance system z Royalties z Energy and heat z Air emissions z Rehabilitated land z Energy z Noise z Aluminium and its products z Financial results z Air emissions z Taxes z Water level fluctuations and z GHG emissions z Payments to suppliers flood protection z Waste z Wastewater z Salaries and social benefits for employees z Skilled employees z Social investments z Affordable energy and heat for consumers Key effect z Biodiversity impact z Contribution to climate z Effect on the landscape z Biodiversity impact z Contribution to climate z Value for shareholders z Effect on the landscape change z Biodiversity impact z Biodiversity impact change z Biodiversity impact z Potential reduction of water reserves and water pollution z National and local economic development z Employment stability z Regional development z Professional development of employees z Product development z Innovation development MEASURES TO MITIGATE EFFECT Climate change strategy Modernisation of equipment Engagement with local communities Environmental monitoring The biodiversity conservation programme Collaboration with scientific community Transparency in sustainability indicators through the disclosure of annual reporting 334 335 APPENDICESЕДИНЫЙ ГОДОВОЙ ОТЧЕТ 2023CONSOLIDATED REPORT 2023Climate change GRI 305-1 GHG emissions of the Power segment by substance 2021 2022 2023 Methane (СH4) Nitrous oxide (N2O) Hydrofluorocarbons (HFCs) Perfluorocarbons (PFCs) Sulphur hexafluoride (SF6) СO2 total % total % total % 4,896.03 0.02 5,460.74 0.02 16,918.40 0.07 86,003.36 0.37 96,100.24 0.38 44,188.33 0.18 - - - - 107.88 0.00 120.09 0.00 104.83 0.00 939.63 0.00 1,586.09 0.01 1,269.44 0.01 22,918,368.78 99.60 25,029,081.80 99.59 24,922,967.16 99.74 Total for Scope 1,2 and 3 23,010,315.68 25,132,348.96 26,443,629.6 GRI 305-4 Specific GHG emissions Specific GHG emissions per revenue, t CO2e/USD mn Specific GHG emissions per revenue, t CO2e/RUB mn Specific GHG emissions per generated electricity and heat, mt CO2e/bn kWh GRI 201-2 Physical risks Power segment Metals segment 2021 2022 2023 2021 2022 2023 2021 En+ 2022 2023 7,332.80 6,469.07 7,372.07 3,243 2,903 3,232 4,382.12 3,970.56 4,172.10 99.56 94.37 86.48 38.04 34.05 37.91 53.28 48.27 48.94 0.19 0.22 0.23 - - - 0.19 0.22 0.23 Risk category Physical risk Risk factor Scenario Impact over the time horizon Region of exposure Short-term 2024 Medium- term 2024– 2025 Long- term 2025– 2050 Probability* Acute Underflooding of quarries Acute Infrastructure disruption extreme precipitation Acute Supply disruptions extreme precipitation 336 Komi Republic Republic of Guinea Komi Republic Republic of Guinea Republic of Guinea Komi Republic Krasnoyarsk Territory Republic of Guinea Nizhny Novgorod Region Irkutsk Region Republic of Guinea Nizhny Novgorod Region Irkutsk Region Krasnoyarsk Territory Armenia • • • • • • • • • ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● ● ● Low Medium Low High High Low Low Low ○ ○ ● Low ○ ○ ○ ○ ○ ○ ○ ○ ● ● ● ● Medium Low Low Low Impact over the time horizon Risk category Physical risk Risk factor Scenario Region of exposure Short-term 2024 Medium- term 2024– 2025 strong wind Acute Reduced productivity extreme heat Acute Equipment damage/loss extreme cold Chronic Halt in production Damage to production facilities Acute Acute extreme precipitation deficit extreme precipitation Collapse of the main building roof extreme snowfall • • • • • • • • • • • • • • • • • Jamaica Krasnoyarsk Territory Republic of Guinea Krasnoyarsk Territory Republic of Guinea Krasnoyarsk Territory Republic of Guinea Irkutsk Region Irkutsk Region Irkutsk Region Irkutsk Region ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ Long- term 2025– 2050 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Probability* Low Low Low Medium Medium High Medium High Low Low Low Low Low Low Low Medium Low Low Low Low SSP126 - • SSP245 - • SSP585 - • ○ – insignificant impact, ● – significant impact (based on a quantitative risk assessment) * – Based on the quantitative risk assessment scale: low (less than 20%), medium (20–60%), high (60–100%) probability Transition risks Risk category Risk Risk factor Scenario Policy and legal Expenses to purchase offsets Expenses related to the introduction of CBAM Introduction of a national carbon price and development of a regional GHG emissions inventory Introduction of CBAM • • • • • • • Exposed assets Impact over the time horizon Metals segment Power segment Short- term 2022 Medium- term 2022– 2025 Long- term 2025– 2050 Probability within the scenario analysis* Applicable to En+ ○ ○ ○ ○ ○ ○ ○ ● ● ● ○ ○ ○ ○ ● ● ● ● ● ● ● High Medium Low High High High Medium 335 336 337 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Risk category Risk Risk factor Scenario Exposed assets Impact over the time horizon Metals segment Power segment Short- term 2022 Medium- term 2022– 2025 Long- term 2025– 2050 Probability within the scenario analysis* Expenses to take measures to adapt to and minimise climate change impacts Reduced demand for green electricity due to the introduction of CBAM Technology Expenses to switch to energy-efficient and energy- saving solutions in production processes Reduced demand for the Company’s products in European markets Reduced or no public investment in GHG emissions reduction Failure to achieve the declared performance of hydroelectric unit impellers under the New Energy programme More carbon- intensive production through the use of SF6 insulated switchgear Reputation Reduced investment appeal of the Company Sludge spillage entailing costs to recover from the accident and pay the fine Approval of the national action plan for adaptation to climate change Introduction of CBAM High carbon intensity of production processes Reorientation of aluminium exports to Asian markets Limitation of investment in hydropower facilities Implementation of the New Energy programme Replacement of switchgear Negative perception of the Company by investors, independent shareholders, local communities Overflow of sludge at sludge disposal sites Market Reduced product margins and Lower demand for high-carbon generation 338 • • • • • • • • • • • • • • • • • • • • • • • • • • • + + + Applicable to En+ + + + + + + + + + + + + Applicable to En+ + + + Applicable to En+ ○ ○ ○ ○ ○ ○ ○ ○ ● ● ● ○ ○ ○ ● ● ● ○ ○ ○ ○ ○ ○ ● ● ● ○ ○ ○ ○ ○ ● ● ● ● ● ● ● ● ● ● ● ● ● ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● High High High Medium Low High Medium Low High Medium Low Medium Medium Low Low Low Low Low Low Low High Medium Low High Medium Medium High Medium 337 Exposed assets Impact over the time horizon Metals segment Power segment Short- term 2022 Medium- term 2022– 2025 Long- term 2025– 2050 Probability within the scenario analysis* ○ ○ ○ ○ ● ● ● ● + + + Low High Medium Low ● ● ● ● Risk category Risk Risk factor Scenario competitiveness due to a high carbon footprint Lower demand for coal products Transition to low-carbon economic development • • • SSP126 - • SSP245 - • SSP585 - • ○ – insignificant impact, ● – significant impact (based on a quantitative risk assessment) * – Based on the quantitative risk assessment scale: low (less than 20%), medium (20–60%), high (60–100%) probability Energy management GRI 302-4 Reduction of energy consumption in the Power segment, GJ Reduction of energy consumption 2021 2022 2023 8,365,779.225 3,126,243.31 5,948,299.47 GRI EU2 Net energy output of the Power segment, GJ3 Electricity Heat 2021 316,499,624 119,772,801 2022 292,766,726 3 116,429,914 2023 296,643,840 115,001,675 GRI EU2 Net energy output of the Power segment by source Non-renewable Renewable Coal Natural gas Petroleum products Nuclear power Biomass Solar power Wind power Geothermal Hydropower Electricity, GWh Heat, Gcal 2021 2022 2023 2021 2022 2023 8,798 1,694 10,984 12,370 23,501 1,512 1,406 5,253 23,169 4,771 13 0 0 6 0 0 16 0 0 6 0 0 16 0 0 6 0 0 77,408 68,816 68,602 27 0 12 0 0 0 0 28 0 11 0 0 0 0 23,185 4,269 27 0 5 0 0 0 0 GRI EU1 Installed capacity with breakdown by primary energy sources and regulation mode, MWh Non-renewable Renewable Coal Natural gas Solar power Hydropower Электричество Тепловая энергия 2021 2022 2023 2021 2022 2023 3,783.3 3,783.3 3 786,2 14,137.3 14,031.7 13,362.9 513.9 5.2 514.9 5.2 491,4 5,2 15,099.0 15,125.7 15,152.5 3,691.0 3,695.7 3,026.9 0.0 0.0 0.0 0.0 0.0 0.0 3 The value has been adjusted due to the recalculation of indicators for LLC "BEK" and LLC "ESE-Kuban". 338 339 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA GRI 302-1 b, EU Taxonomy, SASB EM-MM 130 a.1, SASB IF-EU-000.E Energy consumption, GJ 4 2022 2021 2023 Energy consumption from non-renewable sources by fuel type 466,046,656 477,450,850 476,176,024 • • • • • • • • Natural gas Heavy oil Coal Petrol Kerosene Propane and butane Diesel fuel Coke Energy consumption from renewable sources by fuel type • Charcoal • Waste wood • Bark waste Consumption of energy purchased or obtained by any means other than self-generation from non-renewable and renewable fuels • • Electricity consumption Heating consumption Energy losses during transportation • • Electricity losses Heating losses Energy sales • • Electricity sales Heating sales Total energy consumption within the organisation Specific energy consumption indicators 156,742,661 27,110,413 275,023,875 260,035 6,313 456,379 5,947,975 499,004 797,722 456,002 175,910 165,810 141,029,714 24,082,306 126,473,984 23,623,279 305,076,445 318,484,246 191,771 5,936 482,090 5,877,301 705,286 1,414,746 954,284 339,822 120,640 165,271 6,113 496,043 6,218,333 708,755 1,983,684 1,135,481 786,527 61,676 251,429,586 253,156,436 255,632,013 246,716,543 248,164,413 251,335,545 4,713,043 25,412,555 12,383,899 13,028,656 436,566,105 316,499,624 120,066,481 307,120,414 4,992,024 27,436,758 14,501,417 12,935,341 4,296,468 28,455,989 15,230,520 13,225,469 409,462,962 409,160,593 292,766,726 296,515,079 116,696,237 112,645,514 349,995,828 353,087,117 Energy intensity ratio per electricity and heat generation, GJ/MWh Energy intensity ratio per tonne of aluminium, GJ/t Energy intensity ratio per revenue, GJ/RUB mn Energy intensity ratio per revenue, GJ/USD mn Energy consumption per unit of net value added Power segment Metals segment 2021 2022 2023 2021 2022 2023 2021 En+ 2022 2023 2.1 2.5 2.7 - - - 2.1 2.5 2.7 - - - 127.2 119.0 117.4 127.2 119.0 117.4 1,099.3 1,047.0 949.9 278.3 258.4 240.5 690.4 645.3 587.6 80,964.8 71,774.9 80,974.0 38,703.2 32,430.0 36,300.5 50,847.7 44,233.6 50,095.0 2,619.2 2,780.4 2,359.6 897.0 1,127.2 1,661.0 1,969.3 2,376.8 2,622.8 Denominator used to calculate intensity metrics Power segment Metals segment Amount of electricity and heat generation, bn kWh Volume of aluminium produced, kt 2021 123,574 2022 116,375 2023 117,375 2021 3,764 2022 3,835 2023 3,848 Use of non-renewable energy, % Percentage of non-renewable energy con- sumption Percentage of renewable energy consump- tion Percentage of supplied energy from non-re- newable sources Percentage of supplied energy from renewable sources Percentage of renewable and low-carbon generating facilities in the installed capacity of generating facilities Power segment Metals segment En+ Unit 2021 2022 2023 2021 2022 2023 2021 2022 2023 % % % % % 97.74 97.95 98.16 0.07 0.04 0.02 11.95 15.37 16.71 88.05 84.63 83.29 77 78 78 52.03 53.91 56.00 99.83 99.70 99.59 47.97 46.09 44.00 0.17 0.30 0.41 - - - - - - - - - 11.95 15.37 16.71 88.05 84.63 83.29 77 78 78 SASB IF-EU-240a.1 Average retail electric rate for (1) residential, (2) commercial, and (3) industrial customers, RUB/kWh 5 Residential Commercial Industrial 2021 0.93 2.99 2.85 2022 0.98 3.14 2.98 2023 1.08 3.47 3.28 SASB 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, RUB 6 500 kWh 1,000 kWh 22002211 564.08 1,125.43 22002222 596.15 1,189.69 22002233 616.85 1,229.24 SASB IF-EU-240a.3 Number of residential customer electric disconnections for non-payment, percentage reconnected within 30 days7 Number of residential customer electric disconnections for non- payment Percentage reconnected within 30 days, % 2021 81,823 0.5 2022 90,774 0.7 2023 73,577 0.3 SASB IF-EU-420a.2 Percentage of electric load served by smart grid technology,8 % 2021 49 2022 52 2023 51 SASB of IF-EU-550a.2 System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), and Customer Average Interruption Duration Index (CAIDI) SAIDI SAIFI CAIDI 2021 87.27 0.66 133.26 2022 66.57 0.48 137.3 2023 60.54 0.50 120.43 4 Data for 2021-2022 was changed due to clarification of coefficients. 5 The average USD/RUB exchange rate was RUB 73.65 per USD in 2021, RUB 68.55 per USD in 2022, RUB 85.25 per USD in 2023. 6 The average USD/RUB exchange rate was RUB 73.65 per USD in 2021, RUB 68.55 per USD in 2022, RUB 85.25 per USD in 2023. 7 The data is given for Volgaenergo Group of Companies only. 8 According to the U.S. Energy Independence and Security Act of 2007, smart grid technologies of the Power segment include smart measurement technologies which provide customers with timely information and control options. 340 340 339 341 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Environmental protection Total environmental protection costs, mn Metals segment 2021 Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ 2022 2023 USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB Percentage of funds used to implement environmental projects, % Percentage of net profit used to implement environmental projects Power segment Metals segment En+ 2021 2022 2023 2021 2022 2023 2021 2022 2023 4.6 6.8 10.4 4.3 12.1 62.9 4.4 13.1 28.9 PCB manage- ment Other envi- ronmental protection costs Waste man- agement Environmental equipment maintenance Land rehabil- itation Water pro- tection Atmospheric air protection Preventing climate change Protection of the environment from noise, vibration and other types of physical impact Conservation of biodiversity and protection of natural areas Ensuring radiation safety of the environment Research and development activities to reduce negative anthropogenic impacts on the environment TToottaall 0.2 14.7 0.0 0.0 0.2 14.73 0.2 10.4 0.0 0.0 0.2 10.4 0.01 0.85 0.0 0.0 0.01 0.85 Total payments for the negative environmental impact, mn 9 1.8 132.6 0.7 51.5 2.9 213.6 3.2 216.4 1.5 104.6 4.7 321.0 1.2 102.3 0.4 36.5 1.6 138.8 50.6 3 726.6 0.7 51.5 51.3 3 778.2 89.4 6 131.2 1.4 94.8 90.8 6 226 40.6 3461.0 1.5 127.9 42.1 3588.9 3.9 287.2 3.6 246.7 7.4 545 3.9 265.3 6.3 431.6 10.2 696.9 4.3 366.6 0.0 0.0 4.3 366.6 1.3 95.7 0.6 44.1 1.9 139.9 1.0 68.4 0.9 63.4 1.9 131.8 4.7 400.7 0.6 54.6 5.3 455.3 10.5 773.3 7.7 567.1 18.2 1 340.4 5.0 339.6 10.7 732.9 15.7 1 072.5 5.0 426.2 13.1 1116.3 18.1 1 542.5 69.6 5 126.0 3.1 228.3 73.0 5 376.4 114.0 7 813.9 5.5 337.6 119.5 8 151.5 116.6 9939.8 13.7 1169.4 130.3 11 109.2 - - - - - - - - - - - 0.03 2.2 0.03 2.2 - - - - - - - - - - - - - - - 0.002 0.1 0.002 0.1 - 0.02 2.3 0.02 2.3 - 0.009 0.8 0.009 0.8 - - - - - - 4.5- 383.6 0.1052 8.9 4.6 392.5 - 0.0004 0.03 0.0004 0.03 - - - - - - - - 0.005 0.4 0.005 0.4 - 0.3 22.6 0.3 22.6 - - - - - - - - 0.2 17.1 0.2 17.1 2021 2022 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment 2023 Power segment En+ USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB 11.87 874.2 0.9 66.3 12.77 913.4 12.5 854.5 1.5 98.3 14.0 952.8 11.4 974.93 1.1 93.78 12.5 1,065.5 Payments for the negative environ- mental impact (NEI) GRI 2-27 Non-compliance with environmental laws and regulations 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total number of significant instances of non- compliance with environmental laws and regulations Total number of instances for which non- monetary sanctions were incurred Total number of cases initiated to resolve disputes related to non-compliance with environmental laws and regulations Air quality 113377..99 1100 115566..11 1166..77 11 221144..88 115555..22 1111 443333..99 221166..77 1144 884455..22 2266..33 11 776644..99 224433..00 1166 661100..11 117777..33 1155111144..22 2299..77 22553377..77 220077 1177,,664477..77 Particulate matter (PM) (excl. Fsolid, tarry substances, benzo(a)pyrene (B(a)P)) Sulphur dioxide (SO2) Sum of nitric oxides as nitrogen dioxide (NO2) Total fluoride (gaseous and solid fluoride) Other emissions 11 Volatile organic compounds (VOCs) Benzo(a)pyrene Mercury (Hg) Lead (Pb) Total 35.9 45.2 22.7 6.0 10.0 1.2 36.1 44.3 19.9 5.5 10.5 0.9 0.0038 0.0036 0.00 0.00 366.3 0.00 0.00 362.6 GRI 305-7, SASB EM-MM-120a.1 Emissions of the Metals segment,10,kt Pollutant 2021 2022 2023 Carbon monoxide (CO) 245.3 245.4 GRI 305-7 Emissions of the Power segment, kt Pollutant 2021 2022 2023 Nitrogen oxides (NOx) Sulphur oxides (SOx) Persistent organic pollutants (POPs) Volatile organic compounds (VOCs) 45.7 160.5 0.0 0.4 52.1 172.3 0.0 0.3 248.0 40.4 42.3 22.9 5.2 9.4 1.2 0.0033 0.00 0.00 371.7 50.5 188.1 0.0 0.4 342 341 343 9 Calculated on the basis of the USD/RUB average exchange rate of RUB 73.65 per USD for 2021, RUB 68.55 per USD for 2022. 10 The data for the Friguia Bauxite and Alumina Complex, that may be material for consolidated indicators, is excluded due to the lack of metering systems and relevant requirements in national legislation. 11 This category includes all pollutants specified by Russian legislation, with the exception of CO and pollutants already presented in this table. 342 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Particulate matter (PM) (excl. Fsolid, B(a)P, Pb, Hg) Other standard categories of air emissions identified in relevant regulations 12 Total 58.3 9.3 67.3 7.5 274.4 299.6 SASB IF-EU-120a.1 Percentage of air emissions of the Power segment in or near areas of dense population, % Pollutant 2021 2022 2023 Nitrogen oxides (NOx) Sulphur oxides (SOX) Particulate matter (PM) Lead (Pb) 13 Mercury (Hg)14 Total Specific emissions of pollutants 93.2 97.8 87.8 0.0 0.0 93.6 95.3 98.4 91.8 0.0 0.0 95.4 74.9 6.0 319.9 94.9 98.5 89.4 0.0 0.0 94.9 2021 2022 2023 Unit Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ kt/kt 0.09 2.22 - 0.10 2.57 - 0.09 2.73 - kt/USD mn kt/RUB mn 0.03 0.09 0.05 0.03 0.08 0.04 0.03 0.09 0.04 0.0042 0.0012 0.0009 0.00038 0.0011 0.0006 0.00036 0.0010 0.0005 kt/kt 0.006 0.3701 kt/kt 0.012 1.2992 - - 0.005 0.4476 0.012 1.4809 kt/kt 0.010 0.4720 - 0.009 0.5787 - - - 0.006 0.4310 0.011 1.6065 0.010 0.6400 kt/kt 0.00031 0.0035 - 0.00023 0.0025 - 0.00032 0.0032 - - - - Total air emissions per unit of output Total air emissions per revenue Total air emissions per revenue NOx emissions per unit of output SOx emissions per unit of output Particulate matter emissions per unit of output VOCs emissions per unit of output Water resources GRI 303-3, SASB IF-EU-140a.1, SASB EM-MM-140a.1 Water withdrawal,15,16 mn m3 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment 178.4 727.0 905.4 172.7 820.2 992.9 163.5 871.8 121.2 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 15.9 109.1 615.2 724.3 12.6 12.5 22.8 15.7 40.5 53.1 164.5 177.0 0.0 0.0 22.8 15.7 98.8 14.4 12.8 22.6 14.8 635.0 33.4 203.4 0.0 0.0 En+ 1,035.3 733.9 47.8 216.2 22.6 14.8 155.4 720.2 875.6 149.9 813.2 963.1 140.9 865.4 1,006.3 121.2 4.0 14.3 15.9 546.1 33.1 141.0 0.0 667.3 37.1 155.3 15.9 109.1 12.6 12.5 15.7 615.2 33.6 164.5 0.0 724.3 46.2 177.0 15.7 98.8 14.4 12.8 22.6 635.1 26.9 203.4 0.0 733.9 41.3 216.2 22.6 Total water withdrawal, including: Surface water Groundwater Public networks Seawater Other Freshwater withdrawal, including: Surface water Groundwater Public networks Other 12 This category includes all pollutants specified by Russian legislation, with the exception of CO and pollutants already presented in this table. 13 Lead emissions are not typical of the Company’s main production facilities. 14 Mercury emissions are not typical of the Company’s main production facilities. 15 Water withdrawal includes quarry, mine, drainage, storm, and other water that is not used in the production process. 16 Total indicators may differ from the sums of the components due to rounding. 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ 1.1 4.4 5.5 1.6 4.6 6.2 1.7 0.0 1.7 1.0 0.0 0.1 0.0 0.0 0.7 0.0 3.6 0.0 0.0 1.7 0.0 3.7 0.0 0.0 1.5 0.0 0.1 0.0 0.0 0.8 0.0 3.8 0.0 0.0 2.3 0.0 3.9 0.0 0.0 1.6 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 4.4 5.5 1.6 4.6 6.2 1.7 0.0 1.0 0.0 0.1 0.0 0.0 0.7 0.0 3.6 0.0 0.0 1.7 0.0 3.7 0.0 0.0 1.5 0.0 0.1 0.0 0.0 0.8 0.0 3.8 0.0 0.0 2.3 0.0 3.9 0.0 0.0 1.6 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.6 0.9 0.6 0.6 1 0.0 1.6 0.0 0.1 0.0 0.0 1.7 1.6 0.0 0.1 0.0 0.0 0.2 91.5 83.6 - 91.5 71.9 - 91.9 74.7 - Total water withdrawal from all areas with water stress Surface water Groundwater Public networks Seawater Other Total freshwater withdrawal from all areas with water stress Surface water Groundwater Public networks Seawater Other Percentage of water withdrawal from all areas with water stress, % Percentage of reused or recycled water, % GRI 303-5, SASB IF-EU-140a.1, SASB EM-MM-140a.1 Water consumption,17 mn m3 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ 107.5 478.4 585.9 99.9 565.4 664.4 91.6 619.0 710.6 1.0 1.9 2.9 1.5 2.0 3.5 1.0 0.0 1.0 - 0.0 0.0 - 0.0 0.0 - 0.0 0.0 1.0 0.4 0.5 1.5 0.3 0.5 1.0 0.0 0.2 Total water consumption Total water consumption in all areas with water stress Change in water storage Percentage of water consumption in areas with water stress, % GRI 303-4 Water discharge, 18, 19 mn m3 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ Total water discharge Surface water Groundwater Public networks Seawater Freshwater discharge Total water discharge in areas with water stress Freshwater discharge in areas with water stress 48.6 25.9 0.0 11.3 22.7 25.9 1.15 446.3 494.9 498.9 524.8 0.0 0.0 10.5 21.8 0.0 22.7 446.3 488.1 47.3 23.0 0.0 13.4 22.8 23.0 509.7 560.0 0.0 557 583 0.0 11.0 24.4 0.0 22.8 509.7 532.7 0.8 1.95 0.03 0.8 0.83 1.15 0.8 1.95 0.03 0.8 0.83 Total volume of wastewater 48.6 499.1 547.7 47.3 560.3 607.6 41.6 41.6 0.0 10.1 22.6 41.6 27.4 27.4 41.6 545.9 592 594.8 636.4 0.0 0.0 18.9 29.0 0.0 22.6 545.9 587.5 0.0 27.4 0.0 27.4 594.2 635.8 17 Water for production needs. The dynamics of water consumption in the Metals segment is due to a change in the accounting approach: in 2021 and 2022, water consumption is calculated using Form 2-TP (water management) as the sum of the following water use codes: “102” (production needs), “8” (other needs). In the reporting period, when calculating the indicator, only code “102” (production needs) was taken into account. 18 Water discharge excludes any quarry, mine, drainage, storm, and other water that is not used in the production process. 19 Total indicators may differ from the sums of the components due to rounding. The significant dynamics in the Metals segment indicator in the reporting period was due to a change in the data calculation methodology and the complete exclusion of the “transferred to others” category indicator from the calculation. 344 344 343 345 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ discharged to surface water bodies by dissolved solids content Polluted Treated Normally clean 81.08 18.15 0.77 1.56 8.62 80.09 1.43 7.55 1.32 2.81 97.12 88.57 19.48 0.43 1.27 2.69 97.3 89.76 86.54 12.98 0.48 1.3 6.88 1.16 1.93 97.5 91.19 Specific indicators for water resources Unit Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ 2021 2022 2023 Total water withdrawal per unit of output Total water withdrawal per revenue Total water withdrawal per revenue Total water discharge per unit of output Total water discharge per revenue Total water discharge per revenue Total water consumption per unit of output Total water consumption per revenue Total water consumption per revenue m3/ bn kWh (Power segment); m3/kt (Metals segment) 47.4 5.88 - 45.0 7.05 - 42.5 7.45 - mn m3/ RUB mn 0.0002 0.003 0.0008 0.0002 0.003 0.0009 0,00016 0.0029 0.00083 mn m3/ USD mn 0.0149 0.23 0.06 0.0124 0.21 0.06 0,013 0.24 0.07 m3/ bn kWh (for the Power segment); m3/kt (for the Metals segment) 3.1 3.60 - 3.88 4.37 - 8.98 4.66 - mn m3/ RUB mn 0.00019 0.00193 0.0006 0.00019 0.00191 0.0006 0.00004 0.00179 0.00047 mn m3/USD mn 0.014 0.142 0.044 0.013 0.131 0.042 0.0038 0.1522 0.0404 m3/ bn kWh (for the Power segment); m3/kt (for the Metals segment) 0.0308 3.872 - 0.0292 4.859 - 0.024 5 - mn m3/ RUB mn 0.0001 0.0021 0.0006 0.0001 0.0021 0.0006 0.039 0.002 0.0006 mn m3/ USD mn 0.0097 0.1525 0.042 0.0080 0.1455 0.041 0.0075 0.1725 0.0485 Waste and tailings GRI 306-3 Waste generated, mt 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ Waste generated, mt 20 84.2 131.1 215.3 62.8 137.1 199.1 60.4 164.6 225.0 GRI 306-3 Non-hazardous waste generated 21, mt 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ Non-hazardous waste generated (excl. overburden), including: Class IV Class V 14.9 6.1 21.0 13.8 8.6 22.4 13.0 15.9 28.9 - - - - - - - - - - - - - - 0.01 15.9 - - 20 The indicator includes hazardous and non-hazardous waste, overburden and rock, tailings and sludge. 21 According to Russian environmental legislation, waste is divided into 5 hazard classes. GRI 306-3, SASB EM-MM-150a.7 Hazardous waste generated, kt 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ Hazardous waste generated, including: Class I Class II Class III 695.8 2.7 698.6 834.6 12 846.6 767.7 2.4 770.1 - - - - - - - - - - - - - - - - - - - - - 0.02 0.04 2.36 - - - GRI 306-4, GRI 306-5, SASB EM-MM-150a.8 Total weight of hazardous waste generated by management method, kt 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ Reused and recycled Offsite disposal Onsite landfilling Onsite storage 660.4 7.3 15.9 13.0 2.0 0.0 0.0 0.6 662.4 807.6 10.8 818.4 745.2 7.3 15.9 13.6 4.3 8.5 11.4 0.0 0.0 0.9 4.3 8.5 12.3 2.4 10.5 10.8 2.0 1.9 0.0 1.0 747.2 4.3 10.5 11.8 SASB EM-MM-150a.4 Total weight of non-mineral waste generated, mt22 2022 2021 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ Non-mineral waste generated 1.5 1.6 3.1 1.8 2.1 3.9 2.0 2.1 4.1 GRI 306-4, GRI 306-5 EM-MM-150a.6 Total weight of non-hazardous waste, including overburden, by management method, 23, 24 mt 2021 Metals segment Power segment En+ Metals segment 2022 Power segment En+ Metals segment 2023 Power segment En+ Reuse and recycling Offsite disposal Onsite landfilling Onsite storage 2.4 0.08 49.1 32.0 118.6 121.0 0.5 0.8 12.6 0.58 49.9 44.6 2.6 0.0 22.7 36.4 122.9 125.5 0.4 0.7 14.6 0.4 23.4 51.0 3.6 0.2 56.4 32.0 148.4 152.0 0.3 0.5 17.0 0.5 56.9 49.0 SASB IF-EU-150a.1, SASB EM-MM-150a.5 Waste generation and management 2022 2021 2023 Tailings waste, 25 kt Percentage of tailings waste recycled,26 % Total weight of mineral processing waste, kt Percentage of mineral processing waste recy- cled, % Metals segment Power segment 14 101.1 3983.6 En+ 18 3084,6 Metals segment Power segment En+ Metals segment Power segment En+ 11 988.4 5997.6 17 986.0 11 792,9 5,806.7 17,924.3 6.7 61.7 19.7 7.7 67.4 27.6 7,4 69.61 27.4 15 617.5 4.0 15 621.5 12 267.2 2.7 12 269.9 11,943.8 2.4 11,723.1 2.2 0.0 2.2 9.4 0.0 9.4 8,3 0 8.3 22 Tailings waste is not generated in the production processes of the 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. 23 Hereinafter in the Additional ESG data section, the data for Bauxite Company of Guyana, Bauxite Company of Kindia (Guinea), and the Dian- Dian (Guinea) project that may be material for consolidated indicators of overburden and rock waste is excluded due to the lack of metering systems and relevant requirements in national legislation. 24 The indicator includes overburden waste that may be used for rehabilitation of abandoned land or reprocessed to make new materials. 25 Tailings waste is not generated in the production processes of the 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. 26 Used as a constructive and anti-filtration element of hydraulic structures in the Power segment. 346 346 345 347 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ - - 1,502.6 1,412.9 68.0 80.0 - - 1,946.1 1,946.1 - 2,092.7 2,092.7 78 78 - 63 63 Amount of coal combus- tion residuals (CCR) generated, kt Percentage of coal com- bustion residuals recy- cled, % G4 MM3, SASB EM-MM-150a.6 Overburden, rock, tailings, and sludge generation and accumulation, mt 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ Total amount of land disturbed because of open-pit mining but not yet rehabilitated as at 31 December of the reporting year 10,433 11,915.7 22,347 12,072.3 12,221.3 24,293.6 10,891 12,372.36 23,263.36 Generated Overburden 68.6 Rock Tailings Sludge 0.0 0.0 14.1 114.8 10.3 4.3 0.2 183.4 10.3 4.3 14.3 Accumulated Overburden 488.0 284.6 772.6 Rock Tailings Sludge 0.0 0.0 969.3 969.3 114.5 114.5 494.2 0.6 494.8 437.5 49.0 0.0 0.0 12.0 516.1 0.0 0.0 117.2 166.2 46.7 136.3 183.0 11.3 6.3 0.2 284.6 980.5 116.3 0.6 11.3 6.3 12.2 800.7 980.5 116.3 438.1 0.0 0.0 11.8 542.9 0.0 0.0 396.7 12.4 6.1 0.3 285.7 992.7 117.9 0.6 12.4 6.1 12.1 828.6 992.7 117.9 397.3 SASB IF-EU-150a.2 Total number of tailings storage facilities broken down by hazard potential classification and structural integrity assessment in the Power segment 2021 2022 2023 Total number of coal combustion residual (CCR) impoundments 16 1 13 2 16 2 12 2 16 2 12 2 High hazard potential Significant hazard potential Low hazard potential Specific waste indicators Unit mt/mt mt/ USD mn mt/RUB mn Total generated waste/unit of out- put Total generated waste/revenue in USD mn Total generated waste/revenue in RUB mn 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ 0.022 1.06073 - 0.016 1.12635 - 0.016 1.17112 - 0.007 0.041772 0.015 0.004 0.03530 0.012 0.005 0.04588 0.015 0.000095 0.00057 0.00021 0.000066 0.00051 0.00018 0.004946 0.00054 0.00018 Land rehabilitation and reclamation G4 MM1 Amount of land disturbed because of open-pit mining and rehabilitated, ha 2021 Metals segment Power segment En+ Metals segment 2022 Power segment En+ Metals segment 2023 Power segment En+ Total amount of land disturbed because of open-pit mining but not yet rehabilitated as at 1 January of the reporting year Total amount of land disturbed because of open-pit mining Total amount of rehabilitated land for which a permit for use has been obtained 10,295 11,761.7 22,054.9 12,104.25 11,994.6 22,428 11,017 12,206 23,223 245 214 459 45 227 272 164 226 390 107 60 167 77 0 77 290 60 350 348 347 348 349 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Indicator Number of fatalities as a re- sult of work- related injuries (employees) Number of fatalities as a re- sult of work- related injuries (contractors) Number of high- consequence work-related injuries (employees) Number of high- consequence work-related injuries (contractors) Number of work- related incidents (employees) Number of work- related incidents (contractors) Number of recordable work- related injuries27 (employees) Number of recordable work- related injuries (contractors) Rate of fatalities (employees), per 200,000 hours//1,000,000 hours Rate of high- consequence work-related injuries (em- ployees), per 200,000 hours//1,000,000 hours Rate of high- consequence work-related injuries (con- tractors), per 200,000 hours//1,000,000 hours Total Recordable Incident Rate (TRIR)28 (employees), per 200,000 hours// 1,000,000 hours Lost Time Injury Frequency Rate Occupational health and safety GRI 403-9, GRI 403-10, SASB EM-MM-320a.1, SASB IF-EU-320a.1, HKEX KPI B2.1 Indicators related to injuries and occupational diseases Metals segment 2021 Power segment 2022 En+ Metals segment Power segment En+ Metals segment 2023 Power segment En+ 7 5 1 8 0 5 4 1 1 1 5 2 1 2 16 7 23 18 9 27 11 11 0 11 6 1 7 9 1 0 5 1 2 2 16 10 82 35 - - 0.015//,0.075 35 117 0 35 - - - - - 85 22 - - 36 121 2 24 84 26 29 113 2 28 - - - - - 115 43 158 31 - - - 0.002//0.01 0.004//0.018 0.003//0.015 - 0.008//0.04 - - - - - - - 0.043//0.214 - 0.27//1.35 0.225//1.125 - 0.23//1.15 0.332//1.66 - 0.24//1.2 0.15//0.77 0.21//1.05 0.17//0.87 0.14//0.68 0.16//0.81 0.18//0.89 0.13//0.67 0.16//0.81 0.18//0.9 0.1//0.52 0.15//0.76 27 Hereinafter in the Additional ESG data section, the number of recordable work-related injuries covers fatalities as a result of work-related injuries, work-related injuries with temporary or permanent disability, and minor injuries requiring medical treatment and/or transfer to another job. 28 Hereinafter in the Additional ESG data section, the TRIR indicator covers fatalities as a result of work-related injuries, work-related injuries with temporary or permanent disability, and minor injuries requiring medical treatment and/or transfer to another job. Indicator (LTIFR)29 (employees), per 200,000 hours// 1,000,000 hours Lost Time Injury Frequency Rate (LTIFR) (contractors), per 200,000 hours// 1,000,000 hours Work-related injury rate 30 Number of cases of occupational diseases31 (employees) Number of unsafe condi- tions/actions identified Total number of man-hours worked (employees), thousand Total number of man-hours worked (contractors), thousand Number of days lost due to work- related injuries (employees) NMFR (employees), per 200,000 hours NMFR (contractors), per 200,000 hours LTISR 32 (employees) Metals segment 2021 Power segment 2022 En+ Metals segment Power segment En+ Metals segment 2023 Power segment En+ - - - - - - - - - - - - - 0.09//0.43 - 1.5 0.9 1.2 114 91 205 123 65 188 142 113 255 270,023 56,551 326,574 350,366 49,955 400,321 351,645 37,967 389,612 90,909 51,845 149 029 95,639 53,574 149,213 97,111 55,994 153,105 - 3,546 5,847 - - - - 0.166 0.28 - - - - - - - - - - 4,147 5,157 - 0.258 0.05 - - - - - - - - 0.05 0.25 - - - 13.00 - - 4,675 - 6,107 2,199 8,306 Indicator 2021 2022 2023 RUB USD RUB USD RUB USD Total health and safety expenses, RUB ‘000 Health and safety expenses per employee, 34 RUB ‘000 Amount of fines for health and safety violations, RUB ‘000 Metals segment - - - - - - - - - - - - 4,026,000 48,948 70.5 0.9 2,832 34.4 Power segment Total health and safety expenses, RUB ‘000 1,085,800 14,747 1,317,600 19,221 1,182,587 15,169 Health and safety expenses per employee, RUB ‘000 30.8 0.5 35.5 0.5 38.1 0.5 29 Hereinafter in the Additional ESG data section, the LTIFR figure covers all injuries with temporary disability recorded by the Company over the given period. 30 To be calculated as the ratio of injuries over the reporting period to the average headcount for the same period multiplied by 1,000. 31 Hereinafter in the Additional ESG data section, the details of work-related ill health cover only recorded cases for existing employees and contractors. The statistics do not include cases of newly diagnosed work-related ill-health in the post-exposure period. 32 Hereinafter in the Additional ESG data section, the LTISR indicator is calculated per 200 thousand man-hours worked and takes into account the number of days of disability due to occupational injuries for the specified period. 33 Hereinafter in the Additional ESG data section, expenditures are calculated on the basis of the USD/RUB average exchange rate of RUB 73.63 per USD for 2021, RUB 68.55 per USD for 2022, RUB 85.24 per USD for 2023. 34 Hereinafter in the Additional ESG data section, calculated as the ratio of actual health and safety expenses for the reporting period to the average headcount in the same period. 350 0.04//0.2 - - 0.04//0.2 - - 0.02//0.1 0.018//0.089 0.02//0.1 Health and safety expenditures33 350 349 351 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Total health and safety expenses, RUB ‘000 Health and safety expenses per employee, RUB ‘000 Health and safety training En+ - - - - - - - - 5,273,680 64,117 58.2 0.7 Employees GRI 2-7 Headcount, people Indicator Metals segment Power segment En+ Metals segment 2021 2022 Power segment En+ Metals segment 2023 Power segment En+ Average amount of health and safety training (employ- ees), hours/person Average amount of health and safety training (contrac- tors), hours/person 37.2 33 36 24.8 38 30 27.5 40 32 57,933// 35,256// 93,189// 59,463// 37,154// 97,583// 57,100// 32,755// 90,542// 100% 100% 100% 100% 100% 100% 100% 100% 100% GRI 403-8 Employees covered by the occupational health and safety management system Metals segment 2021 Power segment En+ Metals segment 2022 Power segment En+ Metals segment 2023 Power segment En+ Indicator Number and percentage of people covered by the occupational health and safety management system, people//% Metals segment 2021 Power segment En+ Metals segment 2022 Power segment En+ Metals segment 2023 Power segment En+ Headcount at Russian and international facilities, including Russia Other countries Percentage of full- time employees, %, including Female Male Percentage of permanent employees, %, including Female Male 57,933 35,256 93,189 59,463 37,154 96,617 57,100 32,964 90,064 47,873 10,060 35,247 83,120 9 10,069 49,313 10,150 37,146 86,459 49,702 32,956 82,658 8 10,158 7,398 8 7,406 98.9 99.1 99.0 97.1 99.1 97.9 98.7 99.3 98.9 98.7 99.0 98.6 99.3 98.7 99.2 97.5 97.0 98.5 99.4 97.9 97.8 98.3 98.9 98.8 99.6 98.5 99.1 92.3 96.1 94.2 92.4 95.5 93.6 92.3 96.4 93.8 89.4 93.2 94.6 96.8 92.0 95.0 90.0 93.2 93.7 96.2 91.6 94.3 90.1 93.1 94.5 97.4 92.0 94.5 57,933// 35,256// 93,189// 59,463// 37,154// 97,583// 57,100// 32,755// 90,542// 100% 100% 100% 100% 100% 100% 100% 100% 100% GRI 405-1 Diversity of employees, % Metals segment Power segment 2021 2022 2023 2021 2022 2023 2021 En+ 2022 2023 Workforce gender diversity 24.9 25.1 25.2 10.5 10.1 9.8 31.1 11.2 31.6 34.1 28.0 27.6 28.4 10.9 11.3 10.9 10.4 10.4 62.5 62.4 62.6 62.4 62.9 62.8 62.5 62.6 62.7 26.9 27.6 27.6 26.4 26.2 25.9 26.7 27.0 26.9 75.1 15.9 74.9 74.8 68.9 68.4 65.9 72.0 72.4 71.6 14.6 14.1 13.6 13.8 13.9 14.8 14.3 14.0 63.0 63.1 63.1 57.3 57.3 57.5 60.2 61.0 61.2 21.1 22.4 22.8 29.1 28.8 28.6 25.1 24.7 24.8 17.4 18.0 18.9 22.6 24.4 29.7 20.0 19.9 22.3 Gender diversity of senior management 0.0 71.9 28.1 0.0 0.0 1.2 2.8 5.3 0.6 1.0 2.2 74.2 67.4 79.0 65.3 69.5 75.5 70.9 68.3 25.8 32.6 19.8 31.9 25.3 24.0 28.1 29.5 82.6 82.0 81.1 77.4 75.6 70.3 80.0 80.1 77.7 0.2 0.2 1.1 0.7 0.4 0.4 0.5 0.3 0.9 57.7 58.7 55.7 69.8 64.6 63.1 63.8 60.3 57.8 42.1 41.2 43.2 29.5 35.0 36.4 35.8 39.4 41.3 21.2 21.7 22.2 22.4 23.2 25.5 21.8 22.4 23.8 Gender diversity of middle-level management 1.6 2.1 10.6 3.1 3.4 4.1 2.4 2.7 3.2 Female, including under 30 years old 30–50 years old over 50 years old Male, including under 30 years old 30–50 years old over 50 years old Female, including under 30 years old 30–50 years old over 50 years old Male, including under 30 years old 30–50 years old over 50 years old Female, including under 30 352 352 351 353 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Metals segment Power segment 2021 2022 2023 2021 2022 2023 2021 En+ 2022 2023 66.2 65.3 66.2 67.6 68.0 66.6 66.9 66.7 66.4 32.2 32.7 23.2 29.3 28.6 29.3 30.8 30.6 30.3 78.8 78.3 77.8 77.6 76.8 74.5 78.2 77.6 76.2 3.2 2.7 2.4 3.4 3.9 4.0 3.3 3.3 3.1 68.9 67.6 66.9 67.0 67.3 67.4 68.0 67.5 67.2 27.9 29.7 30.7 29.5 28.8 28.6 28.7 29.2 29.7 54.5 55.6 55.2 58.8 58.8 58.8 56.7 57.2 57.0 Gender diversity of specialists 14.1 14.3 13.2 12.4 12.0 12.5 13.3 13.0 12.8 67.0 66.8 67.7 67.6 68.6 68.8 67.3 67.7 68.3 18.9 18.9 19.1 20.1 19.5 18.7 19.5 19.2 18.9 45.5 44.4 44.8 12.9 11.4 10.7 41.2 13.2 41.2 12.8 41.2 43.4 42.8 43.0 14.0 13.1 12.1 12.3 66.3 65.7 65.3 62.9 63.6 63.6 64.6 64.6 64.5 20.8 23.0 24.0 23.9 23.6 22.4 22.4 23.3 23.2 20.2 20.1 20.1 22.6 22.9 25.4 21.4 Gender diversity of blue-collar employees 9.9 9.0 9.0 11.8 11.4 11.7 10.9 21.1 9.9 21.7 10.0 59.9 59.7 59.5 56.2 56.3 56.0 58.1 58.5 58.2 30.2 31.3 31.5 32.0 32.4 32.3 31.1 31.7 31.8 79.8 79.9 79.9 77.4 77.1 74.6 78.6 78.9 78.3 Percentage of employees with disabilities, % 0.6 0.9 0.6 1.1 0.8 0.7 1.5 1.0 Employees of retirement age Metals segment 2021 Power segment 2022 En+ Metals segment Power segment En+ Metals segment 2023 Power segment En+ Number of employees of retirement age, people Percentage of employees of retirement age, % -- -- -- - -- -- - - - - - - 1,774 3,715 5,489 3.1 11.3 6 GRI 401-1 New employee hires, people Metals segment 2021 Power segment 2022 2023 En+ Metals segment Power segment En+ Metals segment Power segment En+ Total, including Russia Other countries 8,154 7,327 827 6,893 15,047 6,892 14,219 1 828 6,480 5,747 733 7,226 7,226 0 13,706 12,973 733 6,429 5,848 581 6,761 13,190 6,761 12,609 0 581 GRI 401-1 New employee hires by gender, % Male Female 2021 30.5 69.5 GRI 401-1 New employee hires by age, % Under 30 years old 30–50 years old Over 50 years old 2021 33.7 55.3 11.0 2022 30.8 69.2 2022 33.7 55.0 11.3 2023 32.7 67.3 2023 37.3 50.5 12.2 17.7 16.3 15.8 62.1 62.4 62.6 15.8 54.1 16.2 16.1 16.8 16.3 15.9 54.0 53.9 58.1 59.7 60.0 GRI 401-1 Employee turnover, 36 % years old 30–50 years old over 50 years old Male, including under 30 years old 30–50 years old over 50 years old Female, including under 30 years old 30–50 years old over 50 years old Male, including under 30 years old 30–50 years old over 50 years old Female, including under 30 years old 30–50 years old over 50 years old Male, including under 30 years old 30–50 years old over 50 years old 20.2 21.3 21.6 30.1 29.8 30.0 25.2 24.1 24.1 Number of employees with three or more children Metals segment 2021 Power segment 2022 2023 En+ Metals segment Power segment En+ Metals segment Power segment En+ Number of employees with three or more children 2,720 - - 2,869 - - 2,854 1,947 4,801 Employees with disabilities Metals segment 2021 Power segment 2022 2023 En+ Metals segment Power segment En+ Metals segment Power segment En+ 345 333 372 35 413 785 397 503 900 Number of employees with disabilities, people 2021 Metals segment Power segment Employee turnover Female under 30 years old 30–50 years old over 50 years old Male under 30 years old 30–50 years old over 50 years old 10.6 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 En+ 12.1 12.9 24.3 11.1 12.6 11.8 19.8 9.9 11.9 2022 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 En+ 10.5 11.6 23.8 9.7 11.5 10.1 18.0 7.9 11.0 Metals segment 2023 Power segment 11.3 11.4 23.4 9.7 11.1 11.2 21.5 8.6 12.1 15.4 18.6 43.5 16.3 13.3 13.8 31.9 11.6 9.5 En+ 12.8 14.6 32.9 12.6 12.0 12.1 25.0 9.5 11.1 GRI 401-1 Employee turnover by region, % 2021 2022 2023 35 The value was adjusted as a result of data refinement 354 353 36 The values have been recalculated due to improvements in the methodology. The calculation is based on the headcount as at the end of the year. The high employee turnover in 2019 was caused by layoffs as a result of the reorganisation of the Engineering and Construction Division. 354 355 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Metals segment Power segment Russia Other countries 11.0 8.7 13.6 77.8 En+ 12.3 43.3 Metals segment Power segment 9.7 8.7 12.2 12.5 En+ 11.0 10.8 Metals segment Power segment 11.7 8.2 15.4 0 En+ 13.2 8.2 GRI 202-2 Proportion of senior management hired from the local community in Russia and other countries, % 37 2021 Metals segment Power segment Russia Other countries 99.8 60.8 100 100 En+ 99.9 80.4 Metals segment 99.8 91.9 2022 Power segment 100 100 En+ 99.9 82.3 Metals segment 99.8 60.7 2023 Power segment 100 100 En+ 98.2 60.7 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 38, % 2021 2022 2023 Metals segment Power segment En+ Metals segment Power segment En+ Metals segment Power segment En+ 7,186 1,221 8,407 5,924 1,750 7,674 6,539 1592 8,131 1,536 5,650 312 291 21 630 2,166 591 6,241 1,275 4,649 810 2,085 940 5,589 1,634 4,905 568 880 535 33 826 54 333 320 13 579 912 547 32 867 45 352 309 43 960 2,594 632 5,537 487 839 467 20 776 63 280 218 498 317 287 604 270 219 489 267 13 208 10 475 23 300 17 272 15 572 32 237 33 210 9 447 42 215 126 341 227 149 376 222 121 343 203 12 119 7 322 19 80.8 52.5 66.7 221 6 81.1 142 363 7 13 213 9 118 3 331 12 68.3 75.5 83.6 44.0 57.9 GRI 2-30, SASB EM-MM-310a.1 Employees covered by collective bargaining agreements, % GRI 202-1 Standard entry level wage for employees and established minimum wage in the key countries of the Metals segment’s operation 39 Region 2021 2022 2023 2021 2022 2023 RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD Standard entry level wage Established minimum wage in the region Russia 18,100 22,000 321 23,785 279 12,792 177 15,279 223 16,242 191 Republic of Armenia Ukraine Jamaica Guinea 32,360 17,563 23,043 5,054 Guyana 40,949 Nigeria 10,540 246 439 238 313 69 556 143 37,851 564 53,963 626 13,824 188 14,570 213 22,318 262 14,203 207 - - 17,563 23,624 345 32 742 5,284 77 6 705 384 79 14,815 3,319 37,958 554 47 656 560 15,565 8,955 131 8504 42 5,533 238 201 45 211 75 14,203 207 - - 17,338 253 30,956 363 4,338 63 5,504 65 19,640 286 24,396 286 4,852 71 3,977 47 GRI 202-1 Standard entry level wage for employees and established minimum wage in Russia and the CIS for the Power segment 40 Region 2021 2022 2023 2021 2022 2023 RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD Standard entry level wage 41 Established minimum wage in the region 42 Russia 15,316 208 17,600 257 18,000 211 12,792 174 15,279 223 16,242 Volgograd Region 16,000 217 17,600 257 22,880 269 12,792 174 15,279 223 17,519 Moscow 28,752 390 31,680 462 38,736 456 20,589 280 23,508 343 29,389 St. Petersburg 37,950 515 41,745 609 46,260 543 19,650 267 23,500 343 25,000 Trans-Baikal Territory 19,188 261 19,863 290 24,363 286 19,188 261 19,863 290 24,363 Irkutsk Region 20,467 278 22,423 327 22,801 268 20,467 278 23,508 343 16,242 Krasnodar Territory 30,256 411 18,000 263 18,000 211 12,792 174 16,043 234 17,054 Krasnoyarsk Territory 22,226 302 24,446 357 25,987 305 20,467 278 24,446 357 25,987 Moscow Region 27,590 375 22,989 335 28,736 337 12,792 174 15,279 223 19,000 Nizhny Novgorod Region 15,316 208 18,908 276 24,593 289 12,792 174 15,279 223 16,242 Republic of Karelia 31,375 426 34,513 503 39,680 466 23,026 313 27,502 401 29,236 Republic of Tyva 25,452 346 29,030 423 30,860 362 24,305 330 29,030 423 30,860 Republic of Khakassia 20,467 278 24,446 357 25,987 305 20,467 278 24,446 357 25,987 Chelyabinsk Region 21,011 285 23,178 338 14,711 200 17,571 256 Yaroslavl Region 46,665 634 63,201 922 59,880 703 12,792 174 15,279 223 16,242 Armenia 16,000 217 17,975 262 25,049 294 12,792 174 14,352 209 20,000 Primorsky Territory 28,752 390 40,000 584 47,123 553 20,589 280 22,919 334 25,987 Sakhalin Region 37,950 515 29,794 435 29,279 344 19,650 267 29,794 435 29,279 191 206 345 294 286 191 200 305 223 191 343 362 305 191 235 305 344 2021 Metals segment Power segment En+ Metals segment 2022 Power segment En+ Metals segment 2023 Power segment En+ GRI 405-2 Ratio of basic salary and remuneration of men to women Employees covered by collective bargaining agreements, including Russia Other countries - - 86.0 - - 86.3 85.5 83.6 84.8 85.7 79.5 88.3 - - - 87.9 78.4 86.5 - - - 87.7 70.8 83.6 - 86.1 70.7 2021 2022 2023 Metals segment Power segment Metals segment Power segment Metals segment Power segment 1.33 1.7 1.15 1.48 1.41 1.18 1.46 1.09 1.22 1.4 1.16 1.19 1.06 1.19 1.53 1.13 1.26 1.02 1.22 1.34 1.29 1.32 1.09 1.44 1.41 0.95 1.32 1.06 1.19 1.34 Average salary Senior management Middle-level management Specialists Blue-collar employees 37 The geographical definition of “local” includes a country. Senior management includes the president, vice-presidents, directors of enterprises and production units and other functions, as well as their deputies. 38 Retention rate of employees that took parental leave: 356 Retention rate of employees that took parental leave = Total number of employees retained 12 months after returning to work following a period of parental leave Total number of employees returning from parental leave in the prior reporting period(s) × 100% 355 39 Calculated on the basis of the average USD/RUB exchange rate of RUB 73.58 for 2021, RUB 68.55 for 2022, RUB 85.25 for 2023. 40 Calculated on the basis of the average USD/RUB exchange rate of RUB 73.63 for 2021, RUB 68.55 for 2022, RUB 85.25 for 2023. 41 Average values. 42 Average values; includes the regional coefficient and Northern index. 356 357 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA 200,735 200,735 320,233 257,465 577,698 Daily food subsidy 666,839 666,839 1,566,193 602,404 2,168,597 Preferential mortgage program Compensation of 80% of the cost of children's vouchers to the "Sun City" DOLK GRI 404-1 Total hours of training, hours 2021 Metals segment Power segment En+ Metals segment Hours of training Female Male Hours of training (senior management) Hours of training (middle-level management) Hours of training (specialists) Hours of training (blue-collar employees) - - - - - - - - - - - - - - - - - - - - - - - - - - - - GRI 404-1 Average hours of training per year, hours 2022 Power segment En+ Metals segment 2023 Power segment En+ 1,145,959 1,145,959 2,158,473 1,260,239 3,418,712 185,349 185,349 11,461 196,999 208,460 960,610 960,610 1,747,012 1,063,240 2,810,252 21,804 21,804 37,012 31,396 68,408 256,581 256,581 235,036 368,974 604,010 Metals segment 2021 Power segment En+ Metals segment 2022 Power segment En+ Metals segment 2023 Power segment En+ Hours of training Female Male Hours of training (senior management) Hours of training (middle-level management) Hours of training (specialists) Hours of training (blue-collar employees) Training costs, thousands 4 2 1 8 11 0.1 - - - - - - - - - - - - 16 21 11 23 23 3 16 38 74 56 22 29 16 30 43 40 22 16 29 41 53 51 40 34 18 49 98 24 45 76 88 70 30 30 35 32 2021 2022 2023 RUB USD RUB USD RUB USD Metals segment Employee training costs 352,600 6.1 - - - - Training costs per employee Costs to build the talent pool Employee training costs Training costs per employee Costs to build the talent pool Employee training costs Training costs per employee Costs to build the talent pool 4,136 0.07 - - - - 435,112 5,104.0 530,417 6,221.9 - - - - 9.3 - 0.11 - Power segment 408,100 4,787.1 730,353 8,567.2 7.3 0.1 22.3 0.3 204,200 2,395.3 485,458 5,694.5 En+ 843,212 9,891.05 1,260,770 14,789.09 14 0.16 204,200 2,395.3 485,458 5,694.5 GRI 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees in Power segment Type of benefits Power segment Employees who used the provided benefits, % Life insurance Medical services Health resort treatment and vacations Disability payments (over and above those stipulated by law) Child care leave Pension programs Dismissal payments (in excess of those provided for by law) Material assistance of all types One-time incentive payments for employee anniversaries (from 50 years onwards) Reimbursement of 50% of the cost of fitness club subscriptions 33 54 7 0 3 5 0 57 5 1 71 2 1 EExxppeennddiittuurreess oonn ssoocciiaall pprrooggrraammss ffoorr eemmppllooyyeeeess,, RRUUBB tthhoouussaannddss 22,,118800,,332288 GRI 2-27 Compliance with laws and regulations, pcs Total amount of significant fines Total number of cases of application of non-financial sanctions Total number of cases using dispute resolution mechanisms 2021 2022 2023 Power segment 0 0 0 0 0 0 Number of employees in Power segment belonging to associations, people. Показатель 2023 Power segment Number of employees who are members of Youth Councils Number of employees who are members of Working Councils Number of employees who are members of Women's Councils 0 0 0 874 383 195 Contribution to local communities GRI 413-1 Social investments Power segment Metals segment En+ Power segment Metals segment En+ Power segment Metals segment En+ RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD RUB USD Volunteering 24.8 0.3 0.0 0.0 24.8 0.3 26.8 0.4 0.0 0.0 26.8 0.4 71.2 0.8 5.0 0.1 77.1 0.9 Social assistance and support 65.8 0.9 28.5 0.4 94.3 Sports 128.1 1.7 56.5 0.8 184.7 1.3 2.5 122.8 1.8 36.9 0.5 159.7 2.3 174.9 810.8 11.8 46.2 0.7 857.0 12.5 738.2 Healthcare 1,079.2 14.7 2.2 0.0 1,081.4 14.7 91.9 Culture 97.2 1.3 69.8 0.9 167.0 2.3 82.7 1.3 1.2 1.9 0.0 93.8 47.4 0.7 130.1 1.4 1.9 411.4 11.0 2.1 8.7 4.8 0.1 40.6 0.5 217.6 43.4 0.5 790.2 7.9 0.1 424.1 27.8 0.3 39.0 2.6 9.3 5.0 0.5 Environmental and animal protection Educational projects Social infrastructure 358 164.6 2.2 37.4 0.5 202.0 2.7 177.9 2.6 74.7 1.1 252.6 3.7 146.6 1.7 57.4 0.7 205.8 2.4 892.9 12.1 355.6 4.8 1,248.5 17.0 725.1 10.6 937.0 13.7 1,662.1 24.2 1,645.3 19.3 311.2 3.7 1,975.8 23.2 620.2 8.4 121.9 1.7 742.2 10.1 142.0 2.1 116.2 1.7 258.2 3.8 1,138.0 13.3 25.3 0.3 1,176.7 13.8 358 357 359 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA and urban environment Development of NPOs and local communities Other TToottaall 250.3 3.4 9.0 0.1 259.3 0.0 56.3 0.8 56.3 3.5 0.8 - - 0.0 10.2 0.1 10.2 0.0 50.9 0.7 50.9 0.1 0.7 392.0 4.6 0.0 4.7 4.7 0.1 401.3 0.1 4.7 4.7 0.1 33,,332233..22 4455..11 668811..00 99..22 44,,000044..11 5544..44 22,,118800..00 3311..88 11,,227700..55 1188..55 33,,445500..55 5500..33 44,,772288..66 5555..4477 552288..00 66..11 55,,331122..11 6622..33 Corporate governance Diversity of the Board of Directors, % Tenure 1–3 years 4–9 years 10+ years 2021 92 8 0 2022 43 64 36 0 2023 75 25 0 GRI 2-9, 405-1 Composition and diversity of committees as at 31 December 2023, % 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 60 40 0 100 0 0 100 60 40 100 0 0 40 60 0 100 60 40 80 20 0 60 40 0 100 80 20 80 20 0 60 40 0 100 100 0 75 25 0 50 50 43 As at 31 December 2022. 360 0 100 60 40 80 20 0 80 20 359 Corporate ethics and compliance Categories of relevant messages to the Signal hotline, % Labour relations Relations with counterparties Occupational health and safety Asset protection Other 2022 38 31 11 10 10 Supply chain management44 GRI 204-1 Procurement practices 2023 47 21 9 8 14 Metals segment 2021 Power segment En+ Metals segment 2022 Power segment En+ Metals segment 2023 Power segment En+ 8,574.1 445.4 9,019.5 7,802.3 1,846.78 9,649.15 3,874 1,996.9 5,840.9 631.5 32.8 664.3 534.8 126.6 661.4 330.2 167.7 497.9 32 76 34 35 57 39 68 50 62 - - - - - - - - - - - - 0.9 63.7 68.2 0.3 40.2 13.7 Total purchases from local suppliers, USD mn Total purchases from local suppliers, RUB bn Percentage of purchases from local suppliers, % Total purchases from small and medium-sized suppliers, RUB bn Percentage of purchases from small and medium- sized suppliers, % Innovation management45 2021 2022 Power segment Metals segment En+ Power segment Metals segment En+ Power segment 2023 Metals segment En+ 1.4 99.8, - - - - 2.2 152 0.8 3 54.7 206.7 1.1 90 21.4 22.5 1,824 1,914 4.7 43.2 47.9 9.3 41.3 50.6 9.8 76.38 86.2 346.1 3,181.7 3,527.8 643 2,833 3,476 843 6,500 7,300 Investment in R&D, USD mn Investment in R&D, RUB mn Total economic effect of business system projects and proposals, USD mn Total economic effect of business system projects and proposals, RUB mn 44 Indicators 'Total purchases from small and medium-sized suppliers, RUB bn' and 'Percentage of purchases from small and medium-sized suppliers, %' are presented only for 2023, since previously there was no corresponding information recording system. 45 Data on investment in R&D by Power segment in 2022 and in total for En+ have been adjusted. 360 361 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA GRI content index Topic GRI indicator Reference/response GRI 1 Foundation GRI 2 General disclosures 1. THE ORGANIZATION AND ITS REPORTING PRACTICES Organizational details GRI 2-1 About the report, p. 5 Our presence and scale, p.14 Limitation of liability, p. 391 Topic GRI indicator Reference/response Collective knowledge of the highest governance body Evaluation of the performance of the highest governance body GRI 2-17 Corporate governance, p. 182 GRI 2-18 Corporate governance, p. 182 Remuneration policies GRI 2-19 Corporate governance, p. 193 Process to determine remuneration GRI 2-20 Corporate governance, p. 192 Annual total compensation ratio GRI 2-21 The data cannot be disclosed as the annual total compensation ratio is confidential. Information for shareholders and investors, p. 196 4. STRATEGY, POLICIES AND PRACTICES Entities included in the organization’s sustainability reporting Reporting period, frequency and contact point GRI 2-2 About the report, p. 5 Limitation of liability, p. 391 GRI 2-3 About the report, p. 4 Restatements of information GRI 2-4 About the report, p. 5 External assurance GRI 2-5 About the report, p. 4 2. ACTIVITIES AND WORKERS Activities, value chain and other business relationships Corporate governance, p. 188 Additional ESG Data, p. 384 GRI 2-6 Business review, p. 30, 38 Stakeholder engagement, p. 224 Additional ESG Data, p. 334 Employees GRI 2-7 Employees, p.150 Additional ESG Data, p. 353 External personnel GRI 2-8 Employees, p. 150 The number of non-employees, changes in this indicator and calculation methods were not collected. 3. GOVERNANCE Governance structure and composition Nomination and selection of the highest governance body Chair of the highest governance body Role of the highest governance body in overseeing the management of impacts Delegation of responsibility for managing impacts GRI 2-9 Corporate governance, p. 171 Additional ESG Data, p. 360 GRI 2-10 Corporate governance, p. 174 GRI 2-11 Corporate governance, p. 175 GRI 2-12 Sustainability management, p. 78 Internal control and risk management, p. 202 GRI 2-13 Sustainability management, p. 78 Climate change, p. 87 Energy management, p. 100 Occupational health and safety, p.128 Employees, p. 139 Contribution to local communities, p. 156 Corporate governance, p. 171 Internal control and risk management, p. 201-202 Corporate ethics and compliance, p. 210 Stakeholder engagement, p. 216, 222 Responsible business practices, p. 231, 234, 238 Role of the highest governance body in sustainability reporting GRI 2-14 About the report, p. 4 Materiality assessment, p. 78-79 Conflicts of interest GRI 2-15 Corporate governance, p. 170, 190 Communication of critical concerns GRI 2-16 Corporate governance, p. 180 Internal control and risk management, p. 202 Statement of sustainable development strategy GRI 2-22 Statement from the Chief Executive Officer, p. 20 Policy commitments GRI 2-23 Contribution to Sustainable Development Goals, p. 80, 82 Embedding policy commitments Processes to remediate negative impacts Employees, p. 142 Corporate ethics and compliance, p. 209, 212 GRI 2-24 Corporate ethics and compliance, p. 210-211 Stakeholder engagement, p. 223 GRI 2-25 Materiality assessment, p. 78-79 Climate change, p. 87 Environmental protection, p. 105 Occupational health and safety, p. 131 Internal control and risk management, p. 202 Corporate ethics and compliance, p. 212 Stakeholder engagement, p. 216 Additional ESG Data, p. 332-333 Mechanisms for seeking advice and raising concerns Compliance with laws and regulations GRI 2-26 Corporate ethics and compliance, p. 212 Stakeholder engagement, p. 216 GRI 2-27 Environmental protection, p. 112 Employees, p. 139 Corporate governance, p. 170 Additional ESG Data, p. 343, 359 Membership associations GRI 2-28 Environmental protection, p. 120 Stakeholder engagement, p. 218 5. STAKEHOLDER ENGAGEMENT Approach to stakeholder engagement Collective bargaining agreements GRI 3 Material topics GRI 2-29 Contribution to local communities, p. 153 Stakeholder engagement, p. 215, 216 GRI 2-30 Employees, p. 142 Additional ESG Data, p. 356 Process to determine material topics GRI 3-1 Materiality assessment, p. 79, 80 Additional ESG Data, p. 332 List of material topics GRI 3-2 Materiality assessment, p. 79 Management of material topics GRI 3-3 Strategy, p. 24 Sustainability management, p. 78 Climate change, p. 87-89, 98 Energy management, p. 100 Environmental protection, p. 105, 107, 108, 109, 111, 112, 113, 116, 120, 122, 123 Occupational health and safety, p.127 Employees, p. 138, 143 Contribution to local communities, p. 153 Stakeholder engagement, p.214, 216, 222 Responsible business practices, p. 227, 229, 231, 234, 237-238, 241 362 363 361 GRI 200 ECONOMIC GRI 201 ECONOMIC PERFORMANCE Direct economic value GRI 201-1 Additional ESG Data, p. 330 362 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Topic GRI indicator Reference/response Topic GRI indicator Reference/response 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 Ratios of standard entry level wage by gender compared to local minimum wage Proportion of senior management hired from the local community GRI 201-2 Additional ESG Data, p. 336 Climate change, p. 94, 96 GRI 201-3 Consolidated Financial Statement, p. 246 GRI 201-4 Additional ESG Data, p. 330 GRI 202-1 Additional ESG Data, p. 357 In the Metals segment, the amount of the standard entry level wage is disclosed without a breakdown by gender due to the specifics of data collection. GRI 202-2 Additional ESG Data, p. 356 Significant locations of En+ operations are the regions where production facilities and key personnel of its enterprises are located. GRI 203 INDIRECT ECONOMIC IMPACTS Infrastructure investments and services supported Significant indirect economic impacts GRI 203-1 Contribution to local communities, p. 157 GRI 203-2 Contribution to local communities, p. 154, 158, 160 Stakeholder engagement, p. 224 Additional ESG Data, p. 334 GRI 204 PROCUREMENT PRACTICES Proportion of spending on local suppliers GRI 204-1 Stakeholder engagement, p. 224 Additional ESG Data, p. 361 GRI 205 ANTI-CORRUPTION Operations assessed for risks related to corruption Communication and training about anti-corruption policies and procedures Confirmed incidents of corruption and actions taken GRI 205-1 Corporate ethics and compliance, p. 210 GRI 205-2 Information on the total number and percentage of employees who have been informed about the Company's anti-corruption policies and procedures, as well as information on the total number and percentage of employees who have received the relevant training has been excluded due to existing reporting processes. GRI 205-3 In 2023, the Company recorded three cases of corruption and fraud. GRI 206 ANTI-COMPETITIVE BEHAVIOR Legal actions for anti- competitive behavior, anti- trust, and monopoly practices GRI 207 TAX Approach to tax GRI 206-1 Corporate ethics and compliance, p. 212 GRI 207-1 En+ is a responsible and reliable taxpayer. The basis for the preparation of accounting policies for tax purposes in subsidiaries and affiliates is the general accounting principles, which are reviewed annually by En+. En+ also has a policy describing its approach to taxation. Most of our tax expenses are related to income tax. The methodology for calculating income tax expense is set out on p. 273. En+ is a tax resident of the Russian Federation. It is also registered as a resident of 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 subsidiaries registered in Russia is 20%. In addition, subsidiaries are registered in 10 other countries where the tax rate varies from 0% to 30%. The tax rates in other countries can be found on p. 273. We regularly publish tax information using various types of accounts: Condensed consolidated interim financial information is published several times a year (once every three or six months) and represents interim information on tax expenses and tax liabilities for a given period. Consolidated financial statements are published once a year and contain Tax governance, control, and risk management Stakeholder engagement and management of concerns related to tax financial information for a 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 the Company’s audited consolidated financial statements that are tax residents of a respective country. GRI 207-2 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. The Audit and Risk Committee is responsible for reviewing material aspects of the accounting policies of the Company and its subsidiaries to ensure their proper and consistent application. Further responsibilities of the Audit and Risk Committee are described on p. 188, 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 included in the KPIs of the key divisions responsible for the Company's tax management. The Accounting Department is in charge of tax policy compliance of the Company. The Tax Policy Department is authorised to consider and approve the Company's projects and transactions. The Company performs regular internal and external audits of financial statements. GRI 207-3 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 it is probable (although less than 50%) that additional taxes may be due as a result of tax audits or disputes with tax authorities. Country-by-country reporting GRI 207-4 The data is partially presented in the financial review. Consolidated Financial Statement, p. 246 GRI 300 ENVIRONMENTAL GRI 302 ENERGY Energy consumption within the organization GRI 302-1 Energy management, p. 102 Additional ESG Data, p. 340 Energy intensity GRI 302-3 Energy management, p. 102 Reduction of energy consumption GRI 302-4 Energy management, p. 100 Additional ESG Data, p. 339. GRI 303 WATER AND EFFLUENTS Interactions with water as a shared resource Management of water discharge-related impacts Sources of conversion factors for calculation: 1. IPCC (2006) Guidelines for National Greenhouse Gas Inventories, Volume 2 Energy, Chapter 1 (Introduction), pp.1.19-1.20, tab. 1.2 2. Energy converter, available at http://convert- to.com/conversion/energy/convert-kwh-to-gj.html GRI 303-1 Environmental protection, p. 107, 111 GRI 303-2 Environmental protection, p. 107, 111 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 composition of discharges affecting water bodies. 364 363 364 365 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Water withdrawal GRI 303-3 Environmental protection, p. 114, 115 Additional ESG Data, p. 344 Water discharge GRI 303-4 Environmental protection, p. 114, 115 Additional ESG Data, p. 345 Water consumption GRI 303-5 Environmental protection, p. 114, 115 Additional ESG Data, p. 345 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 304-1 Environmental protection, p. 120, 123 GRI 304-2 Environmental protection, p. 120, 123 Habitats protected or restored GRI 304-3 Environmental protection, p. 109, 118-119 GRI 304-4 Environmental protection, p. 124 IUCN Red List species and national conservation list species with habitats in areas affected by operations GRI 305 EMISSIONS Direct (Scope 1) GHG emissions GRI 305-1 Climate change, p.98-99 Energy indirect (Scope 2) GHG emissions Energy indirect (Scope 3) GHG emissions Additional ESG Data, p. 336 GRI 305-2 Climate change, p.98-99 GRI 305-3 Climate change, p.98-99 GHG emissions intensity GRI 305-4 Climate change, p.99 Additional ESG Data, p. 336 Indirect energy emissions of scope 3 include emissions from fuels and raw materials purchased by the Company Reduction of GHG emissions GRI 305-5 Sustainable development, p.74 Emissions of ozone-depleting substances (ODS) Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions GRI 306 WASTE Waste generation and significant waste-related impacts Management of significant waste-related impacts Climate change, p.90 GRI 305-6 There are no emissions of ODS GRI 305-7 Environmental protection, p. 113 Additional ESG Data, p. 343 GRI 306-1 Environmental protection, p. 108 GRI 306-2 Environmental protection, p. 108 Waste generated GRI 306-3 Environmental protection, p. 116-117 Additional ESG Data, p. 346 Waste diverted from disposal GRI 306-4 Environmental protection, p. 116-117 Additional ESG Data, p. 346-347 Waste directed to disposal GRI 306-5 Environmental protection, p. 117 Additional ESG Data, p. 347 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 308-1 Stakeholder engagement, p.223 GRI 308-2 Stakeholder engagement, p.223 GRI 401 EMPLOYMENT New employee hires and employee turnover Benefits provided to full-time employees that are not provided to temporary or part- time employees GRI 401-1 Employees, p. 150 Additional ESG Data, p. 355 GRI 401-2 Employees, p. 142 Additional ESG Data, p. 358 Parental leave GRI 401-3 Additional ESG Data, p. 356 GRI 402 LABOR/MANAGEMENT RELATIONS Minimum notice periods regarding operational changes GRI 402-1 For Group companies located in the Russian Federation: “the minimum period shall be two months pursuant to the current Labour 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 Labour Code of the Russian Federation”. GRI 403 OCCUPATIONAL HEALTH AND SAFETY Occupational health and safety management system Hazard identification, risk assessment, and incident investigation GRI 403-1 Occupational health and safety, p.127, 129, 136 GRI 403-2 Occupational health and safety, p. 127, 129, 130, 132, 134, 136 Occupational health services GRI 403-3 Occupational health and safety, p. 131 Worker participation, consultation, and communication on occupational health and safety Worker training on occupational health and safety GRI 403-4 Occupational health and safety, p. 127, 134 GRI 403-5 Occupational health and safety, p. 129, 130, 133 Promotion of worker health GRI 403-6 Occupational health and safety, p.131 Additional ESG Data, p. 352 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Workers covered by an occupational health and safety management system Employees, p. 140 GRI 403-7 Occupational health and safety, p.132 GRI 403-8 Occupational health and safety, p.127 Additional ESG Data, p. 352 Work-related injuries GRI 403-9 Occupational health and safety, p. 136, 137 Additional ESG Data, p. 350-351 Work-related ill health GRI 403-10 Occupational health and safety, p. 131, 137 Additional ESG Data, p. 351 GRI 404 TRAINING AND EDUCATION Average hours of training per year per employee Programs for upgrading employee skills and transition assistance programs GRI 404-1 Additional ESG Data, p. 357 GRI 404-2 Employees, p. 144 GRI 405 DIVERSITY AND EQUAL OPPORTUNITY Diversity of governance bodies and employees GRI 405-1 Employees, p. 150 Additional ESG Data, p. 353 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. 151 Additional ESG Data, p. 356 GRI 406-1 Employees, p. 142 GRI 407 FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING GRI 407-1 Stakeholder engagement, p.223 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk 366 366 365 367 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA GRI 408: CHILD LABOR Operations and suppliers at significant risk of incidents of the use of child labor GRI 408-1 Employees, p. 142 Stakeholder engagement, p.223 GRI 409: FORCED AND COMPULSORY LABOR Operations and suppliers at significant risk for incidents of forced or compulsory labor GRI 409-1 Employees, p. 142 Stakeholder engagement, p.223 GRI 411 RIGHTS OF INDIGENOUS PEOPLES Incidents of violations involving rights of indigenous peoples GRI 411-1 In 2023, the Company did not record any conflicts related to lands or objects that present historical or cultural value for indigenous communities. GRI 413 LOCAL COMMUNITIES Operations with local community engagement, impact assessments, and development programs GRI 413-1 Occupational health and safety, p.132 Employees, p. 142 Contribution to local communities, p. 153 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 GRI 414-1 Stakeholder engagement, p.223 GRI 414-2 Stakeholder engagement, p.223 Political contributions GRI 415-1 Corporate ethics and compliance, p. 212 GRI 417 MARKETING AND LABELING Requirements for product and service information and labeling GRI 417-1 Finished goods manufactured by the Company’s enterprises are automatically labelled in accordance with legal requirements. The label contains information about the trademark and name of the manufacturer, the grade of aluminium or alloy, the heat number, and other information. Incidents of non-compliance concerning product and service information and labeling GRI 417-2 In 2023, the Company complied with the relevant legislation affecting RUSAL in terms of product labelling, no significant labelling violations were identified. GRI EU Installed capacity by primary energy source Net energy output by energy source and regulatory regime GRI MM Amount of land disturbed because of open-pit mining and amount of reclaimed land The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites plans in place Total volume of overburden, rock, tailings and sludge and associated risks EU1 EU2 Additional ESG Data, p. 340 All energy-generating assets are subject to the legal and regulatory framework adopted in the Russian Federation. Additional ESG Data, p. 339 All energy-generating assets are subject to the legal and regulatory framework adopted in the Russian Federation. MM1 Additional ESG Data, p. 348 Environmental protection, р. 109, 118 MM2 Environmental protection, p. 122 MM3 Environmental protection, p. 117 Additional ESG Data, p. 348 SASB content index Metals segment Topic Code Accounting metric Reference/response 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 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) Energy Management EM-MM- 130a.1 (1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable Water Management EM-MM- 140a.1 (1) Total fresh water withdrawn, (2) total fresh water consumed, percentage of each in regions with High or Extremely High Baseline Water Stress Climate change, p.98-99 According to regulations, European assets of the Company in Ireland and Sweden are subject to European requirements. Climate change, p.89, 98 Environmental protection, p. 113 Additional ESG Data, p. 344 The Company keeps records in accordance with the requirements of the national legislation of the regions where the Company operates and does not collect data on lead and mercury emissions. Besides, these substances are not specific to the Company's main production units. Energy management, p. 101-102 The share of renewable fuels is insignificant. Additional ESG Data, p. 341 Environmental protection, p. 114-115 Additional ESG Data, p. 344-345 Waste & Hazardous Materials Management EM-MM- 140a.2 Number of incidents of non- compliance associated with water quality permits, standards, and regulations Environmental protection, p. 112 EM-MM- 150a.4 Total weight of non-mineral waste generated Environmental protection, p. 116 Additional ESG Data, p. 347 EM-MM- 150a.5 EM-MM- 150a.6 EM-MM- 150a.7 Total weight of tailings produced Environmental protection, p. 116 Additional ESG Data, p. 347 Total weight of waste rock generated Additional ESG Data, p. 347 Total weight of hazardous waste generated Environmental protection, p. 116-117 Additional ESG Data, p. 347 EM-MM- 150a.8 Total weight of hazardous waste recycled Environmental protection, p. 116 Additional ESG Data, p. 347 EM-MM- 150a.9 Number of significant incidents associated with hazardous materials and waste management EM-MM- 150a.10 Description of waste and hazardous materials management policies and procedures for active and inactive operations Biodiversity Impacts EM-MM- 160a.1 EM-MM- 160a.2 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 There are no critical risks associated with waste management and hazardous materials. In 2023, neither of the Power and Metals segments recorded any significant incidents. Environmental protection, p. 108 Environmental protection, p. 108 Environmental protection, p. 120 Environmental protection, p. 109 Production facilities of both Metals and Power segments do not have any acid effluents. Acidic waters are not typical for nepheline and bauxite fields, since these fields do not contain sulphide- containing rocks. EM-MM- Percentage of (1) proved and (2) probable reserves in or near sites with In its biodiversity activities, the Metals and Power segments are governed by the requirements of the 368 367 368 369 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Topic Code 160a.3 Accounting metric 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 Community Relations EM-MM- 210b.1 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 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 Labour Relations EM-MM- 310a.1 Percentage of active workforce covered under collective bargaining agreements, broken down by U.S. and foreign employees EM-MM- 310a.2 Number and duration of strikes and lockouts Reference/response 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. The Metals and Power segments 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 own production activity, and manage biodiversity conservation issues in a rational manner. Additional information: 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, Burundi, Central African Republic, Rwanda, South Sudan, Tanzania, Uganda or Zambia) are 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 Company does not operate in areas located on or near indigenous lands. Contribution to local communities, p.153 No human rights violations, including violations of the rights of indigenous peoples and minorities, were recorded in the reporting year. The environmental conditions affected by the work of enterprises and the regional economic situation 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. No non-technical delays were recorded in respect of the Metals and Power segments in the reporting year. Employees, p. 142 Additional ESG Data, p. 356 Workforce Health & Safety EM-MM- 320a.1 Business Ethics & Transparency EM-MM- 510a.1 Tailings Storage Facilities Management EM-MM- 540a.1 (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 EM-MM- 540a.2 Summary of tailings management systems and governance structure used to monitor and maintain the stability of tailings storage facilities Additional ESG Data, p. 350-352 Data is disclosed under the requirements of the legislation of the Russian Federation. Corporate ethics and compliance, p. 210 Environmental protection, p. 108 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, 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, a tailings management system has been developed to monitor and maintain the condition of tailings storage facilities. This includes internal production and environmental control and control by state supervisory bodies and independent organisations. The Company has a multi-level structure that ensures transparency in all tailings management processes and maintains a high level of control over them. Tailings storage facilities are managed as part of the environmental management system. EM-MM- 540a.3 Approach to development of Emergency Preparedness and Response Plans (EPRPs) for tailings storage facilities 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 have been developed for 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 such measures. The plans also include probable scenarios of emergencies at tailings storage facilities. Activity Metrics EM-MM- 000.A Production of (1) metal ores and (2) finished metal products Business review, p. 370 EM-MM- 000.B Total number of employees, percentage of contractors Employees, p. 150 The Company collects data only on the number of full-time employees and the share of permanent contracts. The disclosure includes data on all employees. Power segment In the reporting year, no risks of violations of employees' rights to freedom of association or collective bargaining were identified in respect of the Metals and Power segments' production facilities and suppliers. There were also no strikes or mass layoffs. Topic Code Accounting metric Reference Greenhouse Gas Emissions & Energy Resource Planning 370 IF-EU- 110a.1 1) Gross global Scope 1 emissions, percentage covered under (2) emissions-limiting regulations and (3) emission inventory standards Climate change, p.98-99 Decree of the President of the Russian Federation No. 666 of 04.11.2020 “On Reducing GHG Emissions” establishes the national contribution of the Russian Federation as part of the implementation of the Paris Agreement. 370 369 371 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Topic Code Accounting metric Reference IF-EU- 110a.2 IF-EU- 110a.3 IF-EU- 110a.4 IF-EU- 120a.1 Air Quality Water Management IF-EU- 140a.1 IF-EU- 140a.2 IF-EU- 140a.3 IF-EU- 150a.1 IF-EU- 150a.2 Coal combustion residuals disposal 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 quality permits, standards, and regulations Description of water management risks and discussion of strategies and practices to mitigate those risks Climate change, p.98-99 Climate change, p. 89, 98 There are no requirements in Russia for the minimal share of renewable energy in the portfolio of generating companies. Environmental protection, p. 113 Additional ESG Data, p. 344 This category includes all pollutants specified by Russian legislation. Environmental protection, p. 114-115 Additional ESG Data, p. 344-345 Environmental protection, p.112 Environmental protection, p.108 Amount of coal combustion residuals (CCR) generated, percentage recycled Environmental protection, p.117 Additional ESG Data, p. 347 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 IF-EU- 240a.2 Typical monthly electric bill for residential customers (breakdown by users of differentiated tariffs) IF-EU- 240a.3 Number of residential customer electric disconnections for nonpayment, percentage reconnected within 30 days Additional ESG Data, p. 347 Additional ESG Data, p. 341 The maximum electric rate for the residential customers is set in accordance with the directive of the Federal Antimonopoly Service of Russia. Additional ESG Data, p. 341 The maximum electric rate for the residential customers is set in accordance with the directive of the Federal Antimonopoly Service of Russia. Additional ESG Data, p. 341 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. End-Use Efficiency & Demand IF-EU- 420a.1 IF-EU- 420a.2 IF-EU- 420a.3 IF-EU- 540a.1 IF-EU- 540a.2 Emergency Preparedness and Response in the Field of Nuclear Safety Stability of Power Grids IF-EU- 550a.1 Activity Metrics IF-EU- 550a.2 IF-EU- 000.A IF-EU- 000.B IF-EU- 000.C IF-EU- 000.D IF-EU- 000.E 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 Not applicable Additional ESG Data, p. 341 The Company does not implement efficiency measures for electricity savings on the customer’s side. Total number of nuclear power units Not applicable Description of efforts to manage nuclear safety and emergency preparedness Number of incidents of noncompliance 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) 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 Responsible business practices, p.236 Additional ESG Data, p. 341 According to the legislation of the Russian Federation, utilities must provide 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.22 Business model, p.22 Total wholesale electricity purchased Additional ESG Data, p. 340 IF-EU- 240a.4 IF-EU- 320a.1 Discussion of impact of external factors on affordability of electricity for customers, including the economic conditions of the service territory Energy affordability is mainly determined by regional factors and maximum federal rates stipulated and controlled by the Federal Antimonopoly Service of Russia. 1) Total recordable incident rate (TRIR), (2) fatality rate, and (3) near miss frequency rate (NMFR) Additional ESG Data, p. 350-351 Workforce Health and Safety 372 371 372 373 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Compliance of En+ results with the required thresholds under the EU taxonomy Disclosure of the SECR requirements in the Report As part of the Green Deal programme setting energy and climate targets, the European Commission has developed the EU Taxonomy, a classification system establishing a list of sustainable economic activities. The EU Taxonomy provides stakeholders with science-based evidence on the sustainability of economic sectors, which makes it possible to improve interaction, redirecting resources and investments towards climate change mitigation to make societies more resilient to environmental challenges. The EU Taxonomy is based on the Taxonomy pack for feedback published in August 2021. 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 partnerships and limited liability partnerships (LLPs) whose shares are not quoted on the market. Topic Requirement Reference/response Currently, the average value of all En+ smelters by a margin meets the updated criteria for checking technical parameters. GHG emissions Name Specific GHG emissions from electrolysis (Scope 1+2), t CO2eq/t Al En+ Metals segment, average EU Taxonomy mitigation benchmark 46 EU Taxonomy adaptation benchmark 47 <3 <3 6 Topic Aluminium production 48 Production of electricity from hydropower Metric and Required threshold Reference/response Direct GHG emissions per tonne in electrolysis operations are 1,99 t CO2e/t Al. The calculation was performed 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 indicator 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 GHG emissions for electricity produced from hydropower in accordance with the standards referenced in the EU Taxonomy. The Company performed calculations based on actual measurements and calculations carried out in accordance with the IHA (International Hydropower Association) methodologies. 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). The activity complies with all of the following criteria: Emissions of pollutants contributing to acidification 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 customers. 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 customers. The life-cycle emissions of pollutants contributing to the photochemical ozone creation are lower than 0.05 kg PO43 aeq per 1 MWh of electricity output to the power grid or to directly connected customers. The life-cycle emissions of PM10 are lower than 0.05 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. 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 Energy use and GHG emissions figures for the previous year (not included in the 1st year) The greenhouse gases included in the calculations are listed in the Climate leadership section of the Report. Climate leadership, p. 99 Energy management, p. 102 Intensity measurement At least one emissions intensity ratio Climate leadership, p. 99 Energy use Underlying global energy use Energy management, p. 102 Measures taken to improve energy efficiency Narrative on energy efficiency measures Quantification and reporting methodology Details of the methodology used Climate leadership, p. 102-103 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). 46 Scope 1 (1.5 t CO2e/tAl) + Scope 2 (15.5 MWh/t Al * 0.1 t CO2e/MWh) = 3.05 tCO2e/t Al = ~ 3 tCO2e/tAl. 47 Scope 1 (1.5 t CO2e/tAl) + Scope 2 (15.5 MWh/t Al * 0.27 tCO2e/MWh) = 5.68 tCO2e/tAl = ~ 6 tCO2e/tAl. 48 The topic is disclosed in accordance with the requirements of the Taxonomy Technical Report published in June 2019. 374 373 374 375 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Contents by Sustainability Indexes No. Indicator Responsibility and Transparency Index Economic, social and environmental indicators Labour productivity CAPEX/investments Taxes paid Reference/response Additional ESG data, p.330 Financial review, p.57 Additional ESG data, p. 330 Additional ESG data, p.330 High quality of products and services Responsible business practices, p. 226 Share of purchases from local suppliers Stakeholder engagement, p.224 Innovation management Headcount Personnel characteristics The main areas of the Company’s innovation activity are described, R&D costs are given, as well as information on some R&D projects Responsible business practices, p. 237-239 Additional ESG data, p. 360 Employees, p.150 Additional ESG data, p. 353 Employees, p.150 Additional ESG data, p. 353 Occupational health and safety (performance) Occupational health and safety, p.126 OHS costs Additional ESG data, p. 350-352 Additional ESG data, p. 351-352 Occupational health and safety management systems Occupational health and safety, p. 126 Payroll Employees, p.151 Additional ESG data, p. 356 Expenses on social programmes for personnel Additional ESG data, p. 358 Number of beneficiaries of social programmes for personnel Employees, p.143 Remuneration of management Corporate governance, p. 195 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Employee turnover 17 Employee training 18 19 20 21 Employee training costs Labour relations Respect for human rights Air emissions 22 GHG emissions Employees, p.150 Additional ESG data, p. 355 Employees, p.144 Additional ESG data, p.357 Additional ESG data, p.357 Employees, p.138 Employees, p.143 Environmental protection, p. 113 Additional ESG data, p. 343 Climate change, p.99 Additional ESG data, p.336 23 Energy consumption and energy efficiency Energy management, p.102 Additional ESG data, p. 339-341 24 25 Water consumption (the indicator is irrelevant for entities operating in financial markets) Environmental protection, p. 115 Additional ESG data, p.345 Discharges into water bodies (the indicator is irrelevant for entities operating in financial markets) Environmental protection, p.115 Additional ESG data, p.345 26 Waste management 27 Environmental costs Environmental protection, p.117 Additional ESG data, p.346 Environmental protection, p.112 Additional ESG data, p.342 28 29 Environmental management systems Environmental protection, p.105-107 Recording and assessment of environmental risks of funded projects (the indicator is relevant for entities operating in financial markets. It is factored in instead of indicator No. 24, which is irrelevant for such entities. It is factored out for entities operating in other industries) Not applicable No. 30 Indicator Reference/response Financing environmental projects and programmes (the indicator is relevant for entities operating in financial markets. It is factored in instead of indicator No. 25, which is irrelevant for such entities. It is factored out for entities operating in other industries) Not applicable 31 Social investments Employees management and engagement Contribution to local communities, p.167 Additional ESG data, p.358 32 33 34 Details of the Board of Directors: structure, independence, areas of activity, performance review Corporate governance, p. 171-182 Involvement of senior management in administering CSR and sustainability issues Sustainability management, p.76 Corporate governance, p. 179 Incorporation of sustainability risks into the key risk management system and events to mitigate sustainability risks Internal control and risk management, p.204 35 New opportunities in the area of sustainable development Automation and digitalisation, p.230-233 36 37 38 39 40 41 42 43 Availability of the code of ethics, its fundamental principles and incorporation mechanisms Cybersecurity, p.234-236 Corporate ethics and compliance, p. 208 Anti-corruption: policy, mechanisms, activities, outcomes Corporate ethics and compliance, p. 210 Availability of the corporate sustainability (CSR) policy: contents, reference to the document Policies for each ESG aspect Sustainability management, p.76 Refinement of sustainability (CSR) approaches in corporate policies • in the area of environmental protection: contents, reference to the document • • • in the area of staff relations / HR policy (strategy): contents, reference to the document in the area of occupational health and industrial safety: contents, reference to the document in the area of community support (regional policy, external social policy): contents, reference to the document CSR/sustainability management across the supply chain: policies, mechanisms, metrics Sustainability management, p.76 Occupational health and safety, p.176 Fundamental document: Health, Occupational, Industrial and Fire Safety Policy Health, Occupational, Industrial and Fire Safety Policy Environmental protection, р.104 Stakeholder engagement, p. 222-223 Incorporation of CSR and sustainability KPIs in into the company’s strategic KPI system Corporate governance, p. 193 Sustainability management, p.76 Structure of managing CSR and sustainability activity Sustainability management, p.76 Areas and formats of government relations, key programmes/projects Contribution to local communities, p.153 44 Areas and formats of community engagement, key projects Contribution to local communities, p.153 Indicators of the Sustainability Vector Index Workforce productivity rate Additional ESG data, p.330 Occupational health, industrial safety Occupational health and safety, p.126 Remuneration and expenses on social programmes for personnel Employee training Employee turnover rate Air emissions GHG emissions Water consumption and discharges into water bodies (irrelevant for the financial sector) Responsible financing Employees, p. 140 Occupational health and safety, p.126 Additional ESG data, p. 359 Employees, p. 144 Additional ESG data, p. 357-358 Employees, p.150 Additional ESG data, p. 355 Environmental protection, p. 113 Additional ESG data, p. 343-344 Environmental protection, p. 113 Additional ESG data, p. 336 Environmental protection, p. 114 Additional ESG data, p. 344 1 2 3 4 5 6 7 8 376 376 375 377 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA 9 Energy consumption and energy efficiency 10 Waste management Energy management, p. 100-103 Additional ESG data, p. 339-341 Environmental protection, p. 116-117 Additional ESG data, p.346 11 12 13 14 Social investments Contribution to local communities, p. 167 Governance (involvement of senior management in sustainability control) Sustainability management, p.78 Corporate governance, р.179, 194 Risks and opportunities management Internal control and risk management, p. 200-208 Focus of sustainability/CSR activity Sustainability management, p.76 List of the key (basic) indicators of sustainability reporting in line with the recommendations of the Russian Ministry of Economic Development No. Indicator Reference/response 1 2 3 4 5 6 7 8 9 10 11 12 Revenue (its equivalent) Value added Net value added General R&D expenses Labour productivity Statutory payments accrued (excluding fines and penalties), total, including: • • • insurance contributions; and other statutory payments. taxes and levies; Statutory payments effected (excluding fines and penalties), total, including: • • • insurance contributions; and other statutory payments. taxes and levies; Additional ESG data, p.330 Additional ESG data, p.330 Additional ESG data, p.330 Responsible business practices, p. 226 Additional ESG data, p.361 Additional ESG data, p.330 Additional ESG data, p.330 Additional ESG data, p.330 Share of purchases of Russian goods, works and services in total purchases of goods, works and services Not disclosed. Share of purchases of goods, works and services from SMEs in total purchases from Russian entities Partially disclosed (the share of purchases from SMEs in the total volume is disclosed). Additional ESG data, p. 361 Sustainable, including green, investments Additional ESG data, p.330 Investments in projects related to achieving technological sovereignty and structural adaptation of Russia’s economy Additional ESG data, p. 330 Indicator of economic vulnerability of business and other activity to climate risks Additional ESG data, p. 336 13 Amount of water used from all water supply sources Environmental protection, p. 114 Additional ESG Data, p. 345 14 Amount of recycled and reused water supply Environmental protection, p. 114 15 Amount of contaminated wastewater discharge, total, including untreated wastewater Additional ESG Data, p. 345 Additional ESG Data, p. 345 16 Water use efficiency (specific water consumption) Environmental protection, p. 114, 115 No. Indicator category: • waste disposed of; • waste neutralised; • waste buried; • waste reused; • waste recycled; and • waste generation reduced. Reference/response Additional ESG Data, p. 346-347 19 Air pollutant emissions from stationary sources Information from all sources has been disclosed. Environmental protection, p. 113 Additional ESG Data, p. 343 Climate change, p. 99 Additional ESG Data, p. 336 Environmental protection, p.112 Additional ESG data, p.342 20 GHG emissions 21 Expenses on implementing environmental protection measures, total, including: • atmospheric air protection and climate change prevention; • wastewater collection and treatment; • waste management; and • conservation of biodiversity and protection of natural areas. 22 Renewable and low-carbon energy consumption Energy management, p. 102 Additional ESG Data, p.341. 23 24 25 26 27 28 29 30 31 32 Energy efficiency: energy consumption per unit of net value added Additional ESG data, p.340 Payroll expenses, total Average headcount, total, including the number of disabled persons Additional ESG data, p.330 Employees, p.150 Additional ESG data, p.354 by occupation groups; Average salary, total, including: • • • by gender; and by age groups. When calculating the indicator, a methodology different from that proposed by the Ministry of Economic Development was used. Partially disclosed (when calculating the indicator, a methodology different from that proposed by the Ministry of Economic Development was used). Expenses on occupational health and safety events, total, including on average per employee Additional ESG data, p.351-352 Expenses on organising and holding social, fitness, recreational and medical events for employees and their family members Number of occupational accident victims with disability for one or more working days and with fatal outcome, including fatalities Expenses on employees training, total, including on average per employee Average hours of training per year per employee by occupation groups Additional ESG data, p. 358 Occupational health and safety, p.136 Additional ESG data, p. 350 Additional ESG data, p.358 Additional ESG data, p.358 Percentage of employees covered by collective bargaining agreements in the average headcount Employees, p.142 Additional ESG data, p.356 When calculating the indicator, a methodology different from that proposed by the Ministry of Economic Development was used Employees, p.150 Additional ESG data, p.355 When calculating the indicator, a methodology different from that proposed by the Ministry of Economic Development was used. 17 class I; class II; Waste of hazard classes I–V generated, total, including: • • • • • class IV; and class III; class V. Additional ESG Data, p. 345 Partially disclosed (the breakdown of waste by hazard class of the Energy segment is disclosed). Environmental protection, p. 116-117 Additional ESG Data, p. 346 33 Staff turnover rate 18 Waste of hazard classes I–V managed, total, including by Environmental protection, p. 116-117 378 377 378 379 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA 34 35 36 37 38 39 40 41 42 43 44 Expenses on contributing to support for social programmes not aimed at employees and their family members, total, including: • • • • in support for citizens in need of social assistance. charitable housing programmes; in education; and in healthcare; Contribution to local communities, p.167 Additional ESG data, p.359 When calculating the indicator, a methodology different from that proposed by the Ministry of Economic Development was used. Availability of the sustainability policy and/or other related strategic documents Policies for each ESG aspect Number of Board meetings and attendance rate Corporate governance, p.180 Number of Board members, total, including by age groups Number of the Audit Committee meetings and attendance rate Participation in ESG indices and ratings Number of recorded cases of infringing the rights of indigenous minorities of the Russian Federation Corporate governance, p.179 Corporate governance, p.188 Key figures, p. 12-13 Employees, p. 142 Percentage of employees holding positions exposed to high corruption risk Not disclosed Average hours of anti-corruption training per employee Not disclosed Cases of bringing the organisation, its subsidiaries and associates to administrative liability for corrupt practices In 2023, the Company recorded three cases of corruption and fraud. Share of female managers in the total number of managers, total, including on the Board of Directors (Supervisory Board) Additional ESG data, p. 353 List of ESG indicators to be disclosed by entities engaged in the generation of electric (heat) power in line with the recommendations of the NP Market Council Association No. 1.1 1.2 1.3 Indicator Reference/response Environmental management system Environmental protection, p.106 Environmental violations, accidents or emergencies Additional ESG data, p.343 Share of funds used to implement climate projects Not disclosed For more details on En+ Group’s climate projects and the Company’s investments in their implementation, see the SDG Report for 2023 1.4 Share of funds used to implement environmental projects Additional ESG data, p.343 1.5 Monitoring of the state and pollution of the environment during the implementation of climate projects For more details on En+ Group’s climate projects and the Company’s investments in their implementation, see the 1.6 1.7 1.8 Implementation of BAT Energy intensity Reduced energy consumption (dynamics of the indicator by year) SDG Report for 2023 Environmental protection, p.105 Energy management, p. 102 Energy management, p. 102 Additional ESG data, p.340 1.9 Electricity generation efficiency Additional ESG data, p. 339, 346 Specific fuel consumption for the generation of 1 MWh of electricity; Specific water consumption for the generation of 1 MWh of electricity. 1.10 Share of renewable and low-carbon generating facilities in the Additional ESG data, p.341 structure of installed capacity of generating facilities (dynamics of the indicator by year) 1.11 Installed capacity utilisation rate of plants based on the use of renewable and low-carbon energy sources (weighted average value by plant) (dynamics of the indicator by year) Additional ESG data, p.341 When calculating the indicator, a method different from the proposed one was used. No. Indicator Reference/response 1.12 Electricity generation using renewable and low-carbon energy Additional ESG data, p.341 sources (dynamics of the indicator by year) 1.13 Volume of heat production in the combined generation mode with renewable and low-carbon energy (dynamics of the indicator by year) Additional ESG data, p.341 1.14 GHG emissions per 1 MWh of electricity generated (weighted average by plants) (dynamics of the indicator by year) Additional ESG data, p.336 Climate change, р. 99 1.15 GHG emissions attributable to the production of 1 Gcal of heat Not disclosed energy (dynamics of the indicator by year) 1.16 Management of GHG emissions in the course of business Climate change, p.90-93 When calculating the indicator, a methodology different from that proposed by the Ministry of Economic Development was used. operations adaptation of the general regulatory methodology for quantifying direct and indirect GHG emissions to specific business conditions and regular quantification of such emissions; implementation of a program on GHG emissions reduction and/or increase in GHG removal compliance with best business practices; publication and verification of carbon reporting complying with Russian and international standards and requirements. 1.17 Self-diagnostics/diagnostics according to ISO Environmental protection, p.106 14001 and 14040 1.18 Cumulative impact Additional ESG data, p.336 Cumulative impacts mean impacts that arise as a result of additional impact on the area of activity or resources used in a project or directly affected by the impact of a project, as a result of other existing, planned or realistically established circumstances during the process of identifying risks and impacts. 1.19 Efficient use of auxiliary resources, wastewater discharge Additional ESG data, p.345 1.20 Waste management Share of recycled and neutralised waste in the total amount of waste generated, %; Waste of hazard classes I-IV generated, % of the total volume. Environmental protection, p. 117 Additional ESG Data, p. 346-347 2.1 Compliance with the fundamental declarations, conventions and recommendations of the International Labour Organisation (ILO) Employees, p.139 2.2 Regulation of labour relations and human rights Employees, p.139, 142 2.3 Occupational health and safety policies and procedures Occupational health and safety, p.126-127 2.4 Stakeholder engagement Stakeholder engagement, p.214 Stakeholder engagement plan and policy; Disclosure of relevant information; Regular communication of information on ESG activities to the public. Self-diagnostics/diagnostics according to ISO 45001 (dynamics of the indicator by year) Occupational health and safety, p.127 Indicators for monitoring and reporting (dynamics of the indicator by year): Number and structure of employees participating in activities related to a high risk of accidents or work-related ill health; • Number of hours of environmental training (rational use of resources) • Number of work-related injuries (including fatalities), types of injuries or work-related ill health; • Average number of training hours per year per employee, with a breakdown by gender (male and female). • Average number of hours of anti-corruption training per year per employee. Additional ESG data, p. 350 2.5 2.6 380 380 379 381 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA ADDITIONAL ESG DATA No. 2.7 Indicator Reference/response Ratio of entry-level wages of employees of different genders to the established minimum wage in the regions of presence of the company (with an indication of the average wage by region) (dynamics of the indicator by year) Additional ESG data, p. 357 2.8 Investments in the social sphere of the company’s employees (dynamics of the indicator by year) Additional ESG data, p. 359 2.9 Occupational health and safety expenses (dynamics of the Additional ESG data, p. 350 indicator by year) 2.10 Investments in socially important infrastructure, regional, social and charitable programs in the regions of presence, including through joint programs with regional authorities and communities Contribution to local communities, p.167 2.11 Annual expenses on employee training per employee Employees, p.144 Additional ESG data, p.358 2.12 Benefits provided to full-time employees that are not provided Employees, p.144 to temporary or part-time employees 2.13 Categories of employees Share of employees under 35, % Share of working pensioners, % 2.14 Employee turnover Employees, p.150 Additional ESG data, p.353 Additional ESG data, p.355 2.15 Employee performance and career development Employees, p.144 2.16 Causes of equipment failures and accidents Occupational health and safety, p.132, 134 2.17 Industrial safety and reliability risks Occupational health and safety, p.132, 134 3.1 3.2 Involvement and the level of competence of the BoD/Management Board/executive bodies in the area of the sustainability and ESG agenda Sustainability management, p.78 Corporate governance, p.179 Total expenditures on research and development aimed at improving energy efficiency, reducing greenhouse gas emissions and other beneficial effects in the area of climate and environment Responsible business practices, p.237-238 Additional ESG data, p.360 3.4 Public non-financial reporting About the Report, p.4 Preparation of an annual progress report on sustainable development (including ESG) in accordance with national and international standards and recommendations. 3.5 Affiliates List of affiliated legal entities that may directly or indirectly affect the company’s financial and non-financial performance. 3.6 Cases of corruption 3.7 Effectiveness of management measures Assessment of the quality of work of the Board of Directors or another collegial management body. The list of affiliated persons is available on the Company's website (https://enplusgroup.com/en/investors/other- regulatory-disclosures/list-of-affiliates/) In 2023, the Company recorded three cases of corruption and fraud. Corporate governance, p. 182 3.8 GR work 3.9 Compliance risks Contribution to local communities, p. 153 Corporate ethics and compliance, p. 210 Assessment of compliance with applicable laws, internal standards and other mandatory documents. 3.10 Credit and ESG rating 3.11 Asset management system 3.12 Corporate governance system 3.13 Energy management system 3.14 Maintenance and repair management system Key events and indicators, p. 13 The asset management system is implemented partially. Based on the results of asset management, measures were developed to improve the efficiency of asset management. Corporate governance, p. 171 Energy management, p. 100-103 The maintenance and repair management system is implemented partially. Based on the results of energy management, measures have been developed to improve the effectiveness of maintenance and repair. 3.15 Environmental and social assessment of suppliers and Responsible business practices, p. 223 contractors 382 381 383 CONSOLIDATED REPORT 2023APPENDICES EXTERNAL ASSURANCE GRI 2-5 382 384 383 385 CONSOLIDATED REPORT 2023APPENDICES Glossary Units of measurement CO CO e ₂ Carbon dioxide CO equivalent CO2e/tAl ₂ CO2 equivalent per tonne of aluminium ₂ ha GJ GJ/t Hectare Gigajoule Gigajoules per tonne GJ/MWh Gigajoules per megawatt-hour GW GWh Gcal Gcal/h USD kA kV kWh km m3 mn bn mn t Gigawatt (one million kilowatts) Gigawatt-hour (one million kilowatt-hours) Gigacalorie, a unit of measurement for heating energy Gigacalorie per hour, a unit of measurement for heating power capacity US dollar Kiloampere Kilovolt Kilowatt-hour, a unit of energy produced Kilometer Cubic meter Million Billion Million metric tonnes mn t of CO2 Million metric tonnes of carbon dioxide in CO2e MW MWh MJ p.p. RUB Megawatt (one thousand kilowatt), a unit of measurement for electrical power capacity Megawatt-hour (one thousand kilowatt-hours) Megajoules Percentage point Russian rouble t, tonne One metric tonne (one thousand kilograms) TWh ‘000 ‘000 t Terawatt-hour thousand Thousand metric tonnes ‘000 t/year Thousand tonnes per year ‘000 t CO2 Thousand metric tonnes of carbon dioxide in CO2 equivalent h Hour Terms and abbreviations ALLOW APQP ASI Aughinish B20 ССUS CEO CDP CPLC 384 386 RUSAL’s aluminium brand with an independently verified low carbon footprint. Carbon footprint is less than 2.3 t of CO2e per tonne of aluminium (Scope 1 and 2) Advanced Product Quality Planning Aluminium Stewardship Initiative Aughinish Alumina Refinery, Aughinish Alumina, or Aughinish Alumina Limited, a wholly owned subsidiary of RUSAL incorporated in Ireland Business 20 Carbon capture, use and storage technology Chief Executive Officer Carbon Disclosure Project Carbon Pricing Leadership Coalition CO Cobad CPLC DTR Carbon monoxide Cobad S.A., a subsidiary of RUSAL incorporated in Guinea Carbon Pricing Leadership Coalition FCA Disclosure Guidance and Transparency Rules EBITDA Earnings before interest, tax, depreciation and amortisation EPC contracts Engineering, procurement, and construction contracts ESG FCA FCPA FFI GHG GRI G20 HR IAI Environmental, social and governance The UK’s Financial Conduct Authority US Foreign Corrupt Practices Law Fauna & Flora International Greenhouse gases Global Reporting Initiative Group of Twenty Human Resources Department International Aluminium Institute IATF 16949 IATF 16949 — a quality management system for organisations in the automotive industry, using the Advanced Product Quality Planning (Production Part Approval Process) approach ICC IHA IPCC IPO ISO 9001 ISO 14001 ISO 45001 KUBAL LTIFR - OFAC PEFA SASB SECR SSP TCFD International Chamber of Commerce Russia International Hydropower Association Intergovernmental Panel on Climate Change Initial public offering ISO 9001:2015 — international standard “Quality management systems — Requirements”, which has been developed by the International Organisation for Standardisation to set criteria for quality management systems and which is the only standard for certification in quality management ISO 14001:2015 — international standard “Environmental management systems — Requirements with guidance for use”, which has been developed by the International Organisation for Standardisation to set criteria for environmental management systems and which is the basis for certification ISO 45001:2018 international standard “Occupational health and safety management systems – Requirements with guidance for use”, which has been developed by the International Organisation for Standardisation to set criteria for OHS management systems and which is the basis for certification Kubikenborg Aluminium AB, a wholly owned subsidiary of RUSAL incorporated in Sweden The Lost Time Injury Frequency Rate calculated by the Group as the sum of fatalities and lost time injuries per 200,000 man-hours Not applicable The Office of Foreign Assets Control of the US Treasury Primary Equivalent Foundry Alloys Sustainability Accounting Standards Board Streamlined Energy and Carbon Reporting Shared Socioeconomic Pathways Task Force on Climate-Related Financial Disclosures UN Energy The United Nations inter-agency mechanism on energy issues. Its goal is to form a coherent approach to sustainable energy UNFCCC The United Nations Framework Convention on Climate Change JSC BAZ BoAZ BrAZ Joint-stock company Bogoslovsky Aluminium Smelter Boguchany Aluminium Smelter (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 Bratsk Aluminium Smelter or PJSC RUSAL Bratsk, a wholly owned subsidiary of RUSAL incorporated under the laws of the Russian Federation BRICS Brazil, Russia, India, China and South Africa 385 387 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA RES Renewable energy sources GHG emissions (Scope 1) GHG emissions (Scope 2) GHG emissions (Scope 3) UN Global Compact 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 CO not included in Scope 1, as they are reported separately emissions from the combustion of biomass are ₂ Indirect energy greenhouse gas emissions. Scope 2 accounts for GHG emissions resulting from the generation of heat and electricity purchased for the Company’s own needs. 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 Greenhouse gas emissions from activities of assets not owned or controlled by the Company, but on which it indirectly impacts in its value chain. The 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. United Nations Global Compact GDR Global Depositary Receipt Hybrid perovskite Class of semiconductors that combines the advantages of organic and inorganic semiconductors, which is a more competitive material for solar cells than silicon HPP Hydropower plant Directorate for Control Directorate for Control and Internal Audit EuroSibEnergo JSC EuroSibEnergo is a 100% subsidiary of En+ Group, managing its power assets EU European Union Ore Reserves 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. Relevant assessments and studies were carried out taking into account the impact of realistically assumed factors related to mining and metallurgical activity, as well as economic, marketing, social and government factors and the changes caused by them. These assessments demonstrate that extraction could reasonably be justified at the time of reporting. 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 material is mined. Relevant assessments and studies were carried out taking into account the impact of realistically assumed factors related to mining and metallurgical activity, as well as economic, marketing, social and government factors and the changes caused by them. At the time of reporting, these assessments demonstrate 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. Relevant assessments and studies were carried out taking into account the impact of realistically assumed factors related to mining and metallurgical activity, as well as economic, marketing, social and government factors and the changes caused by them. At the time of reporting, these assessments demonstrate that extraction could reasonably be justified. ILM&T IrkAZ Institute of Light Materials and Technologies Irkutsk Aluminium Smelter, a branch of RUSAL Bratsk in Shelekhov (Russia) Irkutskenergo 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 INRTU Irkutsk National Research Technical University ETC (RUSAL) Engineering and Technology Centre JSC Irkutsk Electric Grid 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 Kandalaksha Aluminium Smelter, a branch of JSC RUSAL Ural Competitive capacity auction Compliance Committee of the Company’s Board of Directors IESK Kaizen KAZ CCA Compliance Committee 386 388 Corporate Governance Committee Nominations Committee Remuneration Committee HSE Committee KPI KrAZ TL MSU IPCC Management Team Corporate Governance Committee of the Company’s Board of Directors Nominations Committee of the Company’s Board of Directors Remuneration Committee of the Company’s Board of Directors Health, Safety and Environment Committee Key performance indicator Krasnoyarsk Aluminium Smelter or JSC RUSAL Krasnoyarsk, a wholly owned subsidiary of RUSAL incorporated under the laws of the Russian Federation Transmission line Lomonosov Moscow State University Intergovernmental Panel on Climate Change Executive Directors and Officers of the Company Metals segment The Metals segment is represented by UC RUSAL (56.88% owned by En+ Group). The power assets of UC RUSAL are also included into the Metals segment Six Sigma Methodology A set of quality control tools based on the analysis of limits of errors or defects. The purpose of the process is to improve the cycle time while reducing production defects Mineral Resources 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. Relevant assessments and studies were carried out taking into account the impact of realistically assumed factors related to mining and metallurgical activity, as well as economic, marketing, social and government factors and the changes caused by them. At the time of reporting, these assessments demonstrate 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 material is mined. Relevant assessments and studies were carried out taking into account the impact of realistically assumed factors related to mining and metallurgical activity, as well as economic, marketing, social and government factors and the changes caused by them. At the time of reporting, these assessments demonstrate 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. Relevant assessments and studies were carried out taking into account the impact of realistically assumed factors related to mining and metallurgical activity, as well as economic, marketing, social and government factors and the changes caused by them. At the time of reporting, these assessments demonstrate that extraction could reasonably be justified. International Union for Conservation of Nature and Natural Resources International Financial Reporting Standards Mykolaiv Alumina Refinery Company Limited, a company incorporated under the laws of Ukraine, which is a wholly-owned subsidiary of RUSAL Research and development Non-profit organisation Novokuznetsk Aluminium Smelter or JSC RUSAL Novokuznetsk, a company incorporated under the laws of the Russian Federation, which is a wholly owned subsidiary of UC RUSAL IUCN IFRS NGZ R&D NPO NkAZ New Energy The New Energy Programme involves 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 provides for the modernisation of hydroelectric generation units and the replacement of runners Norilsk Nickel MMC NORILSK NICKEL PJSC, incorporated under the laws of the Russian Federation OJSC LLC UN SPNAs GSM Open Joint-Stock Company Limited Liability Company United Nations Organisation Specially protected natural area(s) General shareholders meeting 387 389 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA OHS HSE OECD GHG Occupational health and safety Health, safety and environment Organisation for Economic Co-operation and Development Greenhouse gases Listing Rules 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 RA RAS RSPP Rating agencies Russian Academy of Sciences Russian Union of Industrialists and Entrepreneurs 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 RUSAL Kremny Ural RUSAL Kremny Ural LLC (formerly SU-Kremny LLC), an indirect subsidiary of RUSAL that is not a 100% subsidiary RUSAL, Metals segment United Company RUSAL Plc, a limited liability company incorporated under the laws of Jersey (56.88% owned by En+) RUSAL SAYANAL RusHydro SAZ JSC RUSAL SAYANAL, a subsidiary of RUSAL incorporated under the laws of the Russian Federation RusHydro PJSC (Public Joint-Stock Company Federal Hydro-Generating Company – RusHydro) organised under the laws of the Russian Federation, an independent third party Sayanogorsk Aluminium Smelter or JSC RUSAL Sayanogorsk, a wholly owned subsidiary of the Company, incorporated under the laws of the Russian Federation OFAC Sanctions The designation by OFAC of certain persons and certain companies which are controlled or deemed to be controlled by some of these persons into the Specially Designated Nationals List ICS SignAL PPE 5S system Internal control system En+ corporate 24-hour hotline Personal protective equipment Methodology of lean and safe organisation of workplaces to create a comfortable working environment, increase productivity and reduce production waste SAP system Systems Analysis and Program Development SKAD The largest Russian company producing cast automotive wheels from aluminium alloys Adjusted EBITDA For any period of time, represents the operating result adjusted for depreciation, impairment of non- current assets and losses on the sale of property, plant and equipment for the relevant period Adjusted net profit For any period, is defined as the net (loss)/profit adjusted for the net effect of the Company’s investment in Norilsk Nickel, the net effect of derivative financial instruments and the net effect of non- current assets impairment QMS SMR CIS Board of Directors, BoD Market Council Quality management system JSC Management Company Soyuzmetallresurs Commonwealth of Independent States Board of Directors of the Company A non-profit organisation formed as a non-profit partnership uniting, on the basis of membership, electric power entities and large electric power consumers. The tasks of the Council are to ensure the proper functioning of the commercial infrastructure of the market and the effective relationship between the wholesale and retail electricity markets, the creation of favourable conditions for attracting investments in the electric power industry; creating equal conditions for wholesale and retail market participants when developing regulatory documents on the functioning of the electric power industry, and ensuring the self-regulation of the system of wholesale and retail trade in electric power, capacity, other goods and services permissible in the wholesale and retail electricity markets. The goal of the Council is to ensure the energy security of the Russian Federation, the unity of the economic space, freedom of economic activity and competition in the wholesale and retail electricity markets by balancing the interests of producers and buyers and meeting needs of the society in terms of having a reliable and stable source of electrical energy POP PMS SPP 388 390 Persistent organic pollutants Production management system Solar power plant CBAM TPP UAZ KhAZ Carbon Border Adjustment Mechanism Thermal power plant Urals Aluminium Smelter, a branch of JSC RUSAL Ural Khakas Aluminium Smelter UN SDGs United Nation’s Sustainable Development Goals Net debt Eco- Søderberg EN+, En+, Company, Group Power segment The sum of outstanding loans, borrowings and bonds less total cash and cash equivalents as at the end of the relevant period 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 International Public Joint Stock Company EN+ GROUP/IPJSC EN+ GROUP and its subsidiaries, whose results are included in the consolidated financial statements prepared in accordance with the International Financial Reporting Standards 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 UNESCO The United Nations Educational, Scientific and Cultural Organisation CCoonnttaaccttss KALININGRAD Russia, 236006, Kaliningrad Region, Kaliningrad, 8, Oktyabrskaya St., office 34 Tel: +7 401 269-74-36 Fax: +7 401 269-74-37 MOSCOW Russia, 121096, Moscow, 1, Vasilisy Kozhinoy St. Tel: +7 495 642-79-37 Fax: +7 495 642-79-38 FOR INVESTORS IR Department Tel: +7 495 642-79-37 Email: ir@enplus,ru REGISTRAR JSC “IRC” Тел: +7 495 234-44-70 Email: info@mrz,ru Website:: www,mrz,ru DEPOSITORY BANK Citibank, N,A. Тел,: +1 212 723-54-35 Email: CCiittiiAADDRR@@CCiittii,,ccoomm Website: https://citiadr.factsetdigitalsolutions. com/www/drfront_page.idms WEBSITE www,enplusgroup,com/en/ MEDIA ENQUIRIES PR Department Tel: +7 495 642 7937 Email: press-center@enplus,ru LLiimmiittaattiioonn ooff lliiaabbiilliittyy Unless otherwise stated, the information presented in the Report reflects the Company’s status during the review period from 1 January 2023 to 31 December 2023 (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 forwardlooking 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 389 391 CONSOLIDATED REPORT 2023APPENDICESADDITIONAL ESG DATAADDITIONAL ESG DATA Contacts KALININGRAD MEDIA ENQUIRIES FOR INVESTORS 8, Oktyabrskaya St., office 34, Kaliningrad, Kaliningrad Region, 236006, Russia Tel.: +7 401 269-74-36 Fax: +7 401 269-74-37 PR Department IR Department Tel.: +7 495 642 7937 Email: press-center@enplus.ru Tel.: +7 495 642-79-37 Email: ir@enplus.ru MOSCOW REGISTRAR DEPOSITORY BANK 1 Vasilisy Kozhinoy St., Moscow, 121096, Russia Tel.: +7 495 642-79-37 Fax: +7 495 642-79-38 WEBSITE www.enplusgroup.com/en/ JSC “IRC” Citibank, N.A. Tel.: +7 495 234-44-70 Email: info@mrz.ru Website: www.mrz.ru Tel.: +1 212 723-54-35 Email: CitiADR@Citi.com Website: www.citiadr. factsetdigitalsolutions.com/ www/drfront_page.idms Limitation of liability GRI 2-1, 2-2 Unless otherwise stated, the information presented in the Report reflects the Company’s status during the review period from 1 January 2023 to 31 December 2023 (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 forwardlooking 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+. The Report was preliminarily approved by the En+ Group’s Board of Directors 25.04.2024 (Minutes №73) General Director Mikhail Khardikov 392 393 APPENDICESCONSOLIDATED REPORT 2023

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