Investor Presentaiton
En+
GROUP
STRATEGIC REPORT
En+ Group Annual Report 2021
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Risk
Description
BUSINESS AND OPERATIONAL RISKS
6 Maintenance
Change
in 2021
Mitigation measures
These risks relate to equipment: failures of equipment N/C
that may result in damage to property, reduced
output or discontinued operations
7
Legal
Risks that losses may be incurred as a result
of enforcement of court judgements on claims
by contractors or shareholders of the companies
of the Group
N/C
8
Commercial
and project
9
Health
and safety
10
IT security &
resilience
Risks of disruptions in supply chains of goods
and raw materials: sales of the products from metals
and coal businesses require the use of railway
infrastructure with its uncertain availability pattern
Risks of monopoly pricing at the transportation
market
Risks of projects not completed on time/on budget
Workforce or contractor injury due to human
error, equipment failure, or job management, given
the endemic risks within the Power and Metals
segments relating to major accident hazards
and asset integrity
N/C
N/C
Timely maintenance and repairs/
overhauls of equipment;
modernisation of production
facilities
Legal defence against lawsuits
Negotiating with the claimants
Negotiating with suppliers
of logistical services
Ensuring timely supply
and performance under investment
contracts in accordance
with the Group's internal
regulations
The Group has arranged
special-purpose units to reduce
the probability of occupational
injuries by means of development
of regulations, staff training
and ensuring compliance
with the rules relevant
to complicated and hazardous
works through relevant
control measures. Supervisory
authorities (the Russian
technological supervision service
Rostechnadzor, and the consumer
rights compliance service
Rospotrebnadzor, etc.) exercise
scheduled and ad hoc checks
to control compliance with HSE
requirements
Testing the IT infrastructure
to detect security vulnerabilities
Use of uniform policies
and procedures for ensuring
security of all Group entities
In late February and in March 2022,
some countries and organisations
announced new packages of sanctions
against the public debt of the Russian
Federation, Russia's central bank,
a number of Russian banks and certain
Russian-government related entities
and institutions plus personal sanctions
against a number of individuals
as well as certain other restrictions.
There has been a significant increase
in volatility on the securities and currency
markets, as well as a significant
depreciation of the rouble against the US
dollar and the euro. The quantitative
effect of these events cannot
be accurately estimated at the moment
with any degree of confidence.
Due to all these circumstances, Central
Bank of Russia increased key rate
to 20% in the end of February 2022
and subsequently decreased to 17% in
the beginning of April 2022 that may
negatively affect the financial position
of the Company due to high interest
rates for credit facilities. The Russian
Government has also announced intention
to change regulation of domestic
metals' sales prices, which may have
an adverse effect on the Company's
profitability. Due to unavoidable logistical
and transport challenges on the Black Sea
and surrounding area, RUSAL's had been
obliged to halt temporarily production
at the Nikolaev Alumina Refinery located
in the Nikolaev Region, Ukraine. Output
of this refinery in 2021 amounted to 1.8 mt
of alumina. In addition, on 20 March 2022
the Australian government imposed
an immediate ban on exports of alumina
and aluminium ores, including bauxite,
to Russia. This action will affect, among
other things, the alumina export from
Australia that comprises almost 20%
of RUSAL's total alumina demand.
At the date of this Report, the Company
continues to evaluate the effect
of all of the above and analysing
the possible impact of a variety
of micro- and macroeconomic
conditions on the Company's
future financial position and results
of operations in 2022 and onwards.
Climate-related risks¹
The Company considers and examines
climate-related risks and opportunities.
This year En+ Group continued its
work on implementing the Task
Force on Climate-related Financial
Disclosures (TCFD) recommendations.
The Company aims to make its climate
change reporting more transparent
for stakeholders. For detailed information
please refer to the Task Force on
Climate-related Financial Disclosures
section that focuses on implementation
of the TCFD recommendations
and to the Sustainability Reports.
FINANCIAL RISKS
11
Financial
Risks of important data loss or damage
to components of the IT infrastructure by hacking or
malware attacks
Risks of failures of the automated information control.
and management systems of large industrial facilities
(HPPS, CHPS, etc.)
Financial impact of market volatility regarding foreign
exchange and interest rates
Tax risks
CLIMATE-RELATED RISKS
12
13
Transitional
risks
N/A
Physical risks
N/A
Financial or reputational impact due to policy, legal,
technology, and market changes
N/C
Negative impact on operational process due
to climate change, including water supply
and temperature variations
N/C
The Group exercises continuous
control over the financial
condition of Group companies.
Monitoring of compliance
with the terms of the loan
agreements with banks is arranged
at the Group's entities to ensure
uninterrupted operating activities.
Regular control is exercised
over compliance with the agreed
financial covenants; tax planning
is undertaken, as well as control
over tax accruals and payments
Constant monitoring of policy,
legal, technology, and market
changes and proactive
management of these issues
Business and scenario planning;
climate research and analysis
108
APPENDICES
For detailed information please refer to the Task Force on Climate-related Financial Disclosures
section of the Annual Report 2021.
109View entire presentation