Investor Presentaiton

En+ GROUP FINANCIAL STATEMENTS En+ Group Annual Report 2021 STRATEGIC REPORT CORPORATE GOVERNANCE (a) PJSC MMC Norilsk Nickel (b) EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2021 In 2021 the Group has participated in the repurchase of Norilsk Nickel shares to raise additional funds to finance its own investment programme. The Group sold 3,691,465 shares for RUB 27,780 per share, with the aggregate consideration of USD 1,418 million. The carrying value of the shares sold amounted to USD 313 million, and USD 613 million of currency translation reserve attributed to the shares sold was reclassified to profit/(loss) for the period, resulting in net gain of USD 492 million recognised in the consolidated statement of income. The effective interest in Norilsk Nickel held by the Metals segment after the transaction comprised 26.39%, the average effective interest for the year 2021 was 27.11%. The Group's investment in Norilsk Nickel is accounted for using equity method and the carrying value as at 31 December 2021 and 31 December 2020 amounted USD 3,274 million and USD 3,122 million, respectively. The Group's share of profit of Norilsk Nickel was USD 1,762 million, other comprehensive income was USD nil million, the foreign currency translation gain of USD 24 million, other effects related to transactions with non-controlling interest owners of USD 129 million for the year ended 31 December 2021. As at 31 December 2020 Group's associate PJSC MMC Norilsk Nickel recognized a liability on the execution of a put option held by owners of 13.3% non-controlling interest in the share capital in LLC "GRK "Bystrinskoye" in the amount of USD 428 million. Since the non-controlling interest owners did not exercise their right under the put option before its expiry date of 31 December 2021, PJSC MMC Norilsk Nickel derecognised the liability on the execution of the put option as at 31 December 2021. PJSC MMC Norilsk Nickel recorded derecognition of the liability directly in the consolidated statement of changes in equity as Other effects related to transactions with non-controlling interest owners in the amount of USD 490 million, which was its fair value at 31 December 2021 immediately before derecognition. The Group recognized its share of this change of interest in the net assets of the associate directly in the consolidated statement of changes in equity as Share of equity transactions of an associate in the amount USD 129 million. The market value amounted USD 12,395 million and USD 14,123 million as at 31 December 2021 and 31 December 2020, respectively, and is determined by multiplying the quoted bid price per share on the Moscow Exchange on the year-end date by the number of shares held by the Group. Queensland Alumina Limited The carrying value of the Group's investment in Queensland Alumina Limited as at both 31 December 2021 and 31 December 2020 amounted to USD nil million. At 31 December 2021 management has not identified any impairment reversal indicators relating to the Group's investment in QAL and as a result no detailed impairment testing was performed in relation to this investment. 14. EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2021 Additional financial information of the Group's effective interest in BEMO project for the year ended 31 December 2021 and 31 December 2020 is presented below: Cash and cash equivalents Current financial liabilities Non-current financial liabilities Depreciation and amortisation Interest income Interest expense Income tax expense Inventories Inventories are measured at the lower of cost or net realisable value. 31 December 2021 USD million 31 December 2020 USD million 32 30 (25) (43) (770) (859) (53) (17) (13) (15) (14) (13) The cost of inventories is determined under the weighted average cost method, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. Production costs include mining and concentrating costs, smelting, treatment and refining costs, other cash costs and depreciation and amortisation of operating assets. Raw materials and consumables Work in progress Finished goods and goods for resale 31 December 2021 USD million 2020 USD million 1,613 786 1,127 591 1,510 778 3,909 2,496 (178) (157) 3,731 2,339 Inventories at 31 December 2021 and 31 December 2020 are stated at cost. Write-down to net realisable value FINANCIAL STATEMENTS Appendices The carrying values of the Group's investment in BEMO project as at 31 December 2021 and 31 December 2020 amounted to USD 595 million and USD 540 million, respectively. For the purposes of impairment testing, the BEMO project was separated into two cash generating units the Boguchansky Aluminium Smelter ("BOAZ") and the Boguchansky Hydro Power Plant ("BoGES"). The recoverable amount was determined by discounting the expected future net cash flows of each cash generating unit. At 31 December 2021 management did not identify any impairment indicators relating to the Group's investment in BoGES nor any impairment reversal indicators relating to investments in BoAZ and as a result no detailed impairment testing was performed in relation to this investment. At 31 December 2021, accumulated losses of USD 51million (2020: USD 443 million) related to impairment charges at BoAZ have not been recognised because the Group's investment has already been fully written down to USD nil million. 15. Inventories with a carrying value of USD 781 million and USD 738 million were pledged as collateral for secured bank loans at 31 December 2021 and 31 December 2020, respectively (note 17). 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. (c) BEMO project 182 183